POCML 6 Inc. Announces Definitive Agreement for Proposed Qualifying Transaction with Lithium Ionic Inc.

Monday, 07. February 2022 23:30

Toronto, Ontario--(Newsfile Corp. - February 7, 2022) - POCML 6 Inc. (TSXV: POCC.P) (the "Corporation" or "POCML6"), a capital pool company ("CPC") listed on the TSX Venture Exchange ("TSXV"), is pleased to announce it has entered into an amalgamation agreement dated February 7, 2022 (the "Amalgamation Agreement") with Lithium Ionic Inc. ("Lithium Ionic"), a private company incorporated under the Business Corporations Act (Ontario) (the "OBCA"), pursuant to which POCML6 will acquire all of the issued and outstanding securities of Lithium Ionic by way of a three-cornered amalgamation with a wholly-owned subsidiary of POCML6 ("Subco") incorporated under the laws of the Province of Ontario, with such acquisition (the "Proposed Transaction") constituting a reverse take-over of POCML6, subject to the terms and conditions outlined below. POCML6, as the resulting issuer following the completion of the Proposed Transaction (the "Resulting Issuer"), will continue on the business of Lithium Ionic. POCML6 intends that the Proposed Transaction will constitute its Qualifying Transaction, as such term is defined in TSXV Policy 2.4 - Capital Pool Companies. It is anticipated that the common shares of the Resulting Issuer (the "Resulting Issuer Shares") will be listed for trading on the TSXV.

Unless otherwise noted, all financial information is in Canadian Dollars.

About Lithium Ionic

Lithium Ionic is a private company which owns a 100% ownership interest in the Itinga lithium project in Brazil (the "Itinga Project" or the "Project").

The Itinga Project

The Itinga Project is located in Minas Gerais State (MG), Brazil. The Project comprises five mineral licenses covering more than 1,300 hectares in the prolific Aracuai lithium province. A portion of the Project occurs immediately south of the CBL lithium mine and plant, Brazil's only lithium producer, and immediately north of the large Barreiro and Xuxa lithium deposits of Sigma Lithium Corp. CBL has been in operation since 1993. Sigma's estimated mineral resources, based on their technical reports prepared pursuant to National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), exceeds 50 million tonnes of lithium oxide (Li2O) mineralized pegmatite in four deposits.

The Project area has excellent infrastructure, including access to hydroelectrical grid power, water, a commercial port, highways and communities. Lithium mineralization (spodumene, lepidolite, petalite) occurs within a halo of pegmatite dikes and apophyses that occur within the rocks surrounding Neoproterozoic granitic intrusions. Mineralization within the mineralized province and the distribution of the mineralized pegmatites is controlled by a complex and crosscutting system of northeast and northwest oriented faults that were exploited by the dikes. Mineralized structures have been identified in two areas within the Project and the remainder of the Project area remains to be explored.

The technical information in this news release has been prepared by David Gower, a director of Lithium Ionic, and a "qualified person" as defined in NI 43-101. Lithium Ionic has commissioned a NI 43-101 compliant technical report on the Project, which it expects will be finalized before the end of Q1 2022.

The following table contains selected financial information in respect of Lithium Ionic as at and for the period indicated. This information should be read in conjunction with Lithium Ionic's audited and unaudited financial statements for the periods presented which will be included in the filing statement to be filed by POCML6 on SEDAR in connection with the Proposed Transaction (the "Filing Statement").


Period from incorporation (July 5, 2021) to December 31, 2021
(unaudited)
Assets6,162,000
Liabilities65,000
RevenuesNil
Net Profit (losses)(380,000)

 

Summary of the Qualifying Transaction

The Amalgamation Agreement contemplates POCML6 and Lithium Ionic completing an arm's length three-cornered amalgamation, pursuant to which Resulting Issuer Shares will be issued to holders of common shares in the capital of Lithium Ionic (the "Lithium Ionic Shares").

POCML6 currently has 11,104,958 common shares (the "POCML6 Shares") issued and outstanding. Additionally, POCML6 has 1,100,000 incentive stock options in addition to 91,042 broker warrants outstanding.

Prior to the Closing Date (as defined below), POCML6 shall undertake a consolidation (the "Consolidation") of the POCML6 Shares on the basis 0.61983471 post-Consolidation POCML6 Share for each one pre-Consolidation POCML6 Share, or such other ratio that results in POCML6 having 7,500,000 POCML6 Shares, plus such number of POCML6 Shares resulting from the exercise of all, or part of, the POCML6 Broker Warrants, issued and outstanding upon completion of the Consolidation.

There are currently 71,710,001 Lithium Ionic Shares outstanding. Additionally, there are outstanding warrants to acquire an aggregate of 2,672,750 Lithium Ionic Shares.

In accordance with the terms of the Amalgamation Agreement, the Proposed Transaction will be structured as a "three-cornered amalgamation" involving Lithium Ionic, Subco and POCML6. In connection with closing of the Proposed Transaction, it is expected that, among other things:

  • Lithium Ionic and Subco will be amalgamated under the provisions of the OBCA and the resulting amalgamated entity will become a wholly-owned subsidiary of POCML6.
  • Each Lithium Ionic Share will be cancelled, and the former holders of Lithium Ionic Shares (including the Lithium Ionic Shares issued upon conversion of the Subscription Receipts (as defined below) issued under the Offering (as defined below)) will receive one (1) Resulting Issuer Share for each Lithium Ionic Share held by them.
  • Other securities of Lithium Ionic (including warrants and options that are exercisable into Lithium Ionic Shares) will be cancelled, and the former holders of such securities will receive economically equivalent securities of the Resulting Issuer.
  • The Resulting Issuer will have obtained conditional approval of the TSXV for the listing on the TSXV of the Resulting Issuer Shares, as required by the policies of the TSXV.

It is anticipated that a total of 91,710,001 Resulting Issuer Shares, having a deemed value of $64,197,000.70 based upon the price of the Offering, as defined below, will be issued to current securityholders of Lithium Ionic (including the Resulting Issuer Shares issued upon conversion of the Subscription Receipts).

Upon completion of the Proposed Transaction, the non-diluted common shares of the Resulting Issuer shall be held as follows: 71,710,001 Resulting Issuer Shares (72.28%) held by former Lithium Ionic shareholders; 20,000,000 Resulting Issuer Shares (20.16%) held by subscribers of Subscription Receipts assuming closing of the maximum amount of the Offering); and 7,500,000 Resulting Issuer Shares (7.56%) held by existing POCML6 securityholders (assuming exercise of all POCML6 options and broker warrants prior to the closing of the Proposed Transaction), subject to change as a result of the final size of the Offering and other issuances of securities of Lithium Ionic prior to closing of the Proposed Transaction.

The parties to the Proposed Transaction are at arm's length and it is therefore anticipated that the approval of the shareholders of POCML6 in respect of the Proposed Transaction, as per the provisions of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions and TSXV Policy 5.9 will not be required. It is anticipated that the Proposed Transaction and Amalgamation Agreement will be put before the shareholders of Lithium Ionic for their approval. Lithium Ionic was incorporated on July 5, 2021 under the laws of the Province of Ontario.

Subject to applicable laws and TSXV policies, it is anticipated that all Resulting Issuer Shares issued in exchange for the Lithium Ionic Shares (including the Lithium Ionic Shares issued upon conversion of the Subscription Receipts of Lithium Ionic issued pursuant to the Offering) on closing of the Proposed Transaction will be freely tradable pursuant to applicable securities laws in Canada.

Conditions to Closing

The completion of the Proposed Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including but not limited to (i) receipt of all requisite regulatory, stock exchange, court or governmental approvals, authorizations and consents; (ii) the absence of any material change or a change in a material fact or a new material fact affecting POCML6 or Lithium Ionic; (iii) the completion of the Consolidation and the name change of POCML6 (the "Name Change") to "Lithium Ionic Corp." or such other name as determined by Lithium Ionic; (iv) if applicable, POCML6 having received appropriate approvals from its shareholders; (v) Lithium Ionic having received appropriate approvals from its shareholders; (vi) the completion of the Offering for minimum gross proceeds of $7,500,000; (vii) the completion of a NI 43-101 compliant technical report in respect of the Itinga Project; and (viii) the exercise of all outstanding stock options of POCML prior to the Consolidation. There can be no assurance that the Proposed Transaction will be completed on the terms proposed above or at all.

Concurrent Financing

In connection with the Proposed Transaction, each of Lithium Ionic and POCML6 are completing a brokered private placement subscription receipts ("Subscription Receipts") at a price of $0.70 per Subscription Receipt up to a maximum of 20,000,000 Subscription Receipts under both offerings for gross proceeds of up to $14,000,000 (collectively, the "Offering"). The Offering is being conducted on a commercially reasonable efforts basis led by Clarus Securities Inc., on behalf of a syndicate of agents including PowerOne Capital Markets Limited, iA Private Wealth Inc., Haywood Securities Inc., and Research Capital Corp.

Upon satisfaction or waiver of all conditions precedent to the Transaction and certain other ancillary conditions (the "Escrow Release Conditions"), immediately prior to effecting the Proposed Transaction, (a) each Subscription Receipt of POCML6 will automatically convert into one post-Consolidation POCML6 Share without any further consideration on the part of the purchaser and (b) each Subscription Receipt of Lithium Ionic will automatically convert into one Lithium Ionic Share (which will in turn be exchanged for one Resulting Issuer Share pursuant to the Proposed Transaction) without any further consideration on the part of the purchaser.

For further details on the Offering, please see the Corporation's press releases dated January 12, 2022 and January 18, 2022.

The Resulting Issuer

Upon completion of the Proposed Transaction, the Resulting Issuer is expected to change its name to "Lithium Ionic Corp." or such other name as determined by Lithium Ionic. It is expected that the Resulting Issuer will be a Tier 2 Mining Issuer under the policies of the TSXV.

Concurrently with the completion of the Proposed Transaction, it is expected that all directors and officers of POCML6 will resign, and be replaced by nominees put forth by Lithium Ionic. The directors of the Resulting Issuer are anticipated to be Helio Diniz, Patrizia Ferrarese, David Gower, Lawrence Guy, Blake Hylands and Michael Shuh. These directors shall hold office until the first annual meeting of the shareholders of the Resulting Issuer following closing, or until their successors are duly appointed or elected. The officers of the Resulting Issuer are anticipated to be Helio Diniz as Chief Executive Officer, Greg Duras as Chief Financial Officer and Damian Lopez as Corporate Secretary. Biographies of the proposed directors and officers of the Resulting Issuer are included below.

Helio Diniz - Chief Executive Officer and Director - Mr. Diniz, has 40 years of experience with exploration and mining activities and has served as the Managing Director of Brazil Potash Corp. since July 2009. Mr. Diniz started his career with GENCOR South Africa where he was involved in the evaluation and development of the Sao Bento gold mine in Brazil currently operated by Eldorado Gold Corp. He then went on to work for Xstrata (now Glencore) as Managing Director Brazil during which he discovered the world class Araguaia Nickel Deposit (over 100 million tonnes, 1.5% Ni). He then went on to set up several companies, such as Falcon Metais and HDX Consultoria, as an entrepreneur to identify, explore and develop mining opportunities in Brazil. During this time, he founded and developed several companies for the Forbes & Manhattan Inc. group in different commodities such as potash - Brazil Potash, phosphate - Aguia Metais, gold - Belo Sun Mining and oil shale - Irati Petroleo e Energia Ltda.

Patrizia Ferrarese - Director - Ms. Ferrarese has more than 20 years of experience in capital markets, entrepreneurship, and strategy consulting. She is currently Vice President (VP) of Business Design and Innovation at Investment Planning Counsel (IPC), overseeing strategic growth initiatives in wealth management. Prior to joining IPC as VP of Product Management, Ms. Ferrarese held senior roles in product management and performance optimization at Tangerine Bank and Praxair, with responsibility for strategic growth across Canada. Her management consulting experience includes engagements in South America and EMEA spanning graphite, oil and gas, and potash industries focused on identifying new market opportunities. Her career includes equity and options market making and trading in North America, culminating in portfolio and commodity trading manager roles as co-founder of an investment management company. Beyond her professional career, Ms. Ferrarese mentors case competition teams at the Rotman School of Management and is a Volunteer Advisor with the Canadian Executive Service Organization (CESO). Ms. Ferrarese is currently pursuing her Doctorate in Business Administration at SDA Bocconi and holds an MBA from Wilfrid Laurier University and a Bachelor of Arts (Honours) in Economics from York University.

Blake Hylands - Director - Mr. Hylands is a Professional Geoscientist with over a decade of experience in advanced and early-stage exploration. Mr. Hylands is currently the Senior Vice President of Exploration for Troilus Gold Corp. where he has built and led a substantial technical team to the discovery of over eight million gold equivalent ounces at their development stage asset in northern Quebec. He has successfully trained and managed large teams with a focus in gold, base metals, and iron ore in Canada and internationally including South America and Europe. He has held numerous board positions for junior mining companies and has extensive professional experience in capital markets and community outreach including executive roles in corporate development and communications with First Nations. Mr. Hylands has a B.Sc in Geology from the University of Western in London Ontario.

David Gower - Director - Mr. Gower has held Executive and Director positions with several junior and midsize mining companies for the past 12 years, including Chief Executive Officer and Director of Emerita Resources, Nobel Resources and President of Brazil Potash Corp. David spent over 20 years with Falconbridge (now Glencore) as Director of Global Nickel and PGM exploration and as a member of the Senior Operating Team for mining projects and operations. He led exploration teams that made brownfield discoveries at Raglan and Sudbury, Matagami, Falcondo, in the Dominican Republic, and greenfield discoveries at Araguaia in Brazil, Kabanga in Tanzania and Amazonas in Brazil. Mr. Gower is a Director of Alamos Gold.

Lawrence Guy - Director - Mr. Guy is Chief Executive Officer of North 52nd Asset Management Inc. and Chair of Emerita Resources Corp. Previously, Larry was a Portfolio Manager with Aston Hill Financial Inc. Prior to Aston Hill, Mr. Guy was Chief Financial Officer and Director of Navina Asset Management Inc., a company he co-founded that was subsequently acquired by Aston Hill Financial Inc. Mr. Guy has also held senior offices at Fairway Capital Management Corp., and First Trust Portfolios Canada Inc. Mr. Guy holds a Bachelor of Arts (Economics) degree from the University of Western Ontario and is a Chartered Financial Analyst.

Michael Shuh - Director - Mr. Shuh is a Managing Director, Investment Banking, at Canaccord Genuity. Mr. Shuh has over 20 years of investment banking experience and leads the Financial Institutions Group at Canaccord Genuity, Canada's largest independent investment bank. In addition to covering traditional financial institutions, Mr. Shuh has deep expertise in structured finance and special purpose acquisition corporations (SPACs). Mr. Shuh is also is the CEO and Chairman of Canaccord Genuity Growth II Corp., a publicly-listed SPAC that raised $100MM to pursue acquisitions. Mr. Shuh received an Honours, Bachelor of Business Administration from the Lazaridis School of Business & Economics at Wilfrid Laurier University and a Masters of Business Administration from the Richard Ivey School of Business at Western University.

Greg Duras - Chief Financial Officer - Mr. Duras is a senior executive with over 20 years of experience in the resource sector in corporate development, financial management and cost control positions. He's held the position of CFO at several publicly traded companies, including Savary Gold Corp., Nordic Gold Corp and Avion Gold Corp. Greg is a Certified General Accountant and a Certified Professional Accountant and holds a Bachelor of Administration from Lakehead University.

Damian Lopez - Corporate Secretary - Mr. Lopez is a corporate securities lawyer who works as a legal consultant to various TSX and TSX Venture Exchange listed companies. He previously worked as a securities and merger & acquisitions lawyer at a large Toronto corporate legal firm, where he worked on a variety of corporate and commercial transactions. Mr. Lopez obtained a Juris Doctor from Osgoode Hall and he received a Bachelor of Commerce with a major in Economics from Rotman Commerce at the University of Toronto.

Sponsorship

Sponsorship of a Qualifying Transaction of a CPC is required by the TSXV unless exempt in accordance with TSXV policies. POCML6 intends to apply for an exemption from the sponsorship requirements.

About POCML6

POCML6 is a CPC governed by the policies of the TSXV. POCML6's principal business is the identification and evaluation of assets or businesses with a view to complete a Qualifying Transaction. Investors are cautioned that trading in the securities of a CPC should be considered highly speculative.

Additional Information

Further updates, including financial information and further particulars of the Resulting Issuer, and the Offering, will be provided as the Proposed Transaction advances in accordance with the policies of the TSXV.

All information contained in this press release with respect to POCML6 and Lithium Ionic was supplied for inclusion herein by the respective parties and each party and its directors and officers have relied on the other party for any information concerning the other party.

For more information, please contact:

From Lithium Ionic Inc.
Lawrence Guy, Director
p:416-930-7660
larry.guy@nextedgecapital.com

From POCML 6 Inc.
David D'Onofrio Director
p:(416) 643-3880
ddonofrio@poweronecapital.com

Cautionary Note

As noted above, completion of the Proposed Transaction and the Offering are subject to receipt of all requisite regulatory, stock exchange, court or governmental approvals, authorizations and consents and approval of the shareholders of Lithium Ionic and POCML6 (as applicable). Where applicable, the Proposed Transaction and Offering cannot close until the required approvals have been obtained. There can be no assurance that the Proposed Transaction or Offering will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the continuous disclosure document containing full, true and plain disclosure regarding the Proposed Transaction, required to be filed with the securities regulatory authorities having jurisdiction over the affairs of POCML6, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. The trading in the securities of POCML6 on the TSXV should be considered highly speculative.

Trading in the common shares of POCML6 is presently halted and is expected to remain halted pending closing of the Proposed Transaction. While halted, the common shares of POCML6 may only trade upon TSXV approval and the filing of required materials with the TSXV as contemplated by TSXV policy.

Forward-Looking Information

Although POCML6 believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because POCML6 can give no assurance that they will prove to be correct. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to: the business plans of POCML6 and Lithium Ionic, Lithium Ionic management's expectation on the growth and performance of its acquisitions, the completion of the Proposed Transaction (including TSXV approval of the Proposed Transaction), the completion of the Consolidation, the completion of the Name Change, the board of directors and management of the Resulting Issuer upon completion of the Proposed Transaction, the completion and amount of the Offering, and the preparation of a technical report for the Project, the listing of Resulting Issuer Shares on the TSXV and the exercise of POCML6 options and warrants. Such statements and information reflect the current view of POCML6 and/or Lithium Ionic, respectively. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

Forward-looking information in this news release are based on certain assumptions and expected future events, namely: the Corporation and Lithium Ionic's ability to continue as a going concern, continued approval of the Corporation's and Lithium Ionic's activities by the relevant governmental and/or regulatory authorities, the continued growth of Lithium Ionic, and the ability of the Corporation and Lithium Ionic to fulfil the listing requirements of the TSXV.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the potential inability of the Corporation and Lithium Ionic to continue as a going concerns, risks associated with potential governmental and/or regulatory action with respect to the Corporation's and Lithium Ionic's operations, respectively, the potential unviability of the business plans of POCML6 and Lithium Ionic, respectively, Lithium Ionic's expectation on the growth and performance of its acquisitions may prove incorrect, failure to complete the Proposed Transaction (including the inability of the Corporation and Lithium Ionic to obtain TSXV approval of the Proposed Transaction), failure to complete the Consolidation, failure to complete the Name Change, the inability of the Corporation and Lithium Ionic to appoint members of the board of directors and management of the Resulting Issuer upon completion of the Proposed Transaction, the potential inability to complete the Offering on the terms outlined herein, and the potential inability to complete a technical report for the Project, and the inability of the Resulting Issuer to list its shares on the TSXV. Such statements and information reflect the current view of POCML6 and/or Lithium Ionic , respectively. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information The forward-looking information contained in this press release represents the expectations of POCML6 as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. POCML6 does not undertake to update this information at any particular time except as required in accordance with applicable laws.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/113066

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