Sorrento closes $3.17-million private placement

Executive Summary

• Sorrento Resources Ltd. has closed a $3.175 million brokered private placement offering led by Research Capital.
• The company issued a mix of premium flow-through units, flow-through units, and regular units, along with associated warrants, to raise gross proceeds of $3,175,000.
• Proceeds are designated for eligible Canadian exploration expenses (CEE) on projects in Newfoundland and Labrador, working capital, and general corporate purposes.

Key Details

• Total Gross Proceeds: $3,175,000.
• Agent: Research Capital (sole agent and sole bookrunner).
• Securities Issued:
  • Premium Flow-Through Units: 4,200,000 units at $0.35/unit for $1,470,000. Each unit consists of one common share (qualifying as a flow-through share under Subsection 66(15) of the Income Tax Act) and one common share purchase warrant.
  • Flow-Through Units: 916,700 units at $0.30/unit for $275,010. Each unit consists of one common share (qualifying as a flow-through share) and one-half of one warrant.
  • Regular Units: 5,719,960 units at $0.25/unit for $1,429,990. Each unit consists of one common share and one warrant.
• Warrant Terms (Investors): Each warrant entitles the holder to purchase one common share at an exercise price of $0.35 per warrant share. Warrants expire on November 18, 2027.
• Use of Proceeds:
  • Gross proceeds from Premium FT and FT units: To incur eligible Canadian exploration expenses (CEE). Half will be flow-through critical mineral mining expenditures, and half will be flow-through mining expenditures related to exploration expenses on projects in Newfoundland and Labrador. The company will renounce such CEE to purchasers with an effective date no later than December 31, 2025.
  • Net proceeds from Regular Units: For continuing exploration drilling program, working capital requirements, and other general corporate purposes.
• Agent Compensation:
  • Cash commission: $171,300.
  • Broker warrants: 573,400 warrants granted to the agent.
  • Advisory fee: Approximately $6,000.
  • Advisory broker warrants: 24,000 warrants granted to the agent.
  • Agent Warrant Terms: Each agent's warrant entitles the holder to purchase one common share at an exercise price of $0.25 until November 18, 2027.
• Resale Restrictions: Securities issued are subject to resale restrictions under Canadian securities legislation until March 19, 2026.
• Debt Set-Offs:
  • $150,000 in principal value of a loan from Canal Front Investments Inc. (owned by Blair Naughty) was set off against a subscription for 600,000 units at $0.25/unit.
  • $70,000 in accrued and unpaid fees to a company owned by Alex Bugden was set off against a subscription for 280,000 units at $0.25/unit.
• Insider Participation: Insiders acquired an aggregate of 880,000 units on the same basis as other subscribers. This constitutes a related-party transaction under Multilateral Instrument 61-101. The company relied on exemptions from formal valuation (Section 5.5(a)) and minority shareholder approval (Section 5.7(1)(a)) as the fair market value of the offering involving interested parties did not exceed 25% of the company's market capitalization.
• Debt Settlement with Kluane Capital FZCO:
  • Entered into a debt settlement agreement dated November 17, 2025.
  • Settled a $50,000 principal value loan (dated Oct 25, 2024) by issuing 200,000 units at $0.25/unit.
  • Closing of this specific debt settlement is expected on or around November 25, 2025.
• Commitment Warrants:
  • Issued 800,000 commitment warrants to Canal and Kluane in accordance with prior loan agreements.
  • Terms mimic the warrants issued in this financing (exercise price $0.35, expiry Nov 18, 2027).
  • Subject to resale restrictions until March 19, 2026.
  • Issuance to Canal is a related-party transaction; exemptions from MI 61-101 valuation and approval requirements were relied upon.
• Early Warning Disclosure:
  • Blair Naughty (via Canal Front Investments Inc.) acquired 600,000 units and 600,000 commitment warrants.
  • Total beneficial ownership: 5,130,500 shares (11.78% undiluted, 15.09% partially diluted).
  • Prior ownership: 4,530,500 shares (13.85% undiluted, 15.14% partially diluted).
  • Aggregate value of units issued to Canal: $150,000.