Lion One Announces Closing of Second Tranche of Non-Brokered Private Placement of Convertible Debenture Units and Units for Aggregate Gross Proceeds of $17.5 Million
Lion One Metals Limited (LIO) has closed the second tranche of its non-brokered private placement, raising aggregate gross proceeds of $17.5 million through convertible debenture units and equity units. Concurrently, the company entered into a transition agreement with Concept Capital Management Ltd., resolving a shareholder requisition for a meeting and establishing a standstill on dissident actions, while adopting new corporate governance measures. The Board also approved a significant stock option grant of 18.9 million options to employees, consultants, officers, and directors to align incentives with long-term objectives.
The financing structure included the issuance of 14,000 convertible debenture units at $1,000 per unit, with the second tranche contributing $1.5 million from 1,500 units. These units carry terms of a 10% subordinated secured convertible debenture with a face value of $1,000, convertible at $0.13 per Common Share into 7,692.3 shares per unit. The debentures mature four years from issuance, and each unit includes 7,692.3 Common Share purchase warrants exercisable at $0.175 per share for four years. Additionally, the company issued 26,923,080 equity units at $0.13 per unit, with the second tranche adding $0.71 million from 5,475,505 units. Each equity unit consists of one Common Share and one Common Share purchase warrant exercisable at $0.175 per share for three years from issuance.
Proceeds from the offering are primarily intended to satisfy upcoming payment obligations under the senior secured loan facility with Nebari Gold Fund I, LP, Nebari Natural Resources Credit Fund I, LP, and Nebari Natural Resources Credit Fund II LP. Secondary use of the funds includes curing the Company's ongoing working capital covenant default under the Facility, with remaining proceeds allocated to general corporate and working capital purposes.
In a move to enhance corporate governance, Lion One Metals entered into a transition agreement with Concept Capital Management Ltd. on July 10, 2026. Under the agreement, Concept Capital withdrew its requisition for a shareholder meeting and agreed to a standstill on future dissident actions. In return, the company adopted a majority voting policy and other measures to enhance corporate governance and shareholder communication, and agreed to reimburse Concept Capital for certain legal costs associated with the agreement.
The Board approved a grant of 18,900,000 stock options under the Omnibus Plan to various employees, consultants, officers, and directors. The options carry an exercise price of $0.16 per option and have a term of five years. The vesting schedule dictates that one-third of the options vest on the date of grant, one-third vests one year following the grant date, and the final one-third vests two years following the grant date.
Finder’s fees totaling $125,351.74 were paid to Leede Financial Inc., Research Capital Corporation, Canaccord Genuity Corp., Ventum Financial Corp., Integral Wealth Management Limited, Hasselbom Forvaltning AB, and RedPlug Inc. The Debenture Units, Units, and underlying securities are subject to a statutory hold period expiring four months and one day after issuance. Completion of the transaction remains subject to final TSXV acceptance. Certain subscribers are directors and management; consequently, the transactions are exempt from formal valuation and minority shareholder approval requirements of MI 61-101 as consideration does not exceed 25% of market capitalization.