The transaction remains subject to completion of a due diligence review by each party and negotiation of definitive agreements, audits of Torchlight and Metamaterial and the structure may change due to tax or other transaction considerations. If a definitive agreement is entered into, it is expected that the closing of a transaction will include customary closing conditions including approval of Ontario Superior Court of Justice, dissenters rights limited, lock-up agreement, execution of support agreement, NASDAQ and CSE approval and approval by the shareholders of both companies. Pursuant to the letter of intent, both Torchlight and Metamaterial are prohibited from directly or indirectly soliciting or participating in any discussions regarding a sale of their business until November 2, 2020, unless extended in writing by both parties. Torchlight's management is to remain in an advisory role focused on winding down the Torchlight legacy business and maximizing the value obtained from the divestiture of the Torchlight oil and gas assets. Allison Christilaw, Eric Leslie, Maurice Guitton, Ken Hannah and Steen Karsbo are expected to be appointed as Directors upon completion.
The current management of Torchlight will resign and be replaced Metamaterial's Chief Executive Officer, George Palikaras will be appointed Chief Executive Officer and President and Jonathan Waldern as the Chief Technical Officer of the combined company, along with the appointment of Kenneth Rice as Chief Financial Officer and Executive Vice President and Ram Ramkumar will serve as the Chairman of the Board of Directors. Metamaterial shall appoint the five remaining members of the board, which members must include the required number of independent members to maintain the NASDAQ listing requirement. In case of termination, terminating party will be liable to pay a fee of $2 million.įollowing the closing of the transaction the Board of Directors of the combined company shall be comprised of seven members one of whom shall be appointed by Torchlight, subject to the approval of Metamaterial and one of whom shall be jointly agreed to by Metamaterial and Torchlight. The combined entity will be named as 'Meta Materials Inc.' and trade under the ticker "MMAT. The combined company, formerly known as Torchlight Energy Resources, Inc., will at closing focus its business to align with the current business of Metamaterial. If Torchlight does not enter into a definitive agreement by the later of Novemor such later date, that is agreed to by Torchlight and Metamaterial in writing, the $0.5 million from this escrow account will be released back to Greg McCabe and deducted from the principal amount outstanding under the Greg McCabe Note. If Torchlight and Metamaterial enter into a definitive agreement by the later of Novemor such later date that is agreed to by Torchlight and Metamaterial in writing, the $0.5 million from the escrow account will be released to Torchlight and Torchlight will lend this amount to Metamaterial pursuant to another convertible promissory note. Metamaterial will become a wholly owned subsidiary of Torchlight. As of February 4, 2021,Torchlight will use a portion of the net proceeds to provide $5 million of additional bridge financing to Metamaterial in the form of a third unsecured promissory note. An entity owned by Greg McCabe, Torchlight's Chairman, provided a bridge loan to Torchlight for $1.5 million with a conversion feature of $0.375 per common share of Torchlight. Torchlight has loaned $0.5 million to Metamaterial pursuant to an unsecured convertible promissory note and has agreed to loan an additional $0.5 million to Metamaterial within 5 days of signing the definitive agreement. Torchlight legacy shareholders will be entitled to a distribution of any values attributable to the sale of Torchlight's existing oil and gas business asset. Torchlight will divest within the first half of 2021 Torchlight's oil and gas assets for the benefit of Torchlight's legacy shareholders. Torchlight will issue 455 million shares in connection with the arrangement. Torchlight will acquire 100% of Metamaterial through the issuance of common stock, such that at closing, the former equity holders of Torchlight would own 25% of the combined company with the former equity holders of Metamaterial owning the remaining 75%. in a reverse merger transaction on December 14, 2020.
signed a definitive agreement to acquire Torchlight Energy Resources, Inc.
(NasdaqCM:TRCH) from Tom Welch and others for approximately $140 million in a reverse merger transaction on September 15, 2020. (CNSX:MMAT) signed a non-binding letter of intent to acquire Torchlight Energy Resources, Inc.
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