Focus Metals (CVE:FMS)(OTCQX:FCSMF) said Monday it has completed a US$500,000 loan to Grafoid, a private corporation in which the company owns a 40 percent interest.
The loan is in connection with Grafoid's business initiative for the
transformation of graphite into graphene on a commercial scale, using
primarily unprocessed graphite ore from Focus' Lac Knife project.
Grafoid manages high growth, scalable graphene investments, patents
and material applications, and is focused on the development of a
scalable graphene process. Graphoid also provides technical advisory and
consulting services on graphene and its chemistry to miners, suppliers,
manufacturers and processors of these materials.
Grafoid and Focus signed a loan agreement, and under this, the common
shares of Grafoid held by Focus president and CEO Gary Economo,
chairman Jeff York, Chairman and chief scientist Dr. Gordon Chiu, were
pledged in favour of Focus Metals.
In December, Grafoid signed a term sheet to pay an unnamed foreign
private company an initial installment of $500,000 upon the successful
negotiation of an exclusive license agreement with a foreign university
for the patent-pending technology relating to the exfoliation of
graphite using raw grapite rock.
The $500,000 loan will be used to pay the installment, Focus Metals said.
In connection with the Focus loan, the company's chief scientist Chiu
also pledged the voting shares he holds in the foreign private company,
with Grafoid now owning 50 percent of such voting shares. Chiu is a
named inventor of this agnostic patent pending process that was derived
by applying Focus Metals' technology-grade graphite flake.
In May, the company will hold its annual and special meeting of
shareholders, and will seek disinterested shareholder approval for the
organization of Grafoid and related transactions.
As of Monday, Focus owns 40 percent of Grafoid and Economo, York, and Chiu, respectively, own 20 percent of Grafoid.
Under the terms of the unanimous shareholder agreement of all the parties, Focus Metals
must pay Grafoid C$1.5 million in order to maintain its ownership
position in Grafoid. This payment will be made once Focus attains the
required approval at the shareholder meeting.
The USD$500,000 loan, which is intended to allow Grafoid to make the
first milestone payment to the foreign private company, will form part
of the $1.5 million.
The transaction is also subject to final regulatory approval, in addition to the approval of disinterested shareholders.
If such approval is obtained, the loan agreement and the various
share pledges will be terminated and the US$500,000 loan will be
considered to form part of the C$1.5 million.
If not approved, the loan agreement and share pledges will remain in effect.
is an emerging mid-tier junior graphite company and is the owner of the
highest-grade technology graphite resource in the world.