Business
Avalon Enters into Preferred Share Financing Agreement for Gross Proceeds of $2.5 million
Toronto, Ontario--(Newsfile Corp. - March 3, 2017) - Avalon Advanced Materials Inc. ...
About this update from Avalon Advanced Materials Inc.
[{"type":"text","content":"\nAvalon Enters into Preferred Share Financing Agreement for Gross Proceeds of $2.5 millionToronto, Ontario--(Newsfile Corp. - March 3, 2017) - Avalon Advanced Materials Inc. (TSX: AVL) (OTCQX: AVLNF) (\"Avalon\" or the \"Company\") is pleased to announce that it has entered into a preferred share purchase agreement (the \"Agreement\") with an entity managed by The Lind Partners, a New York based asset management firm (\"Lind\"). The financing will involve the issuance of 500 Series A1 Preferred Shares (the \"Preferred Shares\") on a private placement basis at a price of $5,000 per Preferred Share for gross proceeds of $2,500,000. The proceeds will be used for ongoing market development work, metallurgical studies and preliminary engineering work on the Separation Rapids Lithium Project and for general working capital purposes. The transaction is expected to close the week of March 6, 2017.The Preferred Shares do not carry a dividend and have a redemption value per share that starts at $5,000 and increases by $250 per share each quarter over the next 24 months, to a cap of $6,750 per share. After the four month Hold Period (defined below), the Preferred Shares can be converted by Lind into common shares of the Company at a price per common share equal to 85% of the five-day volume weighted average price of the common shares on the Toronto Stock Exchange (the \"TSX\") immediately prior to the date that notice of conversion is given.In conjunction with the closing, Lind will receive a commitment fee of $125,000 and 6,900,000 common share purchase warrants. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.23 per common share until 60 months after closing.Pursuant to Canadian securities laws, the securities issuable under this private placement will be subject to a hold period (the \"Hold Period\"), which expires four months and one day after closing. After the Hold Period, Lind has the basic right to convert 25 Preferred Shares into common shares of the Company on a monthly basis, subject to certain conversion limits set out in the Agreement, however Lind is permitted to convert up to 100 Preferred Shares on a monthly basis in the event such amount does not exceed 20% of the Company's 20-day traded volume of common shares on the TSX immediately prior to the date of delivery of a conversi...