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Alabama Graphite arranges $735,000 private placement

2016-09-02 16:11 ET - News Release

Mr. Donald Baxter reports
ALABAMA GRAPHITE CORP. ANNOUNCES PROPOSED NON-BROKERED PRIVATE PLACEMENT
Alabama Graphite Corp. is proposing to complete a non-brokered private placement of up to approximately 4.9 million units at a subscription price of 15 cents per unit for aggregate gross proceeds to the company of up to approximately $735,000. Each unit comprises one common share in the capital of the company and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at an exercise price of 20 cents for a period of 24 months following the date of issue, subject to customary adjustment provisions.
Alabama Graphite intends to use the net proceeds of the private placement for working capital and further advancing the company's development of its metallurgical process for producing coated spherical purified graphite (CSPG) for use in lithium-ion batteries.
Certain insiders of the company have indicated their support for the private placement. Any such participation would be a related party transaction under Multilateral Instrument 61-101, Protection of Minority Securityholders in Special Transactions, but will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of the transaction nor the consideration paid will exceed 25 per cent of the company's market capitalization. The private placement was approved by all of the independent directors of the company.
The number of common shares potentially issuable to insiders of the company pursuant to the private placement (including any common shares issuable upon the exercise of the warrants) will represent not more than 10 per cent of the company's currently issued and outstanding common shares on a non-diluted basis.
The closing of the private placement is subject to the final approval of the TSX Venture Exchange. The company intends to close the private placement in one tranche and as soon as practicable, subject to receipt of all necessary regulatory approvals. All securities issued pursuant to the private placement will be subject to, among other things, a hold period of four months and one day, in accordance with applicable Canadian securities laws.
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