LiTHOS Announces Execution of Letter of Intent for Technology to Launch TiERRA™ Re-Injection Service.
LiTHOS Group Ltd. (“LiTHOS” or the “Company”) (CBOE CA: LITS) (OTCQB: LITSF) (FSE: YU8) (WKN: A3ES4Q) is pleased to announce it has entered into a non-binding letter of intent (the “LOI”) with 1481450 B.C. Ltd. (“1481450”), dated June 5th, 2024, pursuant to which the Company would acquire all of the outstanding securities of 1481450 from the securityholders of 1481450 (the “Transaction”).
1481450 has entered into an Agreement, and, at the time of Closing (as defined herein), will hold all of the outstanding securities of Reservoir Imaging Solutions LLC (“RIS”), a private corporation existing under the laws of the State of Delaware with foreign registration to operate in the State of Colorado (the “RIS Transaction”).
RIS’s proprietary TiERRA™ microseismic imaging technology uses reflectance from fluid-filled spaces to produce high-resolution images of reservoir dynamics. This technology is applicable in optimizing lithium continental brines, shale, and geothermal reservoir completions and recovery processes. TiERRA™ also has potential applications in renewable developments such as Carbon Capture Utilization & Storage (CCUS) and imaging of brine and geothermal reservoirs for lithium production.
In January 2022, Darcy Partners published a 2021 Review of the Top Innovators in Subsurface Characterization. Darcy, an independent specialist analyst with data from over 10,000 energy company Connect Users, selected Reservoir Imaging Solutions in the top 10 global list for its real-time surveillance and diagnostic services to dynamically image fluid, fractures, and proppant placement during well completions.
Scott Taylor, CEO of LiTHOS, commented:
TiERRA™ is a unique technology that enables direct imaging of fluid-filled regions in reservoirs.
“We anticipate that this technology will support various applications, including geothermal and CCUS, as well as imaging lithium-enriched brine reservoirs.”
RIS was recognized with the Best of Award at the 2024 Society of Petroleum Engineers HFTC conference. For the year ending December 31, 2022, RIS reported C$1,187,412 (US$870,845) in revenue, C$268,823 (US$197,154) in gross income, and a net profit of C$91,896 (US$67,396). These financials will be audited and included in LiTHOS’s consolidated financial statements in due course
RIS’s largest customer is Devon Energy Corporation (NYSE: DVN). The company has also completed demonstration projects with Halliburton Company (NYSE: HAL), EOG Resources Inc. (NYSE: EOG), and Hess Corporation (NYSE: HES). In 2023 and 2024, RIS added Occidental Petroleum Corp. (NYSE: OXY), ExxonMobil Corp. (NYSE: XOM), SM Energy Co. (NYSE: SM), and Permian Resources (NYSE: PR) as paying customers.
Summary of Transaction
The LOI is a non-binding agreement which sets out the principal terms on which the parties have agreed to complete the Transaction. Subject to satisfactory due diligence and successful additional negotiations, the parties intend to enter into a definitive agreement with respect to the Transaction (the “Definitive Agreement”) on or before July 31, 2024.
On completion of the Transaction (the “Closing”), the Company has agreed acquire all of the issued and outstanding Target Securities in exchange for an aggregate of 8,000,000 Lithos Shares as follows: (i) 4,000,000 Lithos Shares issuable pro rata to the Shareholders; and (ii) 4,000,000 performance-based Lithos Shares (each, a “Performance Share”) issuable pro rata to the Shareholders, which Performance Shares shall vest in tranches within five (5) calendar years from the Closing as follows: A. 800,000 Performance Shares upon the achievement by RIS of USD$600,000 in revenue; B. 800,000 Performance Shares (an aggregate of 1,600,000 Performance Shares) upon the achievement by RIS of an additional USD$600,000 in revenue (USD$1,200,000 in aggregate revenue); C. 800,000 Performance Shares (an aggregate of 2,400,000 Performance Shares) upon the achievement by RIS of an additional USD$600,000 in revenue (USD$1,800,000 aggregate revenue); D. 800,000 Performance Shares (an aggregate of 3,200,000 Performance Shares) upon the achievement by RIS of an additional USD$600,000 in revenue (USD$2,400,000 aggregate revenue); and E. 800,000 Performance Shares (an aggregate of 4,000,000 Performance Shares) upon the achievement by RIS of an additional USD$600,000 in revenue (USD$3,000,000 aggregate revenue); (b) and upon consummation of the Transaction (the “Closing”), 1481450 will become a wholly-owned subsidiary of Lithos. The Transaction will be completed pursuant to available exemptions from any applicable securities legislation.
Completion of the Transaction remains subject to a number of conditions, including satisfactory due diligence, entry into the Definitive Agreement, the receipt of all requisite approvals including approval from the Cboe Canada, if necessary, and other conditions customary for transactions of this nature. The LOI includes a completion deadline of July 29, 2024. The parties will endeavor to complete the Transaction as soon as practicable and intends to complete the Transaction prior to the completion deadline. There can be no assurance that the Transaction will be completed as proposed or at all.
The Transaction will be completed pursuant to available exemptions under applicable legislation.
This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein in the United States. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to the account or benefit of a U.S. person absent an exemption from the registration requirements of such Act.
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LiTHOS Announces Execution of Letter of Intent for Technology to Launch TiERRA™ Re-Injection Service. source
