Kaizen Capital Corp.
TSX VENTURE : KZN.H
NEX BOARD : KZN.H

April 19, 2016 14:30 ET

Kaizen Completes Private Placement of C$1.188 Million in Subscription Receipts and Announces the Closing of Its Qualifying Transaction With Tudor Holdings Ltd.

VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 19, 2016) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Kaizen Capital Corp. (the "Corporation" or "Kaizen") (NEX:KZN.H) a capital pool company listed on the NEX board of the TSX Venture Exchange (the "Exchange"), is pleased to announce that, in connection with the previously announced private placement relating to its Qualifying Transaction (the "Transaction") within the meaning of the policies of the TSX Venture Exchange (the "Exchange") described in the Company's filing statement (the "Filing Statement") dated April 6, 2016, Kaizen has issued 11,880,000 subscription receipts of the Corporation ("Subscription Receipts") at a price of C$0.10 per Subscription Receipt, for aggregate gross proceeds of approximately C$1.88 million (the "Financing"). Upon certain escrow conditions being met, Kaizen converted the Subscription Receipts into 11,880,000 common shares of the Company.

Kaizen is also pleased to announce the closing of the Transaction and pursuant to the policies of the Exchange, the Corporation will no longer be a capital pool company and will be classified as a Tier 2 Mining Issuer. The Transaction was an arm's length transaction and therefore was not subject to approval of the shareholders of Kaizen.

On March 31, 2016, the Exchange issued its conditional acceptance of the Transaction. The Corporation's common shares ("Kaizen Shares") will resume trading on the Exchange under the ticker symbol "KZN" after the Exchange's conditions for listing are satisfied and the Exchange issues its final exchange bulletin confirming the completion of the Transaction. The Corporation will issue a news release once the Exchange issues its final exchange bulletin and will then advise of the expected listing date.

The Transaction consisted of a definitive agreement with Tudor Holdings Ltd., a private company ("Tudor"), dated April 6, 2016 (the "Definitive Agreement") pursuant to which Kaizen acquired, subject to certain conditions, the Mackie mineral property (the "Mackie Property") located in northwestern British Columbia in the Skeena Mining District. The Mackie Property comprises 6,992 hectares and consists of three claim groups designated Mackie East, Mackie West and Doc. As consideration for the Transaction, Kaizen issued to Tudor an aggregate of 30,000,000 Kaizen Shares at a deemed price of $0.10 per share, for a total acquisition price of $3,000,000.

The filing statement ("Filing Statement"), which describes the terms of the option of the Mackie Property also includes the National Instrument 43-101 technical report with respect to the Mackie Property, have been filed with the Exchange and applicable securities commissions and are available on SEDAR under the Corporation's profile at www.sedar.com.

In connection with the Transaction, Richard A. Graham, Donn Burchill and Sandra Lee stepped down from the Corporation's board of directors (the "Board"). Raymond Marks remains on the Board and Walter Storm, Robert Quinn and Helmut Finger were appointed to the Board. Messrs. Storm, Quinn and Finger will comprise the Audit Committee of the Corporation going forward. In addition, Richard A. Graham stepped down as the President, Chief Executive Office, Chief Financial Officer and Corporate Secretary of the Company and the following individuals were appointed officers of the Company:

  • Walter Storm, President and Chief Executive Officer
  • Aris Morfopoulos, Chief Financial Officer and Corporate Secretary
  • Alexander Burton, Vice President, Exploration
  • Raymond Marks, Executive Vice President

For further details on the Corporation's directors and officers, please see the Filing Statement (a copy of which is available at www.sedar.com).

In connection with the Transaction, 250,000 escrow shares will be transferred within escrow to Tudor Holdings Ltd. (the "Transfer").

Immediately prior to the closing of the Transaction there were 3,025,000 Kaizen Shares outstanding. Following the closing of the Financing and completion of the Transaction, there are 44,905,000 common shares outstanding. The original shareholders of Kaizen Shares hold approximately 6.74% of the issued and outstanding common shares of the resulting issuer. Tudor will own approximately 66.81% of the resulting issuer. The Kaizen Shares issued as part of the Transaction are subject to the value escrow requirements of the Exchange, with common shares being released from escrow on the following schedule:



Release Dates
Percentage of Total Escrowed
Securities to
be Released
Date of Final Exchange Bulletin approving the Acquisition 10 %
6 months following Final Approval 15 %
12 months following Final Approval 15 %
18 months following Final Approval 15 %
24 months following Final Approval 15 %
30 months following Final Approval 15 %
36 months following Final Approval 15 %

The Corporation also granted 2,850,000 stock options to directors, officers and consultants of the Company. The options have an exercise price of $0.10 per share and expire in ten years.

Early Warning

Pursuant to the Transaction, Tudor (controlled by Walter Storm) acquired direct ownership of 30,000,000 Kaizen Shares and will acquire an additional 250,000 shares subject to value escrow requirements upon receipt of Exchange approval. Zoe Storm, the spouse of Walter Storm, acquired 2,000,000 Kaizen Shares from the Financing. Zoe Storm is an associate of Walter Storm and, pursuant to the provisions of Multilateral Instrument 62-104, is deemed to be acting jointly or in concert with Tudor.

In addition, Walter Storm, a principal of Tudor was granted stock options to purchase an aggregate of 1,000,000 Kaizen Shares with an exercise price of $0.10 per Kaizen Share that expire in ten years. Collectively, these Kaizen Shares and stock options represent 67.53% of the issued and outstanding common shares of Kaizen on a partially diluted basis assuming the exercise of the stock options held by Walter Storm.

An early warning report respecting this transaction will be electronically filed with the Securities Commissions in British Columbia, Alberta and Ontario and will be available for viewing at www.sedar.com. A copy of the report can be obtained by contacting Aris Morfopoulos, Chief Financial Officer and Corporate Secretary of Kaizen Capital Corp. at 604 721-2650.

About the Mackie Property

The Mackie Property is situated in north-western British Columbia, approximately 50 km north-northwest of Stewart and 950 km northeast of Vancouver, BC, on NTS Map Sheet 104B/8. The Mackie Property is roughly centered on at a latitude and longitude of approximately 56.45°N and 130.25°W, respectively. The area is mountainous and rugged, and partly covered by glaciers and ice fields but has a long and rich history of mineral exploration and production.

The property consists of 17 staked claims covering approximately 6992 hectares. The claims are in three groups, designated Mackie East, Mackie West and Doc.

Walter Storm, President and Chief Executive Officer

Cautionary statements

This press release contains "forward-looking information" within the meaning of applicable securities laws, including final approval of the TSX Venture Exchange. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to update forward-looking information, except as required by securities law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Qualifying Transaction and has neither approved or disapproved the contents of this press release.

The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Contact Information

  • Kaizen Capital Corp.
    Aris Morfopoulos
    Chief Financial Officer and Corporate Secretary
    604-721-2650