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Stria to license Grafoid's water purification assets
2021-07-07 19:58 ET - News Release
Mr. Scott Anderson reports
STRIA LITHIUM INC. ANNOUNCES CHANGE OF BUSINESS TRANSACTION
Stria Lithium Inc. has signed a letter of intent dated July 6, 2021, with Grafoid Inc., a private corporation incorporated under the laws of the Province of Ontario, which sets forth the general terms and conditions of a proposed licensing agreement that will result in a change of business pursuant to Policy 5.2 -- Change of Business and Reverse Takeovers of the TSX Venture Exchange.
Change of business
Subject to the conditions set forth in the LOI, Stria and Grafoid will enter into a licence agreement, whereby Grafoid will grant Stria an exclusive, worldwide licence to all its intellectual property and technology related to water purification. Upon the completion of the change of business transaction, Stria will change its name to Purafy Clean Technologies Inc. (the resulting issuer and common shares of the resulting issuer are referred to herein as the resulting issuer shares), and the resulting issuer will be a Tier 2 technology issuer.
As consideration for granting the licence, the resulting issuer will issue 20 million resulting issuer shares to Grafoid at a deemed price of five cents per share for aggregate consideration of $1-million. The licence will also be subject to a royalty, payable by the resulting issuer to Grafoid based on a percentage of net or gross sales of the resulting issuer on a quarterly or annual basis. Specific terms of the royalty will be set out in a definitive licence agreement.
Financing
Concurrent with the closing of the proposed transaction, Stria will complete an equity financing of resulting issuer shares to issue a minimum of 42 million resulting issuer shares and a maximum of 60 million resulting issuer shares at a price of five cents per share, resulting in minimum gross proceeds of $2.1-million and maximum gross proceeds of $3-million. Stria intends on engaging an agent to complete the concurrent private placement.
On completion of the proposed transaction and the minimum financing, there will be approximately 206,975,461 resulting issuer shares issued and outstanding. On completion of the proposed transaction and the maximum financing, there will be approximately 225,580,369 resulting issuer shares issued and outstanding.
No sponsor has been engaged by Stria. The company intends to apply for a waiver to the sponsorship requirement under Section 3.4(a) (iii) of Exchange Policy 2.2 -- Sponsorship and Sponsorship Requirements. There is no assurance that such a waiver will be granted.
Board of directors
The board of Stria will remain the board of directors for the resulting issuer. On completion of the proposed transaction, it is anticipated that Marc Roy will be appointed chief executive officer of the resulting issuer. The following are summaries of those individuals considered insiders of the resulting issuer. The summaries include each individual's expected positions with the resulting issuer, and relevant work and educational backgrounds.
Mr. Roy -- chief executive officer
Mr. Roy was appointed as CEO of Grafoid in June, 2020. He was appointed as CEO and director of Focus Graphite Inc. in July, 2020. Mr. Roy served as deputy vice-president at Bensussen Deutsch & Associates Inc., overseeing Europe, Middle East and Asian operations as well as global mergers and acquisitions. Prior to his position at BDA Inc., Mr. Roy served as CEO of BrandAlliance as well as ARPG.
Judith Mazvihwa-MacLean -- chief financial officer
Ms. Mazvihwa-MacLean has nearly two decades of experience in mineral exploration, mining, management and corporate finance. She is the chief financial officer for Stria and Grafoid, as well as Focus Graphite Inc., an exchange-listed mining company, and Braille Energy Systems Inc., an exchange-listed battery manufacturer. Ms. Mazvihwa-MacLean was the chief financial officer for Golden Harp Resources, Logan Resources and Acme Resources (formerly International KRL Resources Corp.) from 2002 to 2009. She also served on the board of directors for both Logan Resources and Acme Resources.
She holds a BSc (geology) from the University of Zimbabwe and an MSc from Brunel University in England, and earned her MBA at Simon Fraser University in British Columbia. She was accredited as a certified management accountant by the Certified Management Accountants Society of British Columbia.
Jeffery York -- chairman of the board
Mr. York is chairman of the board for Stria and Grafoid. He is a partner and special adviser to Farm Boy and its parent company Empire. He received an honours degree in economics from Princeton University and achieved his chartered accountant designation.
Robin Dow -- director
Mr. Dow is director of Stria Lithium. He is also a director of Focus Graphite. From May, 2014, to May, 2020, Mr. Dow was CEO of Eden Empire Inc. (formerly Rosehearty Energy Inc.) and continues to be a director. Mr. Dow graduated with an honours in business administration and masters in business administration from the University of Western Ontario, and in 1979 he was granted the FCSI designation by the CSI.
Harry Martyniuk -- director
Since 2000, Mr. Martyniuk has been a partner in Pioneer Family Pools and Pioneer Distribution, an Ontario-based retailer of pools, hot tubs, swim spas, related chemicals and accessories as well as patio furniture. Pioneer Distribution is a wholesale distributor, supplying Pioneer Retail Stores as well as various independent pool and spa dealers. Pioneer Distribution operates three distribution centres located in Southern Ontario. Mr. Martyniuk earned a bachelor's degree, with honours, in business administration from Wilfrid Laurier University, Waterloo.
Shareholder approval
The proposed transaction is not an arm's-length transaction pursuant to the policies of the exchange. Stria and Grafoid are non-arm's-length parties, as they share common management and directors. Prior to completion of the proposed transaction, Stria will hold a meeting of shareholders where they will be asked to approve the change of business as well as the name change.
Trading halt
As required by the policies of the exchange, trading in the common shares of Stria has been halted. The trading halt will remain in place until the requirements set forth in exchange Policy 5.2 have been met, but may not resume until either the termination or completion of the proposed transaction.
Completion of the transaction is subject to a number of conditions, including, but not limited to, exchange acceptance and, if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Stria Lithium should be considered highly speculative.
Overview of Grafoid Inc.
Founded in 2011, Grafoid is a graphene research, development and investment company that invests in, manages and develops markets for processes that produce economically scalable graphene for use in graphene development applications by leading corporations and institutions. Grafoid's leading investment produces application-friendly, minimal-defect, high-energy density, few-layer graphene, utilizing a safe, non-destructive extraction process, leaving the lowest possible ecological footprint. The completely unique, proprietary process results in what Grafoid regards as a new global standard for economically scalable, high-purity graphene products that can be tailored to both industrial and commercial applications.