REG - Cloudbreak Discovery - Company Update

Cloudbreak DiscoveryAnnouncement

15/11/2023 07:00

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RNS Number : 4603T  Cloudbreak Discovery PLC  15 November 2023

15 November 2023

 

Cloudbreak Discovery Plc

('Cloudbreak', or 'the Company')

 

Company Update

Cloudbreak Discovery Plc, (LSE: CDL), a natural resources project generator in
the mining and energy sectors is pleased to provide the following corporate
update.

Following the resignation of Kyler Hardy as Chairman and CEO and the
appointment of Andrew Male as Interim CEO, the Board has, over the past few
months, undertaken an analysis and review of the Company's investments, assets
and operations and legacy matters relating to its former management. Upon
completion of this review, the Board has agreed to a number of matters with
former management and have entered into the agreements described below
(collectively, the "Settlement Agreements").

Under the terms of the Settlement Agreements, former management and their
related consulting companies Cronin Capital Ltd ("CCL"). and Cronin Services
Ltd ("CSL") (together "the Cronin Parties"), have agreed to enter into the
following agreements with the Company.

1.   Purchase and Assignment of Debt Agreement ("Debt Agreement").

 

The Company has an existing liability in its books of £907,710 ("Cloudbreak
Debt") to the Cronin Parties in relation to outstanding management charges
incurred over the past  two  years. Under the terms of this Debt Agreement all
outstanding amounts owed to the Cronin Parties are being purchased and
assigned to investors. The investors have agreed to pay the Cronin Parties
£136,156.50 in consideration for the assignment. The investors have also
agreed with the Company that they will subsequently convert the Cloudbreak
Debt into ordinary shares in the Company following the Annual General Meeting
on 24 November 2023.

 

Two of the investors participating in the Debt Agreement are Andrew Male,
interim CEO and Director, and Paul Gurney, Director.

 

2.   Share Purchase Agreement ("SPA").

 

CCL and CSL own 91,626,928 and 21,090,400 ordinary shares in Cloudbreak,
respectively, giving a total of 112,717,328 ordinary shares. Under the terms
of the SPA, CCL and CSL will sell 100% of their shares in Cloudbreak, in the
second of a two-stage process.

 

Stage 1:

The Galleon 2023 Ltd., ("Galleon") a company unconnected to Cloudbreak, has
agreed to purchase the following assets from Cloudbreak. The assets
(collectively, the "Legacy Assets") being acquired include the following:

 

·      100% of the shares of Kudu Resources Ltd. and all of its
holdings;

·      The Foggy Mountain Property in the Toodoggone region of British
Columbia;

·      The Le Blache Royalty Agreement stipulating a 2% Net Smelter
Royalty;

·      1,700,000 shares of Buscando Resources Corp.; and

·      950,000 shares of Temas Resources Corp.

The Legacy Assets are being transferred from Cloudbreak to Galleon for an
aggregate consideration of £102,000. During the analysis and review of the
Cloudbreak assets, the Board agreed that the Legacy Assets were not core to
the Company's business strategy and given the Cronin Parties' historic
involvement in the Legacy Assets, it was resolved to dispose of the Legacy
Assets. Paul Gurney and Emma Priestley, the independent directors of
Cloudbreak have also agreed to the transactional value of these Legacy Assets
as being fair and reasonable.

Stage 2:

Galleon has agreed with the Cronin Parties that it will transfer the Legacy
Assets to the Cronin Parties plus an additional £207,000 in cash and in turn
will receive all 112,717,328 ordinary shares in Cloudbreak owned by CCL and
CSL. Cloudbreak currently has 607,678,805 ordinary shares issued and
outstanding and this acquisition of Cloudbreak shares will result in Galleon
becoming an 18.5% shareholder of Cloudbreak.

Pursuant to a lock-in agreement ("Lock-In Agreement") Galleon has agreed with
Cloudbreak that it will not dispose of its shareholding in the Company for a
12-month period following the date of the Lock-in Agreement, unless Galleon
and Cloudbreak mutually agree to change the terms of the Lock-In Agreement or
to provide consent to any disposal.

It is contemplated that all of the Settlement Agreements will have a Closing
Date of 21 November 2023.

Cloudbreak will upon closing provide shareholders with a comprehensive update
on all assets, opportunities and capital structure.

Andrew Male, Interim CEO, commented; "We are happy to have agreed to these
arrangements and agreements with the Cronin Parties and former management and
we look forward to updating our shareholders in the near future. We thank all
shareholders for their patience during this time and look forward to
re-engaging in the near future."

The participation of Andrew Male and Paul Gurney in the Debt Agreement
represents a Material Related Party transaction.  Emma Priestley, the sole
independent director for the purposes of this transaction, has approved the
transaction as being fair and reasonable from the perspective of Cloudbreak
and its shareholders.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

- Ends -

 

For additional information please contact:

 

 Cloudbreak Discovery PLC    Tel: +44 792 6 397675

                             Andrew Male, Interim CEO      andrew@westridgemi.com

 Novum Securities            Tel: +44 7399 9400

 (Financial Adviser)
                             David Coffman / George Duxberry

 Oberon Capital              Tel: +44 20 3179 5355 /

 (Broker)                    +44 20 3179 5315

                             Nick Lovering / Adam Pollock

About Cloudbreak Discovery PLC

Cloudbreak Discovery PLC is a leading natural resource project generator and
royalty business. Cloudbreak is focused on energy royalty acquisitions with
the aim of bringing near-term cashflow and driving shareholder value. Its
primary operating jurisdiction is the United States, but the Company also
deploys its project generation model in the international energy sector to
acquire minority interests in projects of merit.

 

Through its wholly owned but independently operated subsidiary, Cloudbreak
Exploration Inc., the Company will develop its array of mineral assets, whilst
continuing to generate new projects with a particular focus on commodities key
to the energy transition.

 

Cloudbreak's generative model across the energy and mineral sector enables a
multi-asset approach to investing and exploration. Diversification within the
natural resource sector and amongst resource classes is key to withstanding
the cycles of investing.

 

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