For Immediate Release
Vancouver. B.C., January 25, 2019 – NaiKun Wind Energy Group Inc. (TSX-V: NKW) (“NaiKun” or the “Company”) announces that it has entered into a loan agreement (the “Loan Agreement”) to obtain a C$300,000 secured term loan, at an interest rate of 8% per annum (the “Loan”), from Joe Houssian (the “Lender”), a director and significant shareholder of the Company. Concurrently with the entering into the Loan Agreement, the Company and the Lender entered into a general security agreement pursuant to which the Company grants the Lender a general security interest as security for the Loan indebtedness. The Loan will mature on July 31, 2019.
In connection with the Loan, the Company will issue to the Lender 3,000,000 non-transferrable warrants to purchase common shares in the capital of the Company at an exercise price of $0.10 per common share which shall vest immediately and be exercisable for one year from the issuance (the “Bonus Warrants”). Each of the Bonus Warrants and any common shares in the capital of the Company issuable upon the exercise of a Bonus Warrant, shall be subject to a 4 month period commencing on the date of issuance of the Bonus Warrants.
The proceeds from the Loan will be used by the Company for working capital and general corporate purposes.
The issuance of the Bonus Warrants is subject to the approval of the TSX Venture Exchange (“TSX-V”).
Compliance with Policy 5.9 of the TSX-V and Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”)
On the basis that the Lender is a director and a control person of the Company, the proposed Loan and issuance of Bonus Warrants are each a “related party transaction” within the meaning of MI 61-101.
The Loan and the issuance of the Bonus Warrants (the “Related Party Transaction”) will fall under the definition of a related party transaction described in paragraphs (a) to (g) of the definition of “related party transaction”. The Company is exempt from the formal valuation requirement in respect of the Related Party Transaction pursuant to Section 5.5(b) of MI 61-101, on the basis that no securities of the Company are listed on a specified market. The Company is also exempt from the minority approval requirement of MI 61-101 in respect of the Related Party Transaction pursuant to Section 5.7(1)(a) of MI 61-101, because the fair market value of the Related Party Transaction does not exceed 25% of the Company’s market capitalization as at the time the Related Party Transaction was agreed to. Accordingly, the Related Party Transaction is compliant with Policy 5.9 and MI 61-101.
About NaiKun
NaiKun is a British Columbia-based renewable energy company. Located on B.C.’s northwest coast, where the wind resource is one of the strongest and most consistent in the world, NaiKun’s 396MW offshore wind project would generate enough energy to provide electricity to 130,000 B.C. homes. If the project does proceed it is expected to result in an estimated 500 jobs during construction, 50 permanent jobs for maintenance and operations and over $400 million in direct expenditures in the province during construction, of which $250 million will benefit North Coast communities.
Caution Regarding Forward-Looking Statements – This news release contains certain forward-looking statements. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. When relying on forward- looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. The Company does not undertake to update any forward-looking statements, oral or written, make by itself or on its behalf. Forward-looking statements or information relates to, among other things, the approval of the issuance of the Bonus Warrants by the securities and regulatory authorities, the availability of funds under the Loan and the Company’s plans to use the proceeds of the Loan for working capital and general corporate purposes. For more information on NaiKun, please visit www.naikun.ca.
Neither TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
For further information please contact:
Michael O’Connor, President & CEO
NaiKun Wind Energy Group Inc.
Tel: 604-631-4483 • Fax: 604-685-4215
Email: info@naikun.ca
