The WWR Board and management of WWR continually review the company's long-term strategic plan with the goal of maximizing stockholder value. As part of this ongoing process, WWR has periodically evaluated potential acquisitions and business combinations and engaged in discussions with third parties concerning potential strategic transactions, including the potential acquisition or merger of another company. On December 1, 2016, the WWR Board instructed Chris Jones, our President and CEO, to identify and evaluate publicly traded mining companies as potential acquisition targets.
On January 13, 2017, WWR identified Alabama Graphite as a potential candidate.
On February 1, 2017, Mr. Jones called Mr. Baxter, the then CEO of Alabama Graphite, to express WWR's interest in a potential business combination with Alabama Graphite. The two agreed to meet and to further discuss at the Prospectors & Developers Association of Canada ("PDAC") conference in Toronto that would take place from March 5, 2017 to March 8, 2017.
On March 7, 2017, Mr. Jones, Jeff Vigil, the CFO of WWR, Mr. Baxter and Tyler Dinwoodie, the then executive vice president and current President and Corporate Secretary of Alabama Graphite, met at the PDAC conference and discussed a possible business relationship between the two companies. No conclusions were reached.
On March 9, 2017, Mr. Jones and Mr. Baxter confirmed that neither company would pursue a business combination at that time, though they agreed that the two companies should continue to monitor each other's businesses and continue to consider the compatibility of the two companies' businesses.
Prior to May 2017, WWR's increased financial strength contributed to WWR's increased interest in continuing discussions regarding a potential business combination.
On May 4, 2017, Mr. Jones and Mr. Baxter met again at the Mines & Money Conference in New York City where Mr. Jones reiterated WWR's interest in a potential business combination and highlighted for Mr. Baxter WWR's recent successful financing, including its shelf registration and a recently completed $30 million Cantor Fitzgerald at-the-market financing arrangement. During this meeting, Mr. Jones and Mr. Baxter agreed that WWR and Alabama Graphite should enter into a confidentiality agreement so that the parties could move forward and continue their discussion regarding whether a business combination between the two companies would be beneficial for both parties.
On May 8, 2017, Mr. Jones sent a copy of the confidentiality agreement with a one-year term to Mr. Baxter via e-mail. On the following day, WWR and Alabama Graphite executed the confidentiality agreement (the "Confidentiality Agreement"). Promptly thereafter, WWR and Alabama Graphite began exchange of information over the phone.
Starting June 8, 2017, WWR made initial written information requests to Alabama Graphite regarding graphite market prices, a benchmark report, and other information.
On June 12, 2017, WWR requested additional information from Alabama Graphite, including the Preliminary Economic Assessment ("PEA") economic model and the support for the graphite market prices in the PEA. The following day, Mr. Baxter advised Mr. Jones that Alabama Graphite decided to
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discontinue the current discussion with WWR regarding the possible business combination as Alabama Graphite's common shares were then considered by Alabama Graphite to be undervalued.
On July 18, 2017, an internal memorandum was presented to the WWR Board, identifying Alabama Graphite as a potential business combination target.
On August 24, 2017, Terence Cryan, the Chairman of the WWR Board, signed and delivered a letter to Jean Depatie, the Chairman of the Alabama Graphite Board of Directors (the "Alabama Graphite Board"), which letter reiterated WWR's desire to continue discussions regarding a possible strategic combination, joint venture or other mutually agreeable transaction with Alabama Graphite.
On September 5, 2017, Mr. Depatie responded to WWR Board Chairman's e-mail to acknowledge receipt of WWR's letter dated August 24, 2017.
On September 6, 2017, the Alabama Graphite Board sent an additional email to Mr. Cryan noting that the Alabama Graphite Board would not respond to WWR's letter dated August 24, 2017, and expressed the view that there were too many irreconcilable differences between WWR and Alabama Graphite for a business arrangement to take place. However, at the same time, the Alabama Graphite Board's email also noted that Alabama Graphite would be open to further communications with WWR.
On September 7, 2017, WWR sent Alabama Graphite Board an indicative, non-binding offer to merge the two companies at an exchange ratio of 0.10 share of WWR common stock for each Alabama Graphite common share and to provide Alabama Graphite with limited interim funding in connection with the proposed merger, and further responded to the Alabama Graphite Board that that were no known non-reconcilable differences between WWR and Alabama Graphite. Also on September 7, 2017, Mr. Dinwoodie and the Alabama Graphite Board responded separately to WWR, with the latter indicating that it would further respond to WWR as soon as it could.
The following day, on September 8, 2017, Mr. Cryan sent a letter to Alabama Graphite management and Alabama Graphite Board to confirm that it would continue to pursue discussions with Alabama Graphite Board.
On September 12, 2017, Mr. Depatie responded to Mr. Cryan's e-mail, copying the Alabama Graphite Board, Alabama Graphite's legal counsel, Miller Thomson LLP ("Miller Thomson"), and Mr. Dinwoodie, to reconfirm receipt of WWR's letter dated August 24, 2017 and the non-binding indicative offer dated September 7, 2017, and to request that Alabama Graphite's legal counsel to be copied on all future correspondence.
On September 20, 2017, Alabama Graphite issued a press release, signed by Mr. Baxter, announcing the creation of a Special Committee of the Alabama Graphite Board (the "Alabama Special Committee") comprised of Dr. Gareth P. Hatch, to consider and review, with the assistance of advisors and with the support of Alabama Graphite's management, an unsolicited, non-binding indicative offer. The press release described the indicative offer but did not identify WWR by name.
In late September and early October, 2017, counsels for both companies exchanged communications regarding the press release, the Confidentiality Agreement, WWR's ability to provide Alabama Graphite with limited interim funding in connection with the proposed transaction and plans for the companies' representatives to engage further regarding WWR's non-binding indicative offer.
On October 20, 2017, Miller Thomson sent a letter to WWR's Canadian counsel, Stikeman Elliott LLP ("Stikeman"), to provide an update on the review of the Alabama Special Committee and to request information on the availability of interim funding.
On October 27, 2017, Miller Thomson sent a letter to Stikeman to provide a counter-offer by Alabama Graphite that proposed an investment by WWR in Alabama Graphite and Alabama Graphite Sub.
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On November 10, 2017, Mr. Cryan sent an email to Mr. Depatie to respond to Alabama Graphite's letters dated October 20 and October 27, 2017, reiterating WWR's desire to merge the two companies, to provide interim funding but only in conjunction with a merger, and to arrange a meeting in London during the week of November 27, 2017.
On November 14, 2017, Dr. Hatch, member of the Alabama Special Committee, emailed Mr. Cryan, copying the Alabama Graphite Board and Miller Thomson, confirming receipt of the November 10, 2017 letter, expressing a willingness to meet in London the week of November 27, 2017 and requesting an updated indicative offer and details on interim funding including amount and terms.
On November 16, 2017, Mr. Dinwoodie called Mr. Jones and requested an in-person meeting on November 20, 2017 at WWR's corporate office in Centennial, Colorado to discuss the strategic value of a merger, the possible terms, and the availability of interim funding.
On November 20, 2017, Mr. Dinwoodie, Mr. Jones, Mr. Vigil Mr. Lawrence and WWR's financial advisor, Cantor Fitzgerald, met at WWR's offices to discuss the strategic value of a merger, the possible terms, and the availability of interim funding.
On November 21, 2017, Mr. Dinwoodie, Mr. Jones, Mr. Vigil and Mr. Lawrence met to further discuss the strategic issues associated with a merger and next steps.
On November 22, 2017, Mr. Cryan signed a non-binding letter of intent to enter into a plan of arrangement whereby WWR would acquire all of the outstanding common shares of Alabama Graphite at an exchange ratio of 0.13 share of WWR common stock for each Alabama Graphite common share and to provide Alabama Graphite with interim funding in the form of a secured financing facility. On November 23, 2017, Mr. Depatie signed the non-binding letter of intent and Mr. Dinwoodie delivered the executed document to WWR via email.
On November 27, 2017, WWR's management team, its financial advisors and legal counsel began formal due diligence on Alabama Graphite.
On December 7, 2017, WWR and Alabama Graphite held a telephone conference during which the parties agreed to reduce the exchange ratio to reflect due diligence findings, Alabama Graphite's need for immediate financing and Alabama Graphite's request to increase the size of the secured financing facility to be provided by WWR from $1.5 million to $2.0 million.
Between November 23, 2017 and December 13, 2017, the parties engaged in due diligence regarding their counterparts, conducted further price negotiations and negotiated the definitive version of the Arrangement Agreement and the Loan Agreement, including cancellation of options and warrants held by certain directors and officers.
On December 13, 2017, certain directors, officers and other holders of warrants and options of Alabama Graphite, including holders affiliated with Alabama Graphite directors and officers, entered into Option Surrender Agreements and Warrant Surrender Agreements, as applicable, in connection with the execution of the Plan of Arrangement.
Also on December 13, 2017, Mr. Jones and Mr. Dinwoodie executed the Arrangement Agreement (and associated agreements) and the Loan Agreement (and associated agreements) and publicly announced the details of the Arrangement for WWR to acquire Alabama Graphite.