Lithium Americas -- summary under Continuances/Migrations

Overview

Lithium Americas continued from B.C. to Zug, Switzerland on or about January 23, 2025. Management anticipated that the continuation would not result in any exit tax under s. 128.1(4)(b) or 219.1.

Continuation

It is proposed that the Corporation be continued (on or about January 23, 2025) pursuant to a B.C. Plan of Arrangement from the Province of British Columbia pursuant to s. 288 of the B.C. Business Corporations Act to the jurisdiction of Zug, Canton of Zug, whereby the Corporation would become and be a Swiss share corporation domiciled in Zug, Canton of Zug, Switzerland, whose existence would be governed under articles 620 et seqq. of the Swiss Code of Obligations, as if the Corporation had been incorporated under the Swiss Code of Obligations. The Continuation will not create a new legal entity, affect the continuity of the Corporation, or impact the Corporation’s ownership of its properties.

Corporation’s shares

Upon the continuation being effective, shareholders will continue to hold common shares with a nominal/par value per common share of US$0.01. Upon completion of the Continuation, the Corporation’s shares will continue to be listed on the TSX and NYSE.

Canadian income tax consequences

S. 128.1(4)(b)

Upon the continuation, the Corporation will cease to be Canadian-resident corporation and its taxation year will be deemed to end immediately before that time. In addition, each property owned by the Corporation immediately before the deemed year end will be deemed to have been disposed of under s. 128.1(4)(b) for proceeds of disposition equal to its fair market value.

S. 219.1

The Corporation will also be subject to an additional tax under Part XIV on the amount by which the fair market value, immediately before its deemed year end resulting from the continuation, of all of the property owned by the Corporation exceeds the total of its liabilities and the paid-up capital of all the issued and outstanding shares of the Corporation immediately before the deemed year end. This additional tax is generally payable at the rate of 25%, but will be reduced to 5% under the Canada-Swiss Treaty unless it can reasonably be concluded that one of the main reasons for the Corporation becoming resident in Switzerland was to reduce the amount of such additional tax or Canadian withholding tax.

No expectation of exit tax

Management has advised that based upon the current fair market value of the properties of the Corporation, the tax costs of such properties, the aggregate of the paid-up capital of the shares and the liabilities of the Corporation, and the Corporation’s available capital and non-capital loss carryforwards, the continuation should result in no tax payment by the Corporation.

U.S. tax consequences

F or D reorg

The continuation will constitute a reorganization under s. 368(a)(1)(F), and generally will not represent a taxable transaction to the Corporation for U.S. federal income tax purposes, provided that holders of not more than 1% of the Corporation’s common shares entitled to vote on the transaction elect to exercise their dissenters’ rights. If the continuation does not qualify as an F reorganization for the reason stated above, it will qualify as a tax-free transaction under s. 368(a)(1)(D), unless the Corporation is required to use an amount of its assets to satisfy claims of dissenting shareholders which would prevent the Corporation from transferring substantially all of its assets to the continued corporation.