Company: PRMLF
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022391
Chunk: 29

Company: NexMetals Mining Corp.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 1
Chunk 29
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 “Debt
Conversion”).

The
Company issued to Cymbria an aggregate of 3,480,392 units
(each, a “Settlement Unit”) at a deemed issue price of $6.00 per
Settlement Unit in full satisfaction of the $20,882,353 principal
amount outstanding under the Term Loan. Each Settlement Unit consisted of one Common Share of the Company and one Common Share
purchase warrant (each, a “Settlement Warrant”) of the Company. Accrued interest under the Term Loan, up to the
date of the Debt Conversion, in the amount of $268,896,
was settled in cash. 

Each
Settlement Warrant entitles the holder to acquire one additional Common Share of the Company at a price of $8.00 per Common Share until
March 18, 2028. If, at any time prior to the expiry date, the volume-weighted average trading price of the Common Shares is at least
$40.00 per Common Share for a period of 20 trading days, the Company may, at its option, accelerate the expiry date with 30 days’
notice to the Settlement Warrant holders.

The
fair value of the Common Shares issued as part of the Settlement Units was estimated at $17,727,018 and was determined by applying an
implied discount for lack of marketability to the market observed price on the date of issuance. The fair value of the Settlement Warrants
was estimated at $7,398,104 using a Monte Carlo model. The $5,982,434 difference between the fair value of the Settlement Units issued
of $25,125,122 and the carrying amount of the Term Loan of $19,142,687 was recognized as a loss in the current period.

The
Monte Carlo model used to value the Settlement Warrants was based on the following assumptions:

SCHEDULE
OF FAIR VALUE OF SETTLEMENT WARRANTS

    Settlement Warrants 
  
    Expected dividend yield 
     0%
  
    Share price 
    $5.00 
  
    Expected share price volatility 
     81.8%
  
    Risk free interest rate 
     2.57%
  
    Expected life of warrant 
     3 years 

The
volatility was determined by calculating the historical volatility of the Company’s share price over a 3-year period using daily
closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns.