Solid Impact Investments Corp. Signs Letter Agreement for Qualifying Transaction with Allied Critical Metals Corp.

(TheNewswire)

Vancouver, British Columbia – TheNewswire - July 20, 2023 – Solid Impact Investments Corp.(TSXV:SOLI.P) (the "Company" or "Solid"), a capital pool company, is pleased to announce that it has signed a letter agreement (the "Letter Agreement") dated effective July 18, 2023 with Allied Critical Metals Corp. ("ACM" or "Allied Critical Metals"), which provides the general terms and conditions of the reverse takeover (the "Transaction") of the Company by Allied Critical Metals, pursuant to the policies of the TSX Venture Exchange (the "Exchange").

As part of the Transaction, Allied Critical Metals agreed to acquire (the "Acquisition") the Portuguese company, Pan Metals Unipessola Limitada ("PanMetals") as the 90% beneficial owner of the two historical and established Portuguese tungsten projects (the "Tungsten Projects"): the Borralha Tungsten Project ("Borralha"); and the Vila Verde Tungsten Project ("Vila Verde"). Upon completion of the Acquisition, ACM will own 90% ownership of the Tungsten Projects with the right to acquire the remaining 10%.

Roy Bonnell, CEO of Allied Critical Metals commented, "We are very excited to be accelerating the advancement of these near-term, low-cost Portuguese Tungsten Projects in the heart of the European Union where demand is sharply increasing. The Tungsten Projects are brownfield historical production sites located in northern Portugal with excellent infrastructure and access to inexpensive water, power and skilled labour and an existing road network. The projects are located approximately 100 km northeast of the ocean port city of Porto for excellent access to EU and North American markets. Borralha presently has a 25-year mining license and Vila Verde has an experimental mining license that provide a clear path for further development."

Solid's CEO Itamar David added, "We are excited for our shareholders to participate in such a unique and timely opportunity for near-term commercialization of tungsten, which has been declared a "critical mineral" by Canada, the USA, and the EU facing significant supply chain risks due to almost 90% of world supply dominated by China, Russia and Vietnam."

The Company and ACM are presently preparing the required technical reports (the "Technical Reports") in accordance with National Instrument 43-101—Standards for Disclosure of Mineral Projects ("NI 43-101") for each of the Tungsten Projects, which will be filed under the Company's profile on SEDAR as a condition to closing the Qualifying Transaction. Further details of the Tungsten Projects will be provided in the Technical Reports and a subsequent news release to be disseminated prior to the closing of the Transaction.

Solid is a "capital pool company" and it is intended that the Transaction will constitute its "Qualifying Transaction", as such terms is defined in Exchange Policy 2.4—Capital Pool Companies ("Policy 2.4"). It is intended that Solid and ACM will complete the Transaction by way of a proposed business combination that would result in the reverse takeover of Solid by ACM, subject to ACM successfully completing the Concurrent Financing (defined below) and other conditions precedent as described below.

ACM is a privately held company existing under the provincial laws of Ontario, having a registered office in Toronto, Ontario, which is engaged in the acquisition, exploration, and potential development of the Tungsten Projects in Portugal. ACM has the right to acquire 90% beneficial ownership of the Tungsten Projects with the right to acquire the remaining 10%. Borralha has an Experimental Mining License that allows for production of up to 150,000 tonnes per year of mineralized material covering an area of 12,750 hectares (127.5 sq. km). Vila Verde has a Prospecting and Research License that is being converted to an Experimental Mining License covering 1,400 hectares (14 sq. km). Both properties were past producing mines which have excellent infrastructure including paved and gravel roads, electricity, water, nearby skilled labour and the ability to use existing waste dumps.

Under the Transaction, ACM will change its name to "ACM Holdings Ltd." and Solid will change its name (the "Name Change") to "Allied Critical Metals Corp." as the resulting issuer (the "Resulting Issuer") which will continue the business of ACM with ACM as a wholly owned subsidiary. Solid intends to apply to the Exchange to have the common shares of the Resulting Issuer listed and posted for trading on the Exchange. The Transaction is an arm's length transaction.

Concurrent Financing

Prior to completion of the Transaction and as a condition precedent to the obligations of Solid, ACM intends to complete a concurrent financing (the "Concurrent Financing") to raise aggregate gross proceeds of $3,000,000 CAD up to $5,000,000 CAD by way of a private placement of units (the "Units") of ACM at a price of $0.25 per Unit (the "Listing Price"). Each Unit will be comprised of one common share of ACM (each an "ACM Share") and one common share purchase warrant of ACM (each a "Warrant") and each Warrant will entitle the holder to acquire an ACM Share at a price per ACM Share of $0.50 for a period of 24 months from the date of issuance. On closing of the Transaction (the "Closing"). ACM expects to pay eligible finders under the Concurrent Financing commissions comprised of cash and brokers warrants (the "Brokers Warrants"). Each Brokers Warrant will entitle the holder to acquire one Unit at an exercise price of $0.25 for a period of 24 months from the date of issuance.

ACM and Solid intend to use the net proceeds of the Concurrent Financing to fund the Acquisition costs of the Transaction, to fund the recommended work programs described in the Technical Reports, and to fund general working capital expenses of the Resulting Issuer.

The Transaction

Acquisition of Tungsten Projects

Pursuant to the Letter Agreement and prior to completion of the Transaction, ACM will complete the Acquisition of the Tungsten Properties from the vendor, Pan Iberia Limited (the "Vendor") under an acquisition agreement dated February 15, 2023 (the "Acquisition Agreement") assigned to ACM by Dalmington Investments Limitada ("Dalmington") under an assignment agreement (the "Assignment Agreement") dated March 27, 2023 as amended April 27, 2023 (the "Assignment"). Pursuant to the Acquisition Agreement and Assignment Agreement, ACM will incorporate a wholly-owned Portuguese subsidiary incorporated under the laws of Portugal ("PortCo") to acquire 100% of the equity capital of PanMetals, in return for ACM:

(1) granting to Dalmington consideration for the Assignment comprised of:

(a) a 1% net smelter returns royalty (the "1% NSR") on all production from the Tungsten Projects, 50% of which may be repurchased by the royalty payor at any time after commencement of commercial production at the Tungsten Projects at a cash purchase price equal to a 70% of the net present value of the 1% NSR based on a 7% discount factor; and

(b) a 10% beneficial ownership in the Tungsten Projects, as a carried, non-participating interest that becomes a carried, participating interest upon commencement of commercial production at each of the respective Tungsten Projects (the "Retained Interest"), which may each be acquired separately by ACM in consideration for payment equal to a 30% discount to the respective net present values using a discount factor of 7% paid 30% in cash and 70% in common shares of the Resulting Issuer ("RI Shares") based on the greater of the Listing Price and the 20-day volume weighted average price for the 14 days prior to completing the acquisition, subject to the policies of the Exchange;

(2) paying a purchase price to the Vendor comprised of:

(a) $500,000 USD (which ACM has already paid);

(b) $2,000,000 USD, of which $1,500,000 USD will be paid $750,000 USD in cash and $750,000 USD by promissory note bearing interest at 10% per annum payable quarterly, pre-payable at any time without penalty or bonus, and due 15 months from the date of issuance, and $500,000 USD will be paid by way of an unsecured convertible debenture (the "Convertible Debenture") bearing interest at 5% per annum for a term of 12 months plus 30 days from the date of closing (the "Closing Date") of the Transaction, which is pre-payable and may be converted into RI Shares which are each equal to the greater of the Listing Price and the then applicable market price pursuant to the policies of the Exchange;

(c) $2,000,000 USD satisfied on Closing by issuance to the Vendor of ACM Shares (the "Payment Shares") at the Listing Price;

(d) special common share purchase warrants of ACM (the "Borralha Special Warrants") issued to the Vendor on Closing and vesting on the later of (i) 12 months plus one day after Closing, and (ii) publication by the Resulting Issuer of a technical report for Borralha prepared in accordance with NI 43-101 with a resource estimate (in any category) of at least 15,000 tonnes of tungsten oxide (WO3) (the "Resource Estimate") and are exercisable within 5 years of Closing for no additional consideration into RI Shares equal to $1,000,000 USD divided by the greater of the Listing Price and the closing market price one business day following public announcement of the Resource Estimate, subject to the policies of the Exchange; and

(e) special common share purchase warrants of ACM (the "Vila Verde Special Warrants") issued to the Vendor on Closing and vesting on the later of 36 months plus one day after Closing, and (ii) the date that PanMetals is issued a Mining Exploitation License (the "VV License") for commercial production of tungsten at economically viable levels from Vila Verde for no additional consideration into RI Shares equal to $2,000,000 USD divided by the greater of two times (2x) the Listing Price and the closing market price one business day following the public announcement of the VV License, subject to the policies of the Exchange, and

the Convertible Debenture, Payment Shares, Borralha Special Warrants, and Vila Verde Special Warrants shall be subject to restrictions preventing the Vendor from owning 20% or more of the RI Shares, unless determined otherwise by the Resulting Issuer and subject to the policies of the Exchange;

(3) acquiring 10% of Vila Verde from Mineralia-Minas Geotecnia E Construcoes Lda. in consideration for cash payment of €60,000;

(4) reimbursing the Vendor €125,000 for payment of license fees and up to $500,000 USD for exploration expenses incurred since February 14, 2023 (collectively, the "Reimbursement Amount") satisfied by either: (i) by way of an unsecured convertible debenture (the "Reimbursement Debenture") bearing interest at 5% per annum for a term of 12 months plus 30 days from Closing, which is pre-payable and convertible after 6 months from date of issuance into RI Shares at the greater of the Listing Price and the then applicable market price pursuant and subject to the policies of the Exchange; or (ii) at the sole election of ACM, by issuing RI Shares on Closing at a share price equal to the Listing Price, subject to the policies of the Exchange (the "Reimbursement Shares"); or (iii) a combination of the Reimbursement Debenture and Reimbursement Shares; and

(5) acquiring a 1% net smelter return royalty in respect of Borralha from the holders thereof for a purchase price of $300,000 USD satisfied by $100,000 USD cash and $200,000 in ACM Shares (the “Royalty Buyback Shares“) at a share price equal to the Listing Price.

Acquisition of ACM

Following completion of the Concurrent Financing and Acquisition, Solid will then acquire ACM by way of a three-cornered amalgamation (the "Amalgamation") wherein ACM will amalgamate with a wholly-owned subsidiary of Solid to be incorporated before the Amalgamation to form an amalgamated company as a wholly-owned subsidiary of Solid, named "ACM Holdings Ltd.", Solid will change its name to "Allied Critical Metals Corp." as the Resulting Issuer and the shareholders of ACM will transfer all of their ACM Shares to Resulting Issuer in consideration for receiving RI Shares on a one-for-one basis (the "Exchange Ratio") at a deemed price per RI Share equal to the Listing Price with the RI Shares becoming listed and posted for trading on the Exchange.

It is expected that, assuming the Concurrent Financing results in aggregate gross proceeds of $3,000,000 and the Reimbursement Amount is satisfied by the issuance of the Reimbursement Debenture instead of the Reimbursement Shares, an aggregate of approximately 53,975,800 RI Shares will be issued and outstanding immediately following the Amalgamation on a non-diluted basis with approximately: (i) 5,600,000 RI Shares held by current shareholders of the Company (10.38%); (ii) 24,247,800 RI Shares held by current shareholders of ACM (44.92%) (excluding any RI Shares issued in exchange for the Payment Shares, Royalty Buyback Shares and ACM Shares issued in connection with the Concurrent Financing); (iii) 10,720,000 RI Shares issued in exchange for the Payment Shares (19.86%); (iv) 1,072,000 RI Shares issued in exchange for the Royalty Buyback Shares (1.99%); (v) 12,000,000 RI Shares issued in exchange for ACM Shares issued in connection with the Concurrent Financing (22.23%); and (v) 336,000 RI Shares issued as Finder’s Shares (as defined below) (0.62%).

RI Shares issued pursuant to the Amalgamation shall be subject to resale restrictions pursuant to the policies of the Exchange, and RI Shares issued to insiders of the Resulting Issuer shall be subject to escrow in accordance with the policies of the Exchange. However, RI Shares issued in exchange for ACM Shares issued under the Concurrent Financing shall be free trading and not be subject to resale restrictions, escrow or hold periods.

Finders Fees

In conjunction with the Transaction, the Company intends to pay a finder's fee on Closing, subject to the policies of the Exchange, to Canaccord Genuity Corp. equal to $84,000 CAD satisfied by issuance of 336,000 RI Shares (the "Finder's Shares") at the Listing Price. The Finder's Shares shall be subject to a 4 month hold from the date of issuance in accordance with applicable securities laws.

Sponsorship

Solid and ACM intend to apply to the Exchange for a waiver from sponsorship requirements. There can be no assurance that the waiver will be granted. In any event, an agreement to sponsor the Transaction should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.

Not a Related Party Transaction

The Transaction is not a related party transaction, and there are no non-arm's length parties in the Transaction and the Transaction does not constitute a Non-Arm's Length Qualifying Transaction pursuant to the policies of the Exchange. Accordingly, the Transaction is not subject to shareholder approval of the Solid shareholders.

The Company specifically confirms that it will not be seeking shareholder approval under the policies of the Exchange for the Transaction as the Transaction does not constitute a “Non-Arm’s Length Qualifying Transaction” as defined under the policies of the Exchange.

Exchange Listing

Upon completion of the Transaction, the Resulting Issuer will own 100% of Amalco, which will own 100% of PortCo, which will own 100% of PanMetals, and PanMetals will own 90% of the Tungsten Properties with the right to acquire the remaining 10%. Upon Closing, the Resulting Issuer expects to list on the Exchange as a Tier 2 Mining Issuer, subject to Exchange approval.

Conditions

Completion of the Transaction is subject to customary conditions precedent, including:

1. Solid and ACM having executed a definitive agreement for the Amalgamation (the "Definitive Agreement"), which will contain the applicable terms and conditions set forth therein and the representations, warranties, covenants, and terms and conditions customarily found in such agreements;

2. receipt of all required regulatory, corporate and third party approvals, including Exchange approvals, and compliance with all applicable regulatory requirements and conditions necessary to complete the Transaction;

3. satisfactory completion of due diligence by each of Solid and ACM and their respective counsel of each other and their respective subsidiaries, business and assets;

4. completion of the Concurrent Financing with gross proceeds of at least $2,000,000;

5. completion by ACM of the Acquisition of the Tungsten Projects pursuant to the Acquisition Agreement and Assignment Agreement;

6. absence of any material adverse effect on the financial or operational condition of the assets or business of each of the parties to the Definitive Agreement;

7. completion of the Technical Reports in accordance with NI 43-101 and filing thereof under Solid's profile on SEDAR;

8. completion and delivery to Solid of the title opinion

9. representations and warranties of each of the Solid and ACM contained in the Definitive Agreement being true and correct as of the Closing Date;

10. there being no material breach of ACM or Solid of the representations, warranties and covenants in the Letter Agreement or Definitive Agreement;

11. each of ACM and Solid being in material compliance with the terms of the Letter Agreement and Definitive Agreement;

12. Solid having working capital of at least $200,000 as at Closing Date, excluding liabilities of up to $50,000 for reasonable costs and expenses incurred in the ordinary course of business;

13. approval of the transaction by the Exchange;

14. delivery of standard completion documentation, including but not limited to, legal opinions, officers' certificates, and certificates of good standing or compliance; and

15. other mutual conditions precedent customary for a transaction such as the Transaction.

Directors, Officers and Other Insiders

On completion of the Transaction, it is anticipated that the board of the Resulting Issuer will consist of five members, with ACM nominating four members and Solid nominating one member. On Closing, all of the directors of Solid will resign other than Andrew Gertler, and Roy Bonnell, Andrew Lee, Sean O'Neill (as Non-Executive Chairman), and Colin Padget will be appointed as directors. Roy Bonnell will be appointed as President and Chief Executive Officer, Keith Margetson as Chief Financial Officer, and Andrew Lee as Corporate Secretary. The Company will provide additional information about its proposed new directors, officers and insiders in a subsequent news release and a Filing Statement that will be prepared and filed under the Company's profile on SEDAR as the principal disclosure document in respect of the Transaction.

Qualified Person

Douglas Blanchflower, B.Sc. (Hons.), P.Geo., is an independent Qualified Person for the purposes of NI 43-101 and has reviewed and approved the scientific and technical information in this news release.

General

In accordance with Exchange policies, the Company's common shares have been halted from trading and will remain so until completion of the Qualifying Transaction or termination of the Letter Agreement or Definitive Agreement, as the case may be. Solid and ACM expect to provide an update with respect to the Tungsten Properties and the proposed Transaction in a subsequent news release in accordance with Policy 2.4.

Contact Information

For further information concerning this press release, please contact the respective representatives of Solid and ACM as follows:

Nether 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.

Cautionary Statement and Forward-Looking Information

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority 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 a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

All information contained in this news release with respect to Solid and ACM was supplied by the parties, respectively, for inclusion herein, and each such party has relied on the other party for any information concerning such party.

Certain statements contained in this press release constitute forward-looking information, including statements regarding the expected issuance of the Final Bulletin and the expected commencement of trading of the common shares of the Resulting Issuer on the Exchange. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties’ current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The business of the Company is subject to a number of material risks and uncertainties. Please refer to the Filing Statement and other SEDAR filings for further details. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the parties. The material factors and assumptions include the parties being able to obtain the necessary corporate, regulatory and other third parties approvals. The forward looking information contained in this release is made as of the date hereof and the parties are not obligated to update or revise any forward looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward looking information contained herein.

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