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.
Cancellation of stock options
The company announces that it has cancelled one million stock options that were granted on April 12, 2016, at an exercise price of 25 cents per share for a period of two years. These options were cancelled as a result of the consultant no longer providing services to the company.
About Alabama Graphite
Alabama Graphite is focused on the exploration and development of its flagship Coosa graphite project in Coosa county, Alabama, and its Bama mine project in Chilton county, Alabama, as well the research and development of its proprietary manufacturing and technological processing process of battery materials.
Alabama Graphite holds a 100-per-cent interest in the mineral rights for these two U.S.-based graphite projects, which are both located on private land. The two projects encompass more than 43,000 acres and are located in a geopolitically stable, mining-friendly jurisdiction with significant historical production of crystalline flake graphite in the flake graphite belt of central Alabama, also known as the Alabama graphite belt (source: U.S. Bureau of Mines).
We seek Safe Harbor.
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