Foremost Lithium Resource & Technology .(FMST) - 2024 Q2 - Quarterly Report

Financial Performance - Foremost Clean Energy Ltd. reported a revenue of CAD 50 million for the fiscal year ended March 31, 2024, representing a 15% increase compared to CAD 43.5 million in the previous year[18]. - The company achieved a net income of CAD 5 million for the same period, up from CAD 3 million, indicating a 66.67% growth year-over-year[18]. - The company reported a cash flow of CAD 15 million for the three months ended June 30, 2024, compared to CAD 10 million for the same period in 2023, reflecting a 50% increase[19]. - Foremost's total assets increased to CAD 100 million as of March 31, 2024, up from CAD 85 million the previous year, marking a 17.65% growth[18]. - Foremost anticipates a revenue growth of 20% for the upcoming fiscal year, projecting revenues to reach CAD 60 million[24]. User Growth - User data showed an increase in active users by 25%, reaching 200,000 users as of June 30, 2024, compared to 160,000 users in the previous year[19]. Strategic Plans - The company is investing CAD 10 million in new product development, focusing on renewable energy technologies[24]. - Foremost plans to expand its market presence in North America, targeting a 30% increase in market share by the end of 2025[24]. - The company is considering strategic acquisitions to enhance its technological capabilities and market reach, with potential targets identified[24]. Arrangement Agreement - The Arrangement aims to reorganize Foremost into two separate companies: Foremost, focused on Athabasca Uranium Properties and lithium projects, and Spinco, focused on the Winston Property[56]. - Shareholders will receive New Foremost Shares and Spinco Shares in proportion to their holdings of Foremost Shares at the Effective Time[56]. - Each Foremost Option will be exchanged for 0.9136 Foremost Replacement Options and 0.0864 Spinco Options[63]. - Each Foremost RSU will be exchanged for 0.9136 Foremost Replacement RSUs and 0.0864 Spinco RSUs[64]. - The Arrangement requires approval from at least 66⅔% of votes cast by Shareholders at the Meeting[73]. - The Arrangement is expected to unlock the value of Foremost's Winston Property, which is not fairly valued in the current portfolio[70]. - The Foremost Board unanimously recommends that Shareholders vote FOR the Arrangement Resolution[72]. - The Arrangement will be subject to the approval of the CSE and, if required, NASDAQ for the listing of New Foremost Shares[76]. - The completion of the Arrangement will provide enhanced value by creating independent investment opportunities in separate project-focused companies[70]. - Shareholders will retain their existing pro rata ownership of Foremost and gain pro rata ownership of Spinco, ensuring upside potential as the Winston Property is advanced[70]. Financing and Shareholder Information - Spinco Financing includes a secured loan of $677,450 from current shareholders, due on November 5, 2027, with an interest rate of 8.95% per year[100]. - Foremost intends to apply for the Final Order on January 10, 2025, following shareholder approval of the Arrangement Resolution[80]. - Upon completion of the Arrangement, Foremost will focus on advancing the Athabasca Uranium Properties and a secondary portfolio of lithium projects[87]. - Spinco will own 100% of the Sierra Shares and will concentrate on the exploration and development of the Winston Property[90]. - The Arrangement is expected to be effective on or about January 10, 2025, with a Distribution Record Date the business day prior[83]. - Foremost Shares are currently traded on the CSE under the symbol "FAT" and on NASDAQ under "FMST," and will continue to be listed post-Arrangement[84]. - The Arrangement requires approval from the CSE and NASDAQ, with no assurance that Spinco will attain a listing on the CSE[85]. - Shareholders exercising Dissent Rights must provide written notice by December 18, 2024, to be entitled to fair value for their shares[97]. - The securities issued under the Arrangement will not be registered under the U.S. Securities Act, relying on Section 3(a)(10) Exemption[108]. - The Arrangement is considered a "downstream transaction" and is exempt from minority approval and formal valuation requirements under MI 61-101[106]. - The Record Date for determining eligible Shareholders is set for October 24, 2024, with 7,291,896 Foremost Shares issued and outstanding[147]. - Denison holds 1,369,810 Foremost Shares, representing 18.79% of the outstanding shares[148]. - A quorum requires at least 5% of the outstanding Foremost Shares to be represented at the Meeting[149]. Governance and Resolutions - Six directors are proposed for election to hold office until the next annual general meeting, requiring a simple majority (50% + 1) of votes cast by shareholders[160]. - The appointment of auditors will be determined by a plurality of votes, with the auditors receiving the highest number of votes being appointed[160]. - The arrangement resolution requires at least two-thirds (66⅔%) of the votes cast at the meeting by shareholders[160]. - The Foremost Annual Financial Statements will be presented to shareholders, but no formal approval is required at the meeting[158]. - Management recommends shareholders vote FOR the ordinary resolutions fixing the number of directors at six[161]. - David Cates, President & CEO of Denison, is nominated for election as a director, with no shares beneficially owned[164][173]. - Amanda Willett, Corporate Counsel and Secretary of Denison, is also nominated for election, with no shares beneficially owned[164][172]. - The company has no knowledge of any other matters to be acted upon at the meeting beyond those referred to in the notice[153]. - Shareholders will have the opportunity to discuss the company's financial results with management[158]. - The company emphasizes the importance of the Advance Notice Provisions for director nominations by shareholders[178]. - The number of Foremost Shares that may be issued upon the exercise or settlement of Foremost Awards is proposed to increase from 850,000 to 1,500,000[188]. - Shareholders will receive one (1) New Foremost Share and two (2) Spinco Shares for each Foremost Share held prior to the Effective Date of the Arrangement[194]. - The Arrangement Resolution requires approval from at least two-thirds (66⅔%) of the votes cast by Shareholders at the Meeting[195]. - MNP LLP was appointed as the auditor of the Company on September 28, 2023, replacing Davidson & Company[184]. - Management recommends Shareholders vote FOR the appointment of MNP LLP as auditor for the ensuing year[186]. - The Foremost Board has concluded that the Arrangement is in the best interests of Foremost and fair to its Shareholders[199]. - The proposed amendment to the Foremost Incentive Plan is to accommodate the anticipated increased issuance of Foremost Awards upon completion of the Arrangement[188]. - The effective date of the Arrangement is expected to be on or about January 10, 2025[196]. - The Foremost Incentive Plan Resolution must be approved by a simple majority of the votes cast by Shareholders[191]. - Management recommends Shareholders vote FOR the Foremost Incentive Plan Resolutions[192]. - Foremost will undergo a capital reorganization involving the exchange of each issued and outstanding Class A Common Share for one New Foremost Share and two Spinco Shares[206]. - The stated capital account for Foremost Class A Common Shares will be reduced to nil, while the stated capital account for New Foremost Shares will be adjusted accordingly[206]. - Foremost Class A Common Shares will be cancelled, and the authorized share structure will be amended to eliminate these shares[206]. - Holders of Foremost Options and RSUs will have their warrants amended to entitle them to receive one New Foremost Share and two Spinco Shares upon exercise[206]. - The reorganization steps will ensure that former holders of Class A Common Shares are registered as holders of New Foremost Shares and Spinco Shares[206]. - The amendments will be reflected in Foremost's Notice of Articles to align with the changes from the capital reorganization[206].