Element One enters LOI to acquire Stone to H2

Executive Summary

• Element One Hydrogen and Critical Minerals Corp. has entered into a non-binding Letter of Intent (LOI) with Stone to H2 Inc. to acquire proprietary technology for subsurface critical mineral extraction and geologic hydrogen production.
• Element One secures an exclusive option to earn up to 100% ownership of Stone to H2 through a staged earn-in structure over three years, contingent on receiving Canadian Securities Exchange (CSE) approval.
• The transaction involves significant share issuances and cash financing milestones, with Element One receiving an exclusive license to the technology during the earn-in period.

Key Details

• Transaction Structure: Non-binding LOI for an exclusive option to acquire up to 100% of Stone to H2 Inc. via a staged earn-in over three years.
• Earn-In Milestones (Post-CSE Approval):
  • Year 1: Element One issues 1,000,000 common shares and provides $500,000 USD in technology development financing to earn a 10% interest.
  • Year 2: Element One issues 2,000,000 additional shares and provides $1,000,000 USD in financing to reach a 30% interest.
  • Year 3: Element One issues 3,000,000 additional shares and provides $2,000,000 USD in financing to reach a 60% interest.
• Further Milestones (100% Acquisition): Element One may earn up to 100% ownership by providing up to $6,000,000 USD in additional cash/share consideration and $10,000,000 USD in field-trial financing, contingent on achieving defined technology readiness levels and successful field testing.
• Intellectual Property & Licensing: During the earn-in period, Element One receives an exclusive license for development, testing, and commercialization. IP improvements created during this period are jointly owned in proportion to Element One's earned interest.
• Timeline: Definitive agreements to be negotiated within 90 days; LOI provides a three-month exclusivity period.
• Regulatory Conditions: Completion is subject to CSE approval, negotiation of definitive agreements, customary conditions, and regulatory approvals.
• Transaction Costs: No finders' fees were paid; the transaction is arm's-length.
• Target Technology: Stone to H2 holds proprietary patents for staged recovery of hydrogen and critical minerals from ultramafic rock via fluid injection and solution mining, including CO2 sequestration capabilities.

Notable Quotes

• "This agreement positions Element One at the forefront of geologic hydrogen innovation and technology and critical metal extraction through solution mining as well as strengthening our strategic relationship with leading academic partners," said Timothy Johnson, Element One. "Stone to H2's proprietary methods for subsurface hydrogen production align perfectly with our vision to commercialize next-generation hydrogen technologies."