Graphite One Announces Shares for Debt Settlement

Rhea-AI Summary

Graphite One Inc. (GPHOF) has announced a Debt Settlement Transaction to clear a total debt of US$6,775,230 by issuing 9,812,791 common shares at CA$0.90 each to Taiga Mining Company. This move aims to enhance the company's financial standing as it continues to advance its Graphite One Project, targeting high-grade anode material production. The settlement shares will be subject to a four-month hold and the transaction requires final approval from the TSX Venture Exchange. This related party transaction does not exceed 25% of the company's market capitalization.

Positive

• Settlement of US$6,775,230 debt improves financial position.
• Issuing shares reduces accrued liabilities quickly.

Negative

• Related party transaction raises potential conflict of interest concerns.
• No material change report filed 21 days prior to the transaction.

VANCOUVER, BC, Aug. 23, 2022 /PRNewswire/ - Graphite One Inc. (TSXV: GPH) (OTCQX: GPHOF) ("Graphite One" or the "Company") announces that the Company has arranged 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 .

Anthony Huston, President and CEO of Graphite One, commented "Graphite One is very appreciative for Taiga's continued support as the Company continues to advance its Graphite One Project and execute on our vision to become an American producer of high-grade anode materials".

Pursuant to the terms of the Debt Settlement Transaction, the Company will issue 9,812,791 common shares (the "Settlement Shares") at a deemed price of CA$0.90 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 28,407,697 common shares and 6,509,232 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"), whereby the Company could potentially become 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 preliminary economic assessment, 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 anodes 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, the location of which is the subject of further study and analysis.  The Company intends to make a production decision on the Project once a feasibility study is completed.

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.

View original content to download multimedia:https://www.prnewswire.com/news-releases/graphite-one-announces-shares-for-debt-settlement-301610511.html

SOURCE Graphite One Inc.

FAQ

What is the purpose of Graphite One's recent debt settlement?

Graphite One's debt settlement aims to clear US$6,775,230 in outstanding debt and improve its financial standing.

How many shares is Graphite One issuing to settle its debt?

Graphite One is issuing 9,812,791 common shares at CA$0.90 each to settle its debt.

What is the date of the debt settlement announcement by Graphite One?

The debt settlement announcement was made on August 23, 2022.

What conditions are attached to the settlement shares issued by Graphite One?

The settlement shares will be subject to a statutory four-month hold period as per securities laws.

Is the debt settlement with Taiga Mining a related party transaction?

Yes, the debt settlement is a related party transaction as Taiga is an insider of Graphite One.