CALGARY, Alberta – Marksmen Energy Inc. (TSXV: MAH) (OTCQB: MKSEF) (“Marksmen” or the “Company”) announces that it has completed the first closing of its previously announced non-brokered private placement of units (the “Units”) of Marksmen (the “Offering”). The Company issued 5,920,000 Units at a price of $0.06 per Unit for aggregate gross proceeds of $355,200. Each Unit is comprised of one (1) common share (“Common Share”) and one (1) share purchase warrant (“Warrant”) of Marksmen. Each whole Warrant entitles the holder thereof to purchase one Common Share at a price of $0.09 per share expiring two (2) years from the date of issuance.
Pursuant to the first closing of the Offering, Marksmen paid cash commissions to qualified non-related parties of $18,240 and issued 304,000 broker warrants entitling the holder to acquire one Common Share at a price of $0.06 per share for a period of one (1) year from the date of issuance.
Marksmen intends to use the net proceeds of $336,960 from the first closing of the Offering to pay a cash-call of $320,000 for its 25% working interest in the southeast Ohio Trenton Black River, Webb #1 well, expected to spud in the next few days, and the remaining $16,960 will go towards working capital.
Completion of the Offering is subject to regulatory approval including, but not limited to, the approval of The TSX Venture Exchange Inc. (“TSXV”). The securities issued are subject to a four-month hold period from the date of issuance.
The Company expects to complete a second closing on or about October 14, 2021.
Related Party Participation in the Private Placement
Insiders subscribed for an aggregate of 1,220,000 Units in the first closing of the Offering for a total of 21%. As insiders of Marksmen participated in this first closing of the Offering, it is deemed to be a “related party transaction” as defined under Multilateral Instrument 61-101-Protection of Minority Security Holders in Special Transactions (“MI 61-101”).
Neither the Company, nor to the knowledge of the Company after reasonable inquiry, a related party, has knowledge of any material information concerning the Company or its securities that has not been generally disclosed.
The Offering is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 (pursuant to subsections 5.5(c) and 5.7(1)(b)) as it was a distribution of securities for cash and neither the fair market value of the Units distributed to, nor the consideration received from, interested parties exceeded $2,500,000.
The Company did not file a material change report more than 21 days before the expected closing of the Offering because the details of the participation therein by related parties of the Company were not settled until shortly prior to the first closing of the Offering and the Company wished to close on an expedited basis for business reasons.