Jesmond Capital Ltd. announced a non-brokered private placement for minimum gross proceeds of CAD 6,000,000 and maximum gross proceeds of CAD 8,500,000 on February 13, 2023. The company will issue 12,000,000 equity subscription receipts at an issue price of CAD 0.25 per equity subscription receipt for gross proceeds of CAD 3,000,000, and issue of a minimum of 3,000 debenture subscription receipts and a maximum of 5,500 debenture subscription receipts of the company at an issue price of CAD 1,000 per debenture subscription receipt for gross proceeds of a minimum of CAD 3,000,000 and a maximum of CAD 5,500,000 in the transaction. Each equity subscription receipt will be deemed to be automatically converted, without payment of additional consideration or further action by the holder thereof, into one common share of the company, subject to adjustment in certain events, immediately before the closing of the transaction upon the satisfaction or waiver of the aforementioned escrow release conditions.

Each debenture subscription receipt will be deemed to be automatically converted, without payment of additional consideration or further action by the holder thereof, into an unsecured convertible debenture of the company in the principal amount of $1,000 (CAD 1,335), subject to adjustment in certain events, immediately before the closing of the transaction upon the satisfaction or waiver of the aforementioned escrow release conditions. The convertible debentures will have an absolute term of eighteen months from the date of issuance with conversion available at the discretion of the resulting issuer or the holder of convertible debentures. The convertible debentures will automatically convert at the end of the eighteen-month term and in no circumstances may the convertible debentures be surrendered or redeemed for cash.

The convertible debentures will be convertible at a rate of CAD 0.25 per share of which 4,000 common shares of the resulting issuer per $1,000 (CAD 1,335) of convertible debenture face value. The holder of the convertible debentures will be entitled to convert their convertible debentures at any time from twelve-months from the date of issuance. The convertible debentures will bear interest only if not converted within the period of twelve -months from the date of issuance.

If not converted within the first twelve-months from the date of issuance, interest will be payable on the convertible debentures from the date of issuance until the convertible debentures are converted at an interest rate of 10% per annum, and subject to exchange approval, such interest will be payable in common shares of the resulting issuer on pro-rated based on the last closing price of the common shares of the resulting issuer before the time the accrued interest becomes payable. The private placements are expected to close in first quarter of 2023, and completion is subject to certain conditions, including approval of the Toronto Stock Exchange. The subscription receipts issued in the private placements will be subject to a statutory four-month hold period.

A cash finderÆs fee of up to 6% of the gross proceeds raised in connection with the private placements and/or that number of finderÆs warrants equal to up to 6% of the number of common shares issued in connection with the private placements, with each finderÆs warrant being exercisable into one common share of the resulting issuer at a price of $0.25 (CAD 0.3338) per share, may be paid to eligible parties in connection with the private placements, subject to the approval of the Toronto Stock Exchange and compliance with applicable securities laws.