Torchlight Energy Resources Inc. (TRCH:NASDAQ) announced in a news release it signed a letter of intent to acquire Metamaterial, a global developer of high-performance functional materials and nanocomposite products, and to divest its oil and gas assets in H1/21 for Torchlight's legacy shareholders' benefit.
Upon completion of the deal, Metamaterial will become a wholly owned Torchlight subsidiary. Torchlight shareholders will hold a 25% stake in Metamaterial and retain full value of Torchlight's oil and gas assets via a special dividend issued at closing. Metamaterial shareholders will hold a 75% interest in the combined entity.
The transaction represents Torchlight's first step in repositioning itself as an advanced materials company serving the cleantech and technology sectors. The ongoing weakness in the oil and gas markets precipitated this pivot, the company noted.
"To unlock value potential from our national listing and access to the capital markets, we shifted some attention from the divestiture of our oil and gas assets to an acquisition strategy targeting proven disruptive technology companies with strong environmental, social and governance priorities," Torchlight CEO John Brda said in the release.
With the acquisition, Texas-headquartered Torchlight can capitalize on Metamaterial's sizable intellectual property portfolio: it has 52 patents and 37 pending patent applications, including 26 in the U.S. and 63 in 18 other countries. Metamaterial also has multiple research and product development agreements with government agencies and private enterprises. The Canadian company also has a wide array of clients in numerous various, including automotive, aerospace, defense, energy, consumer electronics and medical. Many of the acquiree's materials and metamaterials, which increase efficiency of light or other energy forms, are manufactured with an eye toward sustainability, the company stated.
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