MONTREAL, July 09, 2020 (GLOBE NEWSWIRE) — Komet Resources Inc. (“Komet” or the “Corporation”) (TSX-V : KMT) announces today that its board of directors has approved the settlement of $2,556,718of debts through the issuance of common shares of the Corporation (the “Debt Settlement“). Pursuant to the Debt Settlement, the Corporation would issue 21,305,983 common shares at a deemed price of $0.12 per share to a creditor, which is a director and an officer of the Corporation.
The Corporation has currently no liquidities to repay such debts.
The creditor eligible to receive common shares as part of the shares for debt transaction is considered a “related party” of the Corporation within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The shares for debt transaction is exempt from the valuation requirement and the minority approval requirement prescribed in MI 61-101 based on the fact that the fair market value of the related party participation in the shares for debt transaction does not exceed 25% of the Corporation’s market capitalization.
Shares issued as part of the shares for debt transaction will be subject to a statutory four-month hold period until November 10, 2020.
The issuance of the shares is subject to receipt of the approval of the TSX Venture Exchange.