Holly Street Capital Ltd. (TSXV: HSC.P) (“Holly” or the “Company”) announced today that, further to its news release dated November 1, 2021, the Company has entered into a securities exchange agreement with US Critical Metals Corp. (“USCM”) and the securityholders of USCM (the “USCM Securityholders”) dated January 7, 2022 (the “Definitive Agreement”). The Definitive Agreement is in respect of a business combination transaction pursuant to which Holly will acquire all of the issued and outstanding securities of USCM (the “Proposed Transaction”).

It is anticipated that the Proposed Transaction will constitute the qualifying transaction of Holly in accordance with Policy 2.4 - Capital Pool Companies of the Corporate Finance Manual of the TSX Venture Exchange (the “TSXV”). The Company following the completion of the Proposed Transaction is referred to as the “Resulting Issuer”.

More details relating to the Proposed Transaction, as required by TSXV Policy 2.4, section 11.2, will be disclosed in a further news release, constituting a comprehensive news release under the policies of the TSXV.

The Definitive Agreement

The Proposed Transaction will be effected by way of securities exchange among the Company, USCM and the USCM Securityholders. Pursuant to the Definitive Agreement, holders of issued and outstanding common shares of USCM will receive one Post-Consolidation Holly Share (as defined below) for each USCM common share (“USCM Shares”) held (the “Exchange Ratio”). Pursuant to the Definitive Agreement, all existing securities convertible into USCM Shares shall be exchanged, based on the Exchange Ratio, for similar securities to purchase common shares of the Resulting Issuer (“Resulting Issuer Shares”) on substantially similar terms and conditions.

On or immediately prior to the closing of the Proposed Transaction, Holly will complete a consolidation (the “Consolidation”) of its issued and outstanding common shares (the pre-Consolidation common shares in the authorized structure of Holly being referred to as, the “Holly Shares”) on the basis of one new common share in the authorized structure of Holly (the “Post-Consolidation Holly Shares”) for each 1.5 old Holly Shares, such that, prior to closing of the Proposed Transaction, Holly will have approximately 5,006,666 Post-Consolidation Holly Shares issued and outstanding.

It is anticipated that the Resulting Issuer will continue the business of USCM under the name “US Critical Metals Corp.” (the “Name Change”).

In conjunction with closing of the Proposed Transaction, the Company will also pay a finder’s fee of 1,467,857 Resulting Issuer Shares to an arm’s length finder, subject to TSXV approval.

Certain Resulting Issuer Shares to be issued pursuant to the Proposed Transaction are expected to be subject to restrictions on resale or escrow under the policies of the TSXV, including the securities to be issued to principals of USCM (as defined under the TSXV policies), which will be subject to the escrow requirements of the TSXV.

The completion of the Proposed Transaction is subject to a number of terms and conditions, including without limitation the following: there being no material adverse changes in respect of either Holly or USCM; the parties obtaining all necessary consents, orders, regulatory and shareholder approvals, including the conditional approval of the TSXV; completion of the Consolidation, Name Change and any other required corporate changes requested by USCM; completion of a concurrent financing; completion of NI 43-101 compliant technical reports on each of USCM’s material properties; and other standard conditions of closing for a transaction in the nature of the Proposed Transaction.

There can be no assurance that all of the necessary regulatory and shareholder approvals will be obtained or that all conditions of closing will be met.

Upon completion of the Proposed Transaction, it is anticipated that the Resulting Issuer will be listed as a Tier 2 mining issuer on the TSXV, with USCM as its primary operating subsidiary.

Other information relating to the Proposed Transaction

In connection with the Proposed Transaction and pursuant to the requirements of the TSXV, Holly will file a filing statement on its issuer profile on SEDAR (www.sedar.com), which will contain details regarding the Proposed Transaction, Holly, USCM and the Resulting Issuer.

The Proposed Transaction will not constitute a non-arm’s-length qualifying transaction (as such term is defined in the policies of the TSXV) for Holly. Accordingly, the Proposed Transaction will not require the approval of the shareholders of Holly.

The Proposed Transaction may require the approval of the shareholders of USCM. If required, USCM will hold a meeting of shareholders to seek all necessary approvals, the details of which will be disclosed to USCM Securityholders once available.

In accordance with the policies of the TSXV, the Holly Shares are currently halted from trading and will remain so until such time as the TSXV determines, which, depending on the policies of the TSXV, may not occur until completion of the Proposed Transaction.

In connection with the Proposed Transaction, McMillan LLP is acting as legal counsel to Holly and Gowling WLG (Canada) LLP is acting as legal counsel to USCM.

Additional information concerning the Proposed Transaction, Holly, USCM and the Resulting Issuer will be provided in a subsequent news release and in the filing statement to be filed by Holly in connection with the Proposed Transaction in due course.

About Holly Street Capital Ltd.

Holly is designated as a capital pool company under TSXV Policy 2.4. Holly has not commenced commercial operations and has no assets other than cash. Holly’s objective is to identify and evaluate businesses or assets with a view to completing a qualifying transaction. Any proposed qualifying transaction must be approved by the TSXV and, in the case of a non-arm’s-length qualifying transaction, must also receive majority approval of the minority shareholders. Until the completion of a qualifying transaction, Holly will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a proposed qualifying transaction.

As of the date hereof, Holly has 7,510,000 common shares issued and outstanding (2,000,000 of which are subject to escrow restrictions), and an aggregate of 450,000 common shares are reserved for issuance upon the exercise of outstanding stock options.

Holly is a portfolio company of Resurgent Capital Corp. (“Resurgent”), a merchant bank providing venture capital markets advisory services and proprietary financing. Resurgent works with promising public and pre-public micro-capitalization companies listing on Canadian stock exchanges. For more information on Resurgent and its portfolio companies, please visit Resurgent’s website at https://www.resurgentcapital.ca.

For further information regarding Holly and the Proposed Transaction, please contact Joel Freudman, Chief Executive Officer of Holly, at (647) 880-6414.

For further information regarding USCM and the Proposed Transaction, please contact Darren Collins, Chief Executive Officer of USCM, at (786) 633-1756.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to TSXV acceptance and, if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

All information contained in this news release with respect to Holly and USCM was supplied by the parties, respectively, for inclusion herein, and Holly and its directors and officers have relied on USCM for any information concerning such party.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases or state that certain acts, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.

Forward-looking information in this press release may include, without limitation, statements relating to: the completion of the Proposed Transaction, the proposed business of the Resulting Issuer, the completion of the Consolidation, the completion of the Name Change, shareholder and regulatory approvals, the filing of a filing statement on SEDAR, the resumption of trading of Resulting Issuer Shares and future press releases and disclosure.

These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance of each of Holly and USCM may differ materially from those anticipated and indicated by these forward-looking statements. Any number of factors, including without limitation transaction risk, regulatory approval processes, and volatility in financial markets and commodity prices, could cause actual results to differ materially from these forward-looking statements as well as future results. Although each of Holly and USCM believes that the expectations reflected in forward looking statements are reasonable, they can give no assurances that the expectations of any forward-looking statements will prove to be correct. Except as required by law, each of Holly and USCM disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.

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