Graniz Mondal Inc.
TSX VENTURE : GRA.H
NEX BOARD : GRA

Graniz Mondal Inc.

June 08, 2017 12:17 ET

Graniz Mondal Inc. Announces Proposed Transaction With Group NanoXplore Inc.

LÉVIS, QUÉBEC--(Marketwired - June 8, 2017) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

Graniz Mondal Inc. (TSX VENTURE:GRA.H) ("Graniz" or the "Corporation") announced today that it has entered into a letter of intent dated June 6, 2017 with Group NanoXplore Inc. ("NanoXplore" or "GNI"), a corporation incorporated under the laws of Quebec, pursuant to which Graniz and NanoXplore intend to complete a business combination (the "Proposed Transaction"), in accordance with Policy 5.2 of TSX Venture Exchange (the "Exchange").

Concurrently with the completion of the Proposed Transaction, the Corporation and NanoXplore ("Resulting Issuer") intend to make a brokered private placement of a minimum of $2,000,000 and a maximum of $5,000,000, subject to obtaining all requisite regulatory approval, including that of the Exchange.

Sponsorship of a similar transaction is required by Policy 2.2 of the Exchange's Corporate Finance Manual unless exempt in accordance with Exchange policies. The Corporation intends to apply for an exemption from sponsorship requirements. However, there is no assurance that Corporation will be able to obtain such exemption.

Summary of the Proposed Transaction

The Proposed Transaction is an arm's length reverse takeover of the Corporation within the meaning of Policy 5.2 of the Exchange and is subject to a number of conditions precedent, including a due diligence of NanoXplore, a private placement described hereinafter and the receipt of all requisite regulatory and corporate and shareholder approvals, including that of the Exchange.

Pursuant to the Proposed Transaction, the Corporation shall proceed to a 15:1 common share consolidation in order to reduce its outstanding shares to 1,412,939 and shall purchase all of the issued and outstanding common shares in the share capital of NanoXplore for a total consideration of $25,294,594 payable through the issuance of 56,210,209 common shares in the share capital of the Corporation (after consolidation), at a deemed value of $0.45 per common share.

Furthermore, outstanding debts of the Corporation, estimated at $340,000 shall be converted into 755,556 common shares in the share capital of the Resulting Issuer, at a deemed value of $0.45 per common share.

Advisory fees shall be payable to certain advisors, directors and officers of the Corporation, through the issuance of 115,556 common shares of the Resulting Issuer, at a deemed price of $0.45 per common share and 1,028,769 options of the Resulting Issuer, at an exercise price of $0.45 per common share.

Pursuant to the Proposed Transaction, the in-the-money existing options of NanoXplore will be converted into 749,848 common shares in the share capital of the Resulting Issuer, at a deemed value of $0.45 per common share and the out-the-money existing options of NanoXplore will be converted in 520,866 options of the Resulting Issuer at a an exercise price of $0.45 per common share.

Furthermore, the Corporation confirms that pursuant to the Proposed Transaction, it shall return, subject to prior Exchange acceptance and disinterested shareholder approval, the 75% option on Mousseau West property to the owners and accordingly, the outstanding debt and accrued interest relating to the property shall be deemed forgiven (approximately $210,000). There is no other consideration to be paid.

About NanoXplore

NanoXplore is a graphene company, a manufacturer and supplier of high volume graphene powder. NanoXplore has developed a proprietary scalable manufacturing process, a Graphene Production Platform, to produce and supply high quality, engineered graphene materials which can be used by third parties in a wide variety of industrial and commercial applications. NanoXplore is also a designer and producer of blow and injection molded plastic parts for customers in food and health supplement packaging, recreational products, marine and aquaculture products and other industrial sectors. The address of the NanoXplore's corporate office and graphene production facility is 25, Boul. Montpellier, St-Laurent (Montreal), QC, Canada, and its plastic production facility is in Delson, Quebec, Canada.

Financial position of NanoXplore

The audited consolidated financial statements for the years ended June 30, 2016 and 2015 of NanoXplore reveals total revenues of $776,850, total assets of $5,138,434, total liabilities of $4,127,968, a loss of $1,487,257 and an accumulated deficit of $2,512,324. The unaudited condensed interim consolidated financial statement for the nine-month periods ended March 31, 2017 and 2016 of NanoXplore reveals a total revenue of $2,550,895, total asset of $5,192,916, total liabilities of $3,404,434, a loss of $1,591,657 and a an accumulated deficit of $4,103,981.

Private placement

Concurrent to the Proposed Transaction, NanoXplore shall have completed a brokered private placement for a minimum of $2,000,000 and a maximum of $5,000,000 (the "Private Placement"). Pursuant to the Private Placement, the Resulting Issuer will issue a minimum of 4,444,445 subscription receipts and a maximum of 11,111,111 subscription receipts, at a price of $0.45 per subscription receipt (the "Subscription Receipts"). At closing of the Proposed Transaction, each Subscription Receipt will automatically be exchanged, at no cost, for one common share and one half common share purchase warrant ("Warrant") of the Resulting Issuer, after consolidation. Each Warrant will entitle the holder thereof to acquire one additional common share of the Resulting Issuer at a price of $0.70 for a period of 24 months from the closing date. The Resulting Issuer will use the proceeds of the Private Placement to fund its working capital and its commercial and engineering activities.

NanoXplore has executed an engagement letter dated May 24, 2017 ("Engagement Letter") with Paradigm Capital (the "Agent"), as lead agent in connection with the concurrent Private Placement. Under the terms of the Engagement Letter, the Agent has been appointed to act as agent in connection with the concurrent Private Placement on a "best efforts" basis. The Agent will receive a commission of 7% of the aggregate gross proceeds placed under the concurrent Private Placement payable in cash. The Agent will also be granted options of the Resulting Issuer ("Agent's Options") to acquire that number of Resulting Issuer common shares equal to 7% of the total number of Subscription Receipts sold under the concurrent Private Placement, exercisable at the concurrent financing price per Resulting Issuer common share, for a period of 24 months from the closing date of the concurrent Private Placement.

The closing of the brokered Private Placement will be conditional upon, among other things, the Agent's being satisfied that all of the conditions of the Exchange as to the completion of the Proposed Transaction have been satisfied or waived by the Exchange (other than the closing of the concurrent Private Placement), the completion of satisfactory due diligence by the Agent, the receipt of all necessary corporate and regulatory approvals, and the execution of a definitive agency agreement among the Agent and NanoXplore.

Pro forma capitalization

Once the Proposed Transaction and the Private Placement are completed, an aggregate of 63,688,552 common shares of the Resulting Issuer shall be issued and outstanding. The current shareholders of Graniz shall hold an aggregate of 1,412,939 Common Shares (2.2% of the issued and outstanding common shares). The current shareholders of NanoXplore shall hold an aggregate of 56,210,209 common shares (88.3% of the issued and outstanding common shares). The investors subscribing under the Private Placement shall own 4,444,444 common shares (7% of the issued and outstanding common shares). After the Transaction, before the Private Placement, Mason Graphite Inc., continued under the Canada Business Corporations Act and having its head office in Laval, Québec and Soroush Nazarpour, from Ste-Thérèse, Québec, will own respectively 31% and 27%.

Board of directors and senior management of the resulting issuer

It is currently contemplated that on completion of the Proposed Transaction and the receipt of the requisite approvals from the applicable regulatory authorities, including approval of the Exchange, there will be five directors of the Resulting Issuer, consisting of: Soroush Nazarpour, Benoit Gascon, Cameron Harris, Denis Labrecque and another individual to be determined at a later date. It is further anticipated that Soroush Nazarpour will be appointed Chief Executive Officer, Luc Veilleux will be appointed Chief Financial Officer, Paul Higgins will be appointed Chief Operation Officer and Catherine Frigon will be appointed Corporate Secretary of the Resulting Issuer. The current directors and officers of Graniz shall resign at or prior to the closing of the Proposed Transaction without payment or liability to NanoXplore or Graniz, subject to their receiving customary releases acceptable to them. The following is a brief description of the background and experience of the proposed directors and management of the Resulting Issuer:

Benoit Gascon

Mr. Gascon, CPA, CA, the CEO of Mason Graphite, has over 20 years of experience in the Graphite & Carbon industries. He was the CEO of Stratmin Graphite which operates the Lac- des-Iles deposit; one of North America's only producing graphite mines. He was responsible for negotiating the complete take-over of Stratmin Graphite by Imerys SA, a world leader in Industrial Minerals, to form Timcal Graphite & Carbon.

Cameron Harris

Dr. Harris is the President of Canadian Engineering Associates, an engineering consultant that provides services to the global mining industry. He is a former Senior Vice President and General Manager at SNC-Lavalin, and former head of the Mining Industry Practice for North America at Accenture. He earned a PhD in Metallurgy from Imperial College in the UK. He has held a wide range of operational, technical and executive positions at world leading companies such as Noranda, Kvaerner, and Worley Parsons. Dr. Harris has been a Director for Cansolv Technology Inc and has been previously involved in nano-materials production. He is widely published, has been symposium organizer and chair for technical conferences, is a Distinguished Lecturer for the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), and a past Director of the Sustainable Chemistry Alliance (SCA).

Denis Labrecque

Mr. Labrecque is the former President of NorCap Canada Ltd., and is a Special Advisor to the President at Aliston Capital and Advisor to Keira Capital Partners Inc. Mr. Labrecque owned and successfully operated a diversified group of manufacturing companies in Canada and United States for nearly 20 years. Since 1990, he has acted as an advisor in the mid-market Merger and Acquisition business and realized some 40 transactions totalling more than $2 billion in value with manufacturing, consumer products, distribution, utility, and services companies. His educational qualifications include a Bachelor's of Business Administration, Major in Finance from UQTR and Electromechanical Engineering (Instrumentation) from Devry Institute of Toronto.

Soroush Nazarpour

Dr. Nazarpour (PhD, Nanotechnology) has been President & CEO of NanoXplore Inc. since 2011. Over the last five years he has built a unique advanced material company based upon graphene, moving NanoXplore from lab bench fabrication of powder, to pellet masterbatches of graphene-enhanced polymers, to blow and injection molded products in real world. His current focus is on the development of scalable production processes to make available abundant and affordable graphene materials, and the integration of graphene into industrial supply chains.

Dr. Nazarpour has extensive experience in advanced carbon nanomaterials, device physics, materials processing and integration, and is an acknowledged expert in the field of graphene. He is co-author of a new graphene book, "Graphene technology: from laboratory to fabrication" published by Wiley & Co.

Luc Veilleux

Mr. Luc Veilleux, CPA, CA, is the Chief Financial Officer of NanoXplore and Executive Vice President, Chief Financial Officer, and Corporate Secretary of Mason Graphite, and has over 20 years of experience in the mining and manufacturing industries including eight years at Timcal in the roles of Chief Financial Officer, COO and Vice-President of Finance (North America), and Controller for the Lac-des-Iles graphite mine.

Paul Higgins

Mr. Higgins has over 30 years' experience in executive management, business to business marketing and business development, systems engineering, and project and subcontract management, in the advanced materials, aerospace, telecommunication, and photonics sectors, in both large, world class corporations (Lockheed Martin, Unisys, Nortel, Emerson) and start-up ventures (Silk Displays, DSI Datotech, Lumenon Innovative Lightwave Technology).

Catherine Frigon

With extensive experience as Senior Legal Services Manager and Executive Committee Member of large and medium-sized corporations operating in Canada and abroad, Ms. Frigon, LL.B., MBA, has a broad expertise in leading corporate affairs and managing all legal aspects pertaining to corporations, business operations, and compliance with business/industry requirements. Ms. Frigon has a solid track record in negotiations of corporate agreements/government contracts and mergers/acquisitions, as well as negotiations for contracts with institutional/private clients and vendors. Prior to joining Group NanoXplore Inc., Ms. Frigon held executive positions such as Vice President and Corporate Secretary at Leroux Steel Inc., Associate General Counsel at ACE Aviation Holdings, General Counsel and Assistant Corporate Secretary at Hartco Income Fund, Legal Director, Hydro North America at Alstom Renewable Power Canada Inc., and Senior Legal Counsel at Bombardier Business Aircraft.

Specific conditions related to the closing

The specific conditions that must be met in relation to the closing of the Proposed Transaction are: (i) the Resulting Issuer must meet the minimum listing requirements of a Tier 2 issuer according to the Exchange policies up to and including the date on which the Exchange will issue its final approval; (ii) the completion of a due diligence of Graniz shall be to the complete satisfaction of NanoXplore; (iii) the completion of a due diligence of NanoXplore shall be to the complete satisfaction of Graniz; (iv) the completion of the Private Placement shall be to the complete satisfaction of the parties; (v) the execution of an amalgamation agreement, such agreement to include appropriate representations and warranties of NanoXplore, as well as other terms and conditions customary to a transaction of this nature including, without limitation, covenants, indemnification and confidentiality provisions; (vi) the Proposed Transaction must be approved by board of directors of both parties and by the shareholders of NanoXplore and must be accepted as such by the Exchange; (vi) Graniz shall obtain a Sponsorship Letter if so required by the TSX; and (vii) no material change must occur in the business and operations of NanoXplore and Graniz.

In accordance with Policy 5.2 of the Exchange, Graniz will not be obtaining shareholder approval of the Proposed Transaction for the following reasons: (a) the Proposed Transaction is not a related party transaction and no other circumstances exist which may compromise the independence of Graniz or other interested parties (in particular, Graniz directors and senior officers) with respect to the Proposed Transaction; accordingly, Graniz application will fully disclose all non-arm's length parties to Graniz and all non-arm's length parties to the Proposed Transaction; (b) the Exchange has confirmed to Graniz that, in its view, Graniz is without active operations, (c) Graniz is not and will not be subject to a cease trade order and will not otherwise be suspended from trading on completion of the Proposed Transaction; and (d) shareholder approval of any aspect of the Proposed Transaction is not required under applicable corporate laws and is not required under applicable securities laws.

About Graniz Mondal

Graniz Mondal Inc. holds interests in one mineral property located in Northern Québec, and an option on a graphite deposit in the region of Mont-Laurier.

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 Graniz Mondal 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 news release.

Neither TSX Venture Exchange nor its regulation services provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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