Mason Graphite to buy 40% of NanoXplore for $700,000
2014-01-13 07:18 ET - News Release
Mr. Benoit Gascon reports
MASON GRAPHITE SIGNS AGREEMENT TO PURCHASE UP TO 40% INTEREST IN GROUP NANOXPLORE INC. AND ANNOUNCES FULLY SUBSCRIBED FINANCING BY ITS MANAGEMENT AND THE MANAGEMENT OF FORBES & MANHATTAN
Mason Graphite Inc. has signed a letter agreement with Group NanoXplore Inc. whereby Mason Graphite would purchase up to 40 per cent of the issued and outstanding shares of NanoXplore for $700,000. In connection with the proposed transaction, a private placement for 875,000 common shares of the company at a price of 80 cents has been fully subscribed for by members of the management teams of Forbes & Manhattan and Mason Graphite. The issue price represents a 12.7-per-cent premium to Friday's closing price of 71 cents.
NanoXplore is a privately held research and development company focused on developing low-cost, large-scale production of graphene from natural flake graphite and integrating it into several industries, including energy and textiles. Graphene can be produced using a variety of processes, including chemical vapour deposition and liquid exfoliation; however, many of them are not scalable and are associated with higher processing costs. NanoXplore's proprietary technique is a low-cost, low-energy, safe and scalable electrochemical conversion method that turns natural flake graphite into graphene. For more information about NanoXplore, visit its website.
"We are thrilled with the synergies between Mason Graphite and NanoXplore," commented Benoit Gascon, president and chief executive officer of Mason Graphite. "This mutually beneficial alliance will connect our expert teams and combine potential low-cost flake graphite production from our Lac Gueret project and potential low-cost graphene production from NanoXplore's process. Through this strategic alliance, we will eventually become NanoXplore's exclusive supplier of natural flake graphite and we will actively be involved in all facets of their sales and marketing activities. Customers seeking flake graphite are potential customers of graphene; as such, we strongly believe that the relationships we have developed with global graphite customers in the last two decades will greatly benefit NanoXplore's market penetration and distribution abilities. We are eager to work with NanoXplore and to include graphene in our business model, a substance which the Wall Street Journal last year labelled as a 'wonder material.'"
NanoXplore was founded in 2011 by Dr. Soroush Nazarpour, BSc, MSc, PhD, who started his academic career with a materials engineering degree from the Sahand University of Technology. Dr. Nazarpour continued his studies at the University of Barcelona, where he obtained his master's degree in nanoscience and nanotechnology and a PhD in nanoscience. Dr. Nazarpour is a published author of two books and a number of scientific journals.
The proposed transaction would be completed in two tranches, with Mason Graphite purchasing a 20-per-cent interest in NanoXplore on or before Jan. 31, 2014, in consideration for $350,000 and having the right to purchase an additional 20-per-cent interest in NanoXplore on or before July 31, 2014, for an additional $350,000 if Mason Graphite is satisfied with the business, operations and progress of NanoXplore over the six-month period following the completion of the first tranche.
Upon the closing of the first tranche, NanoXplore will appoint Mason Graphite as its sales, marketing and distribution agent and, upon closing of the second tranche, NanoXplore will appoint Mason Graphite as its supplier of graphite once production commences. In addition, upon closing of the first tranche, NanoXplore will appoint Benoit Gascon, Mason Graphite's president and chief executive officer, as the chairman of its board of directors, and Luc Veilleux, Mason Graphite's executive vice-president, chief financial officer and corporate secretary, as a director and its chief financial officer.
Following the completion of some key milestones, NanoXplore will explore the possibility of an initial public offering in order to improve its visibility and access to financing.
The completion of the proposed transaction is subject to customary closing conditions, including the negotiation of definitive agreements and the completion of a due diligence review of NanoXplore by Mason Graphite. The parties anticipate closing the first tranche on or before Jan. 31, 2014.
$700,000 fully subscribed private placement
The company also announces a private placement, fully subscribed for by members of the management teams of Forbes & Manhattan and Mason Graphite, of 875,000 common shares of Mason Graphite at a price per common share of 80 cents for gross proceeds of $700,000. The price of 80 cents per common share represents a 12.7-per-cent premium to Mason Graphite's Jan. 10, 2014, closing price of 71 cents. Mason Graphite intends to use the proceeds of the private placement to finance the equity investment in NanoXplore and for general corporate purposes.
Stan Bharti, chairman of Forbes & Manhattan, commented: "Mason Graphite has secured a large ownership position in NanoXplore on favourable terms due to the contribution of its knowledgeable and experienced team. We are very excited about this investment opportunity and strongly believe that the combined expertise of NanoXplore and Mason Graphite will generate tremendous value."
The closing date of the offering is scheduled to occur on or about Jan. 17, 2014. The common shares issued pursuant to the offering will be subject to a hold period of four months and one day from the date of closing. The offering is subject to customary closing conditions, including TSX Venture Exchange approval.
Qualified person
Jean L'Heureux, Eng, Mason Graphite's executive vice-president of process development and a qualified person as defined by National Instrument 43-101, has reviewed and approved the scientific and technical content of this news release.
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