Frontier Nuclear & Minerals Inc F-3, filed Jun 1, 2023
Frontier Nuclear & Minerals Inc. (FNUC)
As filed with the U.S. Securities and Exchange Commission on June 1, 2023
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SNOW LAKE RESOURCES LTD.
(Exact name of Registrant as specified in its charter)
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Not Applicable
(Translation of Registrant’s Name into English)
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Manitoba, Canada |
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(State or other jurisdiction of |
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| (I.R.S. Employer |
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Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
(800)221-0102
(Names, address, including zip code, and telephone number, including area code, of agent for service)
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Copies to:
Shimmy Posen | David Warburg, Esq. |
Garfinkle Biderman LLP | Seyfarth Shaw LLP |
1 Adelaide Street East, Suite 801 | 620 Eighth Avenue |
Toronto, Ontario, Canada M5C 2V9 | New York, New York 10018-1405 |
(416) 869-7612 | (212) 218-4653 |
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Approximate date of commencement of proposed sale to public: From time to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS |
| SUBJECT TO COMPLETION |
| DATED JUNE 1, 2023 |
Snow Lake Resources Ltd.
$100,000,000
Common Shares
Preferred Shares
Warrants
Debt Securities
Units
We may offer, issue and sell from time to time, in one or more offerings, common shares, preferred shares, warrants, debt securities and/or units, which we collectively refer to as the “securities.” The aggregate initial offering price of the securities that we may offer and sell under this prospectus will not exceed $100 million.
We may offer and sell any combination of the securities described in this prospectus in different series, at times, in amounts, at prices and on terms to be determined at or prior to the time of each offering. This prospectus describes the general terms of these securities and the general manner in which these securities will be offered. Each time we sell securities pursuant to this prospectus, we will provide a supplement to this prospectus that contains specific information about the offering and the specific terms of the securities offered. The prospectus supplement will also describe the specific manner in which these securities will be offered and may also supplement, update or amend information contained in this prospectus. You should read this prospectus and any applicable prospectus supplement before you invest in any of our securities.
The securities covered by this prospectus may be offered and sold through one or more underwriters, dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. The names of any underwriters, dealers or agents, if any, will be included in a supplement to this prospectus. For general information about the distribution of securities offered, please see “Plan of Distribution”.
One or more selling securityholders may also offer and sell securities under this prospectus. We will not receive any of the proceeds from the sale or other disposition of common shares by the selling shareholders.
On May 30, 2023, the aggregate market value worldwide of our outstanding common equity held by non-affiliates was approximately $29.0 million, based on 11,569,810 common shares outstanding held by non-affiliates and a per share price of US$2.51 based on the closing sale price of the common shares on Nasdaq on May 30, 2023. As of the date hereof, we have not sold any securities pursuant to General Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends on and includes the date hereof. Pursuant to General Instruction I.B.5 of Form F-3, in no event
will we sell securities registered on this registration statement of which any prospectus supplement forms a part in a public primary offering with a value exceeding one-third of our outstanding voting and non-voting common equity held by non-affiliates (the “public float”) in any 12-month period so long as our public float remains below $75.0 million.
Investing in our securities involves risks. See “Risk Factors” beginning on page 6 to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission nor any state or foreign securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Prospectus dated June 1, 2023
Our common shares are listed on the Nasdaq Capital Market, or the Nasdaq, under the symbol “LITM.” On May 30, 2023, the last reported sale price for our common share was $2.51.
At present, there is a very limited market for our common shares. The trading price of our common shares has been, and may continue to be, subject to wide price fluctuations in response to various factors, many of which are beyond our control, including those described in “Risk Factors.”
We are an “emerging growth company” and a “foreign private issuer” as defined under the U.S. federal securities laws, and, as such, are eligible for reduced public company reporting requirements for this and future filings. See “prospectus Summary—Implications of Being an Emerging Growth Company” and “prospectus Summary—Implications of Being a Foreign Private Issuer.”
We are not considered a “controlled company” under Nasdaq corporate governance rules as we do not currently expect that more than 50% of our voting power will be held by an individual, a group or another company immediately following the consummation of this offering. Nonetheless, currently, our directors, officers and principal shareholders hold in aggregate approximately 36.38% or more of our common shares. As a result, these shareholders, if they act together, will be able to control the management and affairs of our Company.
As a foreign private issuer, we have the option to follow certain Canadian corporate governance practices, except to the extent that such laws would be contrary to U.S. securities laws, and provided that we disclose the requirements we are not following and describe the Canadian practices we follow instead. We may in the future elect to follow home country practices in Canada with regard to certain corporate governance matters. See “Risk Factors—Risks Related to Our Common Shares and this Offering.”
Investing in our common shares involves a high degree of risk. See “Risk Factors” beginning on page 11 of this prospectus for a discussion of information that should be considered in connection with an investment in our common shares.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is June 1, 2023.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) utilizing a “shelf” registration process. Under this shelf registration statement, we may sell the securities described in this prospectus in one or more offerings up to a total aggregate offering price to the public of $100 million. Furthermore, so long as the aggregate market value worldwide of our public float is less than $75 million, the aggregate market value of securities sold by us pursuant to this shelf registration statement during the period of 12 calendar months immediately prior to, and including, the sale, shall be no more than one-third of the public float. The offer and sale of securities under this prospectus may be made from time to time, in one or more offerings, in any manner described under the section in this prospectus entitled “Plan of Distribution.”
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus, and may also contain information about any material federal income tax considerations relating to the securities covered by the prospectus supplement. Before purchasing any of our securities, you should read both this prospectus and any prospectus supplement together with additional information under the headings “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference.”
We have not authorized anyone to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus (as supplemented or amended). We and any selling shareholders are offering to sell, and seeking offers to buy, our securities only in jurisdictions where it is lawful to do so. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any of our securities other than the registered securities to which they relate, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy our securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
You should not assume that the information contained in this prospectus (as supplemented or amended) is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus (as supplemented or amended) is delivered, or securities are sold, on a later date.
This prospectus and the information incorporated herein by reference contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the heading “Where You Can Find More Information.”
Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the terms “Snow Lake,” “the company,” “we,” “us” and “our” refer to Snow Lake Resources Ltd. and its subsidiaries.
For investors outside the United States: We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the common shares and the distribution of this prospectus outside the United States.
This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, you are cautioned not to give undue weight to this information.
We may sell our securities to underwriters who will sell the securities to the public at a fixed offering price or at varying prices determined at the time of sale. The applicable prospectus supplement will contain the names of the underwriters, dealers or agents, if any, together with the terms of offering, the compensation of those underwriters, dealers or agents and the net proceeds to us. Any underwriters, dealers or agents participating in the offering may be deemed “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
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GLOSSARY OF MINING TERMS
The following is a glossary of certain mining terms that may be used in this prospectus.
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Claim | A mining right that grants a holder the exclusive right to search and develop any mineral substance within a given area. |
Concentrate | A clean product recovered in flotation, which has been upgraded sufficiently for downstream processing or sale. |
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Dyke | A long and relatively thin body of igneous rock that, while in the molten state, intruded a fissure in older rocks. |
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Exploration | Prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. |
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Grade | Term used to indicate the concentration of an economically desirable mineral or element in its host rock as a function of its relative mass. With gold, this term may be expressed as grams per tonne (g/t) or ounces per tonne (opt).
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Indicated Mineral Resource | Part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. |
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Inferred Mineral Resource | Part of a mineral resource for which quantity and grade or quality can be estimated on the basis of limited geological evidence and sampling and reasonably implied, but not verified, geological and grade continuity. |
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Km | Kilometre(s). Equal to 0.62 miles. |
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kMT | Kilo metric tonne. |
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M | Metre(s). Equal to 3.28 feet. |
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Measured Mineral Resource | Part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. |
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Metallurgy | The science and art of separating metals and metallic minerals from their ores by mechanical and chemical processes. |
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Mineral | A naturally occurring homogeneous substance having definite physical properties and chemical composition and, if formed under favorable conditions, a definite crystal form. |
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Mineralization | A natural occurrence in rocks or soil of one or more yielding minerals or metals. |
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Mineral Project | The term “mineral project” means any exploration, development or production activity, including a royalty or similar interest in these activities, in respect of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base, precious and rare metals, coal, and industrial minerals. |
Mineral Reserve | The economically mineable part of a Measured and/or Indicated Mineral Resource. |
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Mineral Resource | A concentration or occurrence of diamonds, natural, solid, inorganic or fossilized organic material including base and precious metals, coal and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. |
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Ore | Mineralized material that can be extracted and processed at a profit. |
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Ounce | A measure of weight in gold and other precious metals, correctly troy ounces, which weigh 31.2 grams as distinct from an imperial ounce which weigh 28.4 grams. |
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Pegmatite | An igneous rock, formed by slow crystallization at high temperature and pressure at depth, and exhibiting large interlocking crystals usually greater in size than 2.5 cm (1 in). |
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PFS | Preliminary feasibility study. A Preliminary Feasibility Study is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors which are sufficient for a Qualified Person, acting reasonably, to determine if all or part of the Mineral Resource may be converted to a Mineral Reserve at the time of reporting. A Pre-Feasibility Study is at a lower confidence level than a Feasibility Study. |
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Probable Mineral Reserve | The mineable part of an indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve. |
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Spodumene | A pyroxene mineral consisting of lithium aluminum inosilicate, LiAl(SiO3)2, and is a source of lithium. |
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Tonne | A metric ton of 1,000 kilograms (2,205 pounds). |
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This summary highlights selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our common shares. You should carefully read the entire prospectus, including the risks associated with an investment in our company discussed in the “Risk Factors” section of this prospectus, before making an investment decision. Some of the statements in this prospectus are forward-looking statements. See the section titled “Special Note Regarding Forward-Looking Statements.”
In this prospectus, “we,” “us,” “our,” “our company,” “Snow Lake” and similar references refer to Snow Lake Resources Ltd. and its consolidated subsidiaries.
OUR COMPANY
Our Mission
Snow Lake is committed to produce and supply lithium to the electric vehicle and battery market in North America. We aspire to set the standard for responsible lithium battery manufacturing.
Overview
We are an exploration stage mining company engaged in lithium exploration in the province of Manitoba, Canada.
Our primary focus is currently conducting exploration for lithium at our 100% owned Snow Lake Lithium™ Project. Our objective is to develop a world-class lithium mine in Manitoba strategically located to supply the U.S. “Auto Alley,” from Michigan to the southern United States, and the European battery market via our nearby access to the Hudson Bay Railway and the Port of Churchill. We aim to derive substantial revenues from the sale of lithium to the growing electric vehicle (“EV”) and battery storage markets in the United States and abroad. With access to renewable and cheap energy produced in Manitoba, we expect to become a low cost North American lithium producer mined exclusively with the benefit of power produced from fully sustainable, local sources.
The Historical Setting for the Growth of Lithium Demand
The unprecedented prosperity of the 20th century is very much attributable to the discovery of oil in Western Pennsylvania in the mid-1800s and the subsequent invention of the internal combustion engine. The symbiotic relationship between oil and the internal combustion engine has been the underpinning of world economic growth, expansion and, most importantly, the empowerment of millions of people to whom mobility and freedom have become a way of life. The interstate highways that flourished in the United States over the past century have enabled commercial fluidity across the globe that capitalized exponentially on the gilded age of rail.
Until recently, a world without oil and the internal combustion engine was inconceivable and environmentalists protesting the high price being paid for our economic way of life, were brandished unrealistic luddites. The paradox of environmental sensitivity and the irreversible progress of a polluting population seemed permanently juxtaposed, until it wasn’t.
Today, we have reached the confluence where economic reality and social responsibility can finally meet. Thanks to technological innovation, through the development of the lithium battery we can now create an electric fleet of vehicles that not only delivers luxury and economy but is also ecologically friendly to our planet. We are now on the precipice of the next great economic age - preceded by the steam engine, the railroad, the combustion engine and the internet, we are now ready to be catapulted into the electric age. With the advent of the lithium battery, no longer will we have to rely on fossil fuel to power our economy or our cars as we embark into the next great age and, more importantly, we can limit and ultimately reverse the damage caused to our planet by the rapid economic expansion of the past century.
The Coming Commodity Supercycle and Growth in Lithium Demand
From our perspective, indications suggest that we are currently on the verge of a commodity supercycle fueled by pent up demand, infrastructure spending and post-COVID-19 economic exuberance. We expect that lithium, in particular, will benefit not only from a general rise in commodity demand but, specifically, from what we see as the tipping point for vehicle fleet electrification.
We believe that the journey now to the full electrification of our global automobile fleet has begun. Demand for EVs is being driven by conscious consumers who take the threat of global warming seriously and who have forced a universal commitment from the manufacturing industry to produce cars to match their environmentally conservative outlook. During the coming years, the achievement of this fleet conversion will be the primary challenge for the worldwide automobile industry and the determining factor will not be design or engineering, but batteries. Batteries will be the fuel and gold of the 21st century. Based on today’s predictions of the trajectory of future EV growth, the world will not have sufficient battery capacity to match growing demand. Today’s global fleet of approximately 1.4 billion automobiles includes 10 million plug in electric vehicles, an increase from only one million such EVs in 2015. Extrapolating the growth trajectory of EV demand, we believe that current industrial infrastructure is not scaled sufficiently to meet the coming demand.
Lithium is the key mineral ingredient in the power storage component of the EV revolution and the global demand growth curve for lithium consumption over the next decade is expected to be exponential. While normal commodity cycles are affected by incremental and organic growth, it is only once in a century that we witness new, previously nonexistent demand grow to accommodate a new economic, social and cultural reality.
We believe that current global lithium production cannot cover a fraction of the projected exponential growth anticipated in the coming EV growth cycle and we intend to position our company to become a significant lithium supplier to the North American automotive industry and beyond.
Today, a large portion of the global lithium output is mined in diverse global locations such as Australia and Chile, transported great distances, primarily to China, for processing and then shipped again, back to the North American automobile industry. This is not a sustainable model and will not provide the necessary environmental or geopolitical comfort that will be required to electrify the global fleet of automobiles.
Our Corporate Strategy
Snow Lake is committed to mining, refining and providing battery grade lithium to the burgeoning North American electric vehicle consumer market.
We are currently finalizing our IA (Initial Assessment) / PEA (Pre-Economic Assessment), which will include metallurgy analysis, an updated mineral resource estimate for both the Grass River and Thompson Brother Lithium Projects, engineering assessment and ore sorting optimization, among other studies. This is scheduled to be released in early July 2023. In addition, the company is now into its second year of environmental baseline studies as well as progressing negotiations and discussions with local communities and First Nations peoples.
As the vast majority of our 59,587 acres of tenure remains underexplored, a field exploration and scout drilling campaign is being planned for the summer of 2023. Additionally, we have just completed over 25,000m of drilling over the last 16 months which will go towards further defining our resource at Thomson Brothers and delineating a resource at the Grass River Project.
We are confident that we will be in a position to begin the construction and commissioning of our mining operations during 2024/2025
The Snow Lake Lithium™ Project
Our 100% owned Snow Lake Lithium™ Project consists of 59,587 acres of Crown land near Snow Lake, north-central Manitoba, Canada. We refer to this property as the Snow Lake Lithium™ property. The Snow Lake Lithium™ property encompasses two lithium-rich spodumene pegmatite clusters known as the Thompson Brothers and Grass River pegmatite dykes.
Approximately 15,000M of extension and infill drilling has been completed at Thompson Brothers to confirm and further define the above mentioned mineral resource. Additionally, the company has recently drilled 10,000m at the Grass River Project in an effort to confirm a maiden Mineral Resource. The results of these drilling campaigns are being fed into updated resources models which are in turn being analyzed to determine the economic viability of the project. We previously obtained an S-K 1300 compliant report dated June 9, 2021 assessing the potential mineral resources. As a result of the death of one of the Qualified Persons participating in that report, which leaves us unable to obtain their consent to the inclusion of the report herein, we are not filing that report, nor describing its specific results or incorporating it by reference herein.
Our Opportunity
Our Snow Lake Lithium™ Project is strategically located in Manitoba, Canada, ideally situated to economically deliver mined and processed lithium products to the EV battery industry serving North America’s “Auto Alley” from Michigan to the southern United States. With direct rail access running north to the Port of Churchill, which supplies access to Europe by ship, we expect to be able to potentially economically deliver our future lithium output to the markets of Europe as well. We have only explored 1% of the Snow Lake Lithium™ property. We expect to continue to prove up our project and hope to delineate SK-1300 resources in the near future through further exploration and technical analysis and reporting, although we can provide no guarantee that our indicated and inferred resource will be confirmed as proven or probable. With expected to be significant mineral resources and our prime location, successful completion of a PEA, obtaining of the required permitting and building of a mine and ore concentrator, we expect to be able to produce economically significant amounts of marketable lithium ore concentrate in a socially responsible and environmentally friendly way while utilizing a significant amount of renewable energy to power our mining operations. We expect to be in a strong position to be able to exploit, through offtake agreements with OEM manufacturers and other battery makers, the anticipated rising demand for lithium to meet the burgeoning needs of the EV battery and related markets in North America and beyond.
Our Competitive Strengths
We believe that the following competitive strengths contribute to be our success and to differentiate us from our competitors:
·Our Snow Lake Lithium™ property is large, and we believe it is host to valuable lithium resources in commercial quantities.
·Access to Manitoba produced 97%+ renewable energy is expected to enable us to become the first supplier in North America of lithium mined exclusively with the benefit of fully renewable sources of energy.
·No significant technical challenges related to exploration and development of the deposits have been identified.
·We are strategically located in the North American market.
·Our operations are located in an exceptional mining friendly jurisdiction with excellent mining infrastructure.
·Our leadership team consists of experienced mining executives and operators, with a track record of de-risking and delivering.
·The combination of the benefits of location in a mining friendly jurisdiction, and strategic proximity to the major United States EV manufacturing markets should make us an attractive source for offtake agreements with lithium battery and/or EV manufacturers who will need to secure their raw material supplies.
Our Growth Strategies
We have developed a strategic plan for further exploration and development of the Snow Lake Lithium™ property that includes the following milestones:
·Complete and announce our resource update in accordance with the SEC’s new Mining Modernization Rules (field work completed) to expand and upgrade our Thomson Brothers Lithium Projects.
·Announce a maiden Mineral Resource Estimate for the Grass River Lithium Project.
·Complete a IA / PEA, study (anticipated in early July 2023).
·Complete next stage of resource exploration drilling leading to resource upgrade to the Measured from Indicated level.
·Conduct “boot and hammer” and scout drilling exploration do determine if there are additional prospects located on our Snow Lake Lithium™ property which in turn could add additional tonnage through further drilling. We also intend to explore for extensions to the existing mineral resources and other potential mineralization within the Snow Lake Lithium™ property.
Recent Developments
Current Cash and Cash Equivalents
As of May 1, 2023, our cash and cash equivalents balance was C$5,953,698 (US$4,395,170 based on the exchange rate of 1.3546 as of May 1, 2023).
Collaboration with LG Energy Solution to Establish Lithium Supply Chain in North America
We signed a non-binding Memorandum of Understanding (MOU) with LG Energy Solution (LGES: KRX 373220) on September 22, 2022 as a next step towards building the domestic supply chain for the North American electric vehicle market.
Under the terms of the MOU, we and LGES are to collaborate to explore the opportunity to create one of Canada's first lithium hydroxide processing plants in CentrePort, Winnipeg, Manitoba. Under the terms of the MOU, we would supply LGES with lithium over a 10-year period once production starts in 2025. The MOU and contemplated partnership are be subject to a number of conditions, including the completion of due diligence from both parties. There has been no substantial progress yet on implementing the goals of the MOU, and there is no assurance that the proposed collaboration contemplated by the MOU will in fact occur.
Our Corporate Structure
We were incorporated in the Province of Manitoba, Canada under The Corporations Act (Manitoba), or MCA, on May 25, 2018 by our major shareholder Nova. As of the date of this prospectus, Nova owned approximately 36.29% of our outstanding common shares.
We have three wholly owned subsidiaries, Snow Lake Exploration Ltd., or Snow Lake Exploration, Snow Lake (Crowduck) Ltd., or Snow Lake Crowduck, and Thompson Bros (Lithium) PTY Ltd. (formerly Manitoba Minerals Pty Ltd), or Thompson Bros. Through a series of agreements between 2016 to 2019 we acquired a 100% interest in the Snow Lake Lithium™ property. Our subsidiary, Thompson Bros, which owned our 20 claims before they were transferred to Snow Lake Crowduck, has been deregistered in Australia and Manitoba.
Corporate Information
Our corporate address is, 360 Main St 30th Floor, Winnipeg, MB R3C 4G1, Canada. Our company email address is info@snowlakelithium.com.
Our registered office is located at 360 Main St 30th Floor, Winnipeg, MB R3C 4G1, Canada.
Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, N.Y. 10168.
Our website can be found at https://snowlakelithium.com. The information contained on our website is not a part of this prospectus, nor is such content incorporated by reference herein, and should not be relied upon in determining whether to make an investment in our common shares.
Implications of Being an Emerging Growth Company
We qualify as an “emerging growth company” under the Jumpstart Our Business Act of 2012, as amended, or the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering; (iii) the date on which we have, during the preceding three year period, issued more than US$1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which could occur if the market value of our common shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
Implications of Being a Foreign Private Issuer
We are subject to the information reporting requirements of the Exchange Act that are applicable to “foreign private issuers,” and under those requirements we file certain reports with the SEC. As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we will be subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, we have four months after the end of each fiscal year to file our annual reports with the SEC and we are not required to file current reports as frequently or promptly as U.S. domestic reporting companies. We also present our financial statements pursuant to IFRS, as issued by the International Accounting Standards Board, instead of pursuant to U.S. generally accepted accounting principles. Furthermore, our officers, directors and principal shareholders are exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer, we are permitted, and intend to follow certain home country corporate governance practices instead of those otherwise required under the listing rules of Nasdaq for domestic U.S. issuers. These exemptions and leniencies will reduce the frequency and scope of information and protections available to you in comparison to those applicable to a U.S. domestic reporting companies.
Notes on Prospectus Presentation
Numerical figures included in this prospectus have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. Certain market data and other statistical information contained in this prospectus are based on information from independent industry organizations, publications, surveys and forecasts. Some market data and statistical information contained in this prospectus are also based on management’s estimates and calculations, which are derived from our review and interpretation of the independent sources listed above, our internal research and our knowledge of the Canadian mining industry. While we believe such information is reliable, we have not independently verified any third-party information and our internal data has not been verified by any independent source.
Our reporting currency and our functional currency is Canadian dollar. This prospectus contains translations of Canadian dollars into U.S. dollars at specific rates solely for the convenience of the reader. Unless otherwise noted, all translations from Canadian dollars into U.S. dollars relating to the unaudited interim consolidated financial statements as of December 31, 2022 and for the six months ended December 31, 2022 and 2021 in this prospectus were made at a rate of C$1.3532 per US$1.00, the noon buying rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board in effect as of December 30, 2022. All translations from Canadian dollars into U.S. dollars relating to the audited consolidated financial statements as of and for the years ended June 30, 2022 and 2021 in this prospectus were made at a rate of C$1.2871 per US$1.00, the noon buying rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board in effect as of June 30, 2022. On March 31, 2023, the noon buying rate for Canadian dollar was $1.3525 per US$1.00. We make no representation that the Canadian dollar or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Canadian dollar, as the case may be, at any particular rate or at all.
All references in the prospectus to “U.S. dollars,” “dollars,” “US$” and “$” are to the legal currency of the United States and all references to “C$” are to the legal currency of Canada.
Share Consolidation (a “Reverse Split”)
On October 7, 2021, we effectuated a one-for-five reverse stock split of our common shares, or the Reverse Split. The Reverse Split combined each five of our common shares into one common share. Fractional shares will not be issued to any existing shareholder in connection with the Reverse Split, but the Company purchased from each existing shareholder the right to such fractional share that would have been issued, at a price based on our initial public offering price. The right to fractional shares which the Company purchased resulting from the Reverse Split, in the aggregate, was less than ten (10) common shares. The historical audited financial statements included elsewhere in this prospectus have been adjusted for the Reverse Split. Unless otherwise indicated, all other share and per share data in this prospectus have been retroactively adjusted, where applicable, to reflect the Reverse Split as if it had occurred as at the June 30, 2019 fiscal year end.
An investment in our securities involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus, contained in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in our most recent Annual Report on Form 20-F and the other documents that are filed after the date hereof that are incorporated by reference into this prospectus and the applicable prospectus supplement before purchasing our common shares. We have listed below (not necessarily in order of importance or probability of occurrence) what we believe to be the most significant risk factors applicable to us, but they do not constitute all of the risks that may be applicable to us. Any of the following factors could harm our business, financial condition, results of operations or prospects, and could result in a partial or complete loss of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section titled “Special Note Regarding Forward-Looking Statements.”
Our Risks and Challenges
Our prospects should be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by similar companies. Our ability to realize our business objectives and execute our strategies is subject to risks and uncertainties, including, among others, the following:
Risks Related to Our Business and Industry
Risks and uncertainties related to our business and industry include, but are not limited to, the following:
All of our business activities are now in the exploration stage and there can be no assurance that our exploration efforts will result in the commercial development of lithium concentrate or lithium hydroxide.
All of our operations are at the exploration stage and there is no guarantee that any such activity will result in commercial production of lithium mineral deposits. Very limited drilling has been conducted on our Snow Lake Lithium™ property to date, which makes the extrapolation of an S-K 1300 compliant indicated or inferred resource, if and when obtained, to an S-K 1300 probable or proven reserve and to commercial viability impossible without further drilling. We intend to engage in that additional exploratory drilling with proceeds from this and potential subsequent financings. The exploration for lithium deposits involves significant risks which even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. Major expenses may be required to locate and establish proven mineral reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. It is impossible to ensure that the exploration programs planned by us or any future development programs will result in a profitable commercial mining operation. There is no assurance that our mineral exploration activities will result in any discoveries of commercial quantities of lithium. There is also no assurance that, even if commercial quantities of ore are discovered, a mineral property will be brought into commercial production. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure, metal prices which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted. Our long-term profitability will be in part directly related to the cost and success of our exploration programs and any subsequent development programs.
Our mineral resources or reserves may be significantly lower than expected or as currently published.
We are in the exploration stage and our planned principal operations have not commenced. There is currently no commercial production on the Snow Lake Lithium™ property and we have not yet completed a PFS. As such, our estimated proven or probable mineral reserves, expected mine life and lithium pricing cannot be determined as the exploration program, drilling, feasibility studies and pit (or mine) design optimizations have not yet been undertaken, and the actual mineral reserves may be significantly lower than expected. You should not rely on the past or any future S-K 1300 compliant technical report, or PFS, if and when completed and published, as indications that we will have successful commercial operations in the future. Even if we prove reserves on the Snow Lake Lithium™ property, we cannot guarantee that we will be able to develop and market them, or that such production will be profitable.
The estimation of lithium reserves is not an exact science and depends upon a number of subjective factors. Any indicated or inferred resource figures presented in this prospectus are estimates from the written reports of technical personnel and mining consultants who were contracted to assess the mining prospects. Resource estimates are a function of geological and engineering analyses that require us to forecast production costs, recoveries, and metals prices. The accuracy of such estimates depends on the quality of available data and of engineering and geological interpretation, judgment, and experience. Estimated indicated or inferred lithium resources may not be upgraded to indicated or measured or to probable or proved reserves, and any reserves may not be realized in actual production and our operating results may be negatively affected by inaccurate estimates. Additionally, resource estimates do not determine the economics of a mining project and, although we have begun to prepare a PFS, even once the PFS is produced we cannot guarantee that it will reflect positive economics for our mining resources or that we will be able to execute our plans to create an economically viable mining operation.
Our mineral resources described in our most recent S-K 1300 compliant indicated and inferred mineral resource report are only estimates and no assurance can be given that the anticipated tonnages and grades will be achieved, or that the indicated level of recovery will be realized.
Further, the independent resource consultant that prepared the currently published and most recent SK-1300 compliant indicated and inferred mineral resource report has recently passed away and the Company has therefore not been able to receive consent from the said consultant to use his estimate in this report. As such, the Company presently takes no responsibility for the accuracy of the said SK-1300 resource report, and is not describing the specific results of that report or incorporating the results of that report herein.
We intend to continue exploration on our Snow Lake Lithium™ property and we may or may not acquire additional interests in other mineral properties. The search for mineral deposits as a business is extremely risky. We can provide investors with no assurance that exploration on our current properties, or any other property that we may acquire, will establish that any commercially exploitable quantities of mineral deposits exist. Additional potential problems may prevent us from discovering any mineral deposits. These potential problems include unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. If we are unable to establish the presence of viable lithium mineral deposits on our properties, our ability to fund future exploration activities will be impeded, we will not be able to operate profitably and investors may lose all of their investment in our company.
·We have a limited operating history and have not yet generated any revenues;
·Our financial statements have been prepared on a going concern basis and our financial status creates a doubt whether we will continue as a going concern;
·If we do not obtain additional financing, our business may be at risk or execution of our business plan may be delayed;
·The coronavirus pandemic may cause a material adverse effect on our business;
·We previously obtained an S-K 1300 compliant indicated and inferred mineral resource report which represented only estimates and no assurance can be given that any anticipated tonnages and grades will be achieved, or that the indicated level of recovery will be realized. Although that report was S-K 1300 compliant, there has been insufficient drilling on the Snow Lake Lithium™ property to determine that we have inferred mineral resources under the SEC’s new Mining Modernization Rules. Further drilling will be required to determine whether the Snow Lake Lithium™ property contains proven or probable mineral reserves and there can be no assurance that we will be successful in our efforts to prove our resource. We are in the process of obtaining an updated S-K 1300 compliant report;
·Mineral exploration and development are subject to extraordinary operating risks. We currently do not insure against these risks. In the event of a cave-in or similar occurrence, our liability may exceed our resources, which could have an adverse impact on us;
·Our business operations are exposed to a high degree of risk associated with the mining industry;
·We may not be able to obtain or renew licenses or permits that are necessary to our operations;
·Our Snow Lake Lithium™ property may face indigenous land claims;
·Volatility in lithium prices and lithium demand may make it commercially unfeasible for us to develop our Snow Lake Lithium™ Project;
·The future market demand for lithium is and will be heavily dependent on the growth and development and continuing market acceptance and growth in market share of EVs with the overall North American and worldwide auto industry. Any reduction in the rate of growth of the EV industry may adversely affect lithium prices and the commercial feasibility of our Snow Lake Lithium™ Project;
·There can be no guarantee that our interest in the Snow Lake Lithium™ property is free from any title defects;
·Our mining operations are dependent on the adequate and timely supply of water, electricity or other power supply, chemicals and other critical supplies;
·We currently report our financial results under International Financial Reporting Standards, or IFRS, which differs in certain significant respect from U.S. generally accepted accounting principles;
·Our directors and officers are engaged in other business activities and accordingly may not devote sufficient time to our business affairs, which may affect our ability to conduct operations and generate revenue; and
·In the event that key personnel leave our company, we would be harmed since we are heavily dependent upon them for all aspects of our activities.
·Risks Related to This Offering and Ownership of Our Common Shares
Risks and uncertainties related to this offering and our common shares include, but are not limited to, the following:
There is currently no trading market for certain of the securities and no assurance can be given that an active or liquid trading market for such securities will develop or be sustained.
There is currently no trading market for any preferred shares, warrants, debt securities or units that may be offered and purchasers may not be able to resell such securities purchased under this prospectus. This may affect the pricing of such securities in the secondary market, the transparency and availability of trading prices, the liquidity of such securities, and the extent of issuer regulation. No assurance can be given that an active or liquid trading market for such securities will develop or be sustained. If an active or liquid market for such securities fails to develop or be sustained, the prices at which such securities trade may be adversely affected. Whether or not such securities will trade at lower prices depends on many factors, including liquidity of such securities, prevailing interest rates and the markets for similar securities, the market price of the common shares, general economic conditions and ours financial condition, historic financial performance and future prospects.
Our continued development may require us to raise additional financing in the future through the issuance of additional equity securities or convertible debt securities.
Our continued development may require the Company to raise additional financing in the future through the issuance of additional equity securities or convertible debt securities. If we raise additional funding by issuing additional equity securities or convertible debt securities such financings may substantially dilute the interests of our shareholders and reduce the value of their investment. Additional financings and share issuances may result in a substantial dilution to our shareholders of the Company and decrease the value of our securities.
The failure to raise or procure such additional funds as required could result in the delay or indefinite postponement of business objectives. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, will be on terms acceptable to the Company.
The market prices for securities of mining companies, including our securities, historically have been and may continue to be volatile.
The market prices for securities of mining companies, including our securities, historically have been and may continue to be volatile. Future developments concerning us or our industry, including downward fluctuations in the price of lithium, may have a significant impact on the market price of the common shares.
There may not be an active liquid market for the common shares and there is no guarantee that an active trading market for the common shares will be maintained on Nasdaq.
There may not be an active liquid market for the common shares. There is no guarantee that an active trading market for the common shares will be maintained on Nasdaq. Investors may not be able to sell their common shares quickly or at the latest market price if trading in the common shares is not active.
Management will have discretion in the use of proceeds and the use of available funds.
Management will have broad discretion concerning the use of the net proceeds from the offering of any securities by us and the use of available funds, as well as the timing of their expenditures. Depending on fluctuations in lithium prices and other factors, the intended use of proceeds from the offering of any securities and use of available funds may change. As a result, an investor will be relying on the judgment of management for the application of the net proceeds from the offering of any securities and use of available funds. Management may use the net proceeds from the offering of any securities and available funds in ways that an investor may not consider desirable if they believe it would be in our best interests to do so. The results and the effectiveness of the application of proceeds from an offering of any securities and available funds are uncertain. If the proceeds and available funds are not applied effectively, our results of operations may suffer.
·If through additional drilling we are not able to prove our resource according to the SEC’s new Mining Modernization Rules, your investment in our common shares could become worthless;
·You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions against us or our management named in the prospectus based on foreign laws;
·We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies;
·As a foreign private issuer, we are permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to domestic U.S. issuers. This may afford less protection to holders of our shares;
·A major shareholder, Nova Minerals, owns a significant interest in our outstanding common shares. As a result, it will have the ability to influence all matters submitted to our shareholders for approval; and
·Future issuances of debt securities, which would rank senior to our common shares upon our bankruptcy or liquidation, and future issuances of preferred shares, which could rank senior to our common shares for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common shares.
In addition, we face other risks and uncertainties that may materially affect our business prospects, financial condition, and results of operations. You should consider the risks discussed in “Risk Factors” and elsewhere in this prospectus before investing in our common shares.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
·our goals and strategies;
·expectations regarding revenue, expenses and operations;
·our having sufficient working capital and be able to secure additional funding necessary for the continued exploration of our property interests;
·expectations regarding the potential mineralization, geological merit and economic feasibility of our projects;
·expectations regarding exploration results at the Snow Lake Lithium™ Project;
·mineral exploration and exploration program cost estimates;
·expectations regarding any environmental issues that may affect planned or future exploration programs and the potential impact of complying with existing and proposed environmental laws and regulations;
·receipt and timing of exploration permits and other third-party approvals;
·government regulation of mineral exploration and development operations;
·expectations regarding any social or local community issues that may affected planned or future exploration and development programs; and
·key personnel continuing their employment with us.
In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the heading “Risk Factors” and elsewhere in this prospectus. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.
This prospectus also contains certain data and information, which we obtained from various government and private publications. Although we believe that the publications and reports are reliable, we have not independently verified the data. Statistical data in these publications includes projections that are based on a number of assumptions. If any one or more of the assumptions underlying the market data is later found to be incorrect, actual results may differ from the projections based on these assumptions.
The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Although we have ongoing disclosure obligations under United States federal securities laws, we do not intend to update or otherwise revise the forward-looking statements in this prospectus, whether as a result of new information, future events or otherwise.
The following table sets forth our cash and capitalization as of March 31, 2023.
You should read this table together with our financial statements and the related notes included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
|
| |||||
|
| C$ |
|
| US$ | ||
Cash |
|
| 8,025,129 |
|
|
| 5,930,044 |
Total long-term obligations |
|
| - |
|
|
| - |
Shareholders’ equity: |
|
|
|
|
|
|
|
Share capital |
|
| 40,570,773 |
|
|
| 29,979,142 |
Reserves |
|
| 7,234,905 |
|
|
| 5,346,121 |
Deficit |
|
| (22,043,401 | ) |
|
| (16,288,629) |
Total shareholder’s equity |
|
| 24,762,277 |
|
|
| 19,036,634 |
Total capitalization |
|
| 24,762,277 |
|
|
| 19,036,634 |
The table above is based on 18,185,810 shares outstanding as of the date of this prospectus and excludes:
·952,407 common shares potentially issuable upon the exercise of outstanding options under our Amended and Restated Stock at an exercise price of US$7.50 per share;
·350,000 common shares potentially issuable upon the exercise of outstanding options under our Amended and Restated Stock at an exercise price of US$2.50 per share;
·584,325 additional common shares that are reserved for future issuance under our Amended and Restated Stock Option Plan;
·1,341,054 common shares issuable upon the exercise of outstanding warrants at a weighted average exercise price of C$2.89 (approximately US$2.14) per share;
·184,000 common shares issuable upon exercise of the warrants issued to the representative of the underwriters in our initial public offering at an exercise price of US$9.375 per share; and
·470,000 common shares issuable upon the exercise of restricted share units.
The use of proceeds from the sale of securities will be described in the applicable prospectus supplement relating to a specific offering and sale of securities. Among other potential uses, we may use the net proceeds from the sale of securities offered hereunder for resource development activities, technical studies and reports, working capital and general corporate purposes.
The foregoing represents our current intentions to use and allocate the net proceeds of this offering based upon our present plans and business conditions. Our management, however, will have broad discretion in the way that we use the net proceeds of this offering. See “Risk Factors—Risks Related to This Offering and Ownership of Our Common Shares—We have considerable discretion as to the use of the net proceeds from this offering and we may use these proceeds in ways with which you may not agree.”
Pending our use of the net proceeds from this offering, we may invest the net proceeds in a variety of capital preservation investments, including short-term, investment grade, interest bearing instruments and U.S. government securities.
We will not receive any of the proceeds from the sale of common shares by selling shareholders in this offering. The selling shareholders will receive all of the proceeds from this offering.
The selling shareholders will pay any underwriting discounts and commissions and placement agent fees or other similar expenses incurred by the selling shareholders for brokerage, or legal services or any other expenses incurred by the selling shareholders in disposing of the common shares. We will bear all other fees and expenses incurred in effecting the registration of the common shares covered by this prospectus, including registration, listing, qualification and filing fees, fees and expenses of our counsel and our independent registered public accountants.
This prospectus may also, from time to time, relate to the offering of securities by way of a secondary offering by certain selling securityholders. The terms under which the securities will be offered by selling securityholders will be described in the prospectus supplement. In connection with any secondary offering, in respect of any selling securityholder that is resident outside of Canada, we will file a non-issuer’s submission to jurisdiction form on behalf of such selling securityholder with the corresponding prospectus supplement. The prospectus supplement for, or including, any offering of the securities by selling securityholders will include, without limitation, where applicable:
·the names of the selling securityholders;
·the number or amount of securities owned, controlled or directed by each of the selling securityholders;
·the number or amount of securities being distributed for the account of each selling securityholder;
·the number or amount of securities to be owned, controlled or directed by each of the selling securityholders after the distribution, and the percentage that number or amount represents out of the total number or amount of outstanding securities of the class or series being distributed;
·whether the securities are owned by the selling securityholders both of record and beneficially, of record only, or beneficially only;
·if the selling securityholder purchased any of the securities held by it in the two years preceding the date of the prospectus supplement, the date or dates the selling securityholder acquired the securities; and
·if the selling securityholder acquired the securities held by it in the 12 months preceding the date of the prospectus supplement, the cost thereof to the selling securityholder in the aggregate and on an average cost-per-security basis.
We may sell the securities offered by this prospectus to one or more underwriters or dealers for public offering, through agents, directly to one or more purchasers or through a combination of any such methods of sale, including in “at-the-market” offerings, within the meaning of Rule 415(a)(4) of the Securities Act into an existing trading market, on an exchange or otherwise. The name of any such underwriters, dealers or agents involved in the offer and sale of the securities, the amounts underwritten and the nature of its obligation to take the securities will be specified in the applicable prospectus supplement. We have reserved the right to sell the securities directly to investors on our own behalf in those jurisdictions where we are authorized to do so. The sale of the securities may be effected in one or more transactions (a) on any national or international securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, (b) in the over-the-counter market, (c) in transactions otherwise than on such exchanges or in the over-the-counter market or (d) through the writing of options. Each time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price of the securities and the proceeds to us, if applicable.
We and our agents and underwriters may offer and sell the securities at a fixed price or prices that may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The securities may be offered on an exchange, which will be disclosed in the applicable prospectus supplement. We may, from time to time, authorize dealers, acting as our agents, to offer and sell the securities upon such terms and conditions as set forth in the applicable prospectus supplement. We may also sell the securities offered by any applicable prospectus supplement in “at-the-market offerings” within the meaning of Rule 415 of the Securities Act made through the facilities of Nasdaq or through a market maker or into an existing trading market, on an exchange or otherwise.
If we use underwriters to sell securities, we will enter into an underwriting agreement with them at the time of the sale to them. In connection with the sale of the securities, underwriters or agents may receive compensation from us in the form of underwriting discounts or commissions and may also receive commissions from purchasers of the securities for whom they may act as agent. The names of any underwriters, any underwriting compensation paid by us to underwriters or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers, will be set forth in the applicable prospectus supplement to the extent required by applicable law. Underwriters may sell the securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions (which may be changed from time to time) from the purchasers for whom they may act as agents. If a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
Dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act. Unless otherwise indicated in the applicable prospectus supplement, an agent will be acting on a best efforts basis.
If so indicated in the prospectus supplement, we will authorize underwriters, dealers or agents to solicit offers by certain specified institutions to purchase offered securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject to any conditions set forth in the applicable prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such contracts. The underwriters and other persons soliciting such contracts will have no responsibility for the validity or performance of any such contracts. Offers to purchase the securities being offered by this prospectus may also be solicited directly.
Underwriters, dealers and agents may be entitled, under agreements entered into with us, to indemnification against and contribution towards certain civil liabilities, including any liabilities under the Securities Act.
To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. These may include over-allotment, stabilization, syndicate short covering transactions and penalty bids. Over-allotment involves sales in excess of the offering size, which creates a short position. Stabilizing transactions involve bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate short covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim selling concessions from dealers when the securities originally sold by the dealers are purchased in covering transactions to cover syndicate short positions. These transactions may cause the price of the securities sold in an offering to be higher than it would otherwise be. These transactions, if commenced, may be discontinued by the underwriters at any time.
Any selling shareholders, which may include donees, pledgees, transferees or other successors-in-interest selling common shares or interests in such securities received after the date of this prospectus from a selling shareholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their common shares or interests therein on any stock exchange, market or trading facility on which the common shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling shareholders may use any one or more of the following methods when disposing of common shares or interests therein:
·ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
·block trades in which the broker-dealer will attempt to sell the common shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
·purchases by a broker-dealer as principal and resale by the broker-dealer for its own account;
·an exchange distribution in accordance with the rules of the applicable exchange;
·privately negotiated transactions;
·short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC;
·through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
·through agreements between broker-dealers and the selling shareholders to sell a specified number of such common shares at a stipulated price per share;
·a combination of any such methods of sale; and
·any other method permitted by applicable law.
The selling shareholders may, from time to time, pledge or grant a security interest in some or all of the common shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the common shares, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b) or other applicable provision of the Securities Act amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer the common shares in other circumstances, in which case the pledgees, transferees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
In addition, a selling shareholder that is an entity may elect to make a pro rata in-kind distribution of securities to its members, partners or shareholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus with a plan of distribution. Such members, partners or shareholders would thereby receive freely tradeable securities pursuant to the distribution through a registration statement. To the extent a distributee is an affiliate of ours (or to the extent otherwise required by law), we may, at our option, file a prospectus supplement in order to permit the distributees to use the prospectus to resell the securities acquired in the distribution.
In connection with the sale of our common shares or interests therein, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common shares in the course of hedging the positions they assume. The selling shareholders may also sell common shares short and deliver these securities to close out their short positions, or loan or pledge the common shares to broker-dealers that in turn may sell these securities. The selling shareholders may also enter into options or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to each such broker-dealer or other financial institution of common shares offered by this prospectus, which common shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling shareholders from the sale of the common shares offered by them will be the purchase price of the common shares less discounts or commissions, if any. Each of the selling shareholders reserves the right to accept and, together with its agents from time to time, to reject, in whole or in part, any proposed purchase of common shares common shares to be made directly or through agents. We will not receive any of the proceeds from this offering.
The selling shareholders also may resell all or a portion of the common shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule.
The selling shareholders and any underwriters, broker-dealers or agents that participate in the sale of the common shares or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the common shares may be underwriting discounts and commissions under the Securities Act. Selling shareholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.
To the extent required, the common shares to be sold, the names of the selling shareholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the common shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common shares may not be sold unless they have has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
We will advise any selling shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of common shares in the market and to the activities of the selling shareholders and their affiliates. In addition, to the extent applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling shareholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the common shares against certain liabilities, including liabilities arising under the Securities Act.
We may agreed to indemnify any selling shareholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the common shares offered by this prospectus.
We may agree with such selling shareholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the common shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement and (2) the date on which all of the common shares may be sold without restriction pursuant to Rule 144 of the Securities Act.
Earnings coverage ratios will be provided in the applicable prospectus supplement relating to any issuance of Debt securities having a term to maturity in excess of one year, as required by applicable securities laws.
Information in respect of prior sales of common shares and other securities distributed under this prospectus and for securities that are convertible or exchangeable into common shares or such other securities within the previous 12-month period will be provided, as required, in a prospectus supplement with respect to the issuance of common shares and/or other securities pursuant to such prospectus supplement.
The outstanding common shares are traded on the Nasdaq under the symbol “LITM”. Trading prices and volumes of the common shares for the previous 12-month period will be provided, as required, in each prospectus supplement.
Directors and Executive Officers
The following table sets forth certain information regarding our directors and executive officers.
NAME |
| AGE |
| POSITION |
Peretz Schapiro |
| 32 |
| Interim Chief Operating Officer and Director |
Keith Li |
| 43 |
| Chief Financial Officer |
Dale Schultz |
| 56 |
| VP of Resource Development |
Brian Youngs |
| 71 |
| Vice President, Exploration |
Nachum Labkowski |
| 37 |
| Director and Chairman of the Board |
Kathleen Skerrett |
| 53 |
| Independent Director |
Brian Imrie |
| 61 |
| Independent Director |
Shlomo Kievman |
| 38 |
| Independent Director |
We are currently searching for a permanent CEO, and have not formally designated an interim CEO. Mr. Schapiro, as interim COO, together with Mr Labkowski as Chairman of the Board are currently handling various tasks that would have usually been handled by a CEO, and Mr Li performs the Company's CFO duties.
Peretz Schapiro. Mr. Schapiro has served as our interim Chief Operating Officer and as a director since January 17, 2023 . Mr. Schapiro holds a Masters degree in Applied Finance and has been a global investor for more than a decade, with a particular focus in the resources sector. He understands the fundamental parameters, strategic drivers, market requirements and what it takes for a high growth business. Mr Schapiro has a diverse professional background, with deep experience in resource exploration, corporate finance, management consulting, marketing and fundraising. Mr Schapiro is also the founding Chairman of Loyal Lithium Ltd (ASX:LLI) Founding Chairman of Summit Minerals (ASX:SUM), and has previously held directorships Asra Minerals Limited (ASX:ASR) and Okapi Resources (ASX:OKR).
Keith Li. Mr. Li has served as our Chief Financial Officer since June 30, 2022. Mr. Li has over 15 years of experience in accounting, audit and executive level financial management. Prior to joining Snow Lake, Mr. Li has been serving as the Chief Financial Officer at Branson Corporate Services Ltd., providing outsourced fractional CFO functions and executive level financial services to public companies, including preparation of IFRS-compliant financial statements and MD&A since November 2017. Prior to joining our company, Mr. Li was a senior auditor with McGovern Hurley LLP from September 2011 to August 2016. From August 2016 to November 2017, he held the role of External Reporting Manager for Sears Canada Inc., and was responsible in overseeing the financial reporting functions of the company. Since joining Branson, Mr. Li had assumed the roles of Chief Financial Officer for many of Branson’s publicly-listed clients, including Pharmadrug Inc. from December 2017 to present, Quinsam Capital Corporation from March 2018 to present, Psyched Wellness Ltd. since January 2020 to present, Jubilee Gold Exploration Ltd. since January 2020 to present, Universal PropTech Inc. from June 2020 to present, Corcel Exploration Inc. since March 2021 to present, US Critical Metals Corp. since August 2021 to present, and Hercules Silver Corp. since November 2022 to present. Mr. Li is responsible in overseeing the financial reporting and accounting functions of these companies. Mr. Li is a Chartered Professional Accountant and holds a Bachelor of Commerce in Finance from McGill University.
Dale Schultz. Mr. Schultz has served as our VP of Resource Development since October 20, 2021 and served as a member of our board of directors from December 2019 to March 2023. Mr. Schultz served as our Chief Operating Officer and Secretary from December 2019 to October 20, 2021. From 2019 Mr. Schultz also managed the exploration program on the Estelle project in Alaska for Nova. From 2018 through 2019, he completed field mapping and sampling of the Temagami green stone belt for Temagami Gold Inc. and Progenitor Metals Corp. Between 2017 and 2018, Mr. Schultz managed a 4000m diamond drill campaign on the Snow Lake Lithium™ property (now owned by Snow Lake Resources) for the previous operator, Nova. From 2016 to 2017 while working for Cobalt Power, he logged core in the Northern Ontario Cobalt Mining Camp. Mr. Schultz has 30 years of exploration and mining experience through roles at Echo Bay Lupin Mine in the Summer of 1986 and 1987, Claude Resources Seabee Mine from March of 1992 to April 1995, Battle Mountain’s Hemlo Camp and Kori Kollo Mine from May of 1995 to April of 2000, and TVX New Britannia Mine, in Snow Lake, Manitoba, from December of 2002 to January 2004. Mr. Schultz has also provided geological consulting services in South and Central America and Asia, and is currently the Principle Geologist with DJS Consulting. He is a graduate of the University of Saskatchewan with a B.Sc. and M.Sc. in Geological Sciences and is a member of the Engineers and Geoscientists of Manitoba.
Brian Youngs. Mr. Youngs joined our company in January 2018 and has served as our Vice President of Exploration since November 2018. Mr. Youngs has more than 25 years of experience in mining exploration. In a number of private and publicly traded junior mining companies, including Randsburg International Gold Corp. from May 2003 to June 2005, Wabana Exploration Inc. from 1999 to 2001 and Meegwich Consultants from 1996 to 2003. He has worked throughout Canada and internationally, as senior airborne geophysics technician with Geotech Ltd. Inc., from June 2008 to December 2017. Mr. Youngs graduated from Northern College – Haileybury School of Mines, Mining Engineering Technician program and is a member of the Ontario Association of Certified Engineering Technicians and Technologists. He has also received a GIS Specialist Diploma from Sault College and a Computer Graphics Design Diploma from Sheridan College.
Nachum Labkowski. Mr. Labkowski has served as a member of our board of directors since November 2018. He is currently the Chief Executive Officer and principal investor in Halevi Enterprises, a private equity firm which Mr. Labkowski founded in 2010 that holds equity in more than 30 private companies and invests in real estate worldwide. Mr. Labkowski’s unique approach to investing has provided significant returns from those companies he has invested in to date.
Brian Imrie. Mr. Imrie is a retired investment banker with over 30 years of experience, primarily with global firms, providing advice and raising capital for companies in multiple industries. He was with Morgan Stanley in New York and Toronto from 1983-1997, Credit Suisse First Boston from 1997-2001, ran Mergers & Acquisitions for National Bank Financial from 2001-2008 and built and ran a global M&A business for KPMG Corporate Finance from 2009-2012. He was previously the Chairman/owner of Debro Inc., a chemical distribution company and serves on several other public and private boards. He received his MBA from Harvard University in 1987 and his BA in Economics from the University of Toronto in 1983.
Shlomo Kievman. Mr. Kievman is an experienced director bringing his extensive experience as a leader in the procurement of ideas and concepts which exemplify American innovation. Mr. Kievman, who has managed and founded several ventures and businesses over the past two decades, has an in-depth understanding and operational capacity for planning and analysis, business plan development, forecasting, financial analysis, and capital commitment planning, as well as competitive analysis and bench marking, providing the tools required to succeed. His work in public and private sectors in the USA and abroad has included business development, financial modeling, action planning, and conceptual design. Mr. Kievman graduated university with honors with a BA in Liberal Arts. He is the principal of Crown Equities, an investment firm transforming the global resources sector, leading several global organizations.
Kathleen Skerrett. Ms. Skerrett is the Chair of the Securities Group at Gardiner Roberts LLP, specializing in advising clients on forming, financing, maintaining and reorganizing public companies. Ms. Skerrett was called to the Bar in Ontario in 1996 after earning a Bachelor of Laws from the University in Toronto in 1994. She also earned a Bachelor of Commerce degree from Trinity College, University of Toronto in 1991 and has completed the Canadian Securities Course. Ms. Skerrett advises clients on all aspects of compliance with corporate and securities laws, including structuring of financing transactions, mergers and acquisition, corporate governance and continuous disclosure reporting. Ms. Skerrett has a broad breadth of industry experience including advising clients in the manufacturing, technology, financial and health and wellness sectors. In particular, she has developed a strong practice in the resource sector with expertise in both structuring mining related contracts and advising on additional public company compliance matters for this sector. Ms. Skerrett also provides advice on a variety of corporate matters to private entities. Ms. Skerrett has acted as a director and/or officer of a number of public companies listed on all of the Canadian stock exchanges and is currently on the board of directors of the Canada’s National Ballet School Foundation.
No family relationship exists between any of our directors and executive officers, except that Nachum Labkowski is Peretz Schapiro’s brother-in-law. There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any person referred to above was selected as a director or member of senior management.
Board of Directors
Nasdaq’s listing rules generally require that a majority of an issuer’s board of directors must consist of independent directors. Our board of directors currently consists of five directors, Peretz Schapiro, Nachum Labkowski, Brian Imrie, Shlomo Kievman and Kathleen Skerrett, three of whom, Mr. Imrie, Mr. Kievman and Ms. Skerrett are independent within the meaning of Nasdaq’s rules.
A director is not required to hold any shares in our company to qualify to serve as a director. Our board of directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and to issue debentures, bonds and other securities, subject to applicable stock exchange limitations, if any, whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third-party.
Board Committees
We have a standing audit committee, a compensation committee and a nominating and corporate governance committee of our board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below.
Audit Committee
Our audit committee consists of Brian Imrie, Shlomo Kievman and Kathleen Skerrett, each of whom satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act and Rule 5605(c)(2) of the Nasdaq Marketplace Rules. Brian Imrie serves as chairman of the audit committee. Our board has determined that each of Brian Imrie, Shlomo Kievman and Kathleen Skerrett qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
The audit committee is responsible for, among other things: (i) retaining and overseeing our independent accountants; (ii) assisting the board in its oversight of the integrity of our financial statements, the qualifications, independence and performance of our independent auditors and our compliance with legal and regulatory requirements; (iii) reviewing and approving the plan and scope of the internal and external audit; (iv) pre-approving any audit and non-audit services provided by our independent auditors; (v) approving the fees to be paid to our independent auditors; (vi) reviewing with our chief executive officer and chief financial officer and independent auditors the adequacy and effectiveness of our internal controls; (vii) reviewing hedging transactions; and (viii) reviewing and assessing annually the audit committee’s performance and the adequacy of its charter.
Compensation Committee
Our compensation committee consists of Nachum Labkowski, Peretz Schapiro and Shlomo Kievman. Shlomo Kievman satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act and Rule 5605(c)(2) of the Nasdaq Marketplace Rules. Nachum Labkowski serves as chairman of the compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
The compensation committee is responsible for, among other things: (i) reviewing and approving the remuneration of our executive officers; (ii) making recommendations to the board regarding the compensation of our independent directors; (iii) making recommendations to the board regarding equity-based and incentive compensation plans, policies and programs; and (iv) reviewing and assessing annually the compensation committee’s performance and the adequacy of its charter.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Nachum Labkowski, Peretz Schapiro and Kathleen Skerrett. Kathleen Skerrett serves as chairman of the nominating and corporate governance committee. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
The nominating and corporate governance committee is responsible for, among other things: (i) identifying and evaluating individuals qualified to become members of the board by reviewing nominees for election to the board submitted by shareholders and recommending to the board director nominees for each annual meeting of shareholders and for election to fill any vacancies on the board; (ii) advising the board with respect to board organization, desired qualifications of board members, the membership, function, operation, structure and composition of committees (including any committee authority to delegate to subcommittees), and self-evaluation and policies; (iii) advising on matters relating to corporate governance and monitoring developments in the law and practice of corporate governance; (iv) overseeing compliance with the our code of ethics; and (v) approving any related party transactions.
The nominating and corporate governance committee’s methods for identifying candidates for election to our board of directors will include the solicitation of ideas for possible candidates from a number of sources - members of our board of directors, our executives, individuals personally known to the members of our board of directors, and other research. The nominating and corporate governance committee may also, from time-to-time, retain one or more third-party search firms to identify suitable candidates.
In making director recommendations, the nominating and corporate governance committee may consider some or all of the following factors: (i) the candidate’s judgment, skill, experience with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions and oversight; (ii) the interplay of the candidate’s experience with the experience of other board members; (iii) the extent to which the candidate would be a desirable addition to the board and any committee thereof; (iv) whether or not the person has any relationships that might impair his or her independence; and (v) the candidate’s ability to contribute to the effective management of our company, taking into account the needs of our company and such factors as the individual’s experience, perspective, skills and knowledge of the industry in which we operate.
Duties of Directors
Under Canadian law, directors have fiduciary obligations to our company. Under the MCA, directors, when exercising the powers and discharging their duties, must act honestly and in good faith with a view to the best interests of our company and exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances.
Under Manitoba corporate law, the MCA imposes specific statutory liabilities on directors of corporations in certain situations. In certain circumstances, directors can be held liable, for example, for the authorization of share issues for a consideration other than money at less than fair market value, or for all debts not exceeding six months’ wages payable to each of the employees for services performed for the corporation while they are directors, or for the payment of a dividend if there were reasonable grounds for believing that the corporation is, or would after the payment be, unable to pay its liabilities as they become due, or the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities and stated capital. Under numerous other provisions in federal and provincial statutes, directors may also face personal liability for, among other things, environmental offences, source deductions from payrolls, and tax remittances. Corporate directors have a number of defenses to legal actions in which it is alleged that they have breached their statutory or fiduciary duties, including:
·dissenting from a resolution passed or action taken at a board meeting, which may relieve the director of any liability for the results of that decision;
·raising a “good faith reliance” defense to an accusation of breach of a fiduciary duty, whereby the director is entitled to rely in good faith on financial statements or reports made by an officer of the corporation, the corporation’s auditor, or by other professionals, such as a lawyer, an accountant, or an engineer; and
·availing themselves of a due diligence defense that permits directors to avoid a number of statutory liabilities, including breach of fiduciary duty, where the directors exercise the same degree of care, diligence and skill as a reasonably prudent person in comparable circumstances.
Conflicts of Interest
There are potential conflicts of interest to which the directors, officers, insiders and promoters of our company will be subject in connection with the operations of our company. Some of the directors, officers, insiders and promoters are engaged in and will continue to be engaged in corporations or businesses which may be in competition with the business of our company. Accordingly, situations may arise where the directors, officers, insiders and promoters will be in direct competition with our company. The directors and officers of our company have a fiduciary obligation to act in the best interests of our company, avoid conflicts of interest and to disclose to all other board members any relevant information about potential conflicts. They have the same obligations to the other companies in respect of which they act as directors and officers. Discharge by the directors and officers of their obligations to our company may result in a breach of their obligations to the other companies, and in certain circumstances this could expose our company to liability to those companies. Similarly, discharge by the directors and officers of their obligations to the other companies could result in a breach of their obligation to act in the best interests of our company. Such conflicting legal obligations may expose our company to liability to others and impair our ability to achieve our business objectives. All of the directors or officers of our company have entered into non-competition or non-disclosure agreements with our company. Conflicts, if any, will be subject to the procedures and remedies as provided under the MCA and applicable securities laws, regulations and policies.
Terms of Directors and Officers
Our officers are appointed by and serve at the discretion of our board of directors. Unless the shareholders, by ordinary resolution, elect directors to hold office for a term expiring later than the close of the next annual meeting of shareholders, the term of office of a director upon election or appointment, subject to Section 103 of the MCA, shall cease at the close of the first annual meeting of shareholders following his or her election or appointment, provided that if no directors are elected at such annual meeting, he or she shall continue in office until his or her successor is elected or appointed. The following persons are disqualified by the MCA from being a director of the Company: (i) anyone who is less than 18 years of age; (ii) a person who is not an individual; and (iii) a person who has the status of a bankrupt.
Employment and Indemnification Agreements
The Company has entered into consulting agreements with entities owned by Peretz Schapiro, Dale Schultz and Brian Youngs. Our executive officers are employed as consultants. Each consulting agreement can be terminated by the Company without cause upon the payment of ninety days’ service fees in lieu of such notice.
Each executive officer has agreed to hold, both during and after the employment agreement expires or is earlier terminated, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information. In addition, certain of our executive officers have agreed to be bound by non-solicitation restrictions set forth in their agreements.
Although as independent contractors our executive officers have been involved in other business activities, we expect that as our business operations ramp up our executive officers will devote substantially all of their time to our business operations.
We have entered into a indemnification agreement with all of our directors and officers, pursuant to which we agree to indemnify them against certain liabilities and expenses incurred by them in connection with claims made by reason of their being a director or officer.
Compensation of Directors and Officers
Currently, there are no requirements for disclosure of the compensation of officers and directors on an individual basis for our most recently completed fiscal year under Canadian law. For the fiscal year ended June 30, 2020 and June 30, 2021, we paid aggregate cash compensation of C$100,500 (approximately US$81,022) and C$200,858 (approximately US$161,930), respectively, to our directors and executive officers as a group. For the fiscal year ended June 30, 2022, we paid aggregate cash compensation of C$728,008 (approximately US$575,091 based on the average exchange rate of 1.2659), to our directors and executive officers as a group. We did not pay any other cash compensation or benefits in kind to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our board of directors may determine compensation to be paid to the directors and the executive officers. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors and the executive officers. For information regarding share awards granted to our directors and executive officers, see “—Stock Option Plan.”
We plan to pay aggregate cash compensation of US$144,000 and US$820,000 per fiscal year, respectively, to our directors and executive officers as a group.
Stock Option Plan
On May 1, 2019, we established the Snow Lake Resources Ltd. Stock Option Plan, which, as amended and restated on October 26, 2021, is referred to herein as the “Plan”). The purpose of the Plan is to grant stock options, or Options, to encourage eligible persons to remain with our Company and to attract new directors, officers, employees and consultants. The aggregate number of common shares that may be reserved for issuance pursuant to Options under the Plan shall not exceed 2,406,732 common shares. On September 7, 2022, the Plan was purported to be further amended, which was ratified on May 17, 2023, to add cashless exercise of the Options under the Plan. Under cashless exercise, a participant may elect to exercise an Option without payment of the aggregate exercise price due on such exercise with written notice to the Company. No fractional common shares will be issued to any participant electing a cashless exercise.
Options give the option holder the right to acquire from us a designated number of common shares at a purchase price that is fixed upon the grant of the option. The exercise price shall not be lower than the greater of the closing market prices of the underlying securities on: (a) the trading day prior to the date of grant of the Options; and (b) the date of grant of the Options.
The following summary briefly describes the principal features of the Plan and is qualified in its entirety by reference to the full text of the Plan.
Purposes of Plan: The purpose of the Plan is to advance the interests of our Company, through the grant of Options, by providing an incentive mechanism to foster the interest of Eligible Persons in the success of our Company and our Affiliates; encouraging Eligible Persons to remain with our Company; and attracting new directors, officers, employees and consultants.
Administration of the Plan: The Plan is currently administered by the Board of Directors, or the Board. The Board shall have the authority to determine the Eligible Persons to whom Options are granted, to grant such Options, and to determine any terms and conditions, limitations and restrictions in respect of any particular Option grant, including but not limited to the nature and duration of the restrictions, if any, to be imposed upon the acquisition, sale or other disposition of common shares acquired upon exercise of the Option, and the nature of the events and the duration of the period, if any, in which any Participant’s rights in respect of an Option or common shares acquired upon exercise of an Option may be forfeited; and to interpret the terms of the Plan, to make all such determinations and take all such other actions in connection with the implementation, operation and administration of the Plan, and to adopt, amend and rescind such administrative guidelines and other rules and regulations relating to the Plan. The Board’s interpretations, determinations, guidelines, rules and regulations shall be conclusive and binding upon our Company, Eligible Persons, Participants and all other persons.
Eligible Persons: Eligible Persons include Directors, Officers, Employees or Consultants. An Eligible Person may receive Options on more than one occasion and may receive separate Options, with differing terms, on any one or more occasions.
Shares Available Under the Plan: The aggregate number of common shares that may be reserved for issuance pursuant to Options under the Plan shall not exceed 10% of the outstanding common shares at the time of the granting of Options, less the aggregate number of common shares then reserved for issuance pursuant to any other share compensation arrangement.
As of the date of this prospectus, 584,325 of our common shares are reserved for issuance under the Plan, 952,407 of our common shares are currently potentially issuable upon the exercise of outstanding options at an exercise price of US$7.50 per share, and 520,000 of our common shares are potentially issuable upon the exercise of outstanding options currently issued and outstanding at an exercise price of C$2.50 (approximately US$2.02) per share, and 350,000 of our common shares are currently potentially issuable upon the exercise of outstanding options issued and outstanding at an exercise price of US$2.50 per share.
Stock Options:
General. Subject to the provisions of the Plan, the Board has the authority to determine all grants of stock options. That determination will include: (i) the number of shares subject to any option; (ii) the exercise price per share; (iii) the expiration date of the option; (iv) the manner, time and date of permitted exercise; (v) other restrictions, if any, on the option or the shares underlying the option; and (vi) any other terms and conditions as the administrator may determine. No fractional common shares shall be reserved for issuance under the Plan and the Board may determine the manner in which an Option, insofar as it relates to the acquisition of a fractional Common Share, shall be treated.
Option Price. Our Company must not grant Options with an exercise price lower than the greater of the closing market prices of the underlying securities on: (a) the trading day prior to the date of grant of the Options; and (b) the date of grant of the Options.
Exercise of Options. An option may be exercised only in accordance with the terms and conditions for the option agreement as established by the administrator at the time of the grant. The option must be exercised by notice to us, accompanied by payment of the exercise price. Payments may be made in cash or, at the option of the administrator, by actual or constructive delivery of shares of Common Stock to the holder of the option based upon the fair market value of the shares on the date of exercise.
Expiration of Options. if not previously exercised, an Option will expire on the expiration date established by the administrator at the time of grant. In the case of stock options, such term cannot exceed ten years.
Blackout Period. The expiration date of an Option shall automatically extend if such expiration date falls within a period, or the blackout period, during which our company prohibits Optionees from exercising their Options to the extent that: (i) the blackout period is formally imposed by our company pursuant to its internal trading policies as a result of the bona fide existence of undisclosed material information. For greater certainty, in the absence of our company formally imposing a blackout period, the expiration date of any Options will not be automatically extended in any circumstances; (ii) the blackout period must expire upon the general disclosure of the undisclosed material information. The expiration date of the affected Options can be extended to no later than ten business days after the expiry of the blackout period; and (iii) the automatic extension of an Optionee’s Options will not be permitted where the Optionee or our company is subject to a cease trade order (or similar order under securities laws) in respect of our common shares.
Vesting Schedule. Options shall vest as determined by the Board. Options that may be granted to Eligible Persons performing investor relations activities shall vest over a minimum of 12 months with no more than 1/4 of such Options vesting in any three month period.
No Rights as a Shareholder. Nothing in the Plan or any Option shall confer upon a Participant any rights as a shareholder of our company with respect to any of the common shares underlying an Option unless and until such Participant shall have become the holder of such common shares upon exercise of such Option in accordance with the terms of the Plan.
Amendment, Suspension and Termination. The Board may amend, subject to the approval of any regulatory authority whose approval is required, suspend or terminate the Plan or any portion thereof. No such amendment, suspension or termination shall alter or impair any outstanding unexercised Options or any rights without the consent of the Participant holding such outstanding Options. If the Plan is suspended or terminated, the provisions of the Plan and any administrative guidelines, rules and regulations relating to the Plan shall continue in effect for the duration of such time as any Option remains outstanding.
Non-Assignability. Options may not be assigned or transferred.
Governing Law. The Plan, all Option Agreements, the grant and exercise of Options thereunder, and the sale, issuance and delivery of common shares thereunder upon exercise of Options are governed by the laws of the Province of Manitoba and the federal laws of Canada. The Courts of the Province of Manitoba shall have the exclusive jurisdiction to hear and decide any disputes or other matters arising under the Plan.
Other Material Provisions: Every Option shall be evidenced by an Option Agreement executed by us and the Participant, which shall, if the participant is an employee, consultant or management company employee, contain a representation and warranty by us and such Participant. In the event of changes in our outstanding common shares by reason of any share consolidation or split, reclassification or other capital reorganization, or a stock dividend, arrangement, amalgamation, merger or combination, or any other change to, event affecting, exchange of or corporate change or transaction affecting the common shares, the Board shall make, as it shall deem advisable and subject to the requisite approval of the relevant regulatory authorities, appropriate substitution and/or adjustment in: (i) the number and kind of shares or other securities or property reserved or to be allotted for issuance pursuant to the Plan; (ii) the number and kind of shares or other securities or property reserved or to be allotted for issuance pursuant to any outstanding unexercised Options, and in the exercise price for such shares or other securities or property; and (iii) the vesting of any Options.
Restricted Share Units
The Board has the authority to grant restricted share units (“RSUs”) to directors, officers, employees or consultants of the Company. The Board may specify the terms of RSUs at its discretion, including the number of RSUs granted, and vesting and acceleration provisions. Each RSU provides the recipient with the right to receive one (1) common share as a discretionary payment in consideration of past services or as an incentive for future services, with such additional provisions and restrictions as the Board may determine. Each RSU grant (“RSU Award”) shall be evidenced by a restricted share unit award agreement (the “RSU Award Agreement”) which shall be subject to the terms and conditions set out in the RSU Award Agreement.
RSUs may not be assigned or transferred, unless specifically permitted in a RSU Award Agreement. If not previously vested, the common shares reserved for issuance pursuant to the RSU Award expire on the earliest of the date specified by the Board, subject to a maximum term of ten (10) years from the date of the RSU Award, unless accelerated or earlier terminated in connection with certain events. All vested and unvested RSU Awards terminate immediately upon termination of the recipient’s services to the Company. The Board may amend, alter, suspend, discontinue or cancel the RSUs, prospectively or retroactively, provided that, no such amendment adversely affect the recipient’s material rights under the RSU Award Agreement without the recipient’s consent.
Certain holders of RSUs have a right (the “Put Right”) exercisable at any one or more time on or after any RSUs are vested, but prior to the conversion into common shares to sell the vested RSUs (the “Put RSUs”) in which case, the Company will be obligated to acquire the Put RSUs at a price equal to US$2.50 per Put RSU.
No RSU Award Agreement shall confer upon the holder of RSUs any rights as a shareholder of the Company with respect to any of the common shares underlying RSUs unless and until such holder of RSUs shall have become the holder of such common shares upon the vesting of such RSUs in accordance with the terms of the RSU Award Agreement.
All RSU Award Agreements, and the RSU Awards, and the issuance and delivery of the common shares thereunder upon vesting of RSUs are governed by the laws of the Province of Manitoba and the federal laws of Canada. The Courts of the Province of Manitoba shall have the exclusive jurisdiction to hear and decide any disputes or other matters arising under the RSU Award Agreements.
DESCRIPTION OF SECURITIES
The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize the material terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement the particular terms of any securities offered by such prospectus supplement. If we so indicate in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized below.
We may sell from time to time, in one or more offerings, common shares, preferred shares, warrants, debt securities and/or units comprising any combination of these securities. The total dollar amount of all securities that we may issue under this prospectus will not exceed US$100 million.
General
As of the date of this prospectus, we had 18,185,810 common shares issued and outstanding held by 137 holders as shown on our shareholder list dated as of May 1, 2023.
Our share capital consists of an unlimited number of common shares, no par value per share, of which 18,185,810 are issued and outstanding, and an unlimited number of preferred shares, issuable in series, no par value per share, none of which are issued and outstanding.
Options
We have granted to employees, consultants, and directors options to purchase 1,822,407 common shares under our stock option plan and we currently have 584,325 remaining options available for issuance under our amended and restated stock option plan ratified on May 17, 2023. See “Management—Stock Option Plan.”
Restricted Share Units
As of the date of this prospectus, there are 470,000 RSUs outstanding pursuant to RSU Award Agreements, none of which have vested, 70,000 of the RSUs vest on January 30, 2024, with the remainder to vest at various stages pending conditions of certain milestones.
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History of Securities Issuances
The following is a list of securities issuances since June 30, 2022:
On January 27, 2023, the Company issued 240,000 common shares to settle a debt of USD$480,000 owed to a director, in relation to services related to the requisitioning of shareholders, which the Company had agreed to complete the settlement on behalf of the director.
On January 30, 2023, the Company granted 350,000 stock options to various directors. The options are exercisable at a price of USD$2.50 per common share for a period of five years. The options vested immediately on grant. The Company also granted 470,000 RSUs to various directors. 70,000 RSUs vest on January 30, 2024, with the remainder to vest at various stages pending conditions of certain milestones.
On February 16, 2023, 110,000 stock options exercisable at USD$7.50 previously granted to certain former officers and directors of the Company, were cancelled.
On February 16, 2023, the Company granted 225,000 warrants to an advisor of the Company. 75,000 of the warrants are exercisable at a price of USD$3.00 per common share, 75,000 of the warrants are exercisable at a price of USD$4.00 per common share, and 75,000 of the warrants are exercisable at a price of USD$5.00 per common share, all for a period of two years from the date of issuance.
On March 9, 2023, the Company issued 21,052 common shares to complete the exercise of warrants for proceeds to us of C$31,578 (approximately US$23,311.68).
On March 31, 2023, the Company granted 500,000 warrants as part of a settlement with shareholders who successfully requested a special meeting of shareholders. The warrants are exercisable at a price of USD$2.50 per common share for a period of three years from the date of issuance.
Limitation of Liability and Indemnification of Directors and Officers
Under the MCA, we may indemnify our current or former directors or officers or another individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity which the Company is or was a shareholder or creditor of, and their heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity.
However, indemnification is prohibited under the MCA unless the individual:
·acted honestly and in good faith with a view to our best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at our request; and
·in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful;
Our bylaws require us to indemnify each of our current or former directors and officers and each individual who acts or acted at our request as a director or officer of another entity which the Company is or was a shareholder or creditor of, as well as their respective heirs and successors, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal or administrative action or proceeding to which they were made a party by reason of being or having been a director or officer, except as may be prohibited by the MCA.
We have entered into indemnification agreements with our officers and directors, pursuant to which we agree to indemnify them against certain liabilities and expenses incurred by them in connection with claims made by reason of their being a director or officer. The indemnity agreements with our directors and our executive officers provide, among other things, that we will indemnify our directors and executive officers to the fullest extent permitted by law from and against all liabilities, costs, charges and expenses incurred as a result of our directors and executive officers actions in the exercise of their duties as a director or officer; provided that, we shall not indemnify such individuals if, among other things, they did not act honestly and in good faith with a view to our best interests, in the case of a criminal or penal action, the individuals did not have reasonable grounds for believing that their conduct was lawful or the individuals did not exercise the care, diligence and skill that a reasonable prudent person would exercise in comparable circumstances.
At present, we are not aware of any pending or threatened litigation or proceeding involving any of our current directors, officers, employees or agents in which indemnification would be required or permitted.
Material differences between Manitoba Corporate Law and Delaware General Corporation Law
Our corporate affairs are governed by our articles of incorporation, as amended, and bylaws and the provisions of the MCA. The MCA differs from the various state laws applicable to U.S. corporations and their stockholders. The following is a summary of the material differences between the MCA and the Delaware General Corporation Law, or DGCL. This summary is qualified in its entirety by reference to the DGCL, the MCA and our governing corporate instruments.
Number and Election of Directors
Under the DGCL, the board of directors must consist of at least one number. The number of directors shall be fixed by the bylaws of the corporation, unless the certificate of incorporation fixes the number of directors, in which case a change in the number of directors shall only be made by an amendment of the certificate of incorporation. Under the DGCL, directors are elected at annual stockholder meetings by a plurality vote of the stockholders, unless a shareholder-adopted bylaw prescribes a different required vote.
Under the MCA, the board of directors must consist of at least three members, at least two of whom shall not be officers or employees of us or our affiliates, so long as Snow Lake has issued securities of which are or were part of a distribution to the public and remain outstanding and are held by more than one person. Under the MCA, the shareholders of a corporation elect directors by ordinary resolution at each annual meeting of shareholders at which such an election is required.
Director Qualifications
Delaware law does not have director residency requirements comparable to those of the MCA. Delaware law permits a corporation to prescribe qualifications for directors under its certificate of incorporation or bylaws.
Under the MCA, a director is not required to hold a share in our capital as qualification for his or her office but must be qualified as required by the MCA to become, act or continue to act as a director. The MCA provides that the following persons are disqualified from being a director of a corporation: (i) a person who is less than 18 years of age; (ii) a person who is not an individual; and (iii) a person who has the status of a bankrupt. Further, the MCA provides that at least 25% of the directors of the company must be resident Canadians, or at least one of the directors if the company has less than four directors.
Vacancies on the Board of Directors
Under the DGCL, vacancies and newly created directorships resulting from an increase in the authorized number of directors, may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.
Under the MCA, vacancies that exist on the board of directors may be filled by the board of directors if the remaining directors constitute a quorum, unless the vacancy results from an increase in the number or minimum number of directors or a failure to elect the number or minimum number of directors provided for in the articles, in which case, or if the remaining directors do not constitute a quorum, the remaining directors shall call a meeting of shareholders to fill the vacancy.
Transactions with Directors and Officers
The DGCL generally provides that no transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation or other organization in which one or more of its directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee which authorizes the transaction, or solely because any such director’s or officer’s votes are counted for such purpose, if (i) the material facts as to the director’s or officer’s interest and as to the transaction are known to the board of directors or the committee, and the board or committee in good faith authorizes the transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (ii) the material facts as to the director’s or officer’s interest and as to the transaction are disclosed or are known to the stockholders entitled to vote thereon, and the transaction is specifically approved in good faith by vote of the stockholders; or (iii) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee or the stockholders.
The MCA requires that a director or officer of a corporation who is: (i) is a party to a material contract or proposed material contract with the corporation; or (ii) is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the corporation, shall disclose in writing to the corporation or request to have entered in the minutes of meetings of directors (or committees of directors) the nature and extent of his or her interest. An interested director is prohibited from voting on a resolution to approve the contract or transaction except in specific circumstances, such as a contract or transaction relating primarily to his or her remuneration as a director, a contract or transaction for indemnification or liability insurance of the director, or a contract or transaction with an affiliate of the corporation.
If a director or officer does not disclose his or her interest in accordance with the MCA, or (in the case of a director) votes in respect of a resolution on a contract or transaction in which he or she is interested contrary to the MCA, the corporation or a shareholder may ask the court to set aside the contract or transaction, according to the conditions the court sees fit. However, if a director or officer has disclosed his or her interest in accordance with the MCA and the contract or transaction was reasonable and fair to the corporation at the time it was approved by the directors, the contract or transaction is not invalid by reason only of the interest of the director or officer or that the director is present at or is counted to determine the presence of a quorum at the meeting of directors that authorized the contract or transaction.
Limitation on Liability of Directors
The DGCL permits a corporation to include a provision in its certificate of incorporation eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for a breach of the director’s fiduciary duty as a director, except for liability: (i) for breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; (iii) under Section 174 of the DGCL which concerns unlawful payment of dividends, stock purchases or redemptions; or (iv) for any transaction from which the director derived an improper personal benefit.
The MCA does not permit the limitation of a director’s liability as the DGCL does. However, the MCA provides that the corporation may indemnify directors and officers against liabilities incurred in the course of their duties and may purchase and maintain insurance against any liability incurred by the individual in their capacity as a director or officer. Further, the MCA provides that an officer or director is entitled to indemnity from a corporation in respect of all costs, charges and expenses reasonably incurred by him or her in connection with the defence of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or officer of the corporation, if the person seeking indemnity (i) was substantially successful on the merits in his or her defence of the action or proceeding, and (ii) he or she acted honestly and in good faith with a view to the best interest of the corporation, and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds for believing that his or her conduct was lawful. A director may also limit his liability by having his or her dissent entered into the minutes in respect of a decision or, by resigning from the board prior to the decision being made.
Call and Notice of Shareholder Meetings
Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than ten nor more than 60 days before the date of the meeting and shall specify the place, date, hour, and purpose or purposes of the meeting.
Under the DGCL, an annual or special stockholder meeting is held on such date, at such time and at such place as may be designated by the board of directors or any other person authorized to call such meeting under the corporation’s certificate of incorporation or bylaws. If an annual meeting for election of directors is not held on the date designated or an action by written consent to elect directors in lieu of an annual meeting has not been taken within 30 days after the date designated for the annual meeting, or if no date has been designated, for a period of 13 months after the later of the last annual meeting or the last action by written consent to elect directors in lieu of an annual meeting, the Delaware Court of Chancery may summarily order a meeting to be held upon the application of any stockholder or director.
Under the MCA, written notice of the shareholders must be given to each shareholder entitled to vote at the meeting, each director and the auditor of the corporation not less than twenty-one nor more than fifty days before the date of the meeting and shall specify the time and place of the meeting. Notice of a meeting of shareholders at which special business is to be transacted must state: (a) the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment thereon; and (b) the text of any special resolution to be submitted to the meeting.
Under the MCA, an annual meeting of shareholders must be held no later than fifteen months after holding the last preceding annual meeting. Under the MCA, the directors of a corporation may call a special meeting at any time.
In addition, holders of not less than five percent of the issued shares of a corporation that carry the right to vote at a meeting sought to be held may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition.
Shareholder Action by Written Consent
Under the DGCL, a majority of the stockholders of a corporation may act by written consent without a meeting unless such action is prohibited by the corporation’s certificate of incorporation.
Under the MCA, a written resolution signed by all the shareholders of a corporation who would have been entitled to vote on the resolution at a meeting is effective to approve the resolution.
Shareholder Nominations and Proposals
Under the MCA, a shareholder entitled to vote at a shareholders’ meeting may submit a shareholder proposal relating to matters which the shareholder wishes to propose and discuss at a shareholders’ meeting and, subject to certain exceptions, such shareholder’s compliance with the prescribed time periods and other requirements of the MCA pertaining to shareholder proposals, the corporation is required to include such proposal in the information circular pertaining to the meeting for which it solicits proxies. Notice of such a proposal must be provided to the corporation at least 90 days before the anniversary date of the last annual shareholders’ meeting.
In addition, the MCA requires that any shareholder proposal that includes nominations for the election of directors must be signed by one or more holders of shares representing in the aggregate not less than five percent of the shares or five percent of the shares of a class or series of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented.
The DGCL does not have a comparable provision.
Amendment of Governing Instrument
Generally, under the DGCL, the affirmative vote of the holders of a majority of the outstanding stock entitled to vote is required to approve a proposed amendment to the certificate of incorporation, following the adoption of the amendment by the board of directors of the corporation, provided that the certificate of incorporation may provide for a greater vote. Under the DGCL, holders of outstanding shares of a class or series are entitled to vote separately on an amendment to the certificate of incorporation if the amendment would have certain consequences, including changes that adversely affect the rights and preferences of such class or series.
Under the DGCL, after a corporation has received any payment for any of its stock, the power to adopt, amend or repeal bylaws shall be vested in the stockholders entitled to vote; provided, however, that any corporation nay, in its certificate of incorporation, provide that bylaws may be adopted, amended or repealed by the board of directors. The fact that such power has been conferred upon the board of directors shall not divest the stockholders of the power nor limit their power to adopt, amend or repeal the bylaws.
Under the MCA, amendments to the articles of incorporation generally require the approval of not less than two-thirds of the votes cast by shareholders entitled to vote on the resolution. Specified amendments may also require the approval of other classes of shares. If the amendment is of a nature affecting a particular class or series in a manner requiring a separate class or series vote, that class or series is entitled to vote on the amendment whether or not it otherwise carries the right to vote.
Under the MCA, the directors may, by resolution, make, amend or repeal any bylaws that regulate the business or affairs of a corporation and they must submit the bylaw, amendment or repeal to the shareholders at the next meeting of shareholders, and the shareholders may confirm, reject or amend the bylaw, amendment or repeal.
Votes on Mergers, Consolidations and Sales of Assets
The DGCL provides that, unless otherwise provided in the certificate of incorporation or bylaws, the adoption of a merger agreement requires the approval of a majority of the outstanding stock of the corporation entitled to vote thereon.
Under the MCA, certain extraordinary corporate actions, such as amalgamations (other than with certain affiliated corporations), continuances and sales, leases or exchanges of the property of a corporation if as a result of such alienation the corporation would be unable to retain a significant part of its business activities, and other extraordinary corporate actions such as liquidations, dissolutions and (if ordered by a court) arrangements, are required to be approved by “special resolution” of the shareholders.
A “special resolution” is a resolution passed by not less than two-thirds of the votes cast by the shareholders who voted in respect of the resolution or signed by all shareholders entitled to vote on the resolution. In specified cases, a special resolution to approve the extraordinary corporate action is also required to be approved by the holders of a class or series of shares, including in certain cases a class or series of shares not otherwise carrying voting rights.
Dissenter’s Rights of Appraisal
Under the DGCL, a stockholder of a Delaware corporation generally has the right to dissent from a merger or consolidation in which the Delaware corporation is participating, subject to specified procedural requirements, including that such dissenting stockholder does not vote in favor of the merger or consolidation. However, the DGCL does not confer appraisal rights, in certain circumstances, including if the dissenting stockholder owns shares traded on a national securities exchange and will receive publicly traded shares in the merger or consolidation. Under the DGCL, a stockholder asserting appraisal rights does not receive any payment for his or her shares until the court determines the fair value or the parties otherwise agree to a value. The costs of the proceeding may be determined by the court and assessed against the parties as the court deems equitable under the circumstances.
Under the MCA, each of the following matters listed will entitle shareholders to exercise rights of dissent and to be paid the fair value of their shares: (i) any amalgamation with another corporation (other than with certain affiliated corporations), (ii) an amendment to the corporation’s articles to add, change or remove any provisions restricting or constraining the issue or transfer of that class of shares, (iii) an amendment to the corporation’s articles to add, change or remove any restriction upon the business or businesses that the corporation may carry on, (iv) a continuance under the laws of another jurisdiction, (v) a sale, lease or exchange of all or substantially all the property of the corporation other than in the ordinary course of business, (vi) an amendment to the corporation’s articles to convert the corporation from a corporation with share capital into a corporation without share capital (or vice versa), or (vii) certain amendments to the articles of a corporation which require a separate class or series vote by a holder of shares of any class or series.
However, a shareholder is not entitled to dissent if an amendment to the articles is effected by a court order approving a reorganization or by a court order made in connection with an action for an oppression remedy, unless otherwise authorized by the court. The MCA provides these dissent rights for both listed and unlisted shares.
Under the MCA, a shareholder may, in addition to exercising dissent rights, seek an oppression remedy where: (i) any act or omission of a corporation or any of its affiliates effects a result; (ii) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner; or (iii) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner; that is oppressive or unfairly prejudicial or that unfairly disregards the interests of any securityholder.
Oppression Remedy
The MCA provides an oppression remedy that enables a court to make any order, whether interim or final, to rectify matters that are oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, any security holder, creditor, director or officer of the corporation if an application is made to a court by a “complainant”. An “complainant” with respect to a corporation means any of the following: (i) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of a corporation or any of its affiliates; (ii) a present or former officer or director of the corporation or any of its affiliates; (iii) the director appointed pursuant to the MCA; and (iv) any other person who in the discretion of the court has the interest to make the application.
The oppression remedy provides the court with very broad and flexible powers to intervene in corporate affairs to protect shareholders and other complainants by making any interim or final order that it thinks fit including, without limiting the foregoing, (i) an order restraining the conduct complained of, (ii) an order appointing a receiver or receiver-manager, (iii) an order to regulate the corporation’s affairs by amending the articles or by-laws or creating or amending a unanimous shareholders agreement, (iv) an order directing an issue or exchange of securities, (v) an order appointing directors in place of or in addition to all or any of the directors then in office, (vi) an order directing a corporation, subject to certain restrictions, or any other person, to purchase securities of a security holder, (vii) an order directing the corporation, subject to certain restrictions, or any other person, to pay to a security holder any part of the moneys paid by him or her for securities, (viii) an order varying or setting aside a transaction or contract to which a corporation is a party and compensating the corporation or any other party to the transaction or contract, (ix) an order requiring the corporation, within a time specified by the court, to produce to the court or an interested person financial statements, (x) an order compensating an aggrieved person, (xi) an order directing rectification of the registers or other records of a corporation; (xii) an order liquidating and dissolving the corporation; (xiii) an order directing an investigation; or (xiv) an order requiring the trial of any issue. While conduct that is in breach of fiduciary duties of directors or that is contrary to the legal right of a complainant will normally trigger the court’s jurisdiction under the oppression remedy, the exercise of that jurisdiction does not depend on a finding of a breach of those legal and equitable rights. Furthermore, the court may order a corporation to pay the interim costs, including legal fees and disbursements, of an applicant seeking an oppression remedy, but the applicant may be held accountable for interim costs on final disposition of the complaint. The DGCL does not provide for a similar remedy.
Shareholder Derivative Actions
Under Delaware law, stockholders may bring derivative actions on behalf of, and for the benefit of, the corporation. The plaintiff in a derivative action on behalf of the corporation either must be or have been a stockholder of the corporation at the time of the transaction or must be a stockholder who became a stockholder by operation of law in the transaction regarding which the stockholder complains.
Under the MCA, a complainant may apply to a court for leave to bring an action in the name of, and on behalf of, the corporation or its subsidiary, or to intervene in an existing action to which the corporation or its subsidiary is a party, for the purpose of prosecuting, defending or discontinuing an action on behalf of the corporation or on behalf of its subsidiary. Under the MCA, no action may be brought and no intervention in an action may be made unless a court is satisfied that: (i) the complainant has given the required notice to the directors of the corporation or of the subsidiary, as applicable, of the shareholder’s intention to apply to the court if the directors do not bring, diligently prosecute or defend or discontinue the action; (ii) the complainant is acting in good faith; (iii) it appears to be in the best interests of the corporation or its subsidiary that the action be brought, prosecuted, defended or discontinued.
Under the MCA, the court in a derivative action may make any order it thinks fit including, without limiting the generality of the foregoing, (i) an order authorizing the complainant or any other person to control the conduct of the action, (ii) an order giving directions for the conduct of the action, (iii) an order directing that any amount adjudged payable by a defendant in the action shall be paid, in whole or in part, directly to former and present security holders of the corporation or its subsidiary instead of to the corporation or its subsidiary, and (iv) an order requiring the corporation or its subsidiary to pay reasonable legal fees incurred by the complainant in connection with the action.
Anti-Takeover and Ownership Provisions
Unless an issuer opts out of the provisions of Section 203 of the DGCL, Section 203 generally prohibits a public Delaware corporation from engaging in a “business combination” with a holder of 15% or more of the corporation’s voting stock (as defined in Section 203), referred to as an interested stockholder, for a period of three years after the date of the transaction in which the interested stockholder became an interested stockholder, except as otherwise provided in Section 203. For these purposes, the term “business combination” includes mergers, assets sales and other similar transactions with an interested stockholder.
Rules and policies of certain Canadian securities regulatory authorities, including the Manitoba Securities Commission, such as Multilateral Instrument 61-101—Protection of Minority Security Holders in Special Transactions, or National Instrument 62-104 – Take-over Bids and Issuer Bids, contain requirements in connection with, among other things, ‘related party transactions” and “business combinations”, including, among other things, any transaction by which an issuer directly or indirectly engages in the following with a related party: acquires, sells, leases or transfers an asset, acquires the related party, acquires or issues treasury securities, amends the terms of a security if the security is owned by the related party or assumes or becomes subject to a liability or takes certain other actions with respect to debt.
Under Multilateral Instrument 61-101, the term “related party” includes directors, senior officers and holders of more than 10% of the voting rights attached to all outstanding voting securities of the issuer or holders of a sufficient number of any securities of the issuer to materially affect control of the issuer.
Multilateral Instrument 61-101 requires, subject to certain exceptions, the preparation of a formal valuation relating to certain aspects of the transaction and more detailed disclosure in the proxy material sent to security holders in connection with related party transaction including related to the valuation. Multilateral Instrument 61-101 also required, subject to certain exceptions, that an issuer not engage in a related party transaction unless the shareholders of the issuer, other than the related parties, approve the transaction by a simple majority of the votes cast.
National Instrument 62-104 provides that a take-over bid is triggered when a person makes “an offer to acquire voting securities or equity securities of a class made to one or more persons … where the securities subject to the offer to acquire, together with the offeror’s securities, constitute in the aggregate 20% or more of the outstanding securities of that class of securities at the date of the offer to acquire...” When a take-over bid is triggered, an offeror must comply with certain requirements. These include, among other things, making the offer of identical consideration to all holders of the class of security that is the subject of the bid; making a public announcement of the bid in a newspaper; and sending out a bid circular to security holders which explains the terms and conditions of the bid. Directors of an issuer whose securities are the subject of a take-over bid are required to evaluate the proposed bid and circulate a directors’ circular indicating whether they recommend to accept or reject the bid or are not making a recommendation regarding the bid. Strict timelines must be adhered to.
National Instrument 62-104 further requires that whenever a person acquires beneficial ownership of, or control or direction over, voting or equity securities of any class of a reporting issuer or securities convertible into voting or equity securities of any class of a reporting issuer that, together with the person’s securities of that class, would constitute 10% or more of the outstanding securities of that class, the person must promptly file a press release announcing that fact and file an “early warning report” with applicable Canadian securities regulators. An additional news release and report must be filed at each instance the person acquires an additional 2% or more of the outstanding securities or securities convertible into 2% or more of the outstanding securities.
An “issuer bid” is defined in Multilateral Instrument 62-104 to be “an offer to acquire or redeem securities of an issuer made by the issuer to one or more persons…” Similar requirements to a takeover bid exist for issuer bids. Multilateral Instrument 62-104 also contains a number of exemptions to the take-over bid and issuer bid requirements.
Other Important Provisions in our Articles of Incorporation and Bylaws
The following is a summary of certain important provisions of our articles of incorporation, as amended, and our bylaws, as amended. Please note that this is only a summary, is not intended to be exhaustive and is qualified in its entirety by reference to our articles of incorporation and bylaws. For further information, please refer to the full version of our articles of incorporation and bylaws, copies of which are filed as exhibits to the registration statement of which this prospectus forms a part.
Objects and Purposes of the Company
Our articles of incorporation do not contain and are not required to contain a description of our objects and purposes. There is no restriction contained in our articles of incorporation on the business that we may carry on.
Directors
Interested Transactions
The MCA states that a director must disclose to us, in accordance with the provisions of the MCA, the nature and extent of an interest that the director has in a material contract or material transaction, whether made or proposed, with us, if the director is a party to the contract or transaction, is a director or an officer or an individual acting in a similar capacity of a party to the contract or transaction, or has a material interest in a party to the contract or transaction.
A director who holds an interest in respect of any material contract or transaction into which we have entered or propose to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless the contract or transaction:
·relates primarily to the director’s remuneration as a director, officer, employee or agent of us or an affiliate;
·is for indemnity or insurance otherwise permitted under the MCA; or
·is with an affiliate.
Remuneration of Directors
The MCA provides that the remuneration of our directors, if any, may be determined by our directors subject to our articles of incorporation and bylaws. That remuneration may be in addition to any salary or other remuneration paid to any of our employees who are also directors.
Age Limit Requirement
Neither our articles of incorporation nor the MCA impose any mandatory age-related retirement or non-retirement requirement for our directors.
Share Ownership
Neither our articles of incorporation nor the MCA provide that a director is required to hold any of our shares as a qualification for holding his or her office. Our board of directors has discretion to prescribe minimum share ownership requirements for directors.
Quorum
Under our bylaws, the quorum for the transaction of business at a meeting of our board of directors is a majority of the number of directors.
Borrowing Powers
Pursuant to our bylaw relating to the borrowing powers of our directors, our board of directors may: (i) borrow money upon our credit; (ii) issue, re-issue, sell or pledge debt obligations of the Corporation; (iii) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the corporation, owned or subsequently acquired, to secure any debt obligation of the Corporation; and (iv) give a guarantee on behalf of the Corporation to secure performance of an obligation of any person.
Action Necessary to Change the Rights of Holders of Our Shares
Our shareholders can authorize the amendment of our articles of incorporation to create or vary the special rights or restrictions attached to any of our shares by passing a special resolution. However, a right or special right attached to any class or series of shares may not be prejudiced or interfered with unless the shareholders holding shares of that class or series to which the right or special right is attached consent by a separate special resolution. A special resolution means a resolution passed by: (1) a majority of not less than two-thirds of the votes cast by the applicable class or series of shareholders who vote in person or by proxy at a meeting or (2) a resolution consented to in writing by all of the shareholders entitled to vote.
Shareholder Meetings
We must hold an annual general meeting of our shareholders at least once every year at such day and time as determined by our board of directors, provided that the meeting must not be held later than 15 months after the preceding annual general meeting. A meeting of our shareholders must be held in the City of Winnipeg, in Manitoba, or at such other place within Manitoba or, at a place outside Canada if the place is specified in our articles or all the shareholders entitled to vote at the meeting agree that the meeting is to be held at that place.
Our directors may, at any time, call a special meeting of our shareholders. Shareholders holding not less than 5% of our issued voting shares may also cause our directors to call a shareholders’ meeting.
A notice to convene a meeting, specifying the date, time and location of the meeting, and, where a meeting is to consider special business, the general nature of the special business, must be sent to shareholders, to each director and the auditor not less than 21 days prior to the meeting, although, as a result of applicable securities laws, the time for notice is effectively longer. Under the MCA, shareholders entitled to notice of a meeting may waive the period of notice for that meeting, provided applicable securities laws requirements are met.
A quorum for meetings under our bylaws is one person present and holding, or represented by proxy, 51% of the issued shares entitled to be voted at the meeting. If a quorum is not present at the opening of the meeting, the shareholders may adjourn the meeting to a fixed time and place but may not transact any further business.
Holders of our outstanding common shares are entitled to attend meetings of our shareholders. Except as otherwise provided with respect to any particular series of preferred shares, and except as otherwise required by law, the holders of our preferred shares are not entitled as a class to receive notice of, or to attend or vote at any meetings of our shareholders. Our directors, our secretary (if any), our auditor and any other persons invited by our chairman or directors or with the consent of those at the meeting are entitled to attend at any meeting of our shareholders but will not be counted in the quorum or be entitled to vote at the meeting unless he or she is a shareholder or proxyholder entitled to vote at the meeting.
Impediments to Change of Control
Our articles of incorporation do not contain any change of control limitations with respect to a merger, acquisition or corporate restructuring that involves us.
Ownership and Exchange Controls
Competition Act
Limitations on the ability to acquire and hold our common shares may be imposed by the Competition Act (Canada). This legislation establishes a pre-merger notification regime for certain types of merger transactions that exceed certain statutory shareholding and financial thresholds. Transactions that are subject to notification cannot be closed until the required materials are filed and the applicable statutory waiting period has expired or been waived by the Commissioner of Competition, or the Commissioner. Further, the Competition Act (Canada) permits the Commissioner to review any acquisition of control over or of a significant interest in us, whether or not it is subject to mandatory notification. This legislation grants the Commissioner jurisdiction, for up to one year, to challenge this type of acquisition before the Canadian Competition Tribunal if it would, or would be likely to, substantially prevent or lessen competition in any market in Canada.
Investment Canada Act
The Investment Canada Act requires notification and, in certain cases, advance review and approval by the Government of Canada of an investment to establish a new Canadian business by a non-Canadian or of the acquisition by a non-Canadian of “control” of a “Canadian business”, all as defined in the Investment Canada Act. Generally, the threshold for advance review and approval will be higher in monetary terms for a member of the World Trade Organization. The Investment Canada Act generally prohibits the implementation of such a reviewable transaction unless, after review, the relevant minister is satisfied that the investment is likely to be of net benefit to Canada.
The Investment Canada Act contains various rules to determine if there has been an acquisition of control. For example, for purposes of determining whether an investor has acquired control of a corporation by acquiring shares, the following general rules apply, subject to certain exceptions. The acquisition of a majority of the voting shares of a corporation is deemed to be acquisition of control of that corporation. The acquisition of less than a majority but one-third or more of the voting shares of a corporation is presumed to be an acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquiror through the ownership of voting shares. The acquisition of less than one-third of the voting shares of a corporation is deemed not to be acquisition of control of that corporation.
In addition, under the Investment Canada Act, national security review on a discretionary basis may also be undertaken by the federal government in respect of a much broader range of investments by a non-Canadian to “acquire, in whole or in part, or to establish an entity carrying on all or any part of its operations in Canada, with the relevant test being whether such an investment by a non-Canadian could be “injurious to national security.” The Minister of Industry has broad discretion to determine whether an investor is a non-Canadian and therefore may be subject to national security review. Review on national security grounds is at the discretion of the federal government and may occur on a pre- or post-closing basis.
Any of these provisions may discourage a potential acquirer from proposing or completing a transaction that may have otherwise presented a premium to our shareholders. We cannot predict whether investors will find our company and our common shares less attractive because we are governed by foreign laws.
Listing
Our common shares are listed on the Nasdaq Capital Market under the symbol “LITM.”
Transfer Agent and Registrar
The transfer agent and registrar for our common shares in the United States will be Endeavor Trust Corporation. The address for Endeavor Trust Corporation is Suite 702, 777 Hornby Street, Vancouver, BC V6Z 1S4 Canada, and the telephone number is 604-559-8880.
Under our amended articles of incorporation, the holders of our common shares are entitled to one vote for each share held at any meeting of the shareholders. Subject to the prior rights of the holders of our preferred shares, the holders of our common shares are entitled to receive dividends as and when declared by our board of directors. See “Dividend Policy.” Subject to the prior payment to the holders of our preferred shares, in the event of our liquidation, dissolution or winding-up or other distribution of our assets among our shareholders, the holders of our common shares are entitled to share pro rata in the distribution of the balance of our assets. Holders of common shares have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to our common shares. There are no provision in our amended articles requiring holders of common shares to contribute additional capital, or permitting or restricting the issuance of additional securities or any other material restrictions. The rights, preferences and privileges of the holders of common shares will be subject to, and may be adversely affected by, the rights of the holders of any series of preferred shares that we may designate in the future.
As of the date of this prospectus, we have never declared or paid cash dividends on our common shares. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends on our common shares in the near future. We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our common shares. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our Board of Directors may deem relevant. Further, under the terms of the MCA, we are prohibited from declaring or paying a dividend if our Board has reasonable grounds for believing that we are, or would after the payment be, unable to pay our liabilities as they become due, or the realizable value of our assets would thereby be less than the aggregate of our liabilities and stated capital.
DESCRIPTION OF PREFERRED SHARES
The following is a brief summary of certain general terms and provisions of the preferred shares that may be offered pursuant to this prospectus. This summary does not purport to be complete. The particular terms and provisions of the preferred shares as may be offered pursuant to this prospectus will be set forth in the applicable prospectus supplement pertaining to such offering of preferred shares, and the extent to which the general terms and provisions described below may apply to such preferred shares will be described in the applicable prospectus supplement.
Under our amended articles of incorporation, we are authorized to issue, without shareholder approval, an unlimited number of preferred shares, and subject to the provisions of the MCA, having the rights, privileges, restrictions and conditions, including dividend and voting rights, as set out in the articles, and such rights and privileges, including dividend and voting rights, may be superior to those of the common shares. The issuance of preferred shares, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company and might adversely affect the market price of our common shares and the voting and other rights of the holders of common shares.
DESCRIPTION OF DEBT SECURITIES
The following sets forth certain general terms and provisions of the debt securities. The particular terms and provisions of debt securities offered pursuant to this prospectus will be set forth in the applicable prospectus supplement, and the extent to which the general terms and provisions described below may apply to such debt securities, will be described in such prospectus supplement.
The debt securities will be issued in series under one or more trust indentures to be entered into between the Company and a financial institution to which the Trust and Loan Companies Act (Canada) applies or a financial institution organized under the laws of any province or territory of Canada and authorized to carry on business as a trustee. Each such trust indenture, as supplemented or amended from time to time, will set out the terms of the applicable series of debt securities. To the extent applicable, the trust indenture will be subject to and governed by the U.S. Trust Indenture Act of 1939, as amended. A copy of the form of the trust indenture has been or will be filed with the SEC as an exhibit to the Registration Statement and has been or will be filed with the securities commissions or similar authorities in Canada when it is entered into. The statements in this prospectus relating to any trust indenture and the debt securities to be issued under it are summaries of anticipated provisions of an applicable trust indenture and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of such trust indenture, as applicable. Each trust indenture may provide that debt securities may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Company.
Any prospectus supplement for debt securities will contain the terms and conditions and other information relating to the debt securities being offered, including:
·the designation, aggregate principal amount and authorized denominations of such debt securities;
·the currency for which the debt securities may be purchased and the currency in which the principal and any interest is payable (in either case, if other than Canadian dollars);
·the percentage of the principal amount at which such debt securities will be issued;
·the date or dates on which such debt securities will mature;
·the rate or rates at which such debt securities will bear interest (if any), or the method of determination of such rates (if any);
·the dates on which any such interest will be payable and the record dates for such payments;
·any redemption, retraction, purchase for cancellation or surrender term or terms under which such debt securities may be defeased;
·any exchange or conversion terms;
·any sinking or purchase fund provisions relating to such debt securities;
·the nature and priority of any security interests for such debt securities, including the principal properties subject to lien or charge;
·any restrictions on issuance of additional debt securities, the incurring of additional indebtedness and other material negative covenants; and
·any other specific terms.
Each series of debt securities may be issued at various times with different maturity dates, may bear interest at different rates and may otherwise vary.
The debt securities will be our direct obligations. The debt securities will be our senior or subordinated indebtedness as described in the relevant prospectus supplement.
The following sets forth certain general terms and provisions of the warrants.
The Company may issue warrants for the purchase of our common shares and/or other securities. The particular terms and provisions of the warrants offered pursuant to this prospectus will be set forth in the applicable prospectus supplement, and the extent to which the general terms and provisions described below may apply to such warrants, will be described in such prospectus supplement.
The Company may offer warrants separately or together with common shares, preferred shares or debt securities, as the case may be, and such warrants may be attached to, or separate from, any such offered securities. The Company will issue warrants under one or more warrant indentures to be entered into between the Company and a warrant agent named in the applicable prospectus supplement. Each such warrant indenture, as supplemented or amended from time to time, will set out the terms and conditions of the applicable warrants. The statements in this prospectus relating to any warrant indenture and the warrants to be issued under it are summaries of anticipated provisions of an applicable warrant indenture and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of such warrant indenture, as applicable.
Any prospectus supplement for warrants will contain the terms and conditions and other information relating to the warrants being offered, including:
·the exercise price of the warrants;
·the designation of the warrants;
·the aggregate number of warrants offered and the offering price;
·the designation, number and terms of our common shares and/or other securities purchasable upon exercise of the warrants, and procedures that will result in the adjustment of those numbers;
·the dates or periods during which the warrants are exercisable;
·the designation and terms of any securities with which the warrants are issued;
·the currency or currency unit in which the exercise price is denominated;
·any minimum or maximum amount of warrants that may be exercised at any one time;
·whether such warrants will be listed on any securities exchange;
·any terms, procedures and limitations relating to the transferability, exchange or exercise of the warrants;
·any other rights, privileges, restrictions and conditions attaching to the warrants; and
·any other specific terms.
Prior to the exercise of their warrants, holders of warrants will not have any of the rights of holders of the securities issuable on exercise of the warrants.
DESCRIPTION OF UNITS
The following description sets forth certain general terms and provisions of units to which any prospectus supplement may relate.
We may issue units comprised of one or more of the other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued, if any, may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
The applicable prospectus supplement may describe:
●the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
●any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units;
●whether the securities comprising the units will be listed on any securities exchange; and
●whether the units will be issued in fully registered or global form.
The applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units in the applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral arrangements and depositary arrangements relating to such units.
Certain legal matters concerning this prospectus will be passed upon for us by Seyfarth Shaw LLP. The validity of the common shares offered in this offering and certain other legal matters as to Canada law will be passed upon for us by MLT Aikins LLP. Seyfarth Shaw LLP may rely upon MLT Aikins LLP with respect to matters governed by Canadian law.
Our consolidated financial statements as of June 30, 2021 and 2022 and for the years then ended included in this prospectus have been audited by DeVisser Gray LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The offices of DeVisser Gray LLP are located at 401-905 West Pender Street, Vancouver, BC V6C 1L6.
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
Owning any of the securities may subject holders to Canadian federal income tax consequences. The applicable prospectus supplement may describe certain Canadian federal income tax considerations generally applicable to investors described therein of purchasing, holding and disposing of applicable securities, including, in the case of an investor who is not a resident of Canada, Canadian non-resident withholding tax consideration. Prospective investors should consult their own tax advisors prior to deciding to purchase any of the securities.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
Owning any of the securities may subject holders to U.S. federal income tax consequences. The applicable prospectus supplement may describe certain U.S. federal income tax considerations generally applicable to investors described therein of purchasing, holding and disposing of applicable securities. Prospective investors should consult their own tax advisors prior to deciding to purchase any of the securities.
ENFORCEABILITY OF CIVIL LIABILITIES
We were incorporated under the laws of the Province of Manitoba, Canada. The Majority of our directors and officers, as well as the certain experts named in the “Experts” section of this prospectus, reside outside of the United States. Service of process upon such persons may be difficult or impossible to effect within the United States. Furthermore, because a substantial portion of our assets, and substantially all the assets of our directors and officers and the Canadian experts named herein, are located outside of the United States, any judgment obtained in the United States, including a judgment based upon the civil liability provisions of United States federal securities laws, against us or any of such persons may not be collectible within the United States. In addition, it may be difficult for an investor, or any other person or entity, to assert United States securities laws claims in original actions instituted in Canada. The Supreme Court of Canada has repeatedly affirmed that the requirements to enforce a foreign judgment are as follows:
·the judgment of the foreign court must be final and conclusive;
·the court granting the foreign judgment must have had jurisdiction over the parties and the cause of action;
·the action to enforce a foreign judgment must have been commenced within applicable limitation periods;
·the judgment is not contrary to the law, public policy, security or sovereignty of Canada and its enforcement is not incompatible with Canadian concepts of justice or contrary to the laws governing enforcement of judgments; and
·the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties;
Foreign judgments enforced by Canadian courts generally will be payable in Canadian dollars. A Canadian court hearing an action to recover an amount in a non-Canadian currency will render judgment for the equivalent amount in Canadian currency.
Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42th Street, 18th Floor, New York, N.Y. 10168.
Offer Restrictions Outside the United States
Other than in the United States, no action has been taken by us that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
Australia
This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.
Canada
The securities may be sold in Canada only to purchasers, purchasing, or deemed to be purchasing, as principal, that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario). Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable Canadian securities laws. Canadian purchasers should refer to any applicable provisions of the securities legislation of their province or territory for particulars of these rights or consult with a legal advisor.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. We also furnish to the SEC under cover of Form 6-K material information required to be made public in our home country, filed with and made public by any stock exchange on which we are listed or distributed by us to our shareholders. As a foreign private issuer, we are exempt from, among other things, the rules under the Exchange Act prescribing the furnishing and content of proxy statements and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov. Additionally, we will make these filings available, free of charge, on our website at https://snowlakelithium.com as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. The information on our website, other than these filings, is not, and should not be, considered part of this prospectus and is not incorporated by reference into this document. We have included our website address in this prospectus solely as an inactive textual reference.
This prospectus and any prospectus supplement are part of a registration statement on Form F-3 that we filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement of which this prospectus forms a part. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to other documents which we have filed or will file with the SEC. We are incorporating by reference in this prospectus the documents listed below and all amendments or supplements we may file to such documents, as well as any future filings we may make with the SEC on Form 20-F and any other reports on Form 6-K that we subsequently furnish to the SEC under the Exchange Act after (i) the date of the registration statement of which this prospectus forms a part and prior to effectiveness of such registration statement (if they state that they are incorporated by reference into such registration statement) and (ii) the date of this prospectus prior to the termination of this offering (if they state that they are incorporated by reference into this prospectus:
·our Annual Report on Form 20-F for the year ended June 30, 2022, filed with the SEC on November 1, 2022;
our Reports on Form 6-K filed with the SEC on November 23, 2022, December 6, 2022, December 15, 2022, December 15, 2022, December 20, 2022, January 11, 2023, January 17, 2023, January 19, 2023, January 31, 2023, March 8, 2023, March 16, 2023, and March 31, 2023; and
·the description of our common shares contained in our Registration Statement on Form 8-A12B filed with the SEC on November 18, 2021.
As you read the above documents, you may find inconsistencies in information from one document to another. If you find inconsistencies between the documents and this prospectus, you should rely on the statements made in the most recent document over different information included in this prospectus or any accompanying prospectus supplement. All information appearing in this prospectus is qualified in its entirety by the information and financial statements, including the notes thereto, contained in the documents incorporated by reference herein.
Unless expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC. We will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of these filings, at no cost, upon written or oral request to us at the following address: 360 Main St 30th Floor, Winnipeg, MB R3C 4G1, Canada, Attn: Peretz Schapiro. Please direct your telephone requests to us at (204) 815-5806.
2
EXPENSES RELATED TO THIS OFFERING
Set forth below is an itemization of our total expenses, excluding underwriting discounts and commissions, which are expected to be incurred by us in connection with the offer and sale of the common shares by the selling shareholders. All amounts shown are in US dollars and are estimates and subject to future contingencies, except the U.S. Securities and Exchange Commission registration fee and the Financial Industry Regulatory Authority filing fee. These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
SEC registration fee |
| $ |
| 11,600 |
FINRA filing fee |
| $ |
| 15,500 |
Printer fees and expenses |
| $ |
| * |
Legal fees and expenses |
| $ |
| * |
Transfer agent fees and expenses |
| $ |
| * |
Accounting fees and expenses |
| $ |
| * |
Miscellaneous |
| $ |
| * |
Total |
| $ |
| * |
*These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
3
$__________
Common Shares
Preferred Shares
Warrants
Debt Securities
Units
Snow Lake Resources Ltd.
PRELIMINARY PROSPECTUS
June 1, 2023
4
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 8. Indemnification of Directors and Officers.
Under the MCA, we may indemnify our current or former directors or officers or another individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity which the Company is or was a shareholder or creditor of, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity. The MCA also provides that we may also advance moneys to a director, officer or other individual for costs, charges and expenses reasonably incurred in connection with such a proceeding; provided that such individual shall repay the moneys if the individual does not fulfill the conditions described below.
However, indemnification is prohibited under the MCA unless the individual:
·acted honestly and in good faith with a view to our best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at our request; and
·in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful.
Our bylaws require us to indemnify each of our current or former directors or officers and each individual who acts or acted at our request as a director or officer of another entity which the Company is or was a shareholder or creditor of, as well as their respective heirs and successors, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or officer, except as may be prohibited by the MCA.
Under the form of indemnification agreement filed as an exhibit to this registration statement, we will agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or executive officer.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 9. Exhibits and Financial Statement Schedules.
(a) Exhibits
Item 10. Undertakings.
The undersigned registrant hereby undertakes:
(1)to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”);
(ii)to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii)to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that:
paragraphs (i), (ii) and (iii) do not apply if the registration statement is on Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement;
(2)that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
(3)to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
(4)if the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.
(5)that, for the purpose of determining liability under the Securities Act to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and
(6)that, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and
(iv)any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
II-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Winnipeg, Manitoba, Canada on May 31, 2023.
| SNOW LAKE RESOURCES LTD. | |
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| By: | /s/ Keith Li |
| Name: | Keith Li |
| Title: | Chief Financial Officer |
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Keith Li, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement, and any registration statement relating to the offering covered by this registration statement and filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys in fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of Snow Lake Resources Ltd. has signed this registration statement or amendment thereto in New York on May __, 2023.
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| By: | /s/ Ms. Colleen A. De Vries |
| Name: | Ms. Colleen A. De Vries |
| Title: | Senior Vice President on behalf of |
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INDEPENDENT DIRECTOR AGREEMENT
INDEPENDENT DIRECTOR AGREEMENT, dated effective _________________, 2023 (this “Agreement”), by and between SNOW LAKE RESOURCES LTD., a company incorporated in the Province of Manitoba, Canada (the “Company”), and [ ] (the “Director”).
RECITALS
A.The Company is a corporation with its common shares listed on the Nasdaq Stock Market; and
B.The Company and its shareholders have elected the Director to serve on the Company’s board of directors (the “Board”) and the Director has accepted such appointment to serve on the Board; and
C.The Director may be appointed as a member of one or more committees of the Board; and
D.The Director may also be appointed to serve as Chairperson of one or more committees of the Board.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the Director’s services to the Company as a member of the Board, as a member of such committees of the Board to which he or she may be appointed from time to time and as Chairperson of one or more committees to which he or she may be appointed in such capacity from time to time, and intending to be legally bound hereby, the Company and the Director hereby agree as follows:
1.APPOINTMENT; DUTIES.
(a)Appointment. The Director has been elected to serve as a member of the Board effective as of [ ].
(b)General Duties. The Company requires that the Director be available to perform the duties of an independent director customarily related to this function and as may be required by the Company’s constating documents, including its articles of incorporation and by-laws, as amended from time to time and its corporate governance and board committee charters, each as amended or modified from time to time, and by applicable law, including The Corporations Act (Manitoba). The Director agrees to devote as much time as is necessary to perform completely the duties as a Director of the Company, including duties as a member of one or more committees of the Board, to which the Director may hereafter be appointed. The Director will perform such duties described herein in accordance with the general fiduciary duty of directors and as required pursuant to applicable law, including The Corporations Act (Manitoba).
(c)Conflicts of Interest. In the event that the Director has a direct or indirect financial or personal interest in a contract or transaction to which the Company is a party, or the Director is contemplating entering into a transaction that involves use of corporate assets or competition against the Company, the Director shall promptly disclose such potential conflict to the Board and proceed as directed by the Board, and as required pursuant to applicable law, including The Corporations Act (Manitoba).
(d)Corporate Opportunities. Whenever the Director becomes aware of a business opportunity, related to the Company’s business, which one could reasonably expect the Director to make available to the Company, the Director shall promptly disclose such opportunity to the applicable Board committee and proceed as directed by such committee or the Board, as applicable, and as required pursuant to applicable law, including The Corporations Act (Manitoba).
2.TERM. The term of this Agreement shall commence as of the date first above written (the “Effective Date”), which shall be the date of the Director’s appointment to the Board, and shall continue until the Director’s removal or resignation.
3.COMPENSATION.
(a)Cash Compensation. Following the commencement of the term of this Agreement, for all services to be rendered by the Director in any capacity hereunder, the Company agrees to compensate the Director a fee of [●] ($[●]) per year in cash (the “Annual Fee”), which Annual Fee shall be paid to the Director in monthly equal installments of [●] ($[●]), at the discretion of the Board, no later than the fifth business day of each applicable payment period commencing in the first month following the Effective Date. The Director shall be responsible for his or her own individual income tax payment on the Annual Fee in jurisdictions where the Director resides.
(b)Equity Compensation. Upon execution of this agreement, the Director may be entitled to receive certain stock options to purchase the Company’s common shares in such amounts as determine by the Board and its compensation committee from time to time, and pursuant to the terms of the Company’s stock option plan, as may be amended or replaced from time to time.
In the event that the Director serves less than a full year on the Board, the Company shall only be obligated to pay the pro rata portion of such Annual Fee to the Director for his or her services performed during such year.
4.INDEPENDENCE. The Director acknowledges that his or her appointment hereunder is contingent upon the Board’s determination that he or she is “independent” with respect to the Company, in accordance with the listing requirements of the Nasdaq Stock Market, and that he or she shall resign as a Director upon written notice from the nomination and governance committee of the Company that he or she ceases to qualify as an independent director pursuant to the listing requirements of the Nasdaq Stock Market.
5.EXPENSES. The Company shall reimburse the Director for pre-approved reasonable business related expenses incurred in good faith in connection with the performance of the Director’s duties for the Company. Such reimbursement shall be made by the Company upon submission by the Director of a signed statement itemizing the expenses incurred, which shall be accompanied by sufficient documentation to support the expenditures.
6.OTHER AGREEMENTS.
(a)Confidential Information and Insider Trading. The Company and the Director each acknowledge that, in order for the intentions and purposes of this Agreement to be accomplished, the Director shall necessarily be obtaining access to certain confidential information concerning the Company and its affairs, including, but not limited to, business methods, information systems, financial data and strategic plans which are unique assets of the Company (as further defined below, the “Confidential Information”) and that the communication of such Confidential Information to third parties could irreparably injure the Company and its business. Accordingly, the Director agrees that, during his or her association with the Company and thereafter, he or she will treat and safeguard as confidential and secret all Confidential Information received by him or her at any time and that, without the prior written consent of the Company, he or she will not disclose or reveal any of the Confidential Information to any third party whatsoever or use the same in any manner except in connection with the business of the Company and in any event in no way harmful to or competitive with the Company or its business. For purposes of this Agreement, “Confidential Information” includes any information not generally known to the public or recognized as confidential according to standard industry practice, any trade secrets, know-how, development, manufacturing, marketing and distribution plans and information, inventions, formulas, methods or processes, whether or not patented or patentable, pricing policies and records of the Company (and such other information normally understood to be confidential or otherwise designated as such in writing by the Company), all of which the Director expressly acknowledges and agrees shall be confidential and proprietary information belonging to the Company. Upon termination of his or her association with the Company, the Director shall return to the Company all documents and papers relating to the Company, including any Confidential Information, together with any copies thereof, or certify that he or she has destroyed all such documents and papers. Furthermore, the Director recognizes that the Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Company’s part to maintain the confidentiality of such information and, in some cases, to use it only for certain limited purposes. The Director agrees that the Director owes the Company and such third parties, both during the term of the Director’s association with the Company and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to, except as is consistent with the Company’s agreement with the third party, disclose it to any person or entity or use it for the benefit of anyone other than the Company or such third party, unless expressly authorized to act otherwise by an officer of the Company. In addition, the Director acknowledges and agrees that the Director may have access to “material non-public information” for purposes of the federal securities laws (“Insider Information”) and that the Director will abide by all securities laws relating to the handling of and acting upon such Insider Information.
(b)Disparaging Statements. At all times during and after the period in which the Director is a member of the Board and at all times thereafter, the Director shall not either verbally, in writing, electronically or otherwise: (i) make any derogatory or disparaging statements about the Company, any of its affiliates, any of their respective officers, directors, shareholders, employees and agents, or any of the Company’s current or past customers or employees, or (ii) make any public statement or perform or do any other act prejudicial or injurious to the reputation or goodwill of the Company or any of its affiliates or otherwise interfere with the business of the Company or any of its affiliates; provided, however, that nothing in this paragraph shall preclude the Director from complying with all obligations imposed by law or legal compulsion, and provided, further, however, that nothing in this paragraph shall be deemed applicable to any testimony given by the Director in any legal or administrative proceedings.
(c)Enforcement. The Director acknowledges and agrees that the covenants contained herein are reasonable, that valid consideration has been and will be received and that the agreements set forth herein are the result of arms-length negotiations between the parties hereto. The Director recognizes that the provisions of this Section 6 are vitally important to the continuing welfare of the Company and its affiliates and that any violation of this Section 6 could result in irreparable harm to the Company and its affiliates for which money damages would constitute a totally inadequate remedy. Accordingly, in the event of any such violation by the Director, the Company and its affiliates, in addition to any other remedies they may have, shall have the right to institute and maintain a proceeding to compel specific performance thereof or to obtain an injunction or other equitable relief restraining any action by the Director in violation of this Section 6 without posting any bond therefore or demonstrating actual damages, and the Director will not claim as a defense thereto that the Company has an adequate remedy at law or require the posting of a bond. If any of the restrictions or activities contained in this Section 6 shall for any reason be held by a court of competent jurisdiction to be excessively broad as to duration, geographical scope, activity or subject, such restrictions shall be construed so as thereafter to be limited or reduced to be enforceable to the extent compatible with the applicable law; it being understood that by the execution of this Agreement the parties hereto regard such restrictions as reasonable and compatible with their respective rights. The Director acknowledges that injunctive relief may be granted immediately upon the commencement of any such action without notice to the Director and in addition Company may recover monetary damages.
(d)Separate Agreement. The parties hereto further agree that the provisions of Section 6 are separate from and independent of the remainder of this Agreement and that Section 6 is specifically enforceable by the Company notwithstanding any claim made by the Director against the Company. The terms of this Section 6 shall survive termination of this Agreement.
7.MARKET STAND-OFF AGREEMENT. In the event of a public or private offering of the Company’s securities and/or upon request of the Company, the underwriters or placement agents placing the offering of the Company’s securities, the Director agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company Director may own, other than those included in the registration, without the prior written consent of the Company or such underwriters, as the case may be, for such period of time from the effective date of such registration as may be requested by the Company or such placement agent or underwriter.
8.TERMINATION. Subject to applicable law, including The Corporations Act (Manitoba), with or without cause, the Company and the Director may each terminate this Agreement at any time upon ten (10) days written notice, and the Company shall be obligated to pay to the Director the compensation and expenses due up to the date of the termination. Nothing contained herein or omitted herefrom shall prevent the shareholder(s) of the Company from removing the Director with immediate effect at any time for any reason, nor shall it cause the removal of the Director as a director of the Company except in accordance with and pursuant to applicable law, including The Corporations Act (Manitoba).
9.INDEMNIFICATION. The Company shall indemnify, defend and hold harmless the Director in accordance with the indemnification agreement in the form attached hereto as Exhibit A, which has or shall be entered into between the Company and the Director.
10.EFFECT OF WAIVER. The waiver by either party of the breach of any provision of this Agreement shall not operate as or be construed as a waiver of any subsequent breach thereof.
11.NOTICE. Any and all notices referred to herein shall be sufficient if furnished in writing at the addresses specified on the signature page hereto or, if to the Company, to the Company’s address as specified in filings made by the Company with all securities regulatory authorities, including the U.S. Securities and Exchange Commission.
12.GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Province of Manitoba and the laws of Canada applicable therein and the parties hereby attorn to the jurisdiction of the courts of the Province of Manitoba.
13.ASSIGNMENT. The rights and benefits of the Company under this Agreement shall be transferable, and all the covenants and agreements hereunder shall inure to the benefit of, and be enforceable by or against, its successors and assigns. The duties and obligations of the Director under this Agreement are personal and therefore the Director may not assign any right or duty under this Agreement without the prior written consent of the Company.
14.MISCELLANEOUS. If any provision of this Agreement shall be declared invalid or illegal, for any reason whatsoever, then, notwithstanding such invalidity or illegality, the remaining terms and provisions of the this Agreement shall remain in full force and effect in the same manner as if the invalid or illegal provision had not been contained herein. The article headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. Except as provided elsewhere herein, this Agreement sets forth the entire agreement of the parties with respect to its subject matter and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party to this Agreement with respect to such subject matter.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Independent Director Agreement to be duly executed and signed as of the day and year first above written.
SNOW LAKE RESOURCES LTD. |
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EXHIBIT A
Indemnity Agreement
(See Attached)
THIS AGREEMENT is made as of the ___ day of May, 2023
BETWEEN
SNOW LAKE RESOURCES LTD., a company existing under The Corporations Act (Manitoba)
(the “Company”),
AND
_____________________, an individual residing at ______________________________________ _______________________________________________________________________
(the “Indemnitee”),
WHEREAS the Company exists under The Corporations Act (Manitoba) (the “Act”);
AND WHEREAS the Company has requested that the Indemnitee serve or continue to serve as a director of the Company and has requested, or may request, that the Indemnitee serve as a director of, or in a similar capacity with, one or more affiliated entities of the Company;
AND WHEREAS it is in the best interests of the Company to attract and retain responsible and capable directors, and the entering into of an agreement containing broad indemnification provisions of the kind contained in this Agreement is of importance to achieving these goals;
AND WHEREAS in order to induce the Indemnitee to serve as a director of the Company or an affiliate thereof, the Company has agreed to indemnify the Indemnitee on and subject to the terms of this Agreement.
NOW THEREFORE, in consideration of the amount of $1.00 now paid by the Indemnitee to the Company (the receipt and sufficiency of which are hereby acknowledged by the Company), the Indemnitee’s agreement to become or continue as a director of the Company and/or its affiliates, and the premises and covenants and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
AGREEMENT TO SERVE
Section 1.1Agreement to Serve
The Indemnitee agrees to serve or continue to serve in accordance with applicable laws: (a) as a director of the Company; and/or (b) as a director of, or in a similar capacity with, one or more Other Entities (as defined below) as specifically requested by the Company (and agreed to in writing by the Indemnitee) so long as the Indemnitee is elected or appointed and is qualified in accordance with the provisions of the Act, the policies of any stock exchange on which the Company’s securities may trade from time to time, including, without limitation, the Nasdaq Capital Market, and the articles and by-laws of the Company (collective, the “Constating Documents”), in the case of the Company, or the constating documents of any such Other Entity, in the case of an Other Entity; provided, however, that: (i) the Indemnitee may at any time and for any reason resign from any such position (subject to any contractual obligation which the Indemnitee shall have agreed to in writing); and (ii) the Company shall not have any
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obligation under this Agreement to nominate the Indemnitee for, or appoint or elect the Indemnitee to, any such position.
ARTICLE II
INDEMNITY AND LIMITATION OF LIABILITY
Section 2.1Definitions:
(i)“Eligible Penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an Eligible Proceeding as a result of the Indemnitee’s service as a director of the Company or an Other Entity;
(ii)“Eligible Proceeding” means a Proceeding in which the Indemnitee or any of the heirs and personal or other legal representatives of the Indemnitee, by reason of the Indemnitee being or having been a director of, or holding or having held a position equivalent to that of a director of, the Company or an Other Entity:
(a)is or may be joined as a party, or
(b)is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the Proceeding;
(iii)“Expenses” includes, without limitation, reasonable and actually incurred costs, charges and expenses, including actual legal and other fees, and out of pocket expenses, including those incurred in attending discoveries, trials, hearings and meetings to prepare for those Eligible Proceedings, and whether incurred before or after the date of this Agreement, but “Expenses” does not include any Eligible Penalty;
(iv)“Other Entity” means a corporation or entity (including a partnership, trust, joint venture or other unincorporated entity) of which the Indemnitee is or was or will be a director (or holds or held or will hold an equivalent position):
(a)at a time when such corporation or entity was affiliated (within the meaning of the Act) with the Company; or
(b)at the request of the Company; and
(v)“Proceeding” includes any actual legal proceeding or investigative action (civil, criminal, regulatory, administrative, arbitral or other), whether current, threatened, pending or completed and any appeal or appeals therefrom, and any other circumstance or situation, in respect of which the Indemnitee reasonably requires legal advice or representation concerning the actual, possible or anticipated imposition of an Eligible Penalty or Expenses upon the Indemnitee and arising at any time in whole or in part, directly or indirectly, from the Indemnitee being or having been a director of the Company or an Other Entity, notwithstanding that the Indemnitee denies liability for the possible Eligible Penalty or Expenses or that the possible attempt to impose such Eligible Penalty or Expenses is without merit.
(i)The Company shall, to the fullest extent permitted by applicable law, promptly upon demand, indemnify and save harmless the Indemnitee in respect of all Eligible Penalties and Eligible Proceedings and Expenses related thereto.
(ii)Without limiting 0 but subject to 0 the Company shall:
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(a)indemnify the Indemnitee against all Eligible Penalties to which the Indemnitee is or may be liable; and
(b)after the final disposition of an Eligible Proceeding, pay the Expenses actually and reasonably incurred by the Indemnitee in respect of that Proceeding, if the Indemnitee was wholly successful, on the merits or otherwise, in the outcome of the Proceeding or is substantially successful on the merits in the outcome of the Proceeding.
(iii)This indemnity shall extend to cover Expenses related to:
(a)investigations, inquiries and hearings, whether or not charges have been laid, a claim has been made, or an Eligible Proceeding or Proceeding has been commenced against the Company, an Other Entity or the Indemnitee; and
(b)any situation in which the Indemnitee is compelled by authorities or requested by the Company or by an Other Entity to participate in an investigation, inquiry, hearing, Eligible Proceeding or Proceeding,
arising as a result of the Indemnitee’s service as a director of the Company or an Other Entity, in any case whether occurring before or after the date of this Agreement.
(iv)For the purposes of the indemnity provided under this Agreement:
(a)the Indemnitee shall be deemed, subject only to compelling evidence to the contrary, to have acted in good faith and in the best interests of the Company or Other Entity, as the case may be, and the Company shall have the burden of establishing the absence of good faith or best interests of the Company or Other Entity, as the case may be;
(b)the knowledge and/or Eligible Proceedings, or failure to act, of any other director, officer, agent or employee of the Company or any Other Entity will not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement; and
(c)the Company shall have the burden of establishing that any Expense it wishes to challenge is not reasonable.
(v)To the extent that prior court or other approval is required in connection with any indemnification obligation of the Company under this Agreement, the Company shall seek and use all commercially reasonable efforts to obtain that approval as soon as reasonably possible in the circumstances.
Section 2.3Indemnity not Invalidated
The failure of the Indemnitee to comply with the provisions of the Act or the Constating Documents or of the constating documents of an Other Entity shall not invalidate any indemnity to which the Indemnitee is entitled under this Agreement and failure to give notice in a timely fashion as required by 0 will not disentitle the Indemnitee to indemnification, except to the extent the Company is prejudiced by such delay.
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Section 2.4Indemnity Prohibited
(i)The Company shall not indemnify the Indemnitee under 0 or pay the Expenses of the Indemnitee under 0 or Section 2.8
(a)if, in relation to the subject matter of the Eligible Proceeding, the Indemnitee did not act honestly and in good faith with a view to the best interests of the Company or the Other Entity, as applicable;
(b)if, in the case of an Eligible Proceeding other than a civil Proceeding, the Indemnitee did not have reasonable grounds for believing that the conduct of the Indemnitee in respect of which the Proceeding was brought was lawful; or
(c)if the Indemnitee did not exercise the care, diligence and skill that a reasonable prudent person would exercise in comparable circumstances.
(ii)If an Eligible Proceeding is brought against the Indemnitee by or on behalf of the Company or by or on behalf of an Other Entity, the Company shall not:
(a)indemnify the Indemnitee under 0 in respect of the Proceeding; or
(b)pay the Expenses of the Indemnitee under 0 or 0 if the Indemnitee was not wholly successful, on the merits or otherwise, in the outcome of the Proceeding or was not substantially successful on the merits in the outcome of the Proceeding.
(iii)The indemnity provided under this Agreement will not apply to any Proceeding initiated by the Indemnitee against:
(a)the Company, unless it is brought to establish or enforce any right under this Agreement; or
(b)any other person or entity unless the Company or an Other Entity has joined with the Indemnitee in or has consented to the initiation of such Proceeding.
Section 2.5Primary Obligations
(i)The Company hereby agrees that it is the indemnitor of first resort under this Agreement or any other indemnification agreement, arrangement or undertaking with respect to the Indemnitee and, as a result, the Company’s obligations to such Indemnitee under this Agreement or any other agreement, arrangement or undertaking to provide advancement of Expenses and indemnification to such Indemnitee are primary without regard to any rights such Indemnitee may have to seek or obtain indemnification or advancement of Expenses from any other person or any of its affiliates or associates (the “Other Indemnitor”) or from any insurance policy for the benefit of such Indemnitee (other than any directors’ and officers’ insurance policy for the benefit of such Indemnitee maintained or paid for by the Company or any of the Other Entities pursuant to 0 hereof), and any obligation of any Other Indemnitor to provide advancement or indemnification to such Indemnitee and any rights of recovery of such Indemnitee under any insurance policy for the benefit of such Indemnitee (other than any directors’ and officers’ insurance policy for the benefit of such Indemnitee maintained or paid for by the Company or any of the Other Entities pursuant to 0 hereof) are secondary.
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(ii)Subject to 0, no failure by the Indemnitee to comply with the provisions of the Act or Constating Documents of the Company will invalidate any indemnity to which the Indemnitee are entitled under this Agreement.
(iii)If the Company makes a payment to the Indemnitee pursuant to this Agreement which it is not permitted to pay by law or is determined not to be required to paid, including, without restriction, pursuant to 0, then such amount shall be deemed to have been a loan by the Company to the Indemnitee and upon written request by the Company, the Indemnitee shall repay such amounts to the Company within thirty (30) days of such written request for reimbursement. No interest shall be payable by the Indemnitee with respect to such loan unless such loan is not repaid within such period of thirty (30) days, in which event simple (not compound) interest shall be payable thereon at the Prime Rate plus three percent (3%) per annum, computed from the date which is thirty (30) days following the written request of the Company for repayment. For the purposes of this 0, “Prime Rate” means the annual commercial lending rate of interest which the Company’s bank quotes from time to time, as its reference rate of interest for the purpose of determining the rate of interest that it charges to its commercial customers for loans in Canadian funds, and which is commonly known as its “prime rate”.
Section 2.6Set-off
The Company grants to the Indemnitee the right to set-off any amount owing by the Company hereunder to the Indemnitee against any amount that the Indemnitee may owe to the Company at that time.
Section 2.7Statutory Liability
Without limiting in any way the generality of 0 hereof, the Company and the Indemnitee acknowledge that the scope of the Eligible Proceedings to which the indemnity provided in such section applies includes, without limitation, all Eligible Proceedings that relate to or arise from any Canadian or foreign federal, provincial, state, regional or municipal statutory liability of any kind or nature imposed or that may be imposed on the Indemnitee as a director of the Company or as a director of, or acting in a similar capacity with, any Other Entity or which in any way involve the business or affairs of the Company or any Other Entity.
Section 2.8Reimbursement and Payment in Advance
The Company shall upon receipt of a written demand from the Indemnitee for indemnification hereunder, promptly, and in any event, no more than thirty (30) days after receipt by the Company of such demand:
(i)reimburse the Indemnitee in relation to, or by virtue of, a matter claimed by the Indemnitee to be subject to indemnification hereunder; and
(ii)to the fullest extent permitted by law, pay amounts in advance to the Indemnitee or any other person (which word shall include individuals, partnerships, corporations and all other entities of whatsoever nature) for the Expenses of any Eligible Proceeding referred to in 0 hereof prior to the final disposition of such Eligible Proceeding; provided, however, that any such reimbursement or advance shall be repaid to the Company by the Indemnitee if the prohibitions on indemnity set out in 0 hereof apply. If and to the extent the Indemnitee makes any such repayment to the Company, the obligation of the Company to indemnify the Indemnitee shall continue in accordance with the terms of this Agreement.
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Each such written demand shall include particulars of the liabilities to be covered by the proposed payment. In the case of an advance of Expenses pursuant to 0 hereof, such advance will be unsecured and no interest will be charged thereon. Each such written demand shall automatically be deemed to include an undertaking that the Indemnitee shall repay to the Company, upon demand, advances of Expenses made pursuant to 0 hereof:
(iii)if and to the extent that it is determined by a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) of a court having jurisdiction over such matter that the Indemnitee is not entitled to indemnification hereunder or that the payment of such Expenses is prohibited by applicable law;
(iv)if and to the extent that the Company has fully performed its obligations to the Indemnitee under this Agreement with respect to the advance of Expenses and other matters bearing on the ability of the Indemnitee to protect his or her interests fully and effectively in the applicable Eligible Proceeding; and
(v)subject to any right of counterclaim or set-off in favour of the Indemnitee.
Such repayment shall be made by the Indemnitee within thirty (30) days of a written request by the Company for repayment and, if such amounts are not repaid by the Indemnitee within such thirty (30) day period, they shall bear interest calculated in accordance with the provisions of 0.
(i)The Company shall purchase and maintain, or cause to be purchased and maintained:
(a)while the Indemnitee remains a director of the Company or a director and/or officer of, or remains in a similar capacity with, any Other Entity, and
(b)for a minimum period of seven (7) years after the Indemnitee ceases to be a director of the Company or a director of, or ceases to act in a similar capacity with, any Other Entity, as the case may be,
directors’ and officers’ liability insurance for the benefit of the Indemnitee (which, in the circumstances of 0 hereof, may be in the form of a non-cancellable seven (7) year director and officer run-off policy) containing such customary terms and conditions and in such amounts as are available to the Company on reasonable commercial terms, having regard to the nature and size of the business and operations of the Company or the Other Entity, as the case may be, from time to time, and as are acceptable to the Indemnitee. The insurance for the benefit of the Indemnitee in respect of any Eligible Proceeding which may be taken against the Indemnitee after the Indemnitee ceases to be a director of the Company or, a director of, or ceases to act in a similar capacity with, any Other Entity as the case may be, shall provide coverage on terms at least as favourable to the Indemnitee as would have been the case had the Eligible Proceeding commenced during the period during which the Indemnitee was a director of the Company, or a director of, or acted in a similar capacity with, an Other Entity, as the case may be.
(ii)Upon receipt by the Company of a notice from the Indemnitee pursuant to 0 hereof, the Company will promptly give notice to the insurer(s) under the insurance maintained by it and comply with all procedures and guidelines of the insurer(s) to ensure coverage of the Indemnitee under such insurance, and thereafter take all necessary or desirable Eligible Proceeding to cause the insurer(s) to pay, to or on behalf of the
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Indemnitee, all amounts payable as a result of or in connection with such Eligible Proceeding in accordance with the terms of such insurance. The foregoing obligation of the Company to give such notice is in addition to any notice obligation of the Company arising under the terms of any such insurance.
(iii)In the event the Company is unable to fund the purchase of extended insurance coverage by reason of its insolvency or bankruptcy, the Indemnitee will be given reasonable notice regarding the Company’s inability to fund such purchase together with an identification of the additional premium that would be required to exercise the extended reporting period coverage option of the relevant insurance policies.
(iv)In the event that an Eligible Proceeding is brought in which the Indemnitee is named as party or in respect of which the Indemnitee may be entitled to receive payments or benefits under any insurance maintained by the Company, the Company will promptly pay, if permitted by applicable law, the insurance deductible applicable under any policies providing coverage to the Indemnitee.
(v)During the period when the Indemnitee serves as a director of the Company or a director of, or in a similar capacity with, an Other Entity, and for a period of seven (7) years thereafter, the Company will promptly notify the Indemnitee if
(a)any of the Company’s insurance policies lapses, is cancelled, as a result of insolvency or bankruptcy of the Company or any other person or otherwise, is not renewed or any provision thereof relating to the extent or nature of the coverage provided thereunder is amended, changed or modified in any material respect, or
(b)any insurer informs the Company that all or part of any Eligible Proceeding is not covered by any of such policies.
(vi)If the Company reasonably anticipates that:
(a) the Company may become insolvent or otherwise unable to pay its liabilities as they become due (an “Insolvency Situation”) and that, as a result of such Insolvency Situation, the Indemnitee may in the future not have the benefit of directors’ and officers’ liability insurance or
(b)the Company will likely be involved in a transaction that will result in an actual change of control of the Company (a “Change of Control”),
the Company will purchase and fund for the Indemnitee a non-cancellable seven (7) year director and officer run-off policy that provides coverage for the Indemnitee that is at least as favourable as the coverage provided by the insurance that the Company purchased and maintained for the benefit of the Indemnitee immediately prior to the time such run-off policy is purchased. Such run-off insurance coverage will be made effective upon the occurrence of an Insolvency Situation or Change of Control, as the case may be.
(vii)The indemnity provided for in this Agreement is separate and independent of any directors’ and officers’ liability insurance policies maintained by the Company and is not in any way limited to the amount of insurance provided under such policies.
Section 2.10Income Tax
(i)Each payment made by the Company to the Indemnitee pursuant to this Agreement shall be made without set-off, counterclaim or reduction for, and free from and clear of, and
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without deduction for or because of, any and all present or future taxes imposed, levied, collected, assessed or withheld by or within any taxing jurisdiction, unless the Company is required by law or the interpretation thereof by any relevant governmental authority to make such withholding or deduction. If the Company does not pay, cause to be paid or remit payments due hereunder free from and clear of such taxes, then the Company shall forthwith pay the Indemnitee such additional amount (the “Tax Indemnity Amount”) as may be necessary in order that the net after tax amount of every payment made to the Indemnitee, after provision for the payment of any taxes payable by the Company and/or the Indemnitee (including any deduction or withholding of taxes imposed, levied, collected, assessed or withheld by or within any taxing jurisdiction on or with respect to any Tax Indemnity Amount and the taxes on or in respect of the receipt of any Tax Indemnity Amount), shall be equal to the amount that the Indemnitee would have received had there been no such taxes.
(ii)If, as a result of any payment by the Company pursuant this Agreement, the Indemnitee is required to pay any taxes imposed, levied, collected, assessed or withheld by any taxing jurisdiction or if a governmental authority asserts the imposition of such taxes, then the Company shall, upon demand by the Indemnitee, indemnify the Indemnitee for the imposition or payment of any such taxes, whether or not such taxes are correctly or legally asserted, and for any taxes on any such indemnity payments, in each case, together with any interest, penalties and Expenses in connection therewith. All such amounts shall be payable by the Company on demand by the Indemnitee, and shall bear interest at the simple rate of 10% per annum from the date such tax is paid by the Indemnitee to the date which is five days after demand has been made by the Indemnitee for indemnification and thereafter at a rate 12 per annum until paid by the Company to the Indemnitee.
(iii)To the extent that the Indemnitee becomes responsible for the preparation or filing of any report or return to any government or any agency or division of any government, whether Canadian or foreign, federal, provincial, state, regional or municipal, the Company shall supply all necessary information for such preparation and filing and shall be responsible for paying all charges, costs and expenses, including those of accountants, appraisers, lawyers and other consultants, relating to such preparation and filing.
Section 2.11Scope of Indemnity
The intention of this Agreement is to provide the Indemnitee with indemnification to the fullest extent permitted by law and, without limiting the generality of the foregoing and notwithstanding anything contained herein:
(i)nothing in this Agreement shall be interpreted, by implication or otherwise, to limit the scope of the indemnification provided in 0 hereof except as specifically provided herein; and
(ii)0 hereof is intended to provide indemnification to the Indemnitee to the fullest extent permitted by the Act and, in the event that such statute is amended or replaced and a broader scope of indemnification (including, without limitation, the deletion or limiting of one or more of the conditions to the applicability of indemnification) is permitted or allowed, 0 hereof shall be deemed to be amended concurrently with the amendment to, or replacement of, the statute so as to provide such broader indemnification.
To the extent permitted by the Act and applicable laws, if there is any inconsistency between the provisions of this Agreement and the Constating Documents, the provisions of this Agreement shall govern and be effective notwithstanding the provisions of the Constating Documents.
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However, notwithstanding any other term herein and for avoidance of doubt, the Company shall under no circumstances be required to indemnify the Indemnitee or take any other action in the circumstances where indemnification of a director or the taking of such action is not permitted under the Act.
Section 2.12Disclosure
In order to assist the Indemnitee in the duties of the Indemnitee as a director of the Company, the Company shall:
(i)keep the Indemnitee informed of all material matters affecting the Company;
(ii)provide the Indemnitee with a copy of all financial statements of the Company; and
(iii)promptly notify the Indemnitee of any Eligible Proceeding of which the Company becomes aware.
Section 2.13Information and Documents
The Company shall provide the Indemnitee, both while the Indemnitee is a director of the Company, or a director of, or acts in a similar capacity with, any Other Entity and after the Indemnitee ceases to be a director of the Company, or a director of, or ceases to act in a similar capacity with, any Other Entity, with all information and documents in the possession of, or reasonably available to the Company, requested by the Indemnitee which will assist or allow the Indemnitee to investigate, respond to, defend, settle, appeal or otherwise participate or be involved in any Eligible Proceeding. All documents and information provided by the Company shall be kept in the strictest confidence by the Indemnitee, shall remain the sole and exclusive property of the Company and shall only be provided by the Indemnitee to its professional counsel and other duly appointed advisors on a need-to-know basis for the sole purpose of the Indemnitee’s participation in an Eligible Proceeding.
Section 2.14Notice of Proceedings
(i)The Indemnitee will give prompt written notice to the Company within seven days upon the Indemnitee being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document asserting, commencing, threatening or continuing any Eligible Proceeding involving the Company or the Indemnitee which may result in a claim for indemnification under this Agreement.
(ii)The Company will give prompt written notice to the Indemnitee within seven days upon the Company being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document asserting, commencing, threatening or continuing any Eligible Proceeding involving the Indemnitee.
(iii)Failure by the Indemnitee to notify the Company of any Eligible Proceeding will not relieve the Company from liability under this Agreement except to the extent that such failure actually and materially prejudices the Company.
Section 2.15 Conduct of Defence
Promptly after receiving notice of any Eligible Proceeding from the Indemnitee, the Company may, and upon the written request of the Indemnitee the Company will, promptly assume the defence of the Eligible Proceeding at the Company’s expense and on behalf of the Indemnitee will retain counsel who is reasonably satisfactory to the Indemnitee to represent the Indemnitee in respect of the Eligible Proceeding. The assumption by the Company of the defence of any Eligible Proceeding shall not in any way affect the Company’s obligation to indemnify and save harmless the Indemnitee hereunder in
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connection with such Eligible Proceeding. If the Company assumes the conduct of the defence on behalf of the Indemnitee, the Indemnitee and the Company will reasonably cooperate with each other in the defence thereof including, without limitation, providing relevant documents, attending examinations for discovery, making affidavits, meeting with counsel and testifying and divulging to the Company all information reasonably required to defend the Eligible Proceeding, and the Company will keep the Indemnitee apprised of all significant developments in relation thereto.
Section 2.16Separate Counsel
(i)In connection with any Eligible Proceeding the Indemnitee shall have the right to employ separate counsel of the Indemnitee’s choosing and to participate in the defence thereof but the fees and disbursements of such separate counsel will be at the Indemnitee’s expense unless:
(a)the Indemnitee has received a written opinion of counsel, reasonably acceptable to the Company, to the effect that there are legal defences available to the Indemnitee that are different from or in addition to those available to the Company or an Other Entity or another director or officer of the Company, as the case may be, or that a conflict of interest exists which makes representation by counsel chosen by the Company not advisable;
(b)the Company has not assumed the defence of the Eligible Proceeding and retained on behalf of the Indemnitee counsel reasonably satisfactory to the Indemnitee within a reasonable period of time after receiving notice of the Eligible Proceeding; or
(c)employment of such separate counsel has been authorized by the Company;
in which event the reasonable and actually incurred fees and disbursements of the separate counsel for the Indemnitee will be paid by the Company. The Indemnitee and the Company will reasonably cooperate with each other and their respective counsel in the defence of any such Eligible Proceeding including, without limitation, providing relevant documents, and will otherwise use reasonable efforts to assist each other’s counsel to conduct a proper and adequate defence, provided that the Indemnitee will not be required to provide assistance that would materially prejudice his or her defence or his or her ability to fulfill his or her business obligations.
(ii)If the Indemnitee is named as a party or a witness to any Proceeding, or the Indemnitee is questioned or any of his or her Eligible Proceedings, omissions or activities are in any way investigated, reviewed or examined in connection with or in anticipation of any actual or potential Eligible Proceeding, the Indemnitee will be entitled to retain independent legal counsel at the Company’s expense to act on his or her behalf to provide an initial assessment to the Indemnitee of the appropriate course of action for the Indemnitee. Any continued representation of the Indemnitee by such legal counsel will be subject to 0.
Section 2.17Settlement of Claim.
No admission of liability and no settlement of any Eligible Proceeding in a manner adverse to the Indemnitee shall be made without the prior written consent of the Indemnitee, such consent not to be unreasonably withheld or delayed. No admission of liability shall be made by the Indemnitee without the prior written consent of the Company and the Company will not be liable for any settlement of any Eligible Proceeding made without its prior written consent, such consent in each case not to be unreasonably withheld or delayed.
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ARTICLE III
GENERAL
Section 3.1Unconditional
(i)This Agreement is absolute and unconditional and the obligations of the Company shall not be affected, discharged, impaired, mitigated or released by (a) any extension of time, indulgence or modification that the Indemnitee may extend or make with any person threatening or commencing an Eligible Proceeding, or (b) the discharge or release of the Indemnitee in any bankruptcy, insolvency, receivership or other Proceedings of creditors.
(ii)No action or Proceeding brought or instituted under this Agreement and no recovery pursuant thereto will be a bar or defence to any further action or Proceeding which may be brought under this Agreement.
(iii)The rights of the Indemnitee hereunder shall be in addition to any other rights the Indemnitee may have under the Constating Documents or the Act or otherwise. To the extent that a change in the Act (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Constating Documents or this Agreement, it is the intent of the Company and the Indemnitee that the Indemnitee be entitled to the greater benefits afforded by that change. The rights of the Indemnitee under this Agreement shall not be diminished by any amendment to the Constating Documents, or of any other agreement or instrument to which the Indemnitee is not a party, and shall not diminish any other rights that the Indemnitee now has, or in the future may have, against the Company.
Section 3.2Amendments and Waivers
No amendment to this Agreement shall be valid or binding unless set forth in writing and executed by both the Company and the Indemnitee. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided, will be limited to the specific breach waived.
Section 3.3Termination
(i)Nothing in this Agreement shall prevent the Indemnitee from resigning as a director of the Company or as a director of, or from ceasing to act in a similar capacity with, any Other Entity at any time.
(ii)The obligations of the Company shall not terminate or be released upon the Indemnitee resigning, or ceasing to act, as a director of the Company or as a director of, or ceasing to act in a similar capacity with, any Other Entity at any time.
Section 3.4Governing Law
This Agreement is governed by and shall be construed in accordance with the laws of the Province of Manitoba and the federal laws of Canada applicable therein. Words and terms used in this Agreement and in the Act and which are not defined herein shall have the same meaning as in the Act.
Section 3.5Further Assurances
The Company shall from time to time execute and deliver all such further documents and instruments and do all such acts and things as the Indemnitee may reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement. Each of the Indemnitee and the Company shall diligently attend to, and assist in the conduct of, the defence of any Eligible
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Proceeding, shall assist in enforcing any right of contribution or indemnity against any person or organization and shall (or in the case of the Company, shall cause its appropriate officers, directors, advisors or personnel to) attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses.
Section 3.6Approvals
Where any indemnification sought pursuant to this Agreement is, pursuant to applicable law, subject to or conditional upon the approval or consent of any court or of any governmental body or regulatory authority, the Company agrees to make or cause to be made all necessary applications and to use its commercially reasonable best efforts to obtain or assist in obtaining or facilitating the obtaining of such approval or consent, at its expense.
Section 3.7Severability
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 3.8Benefit of the Agreement
This Agreement shall enure to the benefit of, and be binding upon, the respective heirs, executors, administrators, other legal representatives, successors and permitted assigns of the Company and the Indemnitee, as the case may be. In the event that the Company proposes to (i) amalgamate, consolidate with or merge or wind up into any other person and the Company will cease to exist as a legal entity or will not be the continuing or surviving corporation or entity of such amalgamation, consolidation, merger or winding up; or (ii) transfer or dispose of all or substantially all of its properties and assets to any person or persons (including by way of a lease, licence, long term supply agreement or other arrangement having the same economic effect as a transfer or other disposition), then in each such case the Company will ensure that proper provision is made so that the obligations of the Company set forth in this Agreement will continue in full force, including providing for the assumption of the obligations under this Agreement by any Company or other entity continuing following an amalgamation, merger, consolidation or winding-up of the Company with or into one or more other entities (pursuant to a statutory procedure or otherwise), or by the person or persons acquiring all or substantially all of the properties and assets of the Company, as the case may be, in each case without prejudice to the Indemnitee, by written agreement in form and substance satisfactory to the Indemnitee, acting reasonably and without undue delay, expressly assuming and agreeing to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no amalgamation, consolidation, merger, winding-up or transfer of properties and assets had taken place. In the event of (i) any acquisition (by way of take-over bid, share exchange, purchase of shares or otherwise, and whether in a single transaction or series of related transactions) by any person, or two or more persons acting “jointly or in concert” (within the meaning of that expression as used in applicable securities laws), of beneficial ownership of fifty percent (50%) or more of the outstanding voting or equity securities of the Company entitled to vote generally in the election of directors of the Company, or (ii) a plan of arrangement, amalgamation, merger, consolidation, recapitalization, liquidation, dissolution or other business combination or reorganization or similar corporate transaction, in each case where the Company does not cease to exist as a legal entity and is not a continuing or surviving Company in such transaction, that results in the voting securities of the Company outstanding immediately prior to the consummation of such transaction no longer continuing to represent (either by remaining outstanding or by being converted into or exchanged for securities of another entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company outstanding immediately after consummation of such transaction, then in each such case the Company will ensure that proper provision will be made so that the obligations of the Company set forth in this Agreement will continue in full force, including providing that any entity that so acquires voting or equity securities of the Company, or any entity which is a surviving Company or entity in any such arrangement, amalgamation, merger, consolidation, recapitalization, liquidation, dissolution, business combination or reorganization or other
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transaction, as the case may be, agrees to cause the Company to fulfil and honour in all respects all of its obligations under this Agreement and, to the extent necessary, make available to the Company, or any successor to the Company, any funding required in order for the Company, or such successor, to fulfil and honour all obligations under this Agreement, in each case without prejudice to the Indemnitee.
Section 3.9Independent Legal Advice
The Indemnitee acknowledges that the Indemnitee has been advised by the Company to obtain independent legal advice with respect to entering into this Agreement, that the Indemnitee has obtained such independent legal advice or has expressly waived obtaining such advice, and that the Indemnitee is entering into this Agreement with full knowledge of the contents hereof and with full capacity to do so.
Section 3.10Assignment
This Agreement may not be assigned by the Company without the prior written consent of the Indemnitee.
Section 3.11Notices
Any demand, notice or other communication to be given in connection with this Agreement shall be given in writing and shall be given by personal delivery, by registered mail or by electronic means of communication addressed to the recipient as follows:
To the Company:
Snow Lake Resources Ltd.
c/o MLT Aikins LLP
30th Floor, 360 Main Street
Winnipeg, Manitoba R3C 4G1
Attention: ______________________________
Email:______________________________
With a copy (not constituting notice to):
Garfinkle Biderman LLP
Suite 801, 1 Adelaide St E, Toronto, ON M5C 2V9
Attention: Shimmy Posen
Email:sposen@garfinkle.com
To the Indemnitee:
______________
______________________________
______________________________
Attention:________________________
Email:______________________________
or to such other street address, individual or electronic communication number or address as may be designated by notice given by the applicable party hereto to the other party hereto. Any demand, notice or other communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof or, if given by registered mail, on the second business day following the deposit thereof in the mail or, if given by electronic communication, on the day of transmittal thereof if
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given during the normal business hours of the recipient and on the business day during which such normal business hours next occurs if not given during such hours on any day. If the party hereto giving any demand, notice or other communication knows or ought reasonably to know of any difficulties with the postal system that might affect the delivery of mail, any such demand, notice or other communication may not be mailed but must be given by personal delivery or by electronic communication.
Section 3.12Remedies Cumulative
The right and remedies of the parties hereto under this Agreement are cumulative and are in addition to, and not in substitution for, any other rights and remedies available at law or in equity or otherwise. No single or partial exercise by a party hereto of any right or remedy precludes or otherwise affects the exercise of any other right or remedy to which that party hereto may be entitled.
Section 3.13Attornment
For the purpose of all legal Proceedings this Agreement shall be deemed to have been performed in the Province of Manitoba and the courts of the Province of Manitoba shall have jurisdiction to entertain any action arising under this Agreement. Each party hereto irrevocably attorns to the jurisdiction of the courts of the Province of Manitoba.
Section 3.14Entire Agreement
The parties hereto agree and acknowledge that this Agreement contains the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements between the parties in respect thereof.
Section 3.15Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page to this Agreement by any party by electronic transmission will be as effective as delivery of a manually executed copy of the Agreement by such party.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement.
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[Snow Lake Resources Ltd. – Signature Page to Director Indemnity Agreement]
This Consulting Agreement (this “Agreement”) is entered into this 28th day of March, 2023.
B E T W E E N:
a corporation incorporated under the laws of British Columbia
(the “Contractor”)
- and –
SNOW LAKE RESOURCES LTD.,
a corporation incorporated under the laws of the Province of Manitoba
(the “Client”)
WHEREAS, the Contractor is in the business of providing executive consulting services;
AND WHEREAS, the Client has retained the Contractor to provide the duties of VP of Resource Development pursuant to a Consulting Agreement commencing on November 1, 2021, (as amended, renewed, extended, supplemented, replaced or otherwise modified from time to time, the “First Consulting Agreement”);
AND WHEREAS the Contractor and the Client wish to terminate the First Consulting Agreement and enter into this Agreement;
IN CONSIDERATION of the mutual covenants and agreements hereinafter set forth, the parties agree as follows:
1.Termination of Prior Agreements
1.1The First Consulting Agreement is hereby terminated effective at 5:00 PM on March 31, 2023 (the “Effective Termination Date”). Neither the Contractor nor the Client will have any further obligations toward one another under the First Consulting Agreement as a result of the said termination, except:
1.1the Client shall pay to the Contractor for any accrued, but unpaid service fees and expenses payable pursuant to the First Consulting Agreement up to the Effective Termination Date; and
1.2the provisions of Section 9, 10, 12, 13, 14 and 15 (as it relates to the aforementioned Sections) of the First Consulting Agreement shall survive the termination of the said agreement.
2.Term. This Agreement shall commence on 9:00 AM on April 3, 2023 (the “Effective Date”) and shall continue until terminated in accordance with the provisions herein.
3.Services
3.1The Contractor shall provide services to the Client consistent with the duties of a person holding the office of VP of Resource Development as more particularly set forth in Schedule 1 (the “Services”). The Services will be provided by the Contractor solely through the Contractor's own employee, Dale Schultz (the “Contractor's Personnel”). The Contractor shall not substitute the Contractor’s Personnel, nor shall the Contractor assign this Agreement, nor shall the Contractor subcontract any of the Services without the written consent of the Client.
3.3Unless otherwise set forth in Schedule 1, the Contractor shall furnish, at its own expense, the equipment, supplies, tools and other materials used to perform the Services.
3.5The Contractor shall make itself available for consultation with the Client at such times and places as are mutually agreeable to the parties. The Contractor agrees to prepare and submit to the Client such periodic reports regarding the performance of the Services, as the Client may require.
3.6In addition to the provisions of Section 3.5, the Contractor shall report directly to the Client’s Chief Executive Officer (“CEO”) with respect to the Services performed under this Agreement and will comply with all reasonable requests and instructions given to the Contractor by the CEO and the Client’s Board of Directors (the “Board”).
4. Independent Contractor Relationship
4.1The Contractor is and shall remain at all times an independent contractor and not an employee or dependent contractor of the Client. Nothing in this Agreement shall be construed to create any association, partnership, joint venture, agency, fiduciary or employment relationship between the Contractor and the Client, for any purpose, and neither party has the authority to contract for or bind the other party in any manner whatsoever.
4.2The Contractor shall provide the Services to the Client on a non-exclusive basis and shall be free to provide its services to third parties during the Term of this Agreement; provided that the Contractor shall not provide such services in a way that is inconsistent with any of the provisions of this Agreement.
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4.3Without limiting Section 4.1, the Contractor and the Contractor's Personnel shall not be eligible to participate in any benefit or compensation plans offered by the Client to its employees, including, without limitation, any payments under any employment standards legislation.
4.4The Client shall have no liability or responsibility for withholding or remitting any income, payroll, or other federal or provincial taxes, including employment insurance remittances, Canada Pension Plan contributions, or employer health tax or worker's compensation insurance premiums for the Contractor and the Contractor's Personnel. The Contractor is responsible for these withholding, remitting and registration obligations, and shall indemnify the Client from and against any order, penalty, interest, taxes or contributions that may be assessed against the Client due to the failure or delay of the Contractor to make any such withholdings, remittances or registration, or to file any information required by any law.
4.5The Contractor shall be fully responsible for the Contractor's Personnel and shall indemnify the Client against any claims made by or on behalf of the Contractor's Personnel, including, without limitation, any claim for unpaid wages, overtime, vacation pay, or any other claim under employment standards legislation, reasonable notice of termination, or any other claim whether arising pursuant to contract, statute, common law or otherwise. Section 4.5 shall survive the termination of this Agreement and remain binding on the Contractor.
5.1The Client shall pay to the Contractor a signing bonus (the “Bonus”) in the amount of US$40,000 within 10 business days of the Effective Date.
5.2In consideration of the provision of the Services by the Contractor, the Client shall pay the Contractor the sum of USD$15,000.00 (Fifteen Thousand Dollars) per month during the Term (the “Fees”).
5.3The Client shall reimburse the Contractor or the Contractor’s Personnel for living, food and vehicle expenses in the amount of CAD$8,515.00 per month pursuant to existing agreements between these parties.
5.4Except as provided for in this Agreement, the Contractor shall be responsible for any expenses incurred by the Contractor or the Contractor's Personnel in connection with the performance of the Services. In no event shall the Client reimburse the Contractor for any such expenses.
5.5The Contractor shall issue invoices to the Client on a monthly basis for its fees for Services performed in the immediately preceding month, calculated as provided in Section 0 and the Contractor shall issue invoices to the Client on a monthly basis for the expense incurred in the immediately preceding month, calculated as provided in Section 5.2.
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5.6The Client shall pay all undisputed Fees and expenses within 14 (fourteen) days after the Client's receipt of the Contractor's invoice. All payments shall be made by immediately available funds.
5.7The Client shall be responsible for all sales, use and excise taxes, and any other similar taxes, duties and charges of any kind imposed by any federal, provincial or municipal governmental entity on any amounts payable by Client hereunder; provided that, in no event shall Client pay or be responsible for any taxes, statutory withholdings, deductions or remittances, imposed on or with respect to the Contractor's income, revenues, gross receipts, real or personal property, or other assets, or the Contractor's Personnel.
6. Intellectual Property Matters
6.1The Client is and shall be the sole and exclusive owner of all right, title and interest throughout the world in and to all the results and proceeds of the Services performed under this Agreement (collectively, the “Deliverables”), including all patents, copyrights, trademarks, trade secrets and other intellectual property rights (collectively “Intellectual Property Rights”) therein. The Contractor irrevocably assigns to the Client, all rights, title and interest throughout the world in and to the Deliverables, including all Intellectual Property Rights therein.
6.2The Contractor irrevocably and unconditionally waives all moral rights that the Contractor may now have or may have in the future relating to the Deliverables.
6.3The Contractor shall make full and prompt disclosure to the Client of any inventions or processes made or conceived by the Contractor alone or with others during the Term, relating in any way to the Services, whether or not such inventions or processes are patentable and whether or not such inventions or processes are made or conceived during normal working hours or on the premises of the Client. The Contractor shall not disclose to any third party the nature or details of any such inventions or processes without the prior written consent of the Client.
6.4Upon the reasonable request of the Client, the Contractor shall promptly take such further actions, including execution and delivery of all appropriate instruments of conveyance, as may be necessary to assist the Client to prosecute, register, perfect, record or enforce its Intellectual Property Rights in any Deliverables.
6.5The Contractor shall require each of the Contractor's Personnel to execute written agreements securing for the Client the rights provided for in this Section 6 prior to and as a condition of the Contractor's Personnel providing or performing any of the Services under this Agreement.
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7.1The Contractor acknowledges that in the course of providing the Services, the Contractor may create or have access to information that is treated as confidential and proprietary by the Client, including, without limitation, information pertaining to any Deliverables, in each case whether spoken, written, printed, electronic or in any other form or medium (collectively, the “Confidential Information”).
7.2The Contractor shall treat all Confidential Information as strictly confidential and only use the Confidential Information for the purpose of the Services. The Contractor shall not, without the prior written authorization of the Client, either during the Term or at any time after the termination of this Agreement:
(a)use any Confidential Information for the benefit or purposes of the Contractor or any other person, company or organization whatsoever; or
(b)disclose any Confidential Information to any person, company or other organization whatsoever.
7.3Confidential Information shall not include information that is or becomes generally available to the public other than through the Contractor's breach of this Agreement or is communicated to the Contractor by a third party that had no confidentiality obligations with respect to such information.
7.4If, either during the Term or after the termination of this Agreement, the Contractor is compelled or required to disclose any Confidential Information by law or court order or pursuant to any requirement, request or process of any legal, regulatory or governmental authority, the Contractor shall:
(a)give the Client immediate prior written notice of such requirement, request or process so that the Client may seek, at its sole cost and expense, an appropriate protective order or other remedy; and
(b)cooperate with the Client, at the Client's sole cost and expense, to obtain such protective order or other remedy.
7.5The Contractor shall require the Contractor's Personnel to execute written agreements securing for the Client the rights provided for in this Section 7 prior to and as a condition of the Contractor's Personnel providing or performing any Services under this Agreement.
8. Non-Solicitation . During the Term of this Agreement and for a period of 12 (twelve) months following the termination or expiration of this Agreement, the Contractor shall not make any solicitation to employ the Client's personnel without the prior written consent of the Client. For the purposes of this clause, a general advertisement or notice of a job listing or opening or other similar general publication of a job search or availability to fill employment positions, including on the internet, shall not be construed as a solicitation or inducement, and the hiring of any such employees or independent contractor who freely responds thereto shall not be a breach of this clause.
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9. Representations and Warranties
9.1The Contractor represents and warrants that:
(a)the Contractor has the right to enter into this Agreement, to grant the rights granted herein and to perform fully the Contractor's obligations in this Agreement;
(b)the Contractor's performance of the terms this Agreement and the engagement of the Contractor with the Client do not and will not breach any confidentiality, non-competition, non-solicitation, proprietary rights or other agreement entered into by the Contractor with any third party;
(c)the Contractor has the required skill, experience and qualifications to perform the Services;
(d)the Contractor shall perform the Services in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services, and in compliance with all applicable federal, provincial, territorial and municipal laws and regulations;
(e)the Contractor shall devote such time, attention and energy as is necessary to implement and comply with its obligations under this Agreement;
(f)the Contractor will provide the Client with good and valid title in and to all Deliverables, free and clear of all encumbrances and liens of any kind; and
(g)all Deliverables are and shall be the Contractor's original work (except for material in the public domain or provided by the Client) and, to the best of the Contractor's knowledge do not and will not violate or infringe upon the intellectual property rights or any other rights whatsoever of any person, firm, corporation or other entity.
9.2The Client represents and warrants that:
(a)the Client has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder; and
(b)the execution of their Agreement by its representatives whose signature is set forth at the end of this Agreement has been duly authorized by all necessary corporate action.
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10.1The Contractor shall defend, indemnify and hold harmless the Client and its officers, directors, employees, agents, successors and assigns from and against all losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, arising out of or resulting from:
(a)bodily injury, death of any person, or damage to real or tangible personal property, resulting from the Contractor's or the Contractor's Personnel's acts or omissions; and
(b)the Contractor's breach of any representation, warranty or obligation under this Agreement.
10.2The Client may satisfy such indemnity (in whole or in part) by way of deduction from any payment due to the Contractor.
11.1During the Term, either party may terminate this Agreement without cause upon 90 (ninety) days' written advance notice to the other party. The principles of mitigation apply to any damages owed for termination of this Agreement without required notice, other than minimum payments required by statute. In the event of termination by the Client pursuant to this clause, the Client shall pay the Contractor for any Services completed up to and including the effective date of such termination.
11.2Either party may terminate this Agreement during the Term, effective immediately for cause, without advance notice or payment in lieu of such notice. Without restricting the generality of the foregoing, “cause” includes a material breach of the provisions of this Agreement, where such breach is incapable of cure, or with respect to a material breach capable of cure, where the breaching party does not cure such breach within 3 (three) days after receipt of written notice of such breach.
11.3Upon the expiration or the termination of this Agreement for any reason, or at any other time upon the Client's written request, the Contractor shall promptly after such expiration, termination or request:
(a)deliver to the Company all tangible documents and materials (and any copies) containing, reflecting, incorporating or based on the Client's Confidential Information;
(b)permanently erase all of the Client's Confidential Information from the Contractor's computer systems; and
(c)certify in writing to the Client that the Contractor has complied with the requirements of this clause.
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12.Guarantee. In consideration of the Client entering into this Agreement with the Contractor, the Contractor’s Personnel, covenants and agrees to be personally bound by, and duly perform and observe all covenants, agreements, obligations, liabilities and provisos of the Contractor under this Agreement, and that the liability of the Contractor’s Personnel under this Agreement shall be joint and several with the Contractor and that the liability of the Contractor’s Personnel shall not be released, altered, affected, reduced or limited in any way by any variation, alteration, amendment or renewal of this Agreement, or any term or provision hereof, whether such variation, alteration, amendment or renewal was made with or without the consent of the Contractor’s Personnel.
13. Miscellaneous
13.1Each party shall, upon the reasonable request, and at the sole cost and expense, of the other party, promptly execute such documents and perform such acts as may be necessary to give full effect to the terms of this Agreement.
13.2This Agreement will be binding on and shall enure to the benefit of the parties hereto and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any legal or equitable right or benefit of any nature whatsoever. The Contractor shall not assign any rights under this Agreement, without the Client's prior written consent.
13.3The headings in this Agreement are inserted for convenience or reference only and are in no way intended to describe, interpret, define, affect the construction of or limit the scope, extent or intent of this Agreement or any provision of this Agreement.
13.4Any amendment to this Agreement must be in writing and executed by both parties. No waiver by any party of any of the provisions hereof shall be effective unless it is set in writing and signed by the waiving party. No waiver of any provision in this Agreement shall be deemed or constitute a waiver of any other provision.
13.5This Agreement shall be governed by and construed in accordance with the laws of the Province of Manitoba and the federal laws of Canada applicable therein. Each party irrevocably submits to the exclusive jurisdiction and venue of the courts located in the Province of Manitoba in any legal suit, action or proceeding arising out of or based upon this Agreement or the Services provided hereunder.
13.6All terms and conditions under Section 4.4, Section 4.5, Section 6, Section 7, Section 8, Section 9.1(f), Section 10 and Section 11.3, shall survive the termination of this Agreement whether the termination is initiated by the Contractor, by the Client, on a with or without cause basis, or by mutual agreement, or whether the termination is lawful or unlawful.
13.7The Contractor acknowledges and agrees that monetary damages might not be a sufficient remedy for any breach of this Agreement by the Contractor, and that, in addition to all other remedies available at law, the Client shall be entitled to seek injunctive or other equitable relief as a remedy for any such breach.
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13.8If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall apply to the term or provision only to the extent of that invalidity or unenforceability, and shall not affect any other term or provision of this Agreement.
13.9This Agreement, together with any other documents incorporated herein by reference and related exhibits and schedules, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
13.10The use or reference to the singular and the masculine shall be read and construed as the plural or the feminine whenever the context so requires.
13.11Each of the parties acknowledge that they each have read and understood the terms of this Agreement and that have obtained, or had the opportunity to obtain, independent legal advice with respect to this Agreement before the same was signed by them.
(signature page follows)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
______________________________ | DJS CONSULTING INC. Per: /s/ Dale Schultz________________________
/s/ Dale Schultz________________________ |
|
|
| SNOW LAKE RESOURCES LTD. |
| Per: /s/ Nochum Labkowski___________________ |
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SERVICES
Subject to the overriding direction and control of the Client, the Contractor shall well and faithfully fulfill and perform all duties, tasks and deliverables as requested by the Client and the Board, including, but not limited to, the following:
·Leading project planning sessions;
·Geological services;
·Coordinating staff and internal resources;
·Managing project progress and adapt work as required;
·Ensuring projects meet deadlines;
·Managing relationships with clients and stakeholders;
·Designing and signing off on contracts and workplace safety and health requirements;
·Overseeing all incoming and outgoing project documentation;
·Participating in the tendering process i.e. design, submission and review;
·Design risk mitigation plans;
·Conducting project reviews and creating detailed reports for executive staff;
·Optimizing and improving processes and the overall approach where necessary; and
·Managing large and diverse teams
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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form F-3 of Snow Lake Resources Ltd. of our report dated October 31, 2022 relating to the financial statements of Snow Lake Resources Ltd. for the year ended June 30, 2022 and 2021 and to all references to our firm included in this Registration Statement.
May 31, 2023
/s/ De Visser Gray LLP
De Visser Gray LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
CONSENT OF MLT AIKINS LLP
We hereby consent to the reference to our firm’s name under the caption “Legal Matters” in the prospectus included in this Registration Statement on Form F-3. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
May 31, 2023
/s/ MLT Aikins LLP
MLT Aikins LLP
MLT AIKINS LLP | MLTAIKINS.COM
Seyfarth Shaw LLP
Seaport East
Two Seaport Lane, Suite 1200
Boston, Massachusetts 02210-2028
T (617) 946-4800
F (617) 946-4801
www.seyfarth.com
CONSENT OF SEYFARTH SHAW LLP
We hereby consent to the reference to our firm’s name under the caption “Legal Matters” in the prospectus included in this Registration Statement on Form F-3. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the SEC promulgated thereunder.
May 31, 2023
/s/ Seyfarth Shaw LLP
Seyfarth Shaw LLP