1Broadway Gold Mining Ltd. Provides Update to Proposed Arrangement With Mind Medicine, Inc.
5:52 pm ET January 24, 2020 (Globe Newswire) Print
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Broadway Gold Mining Ltd. ("Broadway" or the "Company") (TSXV:BRD) (OTC:BDWYF) is pleased to provide an update on its reverse takeover transaction ("RTO") by the current shareholders of Mind Medicine, Inc. ("MindMed") by way of plan of arrangement (the "Arrangement") as announced on July 26, 2019 and October 15, 2019. Effective January 23, 2020 Broadway and MindMed have executed an amendment (the "Amendment") to the definitive arrangement agreement (the "Arrangement Agreement") to extend the closing date of the Arrangement from no later than January 31, 2020 to no later than March 31, 2020. All other terms of the Arrangement Agreement remain in full force and effect and unamended.
On December 19, 2019, MindMed completed the first tranche of its previously announced brokered private placement financing of Class D non-voting shares (the "Shares") of MindMed at a price of CAD$0.33 per share (the "Brokered Private Placement") for gross proceeds of $6,194,726. MindMed anticipates closing a second tranche of the Brokered Private Placement on or about February 11, 2020 raising an aggregate of up to CAD$15 million. There can be no assurances that MindMed will elect to close the second tranche.
In connection with the proposed RTO, Broadway is pleased to announce that it obtained an interim order from the Supreme Court of British Columbia on January 20, 2020 (the "Interim Order"). The Interim Order provides for, among other things, the holding of an annual and special meeting (the "Meeting") of the holders of common shares of Broadway (the "Shareholders") to approve the Arrangement under the Business Corporations Act (British Columbia). The Meeting is scheduled to be held at the offices of Wildeboer Dellelce LLP, Suite 800, Wildeboer Dellelce Place, 365 Bay St., Toronto, Ontario M5H 2V1 on Wednesday, February 19, 2020 at 10:00 a.m. (Toronto time). The record date for determining Shareholders entitled to receive notice of and vote at the Meeting was fixed at the close of business on January 14, 2020.
A management information circular (the "Circular") in respect of the Meeting has been mailed to shareholders of Broadway and has been filed under Broadway's profile on www.SEDAR.com. Broadway Shareholders are encouraged to review the Circular.
At the Meeting, shareholders of Broadway will be asked, among other things, to elect the directors and to appoint the auditor of the Company (both before and after completion of the Arrangement, if approved), to approve the Arrangement (the "Arrangement Resolution"), to approve the consolidation of the existing issued and outstanding securities of Broadway on an eight-for-one (8-1) basis (the "Consolidation"), to approve the creation of a class of majority voting shares which are expected to be issued, if at all, to preserve Broadway's status as a foreign private issuer under U.S. securities laws and the change of name of Broadway's common shares to "subordinate voting shares" and to approve the de-listing of Broadway's common shares from the TSX Venture Exchange, effective and conditional upon the approval of the Arrangement. The Arrangement Resolution requires approval of not less than two-thirds of the votes cast at the Meeting.
If the Plan of Arrangement is approved and completed, Broadway intends to transfer all of Broadway's right, title and interest, and all associated liabilities, in the Broadway and Madison mine (the "Spin-Out Transaction"), which comprises 450 acres of land, a 192 acre ranch, buildings, mine equipment and fixtures, 6 patented, 35 unpatented mineral claims, and mineral rights to a four-square-mile property, in the Butte-Anaconda region of Montana (the "Madison Project") to a wholly-owned B.C. subsidiary of Broadway, Madison Metals Inc. ("SpinCo"). SpinCo was incorporated on October 11, 2019 for the purpose of acquiring the Madison Project in connection with the Arrangement. Pursuant to the Plan of Arrangement, SpinCo will issue 49,860,204 common shares to Broadway as consideration for the Madison Project (the "SpinCo Consideration Shares"), which SpinCo Consideration Shares will be distributed to the holders of record of the Company's shares immediately before completion of the RTO on a pro-rata basis (other than to shareholders who dissent in accordance with the provisions of the Arrangement). Broadway shareholders will be entitled to receive one SpinCo Consideration Share for every common share of Broadway on a pre-Consolidation basis held by such shareholder. As a result, assuming the Arrangement is completed, each Broadway shareholder will hold shares of SpinCo as well as their post-Consolidation subordinate voting shares of the Resulting Issuer. The SpinCo Consideration Shares will not be listed or posted for trading on any stock exchange; therefore there will be reduced liquidity for SpinCo shares. There is no guarantee or assurance that securities of SpinCo will ever be listed for trading on any stock exchange or that any market for the SpinCo Consideration Shares will develop and as a result SpinCo shareholders may not be able to re-sell their SpinCo Consideration Shares.
If the Arrangement Resolution and related matters are approved at the Meeting, Broadway will seek a final order from the Supreme Court of British Columbia on or about February 24, 2020.
In addition to shareholder approval, the Arrangement and related matters is subject to the receipt of regulatory and court approvals. Broadway and MindMed have received conditional approval from the Neo Exchange Inc. (the "Neo Exchange") for the listing of the subordinate voting shares of Mind Medicine (Mind Med) Inc., the resulting issuer following the RTO (the "Resulting Issuer"). Listing is subject to the Resulting Issuer fulfilling all of the Neo Exchange's listing requirements, including minimum distribution and other listing requirements.
If all the conditions of the Arrangement Agreement, a copy of which can be found under the Company's profile on www.SEDAR.com, are satisfied or waived and all the necessary shareholder, regulatory and court approvals are received, Broadway and MindMed plan to close the RTO by the end of February 2020 and commence trading on the Neo Exchange shortly thereafter. There can be no assurances that all such conditions will be satisfied or such approvals obtained.
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