Graphite One Announces Revised Pricing to Shares for Debt Settlement

Rhea-AI Summary

Graphite One Inc. (GPHOF) has revised the share pricing for a debt settlement transaction, settling US$6,775,230 in outstanding debt with Taiga Mining Company. The Company will issue 9,296,328 common shares at CA$0.95 per share. The transaction is subject to TSX Venture Exchange approval and is classified as a related party transaction under MI 61-101. Taiga now holds 30,150,191 common shares and 8,768,189 warrants. The Company aims to improve its financial position by clearing accrued liabilities quickly.

Positive

• Debt settlement of US$6,775,230 reduces outstanding liabilities.
• Issuance of shares may improve cash flow and financial stability.
• Approach aligns with the goal of becoming a leading US producer of high-grade anode materials.

Negative

• The debt settlement could dilute existing shareholders' equity due to the issuance of over 9 million shares.
• Classified as a related party transaction, raising potential governance concerns.

VANCOUVER, BC, Sept. 19, 2022 /PRNewswire/ - Graphite One Inc. (TSXV: GPH) (OTCQX: GPHOF) ("Graphite One" or the "Company") announces that further to the news release disseminated on August 23,  2022, the Company has revised the pricing of a shares for debt transaction (the "Debt Settlement Transaction") to settle outstanding debt in an aggregate of US$6,775,230, including US$1,819,230 of accrued interest, owing pursuant to an unsecured loan facility dated September 6, 2019, as amended and extended, between Taiga Mining Company, Inc. ("Taiga") and the Company.

Pursuant to the revised terms of the Debt Settlement Transaction, the Company will issue 9,296,328 common shares (the "Settlement Shares") at a deemed price of CA$0.95 per share to Taiga in full settlement of the debt.  The Settlement Shares will be subject to a statutory four months and one day hold period pursuant to applicable securities laws.  The Debt Settlement Transaction is subject to final approval by the TSX Venture Exchange. 

The Debt Settlement Transaction constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transaction ("MI 61-101") as Taiga is an insider of the Company. The Company is relying on exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the Debt Settlement Transaction with Taiga does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101.

The Company did not file a material change report in respect of the related party transaction at least 21 days before the closing of the Debt Settlement Transaction, which the Company deems reasonable in the circumstances as the Company wishes to improve its financial position by reducing accrued liabilities as soon as possible.

As a result of this transaction, Taiga now holds 30,150,191 common shares and 8,768,189 warrants to purchase additional common shares of the Company. Additional information concerning the foregoing will be contained in the Early Warning Report to be filed by Taiga on SEDAR under the Company's profile.

About Graphite One Inc.

GRAPHITE ONE INC. (GPH: TSX‐V; GPHOF: OTCQB) continues to develop its Graphite One Project (the "Project"), with the goal of becoming an American producer of high-grade anode materials that is integrated with a domestic graphite resource. The Project is proposed as a vertically integrated enterprise to mine, process and manufacture high grade anode materials primarily for the lithium‐ion electric vehicle battery market.  As set forth in the Company's 2022 Pre-Feasibility Study, potential graphite mineralization mined from the Company's Graphite Creek Property is expected to be processed into concentrate at a graphite processing plant. The proposed processing plant would be located on the Graphite Creek Property situated on the Seward Peninsula about 60 kilometers north of Nome, Alaska.  Graphite anode materials and other value‐added graphite products would be manufactured from the concentrate and other materials at the Company's proposed advanced graphite materials manufacturing facility expected to be located in Washington.  The Company intends to make a production decision on the Project upon the completion of a Feasibility Study.

On Behalf of the Board of Directors

"Anthony Huston" (signed)

Neither the 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.

This release includes certain statements that may be deemed to be forward-looking statements. All statements in this release, other than statements of historical facts, that address events or developments that the Company expects, including but not limited to delays or uncertainties with regulatory approvals, including that of the TSX Venture Exchange, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continuity of mineralization, uncertainties related to the ability to obtain necessary permits, licenses and title and delays due to third party opposition, changes in government policies regarding mining and natural resource exploration and exploitation, and continued availability of capital and financing, and general economic, market or business conditions. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this press release, and the Company undertakes no obligation to update publicly or revise any forward-looking information, except as required by applicable securities laws. For more information on the Company, investors should review the Company's continuous disclosure filings that are available at www.sedar.com.

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SOURCE Graphite One Inc.

FAQ

What is the debt settlement amount for Graphite One (GPHOF)?

Graphite One has announced a debt settlement of US$6,775,230.

How many shares will Graphite One issue to settle debt?

The Company will issue 9,296,328 common shares at a price of CA$0.95 each.

What is the impact of the debt settlement on Graphite One's (GPHOF) shareholders?

The debt settlement may dilute existing shareholders' equity due to the large number of shares issued.

When was the debt settlement transaction for Graphite One approved?

The transaction is subject to final approval by the TSX Venture Exchange.

Who is involved in the related party transaction for Graphite One (GPHOF)?

Taiga Mining Company is involved as it is an insider of Graphite One.