James Bay Resources Limited Enters an Investor Agreement for US Litigation Funding

Executive Summary

• James Bay Resources entered into an investor agreement with 1001399076 Ontario Inc., transferring $452,000 of convertible debentures to the investor in exchange for the investor assuming funding obligations related to the Company’s U.S. litigation claims.
• The investor will receive 80 % of any settlement or final judgment (“Final Award”) from the U.S. claims; James Bay retains the remaining 20 %.
• If no Final Award is received within two years, debenture holders may convert the outstanding principal and accrued interest into Company units at $0.05 per unit, each unit consisting of one common share and one warrant exercisable at $0.05 for three years.

Key Details

• Parties: James Bay Resources Limited (CSE: JBR) and 1001399076 Ontario Inc. (“1001”).
• Purpose: Transfer of funding responsibility for U.S. litigation claims against Wynn Resorts Ltd. and John Armstrong’s firm to 1001.
• Consideration:
• 1001 receives 80 % of any settlement or final judgment proceeds (Final Award) from the U.S. claims; James Bay retains 20 %.
• Convertible Debentures Assigned:
• Aggregate principal value: $452,000.
• Held by shareholders of 1001 and assigned to 1001 under the agreement.
• Conversion Rights (if no Final Award within 2 years):
• Holders may convert outstanding principal + accrued interest into Units at $0.05 per Unit.
• Each Unit = 1 common share + 1 warrant.
• Warrants exercisable at $0.05 per common share for a period of 3 years from issuance.
• Financial Impact:
• Removes $452,000 of convertible debt obligations from James Bay’s balance sheet.
• Provides potential upside through retained 20 % interest in any future settlement.
• Closing Conditions: Transaction subject to customary closing conditions and required approvals.

Notable Quotes

(No direct quotes were included in the release.)