WINNIPEG, MB – Bird River Resources Inc. (CSE:BDR) (“Bird River” or the “Corporation“) is pleased to announce it has entered into a new non-binding letter of intent dated February 27, 2023 (the “Letter of Intent“) with Gestion Faraday Energie Inc. (“Faraday“), which includes the following key components:
- the reverse take-over of Bird River by the shareholders of Faraday (the “Proposed Transaction
- a change of name of Bird River to “Faraday Renewable Power Corp.”, or such other name as may be determined by Faraday (the “Name Change
- the consolidation of Bird River’s common shares on a 2-for-1 basis (the “Consolidation
- the continuance of Bird River from the Corporations Act (Manitoba) to the Canada Business Corporations Act (the “Continuance
- a private placement of subscription receipts of Bird River to raise a minimum of $3,500,000 and a maximum of $5,000,000 prior to the closing of the Proposed Transaction (the “Private Placement
- an unsecured loan from Bird River to Faraday in the principal amount of $250,000 (the “Loan“).
Description of Faraday
Faraday is a private Quebec corporation which owns two subsidiaries, HydroAbitibi Inc. and Renewable Energy Abitibi Inc. The Subsidiaries operate two hydro-electric power plants, Centrale Hydro-Électrique La Sarre 1 (1,050 KWh) and Centrale Hydro-Électrique La Sarre 2 (800 KWh). The Power Plants have a combined output of approximately 1,850 KWh, and are located on the La Sarre River, approximately 75 km north of Rouyn Noranda, Québec, and 700 km north of Toronto, Ontario.
The Proposed Transaction
The Proposed Transaction, which may be structured as an amalgamation or other business combination, shall result in Bird River acquiring all of the issued and outstanding shares of Faraday held by its shareholders in exchange for:
- 10,000,000 common shares of Bird River after giving effect to the Consolidation (each, a “Post-Consolidation Share
- 5,000,000 transferable Post-Consolidation Share purchase warrants (each, a “Warrant“) entitling the holder to acquire one Post-Consolidation Share for a period of 60 months following the closing of the Proposed Transaction at a price equal to the higher of (i) $0.20; and (ii) the minimum authorized by the CSE; and
- a cash payment of $1,300,000.
The Proposed Transaction, if completed, will constitute a “Fundamental Change” for Bird River pursuant to Policy 8 of the CSE.
In connection with the closing of the Proposed Transaction, it is contemplated that the board of directors of the resulting issuer will be reconstituted to be comprised of a minimum of three and a maximum of five members to be nominated by Faraday. After the closing of the Proposed Transaction, the officers of Bird River will be appointed by the new Board of Directors of Bird River.
In accordance with the Letter of Intent, the Corporation intends to effect a small non-brokered private placement financing of up to $150,000 of common shares, with the price per share to be determined in the context of the market at the minimum price authorized by the CSE. The proceeds of this small financing is to be used by the Corporation for general working capital purposes and to pay for expenses related to Proposed Transaction and the Private Placement of Subscription Receipts described below.
The Proposed Transaction is subject to certain conditions precedent, including, among other things, the completion of satisfactory mutual due diligence, execution of a definitive legal agreement, the completion of the Private Placement and receipt of all requisite approvals, including that of the CSE.
The Private Placement
In conjunction with, and prior to the closing of the Proposed Transaction, Bird River intends to complete a Private Placement of subscription receipts (the “Subscription Receipts“) to raise a minimum of $3,500,000 and a maximum of $5,000,000 at an anticipated price of $0.50 per Subscription Receipt. Upon the fulfilment of all escrow release conditions set forth in the subscription receipt agreement governing the Subscription Receipts, which shall include the closing of the Proposed Transaction within 120 days following the closing of the Private Placement, each Subscription Receipt shall be automatically exchanged for one Post-Consolidation Share and one Post-Consolidation share purchase warrant entitling the holder to acquire one Post-Consolidation Share for the price of $0.90 per Post-Consolidation Share until the date that is twenty-four 24 months following the closing of the Proposed Transaction.
In connection with the Proposed Transaction, Bird River has made a Loan in the principal amount of $250,000 to Faraday, half of which shall be reimbursed to Bird River if the closing of the Proposed Transaction does not occur by August 30, 2023.
Additional Information Regarding the Proposed Transaction
Further details of the Proposed Transaction (including business and financial information in respect of Faraday) and the Private Placements will be included in a subsequent press release and other disclosure documents to be filed by Bird River in connection with the Proposed Transaction.