Filed
with the Securities and Exchange Commission on ____________
Registration No.
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
P
RE
-E
FFECTIVE
A
MENDMENT
N
O
. 1
TO
F
ORM
F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
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N
ATCORE
T
ECHNOLOGY
, I
NC
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(Exact Name of
Registrant as Specified in its Charter)
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British Columbia,
Canada
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3674
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Not Applicable
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(State
or Other Jurisdiction
of Incorporation or
Organization)
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(Primary
Standard Industrial
Classification Code Number)
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(I.R.S.
Employer
Identification No.)
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189 N.
Water Street,
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Rochester,
NY 14604-1163
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(585)
286-9180
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(Address, Including Zip
Code, and Telephone Number, Including Area Code, of Registrant’s Principal
Executive Offices)
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LoPresti
Law Group, P.C.
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45
Broadway, Suite 610
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New
York, New York10006
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(212)
732-4029
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(Name, Address,
Including Zip Code, and Telephone Number, Including Area Code, of Agent for
Service)
Copies
of Communications to:
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Marc X. LoPresti, Esq.
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Shauna Hartman
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LoPresti Law Group, P.C.
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Armstrong Simpson
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45 Broadway, Suite 610
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2080-777 Hornby Street
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New York, NY 10006
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Vancouver, B.C.
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Tel: 212-732-4029
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Canada V6Z 1S4
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Tel: 604-683-7361
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If any of the securities
being registered on this Form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the
“Securities Act”), check the following box.
o
If this Form is filed to
register additional securities for an offering pursuant to Rule 462(b) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
o
If this Form is a
post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
o
If this Form is a
post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement
number of the earliest effective registration statement for the same offering.
o
If delivery of the
prospectus is expected to be made pursuant to Rule 434 under the Securities
Act, check the following box.
o
CALCULATION
OF REGISTRATION FEE
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Title
of Each Class of
Securities to be
Registered
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Amount
to be
Registered
1
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Proposed Offering
Price
2
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Maximum
Aggregate
Offering Amount
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Amount
of
Registration Fee
3,4
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Common
shares
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10,325,000
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$
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0.38
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$
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3,923,500
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$
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455.91
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(1)
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The shares of common
stock of Natcore Technology, Inc. (“Natcore” or
the ”Company”) to be registered
includes 10,000,000 shares of the Company’s common shares that the Company
may “Put”
1
to Dutchess Opportunity Fund II, LP (“Dutchess”), pursuant to an
Investment Agreement by and between Dutchess and the Company, dated August
21, 2015, (the ”Investment
Agreement”);and (ii) 325,000 shares of the Company’s common stock to be paid
to LoPresti Law Group, P.C. (“LLG”)in exchange for the provision of legal
services to the Company.
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In the event of stock
splits, stock dividends, or similar transactions involving the common stock,
the number of common shares registered shall, unless otherwise expressly
provided, automatically be deemed to cover the additional securities to be
offered or issued pursuant to Rule 416 promulgated under the Securities Act
of 1933, as amended (the ”Securities Act”). In the event that adjustment provisions of the
Investment Agreement require the registrant to issue more shares than are
being registered in this registration statement, for reasons other than those
stated in Rule 416 of the Securities Act of 1933, as amended, the registrant
will file a new registration statement to register those additional shares.
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(2)
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Estimated solely for
the purpose of calculating the amount of the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933. The Proposed Offering Price is
based on the calculation of the average closing price of Natcore common
shares listed on the TSX Venture Exchange within the two weeks prior to the
offering. Calculation and pricing determination based on Canadian currency
converted to U.S. currency per the exchange rate on August 21, 2015 of $1.32
CND for each $1 US.
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(3)
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Fee calculation based on Rule 457(a), determined by the number of
shares offered multiplied by the proposed offering price (the maximum
aggregate offering amount) multiplied by $0.0001162.
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(4)
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The Registrant previously paid $1,938.07 USD in registration
fees to the Commission in connection to the Registration Statement on
Form F-1 (File No. 333-205807) filed with the Commission on July
23, 2015, under which no securities were sold. Therefore, pursuant to
Rule 457(p) under the Securities Act, registration fees in the amount of
$1,938,07 USD already paid by the Registrant are applied against the total
registration fee of $455.91 USD due for this Registration Statement.
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The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until this Registration Statement shall
become effective on such date as the SEC, acting pursuant to said Section
8(a), may determine
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1
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The dollar amount of
shares which the Company may sell to Dutchess, subject to the terms of the
Investment Agreement.
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2
The information contained in this prospectus is not complete
and may be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
10,325,000Common
shares
This prospectus relates
to the resale of up to 10,325,000 shares of common shares of Natcore
Technology, Inc., a British Columbian corporation, by Dutchess Opportunity
Fund, II, LP (“Dutchess”) and LoPresti Law Group, P.C.(“LLG”), (collectively
the ”Selling
Stockholders”),
which includes (i) up to 10,000,000 Shares that the Company may put to
Dutchess, pursuant to an investment agreement (“Investment Agreement”) dated
August21, 2015; and (ii) 325,000 shares of the Company’s common stock to be
paid to LLG in exchange for the provision of legal services rendered. Subject
to the terms and conditions of the Investment Agreement, the Company has the
right, but not the obligation, to “Put,” or require Dutchess to purchase up to
$5million worth of the Company’s shares of Common Stock during a 36-month
period commencing on the date of this Prospectus. This arrangement is sometimes
referred to as an “Equity Line.”
The Company will not
receive any of the proceeds from the Selling Stockholders sale of these shares.
However, the Company will receive proceeds from the initial sale of these
shares to Dutchess pursuant to the Investment Agreement. The Company will sell
these shares to Dutchess at a price equal to ninety five (95%) of the lowest
daily volume weighted average price (“VWAP”), of the Company’s Common Stock
during the five (5) consecutive Trading Days
2
beginning on the Put
Notice Date
3
and ending on and including the date that is four (4)
Trading Days after such Put Notice Date. The company has the right to withdraw
all or any portion of any Put before the closing, subject to certain
limitations set forth in the Investment Agreement. This offering will terminate
upon the earlier of (i) the first day of the month next following the 36-month
anniversary of the date the registration statement, to which this prospectus is
made a part, is declared effective by the SEC and (ii) the date on which
Dutchess shall have made payment of advances in the aggregate amount of the
Commitment Amount. There are no underwriting agreements. The Company has agreed
to pay all the costs and expenses of this registration.
Natcore common shares
currently trade on the TSX Venture Exchange under the symbol “NXT”, on the
Frankfurt Stock Exchange under symbol “8NT” and on the OTCQB® marketplace under symbol “NTCXF.” The closing price of the
Company’s common shares on August 21, 2015 was $0.40 USD per share. Dutchess
may sell its shares from time to time in regular brokerage transactions, in
transactions directly with market makers or in privately negotiated
transactions. For additional information on the methods of sale that may be
used by Dutchess, see the section entitled “Plan of Distribution” on page 24.
The Company will bear the costs relating to the registration of these shares,
but will not pay any of the selling commissions, brokerage fees or related
expenses.
With the exception of
Dutchess, and LLG, which are each an “underwriter” within the meaning of the
Securities Act of 1933, no other underwriter or person has been engaged to
facilitate the sale of shares of the Company’s Common Stock in this offering.
The Securities and Exchange Commission may take the view that, under certain
circumstances, any broker-dealer or agent that participates with the selling
stockholders in the distribution of the shares may be deemed to be an
“underwriter” within the meaning of the Securities Act. Commissions, discounts
or concessions received by any such broker-dealer or agent may be deemed to be
underwriting commissions under the Securities Act.
Investing in Natcore common shares involves a high
degree of risk. See “Risk Factors” beginning on page 12.
Neither
the Securities and Exchange Commission nor any state securities commission or
other regulatory body has approved or disapproved of these securities, or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
Natcore
is an “Emerging Growth Company” as defined in the Jumpstart Our Business Startups
Act of 2012 (the JOBS Act) and is subject to reduced public company reporting
requirements. Natcore has chosen not to take advantage of the extended
transition period for new accounting standards. While the decision to opt out
of the extended period to comply with new or revised accounting standards is
irrevocable, the Company may in the future elect to avail itself of other
reduced reporting obligations available as an emerging growth company.
Unless
otherwise indicated all currency figures are stated in US ($) dollars.
Prospectus
Dated
: September 24, 2015
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2
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Any day on which the
principal market for the Common Stock is open for trading, from the hours of
9:30 am until 4:00 pm New York Time
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3
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The trading day
immediately following the day on which Dutchess receives a Put Notice,
defined as the written notice sent to Dutchess by the Company stating the
amount in U.S. dollars of common stock the Company intends to sell to
Dutchess.
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3
TABLE
OF CONTENTS
Investors
should rely only on the information contained in this prospectus and in any
free writing prospectus that Natcore authorizes to be delivered to the
investor. Natcore has not authorized anyone to provide investors with
additional, different or inconsistent information from that contained in this
prospectus or such free writing prospectus, if any. The Selling Shareholders
are offering to sell, and seeking offers to buy, common shares only in
jurisdictions where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of the
common shares.
4
PROSPECTUS SUMMARY
This
summary highlights information contained elsewhere in this prospectus and
provides an overview of the material aspects of this offering. This summary
does not contain all of the information you should consider before making an
investment decision. This summary contains forward-looking statements that
contain risks and uncertainties. Natcore’s actual results may differ
significantly from future results due to factors such as those set forth in the
sections “Risk Factors” and “Forward-Looking Statements.” Investors should read
this entire prospectus carefully before making an investment decision.
This prospectus is part
of a registration statement that the Company has filed with the Securities and
Exchange Commission, (the “SEC”). Under this registration process, Dutchess
Opportunity Fund II, LP (“Dutchess”), and LoPresti Law Group, P.C. (“LLG”),
(the “Selling Shareholders”) have elected to be a part of this offering.
Dutchess may offer and sell from time to time up to10,000,000 shares of the
Company’s common stock issuable upon the exercise of Puts by the Company. In
addition, LLG may offer and sell from time to time up to 325,000shares of the
Company’s common stock. The Company will not receive any of the proceeds from
any sale of shares by the Selling Shareholders. However, the Company will
receive proceeds from the initial sale of these shares to Dutchess pursuant to
the Investment Agreement. The Company has agreed to pay all expenses incurred
in connection with the registration of the shares of common stock covered by
this prospectus. Information about the Selling Shareholders may change over
time. Any changed information given to the Company by the Selling Shareholders
will be set forth in a prospectus supplement if and when necessary. Further, in
some cases, the Selling Shareholders will also be required to provide a
prospectus supplement containing specific information about the terms on which
they are offering and selling the Company’s common stock. If a prospectus
supplement is provided and the description of the offering in the prospectus
supplement varies from the information in this prospectus, you should rely on
the information in the prospectus supplement.
THERE
MAY BE SITUATIONS WHERE ALL SOURCES OF REVENUE DESCRIBED BELOW (OR ANY REVENUE
AT ALL) MAY NOT BE AVAILABLE GIVEN MARKET CONDITIONS AND CUSTOMER REQUIREMENTS.
THE COMPANY HAS HAD NET LOSSES IN EACH OF THE LAST THREE FISCAL YEARS 2014,
2013, 2012 OF $2,193,532 $3,938,828, AND $1,838,355, RESPECTIVELY. AS OF
DECEMBER 31, 2014 THE COMPANY HAS HAD RECURRING LOSSES FROM OPERATIONS AND A
CUMULATIVE DEFICIT OF APPROXIMATELY $16,428,813 ($18,071,331 AT JUNE 30, 2015).
THE COMPANY IS STILL CONSIDERED A DEVELOPMENT STAGE COMPANY AND HAS RECEIVED AN
OPINION LETTER FROM ITS AUDITOR EXPRESSING MATERIAL UNCERTAINTY THAT MAY GIVE
RISE TO SIGNIFICANT DOUBT ABOUT THE COMPANY’S ABILITY TO CONTINUE AS A GOING
CONCERN.IN JANUARY, APRIL, AND JULY2015, THE COMPANY COMPLETED NON-BROKERED
PRIVATE PLACEMENTS ISSUING 4,374,112 UNITS FOR GROSS PROCEEDS OF $2,125,734. AS
OF JULY 31, 2015, THE COMPANY HAD $821,026 IN CASH. THE COMPANY ANTICIPATES ITS
CURRENT CASH AND CASH EQUIVALENTS WILL BE SUFFICIENT TO FUND OPERATIONS FOR
APPROXIMATELY 3 MONTHS. THE COMPANY HAS ENTERED INTO A STRUCTURED FINANCING
AGREEMENT WITH DUTCHESS OPPORTUNITY FUND, II, LP THAT HAS COMMITTED $5,000,000
IN EXCHANGE FOR EQUITY SHARES TO BE EXERCISED AT THE COMPANY’S DISCRETION, TO
FUND OPERATIONS OVER THE NEXT 36 MONTHS. ADDITIONALLY, THE COMPANY MAY PURSUE
ADDITIONAL FINANCING ALTERNATIVES, INCLUDING COMPLETING ANOTHER PRIVATE
PLACEMENT.
The
Company
Natcore
Technology, Inc. (“Natcore” or “the Company”) is a corporation organized under
the laws of British Columbia, Canada organized on August 9, 2007 for the
purpose of commercializing technology that intends to make solar energy
cost-competitive with energy derived from fossil fuels. More specifically,
Natcore has technology which enables the controlled deposition of silicon
dioxide and mixed silicon oxides from an aqueous solution at ambient temperatures
and pressures. That technology is called liquid phase deposition and Natcore is
the exclusive licensee. Using our Liquid Phase Deposition (“LPD”), black
silicon, and laser technology, we grow a thin anti-reflective coating on a
silicon disc without the need for toxic chemicals or a high-temperature vacuum
furnace. We are replacing the traditional thermal vacuum processes, such as
chemical vapor deposition and plasma enhanced chemical vapor deposition, for
making solar cells with our LPD wet chemistry process. We believe LPD is the
future of solar and that it will result in solar cells of higher quality, that
are safer, cleaner and less expensive than prior processes. The technology was
developed at William Marsh Rice University (“Rice University”) and is licensed
to Natcore pursuant to an exclusive license agreement. In connection with the
license agreement, Rice University became a Natcore shareholder and continues
to hold a stake in the company.
Natcore’s
business is in the growth of thin and thick films of dielectric and
semiconductor materials using non-vacuum, room temperature processes. Natcore’s
first specific aim is to enter and gain market share in the antireflective
coating market for solar cells by selling a paradigm-shifting, low-cost technology
to solar cell manufacturers that will enable those companies to realize
significantly lower capital costs and higher profit margins from their own
sales.
The
Company’s licensed technology process was developed at Rice University, for which
a patent has been awarded (#7,718,550
“
Method
for low temperature growth of inorganic materials from solution using catalyzed
growth and re-growth”). Verification that the process can be implemented in an
industrial laboratory setting has been accomplished (work performed for Natcore
by the Battelle Memorial Institute) and the process is now ready to be tailored
to specific applications in an industrial product development and manufacturing
facility. Natcore currently has licensed or owns 22 granted and 42 pending
patents surrounding this technology. A liquid phase deposition (LPD) process is
one in which a solid thin film of material is created on a foreign substrate by
allowing the atoms in a pre-mixed solution of that material to condense on the
surface. The solution temperatures may range from room temperature to several
hundreds of degrees Celsius.
5
Company
History
Natcore
was a capital pool company
4
until it completed a Qualifying
Transaction on May 8, 2009. The Qualified Transaction involved a reverse
take-over of Syracuse Capital Corp. by Natcore Technology Inc., a Delaware
company, which is now a wholly owned subsidiary of the Company. Syracuse
Capital Corp. was a company incorporated under the British Columbia
Business Corporations Act
and a Capital
Pool Company, having its common shares listed on the TSX Venture Exchange under
the trading symbol “SYU.P.”
Natcore
completed its Qualifying Transaction by acquiring all of the issued and
outstanding securities of Natcore Technology, Inc. a private Delaware company
in consideration of the issuance of 12,960,686 common shares of the Company
having a deemed price of CDN$0.40 per share and the issuance of 2,145,000 share
purchase warrants, each warrant exercisable into one additional common share at
a price of CDN$0.40 per share for a period of five years expiring May 9, 2014.
The Common Shares of the Company are listed for trading on the TSX Venture
Exchange under the symbol “NXT”.
On
December 11, 2009, Natcore completed the acquisition of NewCyte, Inc.
(“NewCyte”), a private Delaware company. NewCyte’s portfolio of intellectual
property included issued and pending patents covering the coating of fullerenes
(including carbon nanotubes) with silica, dielectric and semiconducting films
for a variety of potential applications, including photon, chemical and
biomolecule sensing. As consideration for the purchase of NewCyte, Natcore had
issued NewCyte shareholders a total of 200,000 share purchase warrants
entitling the holders to acquire Natcore shares at strike prices ranging from
CDN $0.75/share to CDN $2.00/share, all of which warrants have since
expired.
On
May 19, 2010, the Company completed the acquisition of Vanguard Solar, Inc.
(“Vanguard”), a private Delaware company controlling key intellectual property
in the field of solar energy. Vanguard was focused on the development of a
flexible, thin-film photovoltaic material believed to be capable of silicon
solar cell-like efficiency performance. Vanguard employed a proprietary
chemical bath process similar to Natcore’s liquid phase deposition technology,
although Vanguard planned to grow II-VI compound semiconductor thin films on
carbon nanotubes at room temperature and ambient pressure, while Natcore has
thus far concentrated on growing silicon dioxide films on silicon substrates.
As consideration for the purchase of Vanguard, Natcore issued to Vanguard
shareholders 375,236 common shares.
In
March 2012, the Company opened its Research and Development Center (the
“R&D Center”) in Rochester, NY. The R&D Center is enabling Natcore to
develop applications based on the company’s proprietary liquid phase deposition
technology.
The
Company also entered into an exclusive worldwide licensing agreement with the
National Renewable Energy Laboratory (NREL) to commercialize Black Silicon.
NREL and the Company are working together to reduce solar cell costs and
increase solar panel energy output. On October 25, 2012, the Company announced
that its scientists created the world’s first Black Silicon solar cell using
processes amenable to low-cost mass production. After having previously treated
a wafer to make it the “blackest” silicon solar cell surface ever recorded,
Natcore’s technicians used their scalable liquid phase deposition process to
create the Black Silicon solar cell, from wafer to finished cell, in their
R&D Center.
The
Company has taken steps to form an Australian solar panel joint venture. After
having signed a Memorandum of Understanding in September 2013, the Company and
the Australian group Denzo Pty Limited have begun planning for Natcore
Australia, a joint venture that would produce solar cells and solar panels in
Australia, with Australia as the headquarters for this activity. The joint
venture would move initially with currently available technologies. Future
technologies would be deployed as they become available. Natcore Australia
would have exclusive access to Natcore’s intellectual property portfolio in
Australia. Financing for the venture would come from government and private
sources.
The
Company made its first commercial offering with turnkey solar manufacturing
programs in November 2014. The Company established a program through which it
would design, supervise and build facilities to produce solar cells, solar
panels and power plants for third party clients. Natcore plans to serve on
these projects as a consultant or general contractor, hiring subcontractors and
selecting the optimum components, prices and quality available. Clients would
also gain exclusive access, on a geographical basis, to Natcore’s technologies-
including black silicon, laser-processing and rear contact technology- as they
come on line.
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4
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The Capital Pool Company
program is a two-step listing process offered by the TSX Venture Exchange. In
step one, a new company(a “Capital Pool Company”) is listed on the TSX
Venture Exchange as an initial public offering. In step two (the “Qualifying
Transaction”), the Capital Pool Company acquires an asset or completes a
transaction with a private business which results in the listing of the
acquired business on the TSX Venture Exchange. If the acquired business can
meet the minimum listing requirements of the Toronto Stock Exchange (the
“TSX”); it can be directly listed on the TSX at the closing of the Qualifying
Transaction. The listing of a business via the Capital Pool Company program
can be more cost and time efficient than a listing through a traditional
initial public offering.
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6
Implications
of being an Emerging Growth Company
As
a company with less than $1 billion in annual gross revenue during last
fiscal year, Natcore qualifies as an “emerging growth company” pursuant to the
Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging
growth company may take advantage of specified reduced reporting and other
burdens that are otherwise generally applicable to public companies. These
provisions include an exemption from the auditor attestation requirement in the
assessment of the emerging growth company’s internal control over financial reporting.
The JOBS Act also provides that an emerging growth company need not comply with
any new or revised financial accounting standard until such date that a
non-reporting company is required to comply with such new or revised accounting
standard. Furthermore, Natcore is not required to present selected financial
information or any management’s discussion herein for any period prior to the
earliest audited period presented in connection with this prospectus.
Natcore
will remain an emerging growth company until the earliest of (1) the last
day of Natcore’s fiscal year during which it has total annual gross revenue of
at least $1 billion; (2) December 31, 2020
5
; (3) the
date on which Natcore, during the previous three-year period, issued more than
$1 billion in non-convertible debt; or (4) the date that Natcore is
deemed to be a “large accelerated filer” under the Securities Exchange Act of
1934, or the Exchange Act. When Natcore is no longer deemed to be an emerging
growth company, Natcore will not be entitled to the exemptions provided in the
JOBS Act discussed above however reduced reporting obligations may still be
available as a small company. If Natcore chooses to take advantage of any of
these reduced reporting burdens, the information that Natcore provides
shareholders may be different than what investors might get from other public
companies which may make its common stock less attractive to investors. Natcore
has opted out of the extended transition period provided in Securities Act
Section 7(a)(2)(B) for complying with new accounting standards; this election
is irrevocable.
Competitive
Landscape
Solar
cell technology is generally divided into three (3) broadly defined areas.
Generation 1 solar cells are traditionally made from silicon (chemical symbol
Si) wafers and are the predominant technology in the market today. Generation 2
solar cells are not made from silicon wafers but from a variety of thin film
materials such as cadmium telluride (CdTe), copper indium gallium selenide (often
abbreviated CIGS, which is not a chemical symbol) or other more experimental
materials. Generation 3 solar cells are similar to generation 2 solar cells in
that they are made from thin film materials but incorporate nanotechnology in
them to enhance their performance compared to both generation 1 and 2 solar
cells. One example of the nanotechnology that can be incorporated in generation
3 cells is called a quantum dot. A quantum dot is the name given to a very,
very small piece of material, so small that it may contain only a few 10’s of
atoms to a few hundred atoms. The types and properties of quantum dots have
been the subjects of intense scientific study world-wide for over two decades
with the result that quantum dots are now emerging as materials with industrial
applications. Natcore plans to use quantum dots made from silicon (Si) and
germanium (Ge) in its thin film Generation 3 solar cells.
Normally,
a piece of semiconductor material such as silicon is electrically neutral. That
is, there are as many negative charges as positive charges in the solid. The
simple picture is that the negative charges are the electrons that have been
freed from orbiting their host atoms and the positive charges are the empty
spaces, or holes, in the orbits left by the electrons. The situation is very
dynamic in a neutral piece of silicon. Electrons are constantly escaping from
their orbits and creating holes and the electrons also continuously fall back
into the holes so no net charge is created. Compared to silicon, an
electrically neutral piece of phosphorus has one additional electron in an
orbit around the atom. When the phosphorus atom enters the silicon the extra
electron is set loose from its orbit and the hole what would have been left is
filled by an electron from a neighboring silicon atom. The result is that the
whole piece of phosphorus-doped silicon becomes negatively charged, or n-type.
The more phosphorus atoms added, the more electrons are set free and the
material is said to be more n-type. The inverse happens when a boron atom is
added to the silicon. The boron atom has one fewer electron in orbit with the
result that the boron atom pulls an electron away from a neighboring silicon
atom and creates a permanent hole, giving the solid a net positive charge. That
material is called p-type. Natcore’s technology is applicable to both n and p
type material.
Natcore’s
black silicon technology is intended to replace an expensive, energy and
manpower intensive, thermal vacuum process with a simple wet chemistry process
that will make an improved antireflection surface on Generation 1 silicon solar
cells.
The
Company is currently unaware of any other wet chemical, room temperature
antireflective coating technology in commercial use or in development. While
current thermal/vacuum systems are adequate for Generation 1 and 2 cells,
Natcore believes its technology should enable those cell producers to improve
their profit margins by offering lower cell production cost while maintaining
equal or better cell efficiency.
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5
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The last day of the
Company’s fiscal year following the fifth anniversary of the effectiveness of
its initial Form F-1 Registration dated effective May 26, 2015.
|
7
There
are approximately 100 solar cell companies worldwide. The present world silicon
solar cell market is dominated by just a handful of producers. They are: Yingli
Green Energy, JA Solar, Trina Solar, Neo Solar Power, Motech, Jinko Solar,
Gintech, Canadian Solar and Hareon Solar Technology. Although the list keeps
changing, the top ten silicon solar cell producers account for over 40% of
global silicon cell production. The Company believes that most of them are
preparing to introduce Generation 2 (thin film solar cells) in the coming
years. The Company expects the follow-on move to Generation 3 solar cells can
be expected to gain momentum during the next five to eight years, and should
become the dominant technology for new plant expansion thereafter (2019 to
2022).
Natcore’s
path to commercialization of its ultimate product, thin film, all-quantum dot
tandem solar cells, faces several technical obstacles that must be overcome if
the Company is to achieve its commercial goals. A large body of theoretical and
experimental evidence now exists that decisively predicts that high performance
can be achieved by replacing the exotic, expensive materials now used to make
tandem solar cells with thin films of quantum dots (QD’s) of any of a variety
of materials. Natcore’s proprietary LPD technology enables the development of
such devices using silicon (Si) and germanium (Ge) quantum dots, among others.
Rice University, under contract to the Company, has developed technology to
create layers of Si and/or Ge QD’s embedded in an LPD silica thin film layer.
The next steps are to create a p-n junction in such layers and add top and
bottom contacts to make working Si and Ge QD solar cells as separate devices.
Following that development, the Company will join the two different cell types
to make a tandem cell. Once the film deposition and growth processes are well
understood, engineering of a continuous deposition process and system for
implementing it can begin. At that stage of development the Company believes
that it can call upon the equipment and technology used to make photographic film,
all of which exists today. The Company needs to supply the LPD coating
equipment for insertion into existing high speed photographic film production
lines.
The
Company anticipates a 36 to 48 month timeframe from start of device development
to reach production readiness for the all-quantum dot, thin film solar cell
development and the total expenditure of $5-$8M through a pilot production
stage of the product. Moving to full commercial production will require an
additional $10M and an additional 12-18 months to complete, assuming the ready
availability of suitable roll-to roll equipment for the purpose. The company
believes that currently unused Kodak film process equipment lines will be
available.
Hurdles
that must be overcome before the Company can sell its product, whether it is a
thin film, quantum dot tandem solar cell on a flexible substrate or the silicon
quantum dot solar cell on a silicon solar cell used as a substrate are as
follows. Once the technology is fully developed the Company must develop either
(1) a set of equipment for insertion into an existing roll-to-roll coating
system or (2) develop full production scale process equipment for applying the
thin film quantum dot tandem cell layers to the top of a standard silicon solar
cell as it comes from existing silicon solar cell production lines. It is
possible that the Company might choose to develop both approaches in order to
have a more comprehensive product offering. Commercial scale technology exists
for both approaches but will have to be tailored to the specific steps needed
to make the quantum dot solar cell layers in either case.
The
Company will also have to develop marketing and sales capability to distribute
the product and may choose to distribute through wholesale channels or through
retail channels, or be its own distributor.
There
can be no assurances that the Company will compete successfully with existing
or new competitors, or that the competition will not have a material adverse
effect on the business, operating results or financial condition of the
Company. In addition, the Company is still developing and has received a “going
concern” opinion from its auditors, which means
that an entity will continue to operate in the near future provided it
generates or obtains enough resources to operate. There may be situations where
all sources of revenue described (or any revenue at all) may not be available
given market conditions and customer requirements. The Company has had net
losses in each of the last three fiscal years and as of December 31, 2014 the
Company has had recurring losses from operations and a cumulative deficit of
approximately $16,428,813 ($18,071,331 at June 30, 2015).
8
THE OFFERING
|
|
|
|
Common shares Offered by Dutchess, and LLG, who are
the Selling Stockholders
|
10,325,000 common
shares
|
|
|
|
|
Common shares currently outstanding
|
52,632,614 common
shares
6
|
|
|
|
|
Common shares to be outstanding after the offering
|
62,957,614 common
shares
|
|
|
|
|
Offering Price
|
To be determined by the
prevailing market price for the shares at the time of sale or negotiated
transactions.
|
|
|
|
|
Use of proceeds
|
The Company will not
receive any of the proceeds from Dutchess’s or LLG’s sale of the shares of
Common Stock covered by this Prospectus. However, the Company may receive up
to $5million in proceeds from the sale of shares of Common Stock to Dutchess
pursuant to the terms of the Investment Agreement. The Company anticipates that
the net proceeds it receives under the Investment Agreement will be used for
general corporate and working capital purposes and acquisitions or assets,
businesses or operations or for other purposes that the Board of Directors,
in its good faith, deems to be in the best interest of the Company
|
|
|
|
|
Symbol
|
Natcore common shares
currently trade on the TSX Venture Exchange under the symbol “NXT” and on the
OTCQB® marketplace under symbol “NTCXF.”
|
|
|
|
|
Dividends
|
Natcore currently
intends to retain any future earnings to fund the development and growth of
our business. Therefore, the Company does not currently anticipate paying
cash dividends on Natcore common shares.
|
|
|
|
|
Risk factors
|
See “RISK FACTORS”
section, and other information included in this prospectus for a discussion
of factors investors should consider before deciding to invest in Natcore
common shares.
|
Background
of the Offering
On
August 21, 2015, the Company entered into an investment agreement (the
“Investment Agreement”) and registration rights agreement (the “Registration
Rights Agreement”) with Dutchess Opportunity Fund, II, LP (“Dutchess”).
Pursuant to the Investment Agreement, Dutchess committed to purchase, subject
to certain conditions and restrictions, up to $5 million of the Company’s
Common Stock upon issuance by the company of a “Put” to Dutchess at a price
equal to ninety five percent (95%) of the lowest daily VWAP (volume weighted
average price) of the Company’s Common Stock during the five (5) consecutive
Trading Days beginning on the Put Notice Date and ending on and including the
date that is four (4) Trading Days after such Put Notice Date. Pursuant to the
terms of the Registration Rights Agreement, the Company is obligated to file
one or more registration statements with the SEC to register the resale by
Dutchess of shares of Common Stock issued or issuable under the Investment
Agreement. Said shares are being registered for resale by this prospectus. The
Company is also registering 325,000 shares of the Company’s common stock to be
issued to LoPresti Law Group, P.C. (“LLG”) in exchange for the provision of
legal services to the Company.
9
Summary
Consolidated Financial Data
The
following tables set forth the Company’s summary consolidated financial data.
Investors should read the following summary consolidated financial data in
conjunction with “
Management’s Discussion
and Analysis of Financial Condition and Results of Operations,
” and
Natcore’s consolidated financial statements and related notes included
elsewhere in this prospectus. Historical results are not indicative of the
results to be expected in the future. Natcore’s consolidated financial
statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) issued by the International Accounting Standards
Board (“IASB”) and interpreted by the International Financial Reporting
Interpretations Committee (“IFRIC”).
As
a result of the Accounting Standards Board of Canada’s decision to adopt IFRS
for publicly accountable entities for financial reporting periods beginning on
or after January 1, 2011, the Company has adopted IFRS for the 2011 and 2010
annual financial statements. The December 31, 2010 financial statements are
restated to conform to IFRS.
Since
Natcore began preparing its financial statements in accordance with IFRS,
having reviewed significant transactions and compared them to United States
generally accepted accounting principles (“GAAP”), Natcore concluded that there
are no material differences that would impact the users of the accompanying
financial statements other than terminology and headings.
The
Company has derived the consolidated statements of financial position as of
June 30, 2015 and December 31, 2014 from its unaudited and unreviewed June 30,
2015 quarterly financial statements and the 2014 audited consolidated financial
statements (both are included elsewhere in this prospectus), respectively. The
Company has derived the summary consolidated statements of comprehensive income
data for each of the six months ended June 30, 2015 and 2014 from its unaudited
and unreviewed consolidated June 30, 2015 financial statements (included
elsewhere in this prospectus) and for the years ended December 31, 2014 and
2013 from its audited consolidated financial statements (included elsewhere in
this prospectus).
CONSOLIDATED
STATEMENT OF COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2015
(six months ended)
(unaudited)
|
|
June
30, 2014
(six months ended)
(unaudited)
|
|
December
31, 2014
(year ended)
(audited)
|
|
December
31, 2013
(year ended)
(audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
95,707
|
|
|
126,185
|
|
|
229,792
|
|
|
108,657
|
|
|
Depreciation and
amortization
|
|
|
182,555
|
|
|
198,874
|
|
|
412,492
|
|
|
359,178
|
|
|
Filing fees
|
|
|
—
|
|
|
—
|
|
|
34,090
|
|
|
32,082
|
|
|
Foreign exchange
(gain)/loss
|
|
|
92,339
|
|
|
4,658
|
|
|
41,344
|
|
|
90,060
|
|
|
Interest and
bank charges
|
|
|
1,034
|
|
|
580
|
|
|
1,581
|
|
|
1,269
|
|
|
Marketing
|
|
|
89,245
|
|
|
19,090
|
|
|
81,401
|
|
|
96,641
|
|
|
Office and other
operational
|
|
|
133,994
|
|
|
282,841
|
|
|
273,264
|
|
|
267,532
|
|
|
Professional
fees
|
|
|
74,920
|
|
|
210,924
|
|
|
213,888
|
|
|
129,499
|
|
|
Research and
development
|
|
|
439,522
|
|
|
561,032
|
|
|
1,634,864
|
|
|
1,480,058
|
|
|
Stock-based
compensation
|
|
|
195,222
|
|
|
147,906
|
|
|
301,732
|
|
|
325,686
|
|
|
Travel
|
|
|
30,138
|
|
|
35,280
|
|
|
73,922
|
|
|
126,668
|
|
|
Wages and
salaries
|
|
|
420,664
|
|
|
359,496
|
|
|
770,105
|
|
|
855,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,755,340
|
)
|
|
(1,946,866
|
)
|
|
(4,068,475
|
)
|
|
(3,873,183
|
)
|
|
Other
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income,
net
|
|
|
576
|
|
|
16,462
|
|
|
32,626
|
|
|
13,708
|
|
|
Fair value
adjustment on warrants
|
|
|
112,246
|
|
|
1,201,216
|
|
|
1,842,317
|
|
|
(79,353
|
)
|
|
Net
and Comprehensive Loss
|
|
|
(1,642,518
|
)
|
|
(729,188
|
)
|
|
(2,193,532
|
)
|
|
(3,938,828
|
)
|
|
Loss
income attributable per share - Basic and Diluted
|
|
|
(0.03
|
)
|
$
|
0.02
|
|
|
(0.05
|
)
|
|
(0.10
|
)
|
|
Weighted
average number of shares outstanding: Basic and Diluted
|
|
|
49,706,536
|
|
|
41,724,468
|
|
|
42,294,310
|
|
|
41,097,726
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2015
|
|
December
31, 2014
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Financial
Position:
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
284,630
|
|
$
|
548,387
|
|
|
Receivables
|
|
|
4,731
|
|
|
5,939
|
|
|
Prepaid expenses
|
|
|
75,396
|
|
|
60,395
|
|
|
|
|
|
|
|
|
|
|
|
Total Current assets
|
|
|
364,757
|
|
|
614,721
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
449,941
|
|
|
582,503
|
|
|
Intangible Assets
|
|
|
—
|
|
|
36,568
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Current Assets
|
|
|
449,941
|
|
|
619,071
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
814,698
|
|
|
1,233,792
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
386,931
|
|
|
289,688
|
|
|
Derivative liabilities
|
|
|
12,577
|
|
|
124,823
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
399,508
|
|
|
414,511
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
399,508
|
|
|
414,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
15,330,566
|
|
|
13,977,256
|
|
|
Share-based payment reserve
|
|
|
3,155,954
|
|
|
2,956,964
|
|
|
Share subscriptions received
|
|
|
—
|
|
|
313,874
|
|
|
Deficit
|
|
|
(18,071,331
|
)
|
|
(16,428,813
|
)
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
415,190
|
|
|
819,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
814,698
|
|
$
|
1,233,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
(Deficit)
|
|
|
(34,751
|
)
|
|
200,210
|
|
11
RISK FACTORS
An
investment in Natcore common shares involves a high degree of risk. Investors
should consider carefully the risks described below, together with the
financial and other information contained in this prospectus, before investors
decide to invest in Natcore common shares. The occurrence of the risks
described below could have a material adverse impact on Natcore’s business,
financial condition or results of operations. In any such case, the trading
price of Natcore common stock could decline and investors may lose part or all
of his or her investment. Various statements in this prospectus, including the
following risk factors, contain forward-looking statements.
Risks
Related to Natcore’s Business
There is no assurance that the Company will turn a profit.
The
Company is currently not profitable. There is no assurance as to whether the
Company will be profitable, earn revenues or whether the Company will be able
to return any investment funds, to make cash distributions or to meet its
operating expenses and debt service, if any.
Our independent auditor’s reports on our financial
statements for the years ended December 31, 2014 and 2013 includes a “going
concern” explanatory paragraph.
Our
independent auditor has presented our financial statements on the basis that we
are a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business over a reasonable
length of time. This means that we may not generate enough funds to pay our
general operating expenses and bills from professionals and other advisors that
we are obligated to pay. Since we have not generated any revenues from
operations management intends to finance operating costs over the next twelve
months with existing cash resources and the private placement of common stock. There may be situations where all sources of revenue
described (or any revenue at all) may not be available given market conditions
and customer requirements. The Company has had net losses in each of the last
three fiscal years and as of June 30, 2015; the Company has had recurring
losses from operations and a cumulative deficit of approximately $18,071,331.
There is no assurance that the Company will generate
immediate revenues; the Company projects cash on hand sufficient to fund
operations for approximately 3 months.
The
Company anticipates that it will incur substantial expenses relating to the
implementation of its business plan and cost overruns may be incurred. The
Company currently expects the initial expenses it incurs to result in operating
losses for the Company for the foreseeable future. Furthermore, no assurance
can be made that a shareholder will realize any return on his or her
investment, or that such shareholder will not lose his or her entire investment.
In January, April, and July 2015 the Company completed non-brokered private
placements issuing 4,374,112 units for gross proceeds of $2,125,734. As of July
31, 2015, the Company had $821,026 in cash. The Company anticipates its current
cash and cash equivalents will be sufficient to fund operations for
approximately 3 months. The company has entered into a structured financing
agreement with Dutchess Opportunity Fund, II, LP that has committed $5,000,000
in exchange for equity shares to be exercised at the Company’s discretion, to
fund operations over the next 36 months. Additionally, the company may pursue
additional financing alternatives, including completing another private
placement.
Financial projections provided may prove inaccurate.
The
Company’s Management may prepare financial projections concerning the estimated
operating results of the Company. These projections would be based on certain
assumptions that may prove to be inaccurate and that are subject to future
conditions be beyond the control of the Company, such as changes in the
condition of the national and international financial markets, fluctuations in
interest rates, changes in rules and regulations pertaining to the securities
markets and market participants, variations in the local and national economy,
acts of terrorism and occurrences of natural disasters or other such disasters.
The Company has a limited operating history. The Company may experience
unanticipated costs, or anticipated agreements or contracts may not materialize,
resulting in lower revenues than forecasted. There is no assurance that the
results that may be illustrated in financial projections would in fact be
realized by the Company. The financial projections would be prepared by
Management of the Company and would not be examined or compiled by independent
certified public accountants. Accordingly, neither independent certified public
accountants nor counsel to the Company could provide any level of assurance on
them.
12
The Company is entirely dependent on its Management team.
The
Company’s Management makes all decisions with respect to the Company’s assets,
including investment decisions and the day-to-day operations of the Company.
Other than as specified in the Company’s notice of articles and articles, the
shareholders have no right or power to take part in the management of the
Company. As a result, the success of the Company for the foreseeable future
will depend largely upon the ability of Management.
PROSPECTIVE
INVESTORS ARE HEREBY ADVISED THAT THE SUCCESS OF PREVIOUS VENTURES OR PROJECTS
UNDERTAKEN BY THE COMPANY’S MANAGEMENT OR THE MANAGEMENT OF ANY ACQUIRED
COMPANY CANNOT BE CONSTRUED AS A GUARANTEE OF THE SUCCESS OF THE VENTURE
OUTLINED HEREIN.
The Company’s Management may be subject to conflicts of
interest.
The
Company’s Management may in the future become associated with or employed by
other companies, which are engaged, or may become engaged, in operations
similar to the operations engaged in by the Company. Conflicts of interest
between the Company’s officers and/or directors and the Company may arise by
reason of such relationships. Management intends to resolve any conflicts with
respect to such operations in a manner equitable to the shareholders of the
Company, its management, and any of the Company’s affiliates. Officers and all
employees are required to sign a proprietary inventions agreement which means
that anything that is invented while employed at Natcore is owned by Natcore. Additionally
all employees are required annually to complete an outside employment
disclosure which allows the registrant to better control if there are any
outside interests. Directors are not required to do either and may pursue
opportunities independently of the registrant.
The Company may not achieve its goals and objectives.
All
investments in the Company risk the loss of capital. While the Company’s
Management believes that its experience and relationships will moderate this
risk to some degree, no representation is made that the Company’s projects will
be successful.
The Company is subject to the possibility of future
litigation that may have a significant adverse effect on the Company’s
financial condition, operations and plans for expansion.
There
are many risks incident to providing the types of services provided by the
Company that may give rise to future litigation. Under such circumstances, the
Company may be named as a defendant in a lawsuit or regulatory action. The
Company may also incur uninsured losses for liabilities which arise in the
ordinary course of business, or which are unforeseen. There is no assurance
that the Company’s shareholders will not lose their entire investment in the
Company as a result of unforeseen litigation.
The Company will indemnify its officers and directors.
The
Company’s articles, as amended, provide that the Company will, within the
limits of capital contributions and retained assets, hold its directors and
officers harmless against certain claims arising from Company activities, other
than losses or damages incurred by it as a result of its gross negligence,
fraud or bad faith. If the Company were called upon to perform under its
indemnification agreements, then the portion of its assets expended for such
purpose would reduce the amount otherwise available for the implementation of
its business plan, or for distributions to its shareholders, if any.
The enforcement of civil liabilities against the Company and
its officers and directors may be difficult to obtain
We
are incorporated under the laws of the Province of British Columbia, Canada.
Service of process upon us and upon our directors and officers and the Canadian
experts named in this Prospectus, some of whom reside outside the United
States, may be difficult to obtain within the United States. Furthermore, some
of our assets and some of our directors and officers are located outside the
United States, any judgment obtained in the United States against us or any of
our directors and officers, including one predicated on the civil liability
provisions of the U.S. federal securities laws, may not be collectible within
the United States.
The Company is subject to certain institutional risks.
The
institutions with which the Company (directly or indirectly) does business may
encounter financial difficulties that impair or would impair the operational
capabilities or the capital position of the Company.
13
There may be changes in laws applicable to the Company.
The
Company must comply with various legal requirements, including requirements
imposed by the state and federal securities laws and pension laws. Should any
of those laws change over the scheduled term of the Company, the legal
requirements to which the Company and its shareholders may be subject could
differ materially from current requirements.
The Company may face adverse tax consequences and may be
audited by the Internal Revenue Service or the Canada Revenue Agency.
While
the Company is advised in tax matters by its accountants, the Internal Revenue
Service (the “IRS”) or the Canada Revenue Agency (“CRA”) may not accept the tax
positions taken by the Company. As a result, the IRS or CRA could audit the
Company’s information and adjustments to the Company’s tax returns may result.
Any such adjustment could subject the shareholders to additional tax, interest
and penalties, as well as incremental accounting and legal expenses. In addition,
an audit of the Company’s tax returns could lead to audits of the individual
tax returns of the shareholders, resulting in adjustments and additional tax
with respect to non-Company items.
Government Regulation –
General.
The
Company may be subject to regulation by county, state and federal governments,
governmental agencies, and regulatory authorities from several different
countries. Failure to obtain regulatory approvals or delays in obtaining
regulatory approvals by the Company, its collaborators, customers, vendors or
service providers would adversely affect the marketing of products and services
developed by the Company, and the Company’s ability to generate product and
service revenues. Further, there can be no assurance that the Company, its
customers, vendors, or service providers will be able to obtain necessary
regulatory approvals. Although the Company does not anticipate problems
satisfying any of the regulations involved, the Company cannot foresee the
possibility of new regulations, which could adversely affect the business of
the Company. While the Company anticipates that all regulatory approvals
required will be granted, violations by the Company and/or its customers of,
and/or non-compliance with, such regulations and approvals may adversely affect
the Company’s ability to acquire capital, or adversely affect the Company’s
ability to conduct its business as intended.
The Company is subject to various economic risks.
Local,
national and international economic conditions may have a substantial adverse
effect on the efforts of the Company. The Company cannot guarantee its
anticipated results of operations against the possible eventuality of any of
these potential adverse conditions.
The Company may suffer
uninsured losses.
The
Company plans to obtain comprehensive insurance coverage, including liability,
fire and extended coverage, as is customarily obtained for businesses similar
to the Company. Certain types of losses of a catastrophic nature, such as losses
resulting from floods, tornadoes, thunderstorms, and earthquakes, are
uninsurable or not economically insurable to the full extent of potential loss.
Such Acts of God, work stoppages, regulatory actions or other causes, could
interrupt or delay the Company’s development or expansion, and would adversely
affect the Company’s business, results of operations, and profitability.
Dependence on Management and absence of Key Man Insurance.
The
Company’s business, to date, and for the foreseeable future, will be
significantly dependent on the Company’s management team, directors and key
consultants, including but not limited to Charles Provini, Brien Lundin, John
C. Calhoun, and Dennis J. Flood. Mr. Flood is able to devote 30-40 hours a week
to the management of the Company.
The
loss of any one of these officers could have a material adverse effect on the
Company. If the Company lost the services of one or more of its executive
officers or key employees, it would need to devote substantial resources to
finding replacements, and until replacements were found, the Company would be
operating without the skills or leadership of such personnel, any of which
could have a significant adverse effect on the Company’s business. The Company
currently does not carry key-man life insurance policies covering any of these
officers.
14
Risks associated with expansion
.
Any
expansion plans undertaken by the Company to increase or expand its operations
entail risks, which may negatively impact the profitability of the Company.
Consequently, investors must assume the risk that (i) such expansion may
ultimately involve expenditures of funds beyond the resources available to the
Company at that time, and (ii) management of such expanded operations may
divert Management’s attention and resources away from its existing operations,
all of which factors may have a material adverse effect on the Company’s
present and prospective business activities. The Company cannot assure investors
that its products, procedures or controls will be adequate to support the
anticipated growth of its operations.
Inability to protect proprietary and technology rights.
The
Company’s success will depend in part on its ability to protect its proprietary
rights and technologies, including, but not limited to,
Patent 2340039, Patent 7,718,550, Patent 7,253,014,
Patent 7,682,527, Patent 7,491,376,
and
Patent 7,692,218
. The Company relies on a combination of
patents, trademark laws, trade secrets, confidentiality provisions and other
contractual provisions to protect its proprietary rights. However, not all of
these measures may apply or may afford only limited protection. The Company’s
failure to adequately protect its proprietary rights may adversely affect the
Company. Despite the Company’s efforts to protect its proprietary rights,
unauthorized parties may attempt to copy aspects of the Company’s services or
to obtain and use trade secrets or other information that it regards as
proprietary. Based on the nature of its business, it may or may not be able to
adequately protect its rights through patent, copyright and trademark laws. The
Company’s means of protecting its proprietary rights abroad may not be
adequate, and competitors may independently develop similar technologies. The
Company may become involved in litigation over proprietary rights. In the event
of an adverse result in any future litigation with third parties relating to
proprietary rights, the Company could be required to pay substantial damages,
including treble damages if the Company is held to have willfully infringed or
to expend significant resources to develop non-infringing technology. In
addition, litigation frequently involves substantial expenditures and can
require significant management attention, even if the Company ultimately
prevails. However, there can be no assurance that the Company would be able to
successfully resolve such disputes in the future.
No assurance of profitability.
The
Company may experience operating losses as it develops, produces and
distributes its products and services. As a result, the Company may not be able
to achieve profitability in a commercially acceptable time frame, if ever.
Natcore is an “emerging growth company” with reduced reporting
requirements that may make its common shares less attractive to investors.
Natcore
is an “emerging growth company,” as defined in the JOBS Act. Although the
Company has elected not to take advantage of certain reporting exemptions
available it, for so long as Natcore remains an “emerging growth company,” it
will not be subject to the provision of Section 404(b) of the
Sarbanes-Oxley Act, applicable to non-emerging growth companies, that requires
that an independent registered public accounting firm provide an attestation
report on the effectiveness of the Company’s internal control over financial
reporting. This may increase the risk that the Company will fail to detect and
remedy any weaknesses or deficiencies in its internal control over financial
reporting. In general, these reduced reporting requirements may allow the
Company to refrain from disclosing information that investors may find
important. It is also possible that investors may generally find Natcore’s
common shares less attractive due to its status as an “emerging growth company”
and its limited disclosures. Any of the foregoing could adversely affect the
price and liquidity of the Company’s common shares.
Natcore
may take advantage of these disclosure exemptions until it is no longer an
“emerging growth company” however it may still take advantage of certain
reduced reporting requirements if it remains a small company. The Company will
cease to be an “emerging growth company” upon the earliest of:
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the last day of the fiscal year in which the fifth
anniversary of this offering occurs;
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the last day of the fiscal year in which the
Company’s annual gross revenues are $1 billion or more;
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the date on which the Company, during the previous
three-year period, issued more than $1 billion in non-convertible debt
securities; or
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the last day of any fiscal year in which the market
value of the Company’s common shares held by non-affiliates exceeds
$700 million as of the end of the second quarter of that fiscal year.
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15
Risk
Factors Associated with the Nanotechnology Business
The demand for solar power products is dependent on volatile
market and industry trends that can affect demand for Natcore’s products and
negatively impact its revenue.
The
global economic downturn that began in the fourth quarter of 2008 highlighted
the volatility associated with the solar power industry. The capital-intensive
nature of implementation requiring access to capital sources caused an overall
reduction in demand for solar power technology. While global markets have
stabilized and access to capital has returned the demand for solar power
products, the potential for soft demand and the trend of reduced cost of
production could again have the effect of an over-supplied market place. The
effects of a supply driven market place due to soft demand would be adverse to
the Company’s margins and in turn revenues.
In
addition, macroeconomic and geopolitical events influence the demand for solar
power products. Specifically, currency exchange rates and governmental
regulation affect the price of other energy resources like oil, natural gas and
coal. A reduction in the price of these traditional energy resources will
result in a reduction in the demand for alternative energy sources such as
solar power; which in turn could reduce the margins of the Company’s products
and result in a decrease in revenue.
Unforeseen technological failings that increase the cost of
adoption of solar products may inhibit widespread implementation of solar
solutions that would result in reduced revenue or the inability for us to
maintain Natcore’s profitability.
The
recent discovery of hardware failure and technical issues related to solar
power equipment that occurred earlier in product life that had been expected
could alter the associated cost of implementation of solar power products that
could in turn lead to a drop in demand. Historical data is not as readily
available for the solar industry as it is for the traditional sources of energy
limiting the ability to determine a reliable trend upon which to base future
results. Increased costs associated with implementation could lead to the
failure of solar power technology being widely adopted resulting in Natcore’s
inability to sustain revenue growth and profitability.
If third parties claim that the Company’s products infringe
their intellectual property rights, the Company may be forced to expend
significant financial resources and management time, and operating results
would suffer.
The
Company’s portfolio of intellectual property is significant to its financial
condition and operations. Third parties may claim that the Company’s products
and systems infringe their patents or other intellectual property rights.
Identifying third-party patent rights can be particularly difficult, especially
since patent applications are not published until 18 months after their filing
dates. If a competitor were to challenge the Company’s patents, or assert that
its products or processes infringe its patent or other intellectual property
rights, the Company could incur substantial litigation costs, be forced to
design around their patents, pay substantial damages or even be forced to cease
operations, any of which could be expensive and/or have an adverse effect on
the Company’s operating results. Third-party infringement claims, regardless of
their outcome, would not only drain financial resources, but also would divert
the time and effort of management, and could result in customers or potential
customers deferring or limiting their purchase or use of the affected products
or services until resolution of the litigation.
We are subject to certification requirements and other
regulations. Future more stringent regulations may impair Natcore’s ability to
market its products.
The
Company must obtain product certification from governmental agencies, such as
the EPA, to sell certain products in the United States, and must comply with
other product certification requirements in other countries. A portion of
Natcore’s future sales will depend upon sales of solar power products and
technologies that are certified to meet existing and future air quality and
energy standards. The Company cannot assure that its products will meet these
standards. The failure to comply with these certification requirements could
result in the recall of the Company’s products, or civil or criminal penalties.
Any
new government regulation that affects solar power products and technologies,
whether at the foreign, federal, state, or local level, including any
regulations relating to installation and service of these systems, may increase
the Company’s costs and the price of its systems. As a result, these
regulations may have a negative impact on the Company’s revenue and
profitability and thereby harm its business, prospects, results of operations,
or financial condition.
16
Changes in tax policies may reduce or eliminate the economic
benefits that make the Company’s products attractive to consumers.
In
some jurisdictions, such as the United States, governments provide tax benefits
for solar cell technologies, including tax credits, rebates and reductions in
applicable tax rates. In certain markets of the Company these benefits extend
to users of the Company’s products. From time to time, governments change tax
policies in ways that create benefits such as those for the Company’s
customers. Reductions or eliminations in these benefits may adversely affect
the Company’s revenue.
New technologies could render the Company’s existing
products obsolete.
New
developments in technology may negatively affect the development or sale of
some or all of the Company’s products or make its products obsolete. The
Company’s inability to enhance existing products in a timely manner or to
develop and introduce new products that incorporate new technologies, conform
to increasingly stringent emission standards and performance requirements, and
achieve market acceptance in a timely manner could negatively impact the
Company’s competitive position. New product development or modification is
costly, involves significant research, development, time and expense, and may
not necessarily result in the successful commercialization of any new products.
A breach or non-performance of the exclusive licensing
agreement with National Renewable Energy Laboratory to commercialize Black
Silicon could impair the Company’s ability to produce Black Silicon.
The
Company entered into an exclusive worldwide licensing agreement with National
Renewable Energy Laboratory (NREL) to commercialize Black Silicon. NREL and the
Company are working together to reduce solar cell costs by 2% to 3% and
increase solar panel energy output from 3% to 10% over the course of a day
without the aid of a solar tracking mechanism. Black Silicon is one key element
that could give Natcore a competitive edge in producing more efficient and cost
effective solar products; if Natcore’s production of Black Silicon is hindered
the Company’s revenue would be adversely affected.
Risks
Related to the Company’s Common Shares and the Offering
Authorized capital consists of an unlimited number of shares
of one class designated as common shares
The
Company’s authorized capital consists of an unlimited number of shares of one
class designated as common shares. The directors may create any class or series
of shares by resolution but may not make any modification to the provisions
attaching to our common shares without the affirmative vote of two-thirds of
the votes cast by the holders of the common shares. Natcore’s common shares do
not have pre-emptive rights to purchase additional shares. Shareholders should
be aware that the exercise of warrants described herein will dilute the value
of current holdings.
Volatility of the market price of the Company’s common
shares could adversely affect its shareholders and Natcore.
The
market price of the Company’s common shares could be highly volatile and could
be subject to wide fluctuations in response to numerous factors, including the
following:
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actual or anticipated variations in Natcore’s
operating results or those of Natcore’s competitors,
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technological enhancements or developments by
Natcore or its competitors,
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regulatory changes effecting Natcore’s industry,
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changes in the roles of key personnel,
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geopolitical events effecting Natcore’s industry,
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disputes concerning proprietary rights concerning
patents that Natcore holds.
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Natcore has not paid dividends in the past and does not
expect to pay dividends in the future. Any return on an investment could be
limited to the value of the common stock.
Natcore
has never paid cash dividends on its common shares and do not anticipate paying
cash dividends in the foreseeable future. The payment of dividends depends on
the financial condition of the Company, with other business and economic
factors influencing the decision by the board of directors in determining the
issuance of a dividend. If dividends are not issued, the Company’s common
shares may be considered less valuable because a return on an investment
will only occur if the Company’s stock price appreciates.
17
Stockholder ownership interest in Natcore may be diluted as
a result of future financings or additional acquisitions.
Natcore
may seek to raise funds from time to time in public or private issuances of
equity in the near future or over the longer term. Sales of the Company’s
securities offered through future equity offerings may result in substantial
dilution to the interests of the Company’s current shareholders. The sale of a
substantial number of securities to investors, or anticipation of such sales,
could make it more difficult for the Company to sell equity or equity-related
securities in the future at a time and at a price that the Company might
otherwise wish to effect sales. In addition, the Company has issued shares of
its common stock for various acquisitions in the past and may do so in the
future, which may also result in substantial dilution to the interests of the
Company’s current shareholders.
Investors may experience dilution as a result of future
purchases exercised on outstanding options and warrants.
As
of July 31, 2015, the Company had outstanding options to purchase a total of
5,447,000 of its common shares at a weighted average exercise price of CDN$0.80
per share. Also as of July31, 2015, the Company had outstanding warrants to
purchase a total of 10,263,126 of its common shares at a weighted average
exercise price of CDN$0.87 per share and had outstanding warrants to purchase a
total of 6,083,240 of its common shares at a weighted average exercise price of
US$0.62 per share. To the extent these options or warrants are ultimately
exercised, investors will sustain future dilution.
Risks
Related To This Offering
The Company is registering the resale of 10,325,000 shares
of Common Stock. Of these shares, 10,000,000 may be issued to Dutchess
under the Equity Line. The resale of such shares by Dutchess could depress the
market price of the Company’s Common Stock and shareholders may not be able to
sell your investment for what they paid for it.
The
Company is registering the resale of 10,325,000 shares of Common Stock under
this registration statement of which this Prospectus forms a part. The Company
may issue up to 10,000,000 shares to Dutchess pursuant to the Equity Line. The
sale of these shares into the public market by Dutchess could depress the
market price of the Company’s Common Stock such that potential purchasers of
the Company’s common shares may not be able to sell their investment for the
value they paid for it.
Dutchess will pay less than the then-prevailing market price
for the Company’s common stock under the Equity Line.
The
Common Stock to be issued to Dutchess pursuant to the Investment Agreement will
be purchased at a price equal to ninety five percent (95%) of the lowest daily
VWAP (volume weighted average price) of the Company’s Common Stock during the
five (5) consecutive Trading Days beginning on the Put Notice Date and ending
on and including the date that is four (4) Trading Days after such Put Notice
Date, subject to certain exceptions. Dutchess has a financial incentive to sell
the Company’s Common Stock upon receiving the shares to realize the profit
equal to the difference between the discounted price and the market price. If
Dutchess sells the shares, the price of the Company’s Common Stock could
decrease.
Any drawdowns under the Company’s Equity Line with Dutchess
will result in dilution to the Company’s stockholders.
If
the Company sells shares to Dutchess under the Equity Line, it will have a
dilutive effect on the holdings of the Company’s current stockholders, and may
result in downward pressure on the price of the Company’s Common Stock. If the
Company draws down amounts under the Equity Line, the Company will issue shares
to Dutchess at a price equal to ninety five percent (95%) of the lowest daily
VWAP (volume weighted average price) of the Company’s Common Stock during the
five (5) consecutive Trading Days beginning on the Put Notice Date and ending
on and including the date that is four (4) Trading Days after such Put Notice
Date. If the Company draws down amounts under the Equity Line when the share
price is decreasing, the Company will need to issue more shares to raise the
same amount than if the Company’s stock price was higher. Issuances in the face
of a declining share price will have an even greater dilutive effect than if
the Company’s share price were stable or increasing, and may further decrease
the Company’s share price.
The Company’s Equity Line with Dutchess may not be available
to it if the Company elects to make a draw down.
The
Company’s ability to put shares to Dutchess and obtain funds under the Equity
Line is limited by the terms and conditions in the Investment Agreement,
including restrictions on when the Company may exercise its put rights,
restrictions on the amount the Company may put to Dutchess at any one time,
which is determined in part by the trading volume of the Company’s Common Stock
or a limitation on Dutchess’ obligation to purchase if such purchase would
result in Dutchess beneficially owning more than 4.99% of the Company’s Common
Stock. Accordingly, the Equity Line may not be available to satisfy all of the
Company’s funding needs.
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THE
COMPANY CANNOT PREDICT WHETHER IT WILL SUCCESSFULLY EFFECTUATE ITS CURRENT
BUSINESS PLAN. EACH PROSPECTIVE PURCHASER IS ENCOURAGED TO CAREFULLY ANALYZE
THE RISKS AND MERITS OF AN INVESTMENT IN THE COMPANY’S COMMON STOCK AND SHOULD
TAKE INTO CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHERS, THE RISK
FACTORS DISCUSSED ABOVE.
This
Space Intentionally Left Blank
19
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus includes forward-looking statements that involve known and unknown
risks and uncertainties. Forward-looking statements include statements
regarding the Company’s, anticipated future business strategy, expected future
financial condition or results of operations and market data, as well as any
other statements that are not historical facts. These statements reflect
beliefs of Natcore’s management, as well as assumptions made by the Management
and information currently available to the Company. Although the Company
believes that these beliefs and assumptions are reasonable, these statements
are subject to numerous factors, risks and uncertainties that could cause
actual outcomes and results to be materially different from those projected.
Investors can identify these and other forward-looking statements by the use of
words such as “may,” “will,” “should,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “intends,” “potential” or the negative of such terms,
or other comparable terminology.
Such
statements reflect the Company’s current views with respect to future events
and are subject to certain risks, uncertainties and assumptions. Actual results
may differ materially from those expressed in these forward-looking statements
due to a number of uncertainties and risks, including the risks described in
this prospectus and other unforeseen risks, including, without limitation:
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Inability of Selective
Emitter function achieving improved efficiency,
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Black Silicon’s power
output not resulting in the expected power output increase,
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Liquid Phase Deposition
Passivation technology not creating the expected production savings,
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Tandem Quantum Dot
Solar cell not producing the expected increased efficiency that would reduce
expected added revenue to the Company,
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License agreements and
Royalties not being practically obtainable or being executed with terms not
as favorable as predicted, and
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The Company’s reporting
exemptions under the JOBS Act as an emerging growth company being
extinguished in the future (as discussed above) resulting in more onerous reporting
standards that could impact Natcore’s results.
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Natcore’s
ability to predict the results of its operations or the effects of various
events on its operating results is inherently uncertain. Therefore, Natcore
cautions investors to consider carefully the matters described under the
caption “Risk Factors” and certain other matters discussed in this prospectus
and other publicly available sources. In addition, this prospectus contains
information concerning the semiconductor industry and business segments
generally, which is forward-looking in nature and is based on a variety of
assumptions regarding the ways in which the semiconductor industry, the
Company’s market and business segments will develop. Although Natcore believes
that this information is reliable, it has not independently verified and cannot
guarantee its accuracy or completeness. These factors and many other factors
beyond the Company’s control could cause its actual results, performance or
achievements to be materially different from any future results, performance or
achievements that may be expressed or implied by the forward-looking
statements. The Company is not under any obligation, and expressly disclaims
any obligation, to update or alter any forward-looking statements, whether as a
result of new information, future events or otherwise. All subsequent
forward-looking statements attributable to the Company or any person acting on
its behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section, and investors are
cautioned not to place undue reliance on these forward-looking statements which
speak only as of the date of this prospectus.
THE
DUTCHESS EQUITY LINE TRANSACTION
Investment
Agreement
On
August 21 2015, the Company entered into an Investment Agreement (the
“Investment Agreement”) and Registration Rights Agreement (the “Registration
Rights Agreement”) with Dutchess Opportunity Fund, II, LP (“
Dutchess
”).Pursuant
to the Investment Agreement, Dutchess committed to purchase, subject to certain
restrictions and conditions, up to $5million of the Company’s Common Stock upon
issuance by the company of a Put to Dutchess at a price equal to ninety five
percent (95%) of the lowest daily VWAP (volume weighted average price) of the
Company’s Common Stock during the five (5) consecutive Trading Days beginning
on the Put Notice Date and ending on and including the date that is four (4)
Trading Days after such Put Notice Date. The Put Amount shall be equal to the
lesser of either 1) two hundred percent (200%) of the average daily volume
(U.S. market only) of the Common Stock for the three (3) Trading Days prior to
the applicable Put Notice Date, multiplied by the average of the three (3)
daily closing prices immediately preceding the Put Date; or 2) Two hundred
thousand dollars ($200,000).The obligation of Dutchess to purchase the
Company’s shares is contingent upon the Company’s filing of a registration
statement registering the shares of the Company’s Common Stock with the US
Securities and Exchange Commission and such registration statement being
declared effective, as well as the Company’s Common Stock continuing to be
listed for trading, among other things. There are no assurances that this
registration statement will be deemed effective, or that the Company will elect
to take advantage of this opportunity.
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The
aggregate purchase price of $5million was arrived at through negotiations
between the Company’s management and Dutchess. While no assurances can be
provided that the Company will become profitable if the Company obtains this
financing, the Company believes it can begin this process with the funds the
Company derives from the Dutchess financing.
Dutchess
is obligated to make purchases from the Company as the Company directs in
accordance with the Investment Agreement. There are no limitations on use of
proceeds, financial or business covenants, restrictions on future funding,
rights of first refusal, participation rights, penalties or liquidated damages
in the Investment Agreement.
The
maximum amount of each Put Notice is limited to maximum two hundred thousand
dollars ($200,000) and, during the Open Period, the Company is not entitled to
submit a Put Notice until the Pricing Period for the prior Put has been
completed. The Open Period is defined as the period beginning on and including
the trading day immediately following the date that the SEC declares the
registration statement covering the securities effective under the Securities
Act and ending on the earlier to occur of (i) the date which is thirty-six (36)
months from the Effective Date; or (ii) termination of the Investment
Agreement. The Pricing Period is defined as the five (5) consecutive Trading
Days beginning on the Put Notice Date and ending on and including the date that
is four (4) Trading Days after such Put Notice Date. Notwithstanding the
forgoing, the Investment Agreement provides that the minimum purchase price for
the put is $0.30.
CERTAIN
CONDITIONS MUST BE SATISFIED BEFORE THE COMPANY IS ENTITLED TO PUT SHARES TO
DUTCHESS, INCLUDING THE FOLLOWING:
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there must be an
effective registration statement under the Securities Act to cover the resale
of the shares by Dutchess;
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at all times during the
period beginning on the related Put Notice Date and ending on and including
the related Closing Date, the Company’s Common Stock must have been listed on
the principal market and must not have been suspended from trading thereon
for a period of two (2) consecutive trading days during the Open Period and
the Company must not have been notified of any pending or threatened
proceeding or other action to suspend the trading of the Company’s Common
Stock;
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the Company must have
complied with its obligations and not otherwise be in breach or default under
the Investment Agreement, the Registration Rights Agreement, or any other
agreement executed in connection with the Investment Agreement, which breach
or default has not been cured prior to the delivery of a Put Notice;
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no injunction or other
governmental action shall have been issued or remain in force which prohibits
the issuance of shares to Dutchess pursuant to the Equity Line; and
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the issuance of the
Securities pursuant to the Investment Agreement must not violate any
shareholder approval requirements of the Principal Market.
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There
is no guarantee that the Company will be able to meet the foregoing conditions
or any other conditions under the Investment Agreement or that the Company will
be able to draw down any portion of the amount available to us under the Equity
Line.
The
Investment Agreement further provides that the Company and Dutchess are each
entitled to customary indemnification from the other for any losses or
liabilities the Company or it suffers as a result of any breach by the other
party of any provisions of the Investment Agreement or the Registration Rights
Agreement, or as a result of any lawsuit brought by a third-party arising out
of or resulting from the other party’s execution, delivery, performance or
enforcement of the Investment Agreement or the Registration Rights Agreement.
Further, the rights and obligations contained in the Dutchess Agreement may not
be assigned without the express written consent of the other party to the
agreement.
The
Investment Agreement also contains customary representations and warranties of
each of the parties. The assertions embodied in those representations and
warranties were made for purposes of the Investment Agreement and are subject
to qualifications and limitations agreed to by the parties in connection with
negotiating the terms of the Investment Agreement. In addition, certain
representations and warranties were made as of a specific date, may be subject
to a contractual standard of materiality different from what a stockholder or
investor might view as material, or may have been used for purposes of
allocating risk between the respective parties rather than establishing matters
as facts.
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Dutchess
has also agreed pursuant to the Investment Agreement not to sell short any of
the Company’s securities, either directly or indirectly through its affiliates,
principals or advisors during the term of the Investment Agreement.
Registration
Rights Agreement
Pursuant
to the terms of the Registration Rights Agreement, the Company is obligated to
file one or more registration statements with the SEC to register the resale by
Dutchess of shares of Common Stock issued or issuable under the Investment
Agreement. The Company hereby files with the SEC an initial registration
statement of which this Prospectus forms a part, in order to access the Equity
Line, covering the resale of up to 10,325,000 shares of Common Stock. In addition,
the Company is obligated to use all commercially reasonable efforts to have the
registration statement remain effective by the SEC as provided for in the
Investment Agreement.
The
foregoing summary of the Investment Agreement with Dutchess does not purport to
be complete and is qualified by reference to the Investment Agreement and the
Registration Rights Agreement, copies of which have been filed as exhibits
hereto.
Effect
of Performance of the Investment Agreement on the Company’s Stockholders
All
10,325,000 shares of Common Stock that are registered in this offering which
will be issued to LLG and Dutchess, or which may be sold to Dutchess under the
Investment Agreement are expected to be freely tradable. These 10,325,000
shares would represent approximately 16.40%
7
of the Company’s issued
and outstanding shares of Common Stock after issuance, unless the Company
issues additional shares prior to the issuance of these 10,325,000 shares. It
is anticipated that the Dutchess shares registered in this offering will be
sold over a period of up to 36 months from the date of this Prospectus. The
sale by Dutchess of a significant amount of shares registered in this offering
at any given time could cause the market price of the Company’s Common Stock to
decline and to be highly volatile. Dutchess may ultimately acquire all, some or
none of the shares of Common Stock not issued but registered in this offering.
After it has acquired such shares, it may sell all, some or none of such
shares.
If
and to the extent the Company issues Common Stock to Dutchess at a lower price
per share, Dutchess will receive a higher number of shares, which equates to
greater dilution to the Company’s other stockholders. The effect of this
dilution may, in turn, cause the price of the Company’s Common Stock to
decrease further because of the downward pressure on the stock price that would
be caused by a large number of sales of the Company’s shares into the public
market by Dutchess. Additionally, if certain of the Company’s existing
stockholders disagree with the Company’s decision to sell shares to Dutchess at
a time when the Company’s stock price is low, those stockholders may in
response decide to sell additional shares of Common Stock, which could further
decrease the Company’s stock price. Therefore, sales to Dutchess by the Company
under the Investment Agreement may result in substantial dilution to the
interests of other stockholders and a decrease in the Company’s stock price.
However, the Company retains the right to control the timing and amount of any
sales of the Company’s shares to Dutchess and the Investment Agreement may be
terminated by the Company at any time at the Company’s discretion without any
cost to the Company.
In
connection with entering into the Investment Agreement, the Company authorized
the sale to Dutchess of up to $5,000,000 of the Company’s Common Stock. The
number of shares ultimately offered for sale by Dutchess under this Prospectus
is dependent upon the number of shares purchased by Dutchess under the
Investment Agreement. In the event the Company elects to issue more than the
10,000,000 shares offered hereby, the Company would be required to file a new
registration statement and have it declared effective by the SEC. The following
table sets forth the amount of proceeds the Company would receive from Dutchess
from the sale of shares at varying purchase prices:
|
|
|
|
|
|
|
|
7
|
In no event shall
Dutchess be entitled to purchase that number of Shares, which when added to
the sum of the number of shares of Common Stock beneficially owned (as such
term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by
Dutchess, would exceed 9.99% of the number of shares of Common Stock
outstanding, as determined in accordance with Rule 13d-1(j) of the 1934 Act.
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumed
Average
Purchase Price
($)
|
|
Number
of Registered
Shares to be Issued
if Full Purchase (1)(2)
|
|
Percentage
of
Outstanding Shares
After Giving Effect
to the Issuance
to Dutchess (3)
|
|
Proceeds
from the Sale of
Registered Shares
to Dutchess Under the
Investment Agreement
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.50
|
|
10,000,000
|
|
|
17.56
|
%
|
$
|
5,000,000
|
|
|
$
|
0.75
|
|
6,666,667
|
|
|
12.43
|
%
|
$
|
5,000,000
|
|
|
$
|
1.00
|
|
5,000,000
|
|
|
9.62
|
%
|
$
|
5,000,000
|
|
|
$
|
0.40
|
(4)
|
12,500,000
|
|
|
21.02
|
%
|
$
|
5,000,000
|
|
|
|
|
|
|
|
|
|
(1)
|
Although the Investment
Agreement provides that the Company may sell up to $5,000,000 of the Company’s
Common Stock to Dutchess, the Company is only registering 10,000,000 shares
under the Investment Agreement, which may or may not cover all such shares
purchased by them under the Investment Agreement, depending on the purchase
price per share. As a result, the Company has included in this column only
those shares which are registered in this offering.
|
|
|
|
|
(2)
|
The number of
registered shares to be issued represents the number of shares to be
purchased at the applicable price.
|
|
|
|
|
(3)
|
The denominator is
based on 46,626,991shares outstanding held by non-affiliates as of August 17,
2015 plus the corresponding number of shares set forth in the adjacent column
and the 325,000 shares to be issued to LoPresti Law Group, P.C. The numerator
is based on the number of shares issuable under the Investment Agreement at
the corresponding assumed purchase price set forth in the adjacent column.
|
|
|
|
|
(4)
|
The closing price of
the Company’s Common Stock on August 21, 2015 in USD.
|
S
ELLING
S
HAREHOLDERS
I
NFORMATION
Dutchess
Opportunity Fund II, LP
The
shares of Common Stock being offered by Dutchess Opportunity Fund II, LP
(“Dutchess”) are those to be issued to Dutchess under the Investment Agreement.
The Company is registering the shares of Common Stock in order to permit
Dutchess to offer the shares for resale from time to time. Dutchess is not a
licensed broker-dealer or an affiliate of a licensed broker-dealer. Neither
Dutchess nor any of its affiliates has held a position or office, or had any
other material relationship, with Natcore within the past three years.
The
Company does not know when or in what amounts Dutchess may offer shares for
sale. Dutchess may elect not to sell any or all of the shares offered by this
Prospectus. Because Dutchess may offer all or some of the shares, and because
there are currently no agreements, arrangements or understandings with respect
to the sale of any of the shares, the Company cannot estimate the number of the
shares that will be held by Dutchess after completion of the offering. However,
for purposes of the above referenced table, the Company has assumed that, after
completion of the offering, all of the shares covered by this Prospectus will
be sold by Dutchess.
The
address of Dutchess is 50 Commonwealth Avenue, Suite 2, Boston, MA 02116.
Dutchess is a Delaware limited partnership. Michael Novielli and Douglas H.
Leighton are the managing members of Dutchess Capital Management, II, LLC, the
general partner to Dutchess, which has the voting and investment power over the
shares being offered by Dutchess under this Prospectus.
Although
the Investment Agreement provides that the Company may sell up to $5,000,000 of
the Company’s Common Stock to Dutchess, the Company is only registering
10,000,000 shares issuable under the Investment Agreement pursuant to the
registration statement of which this Prospectus is a part. If the Company
elects to issue more than the 10,000,000 shares offered by this Prospectus,
which the Company has the right but not the obligation to do, the Company must
first register under the Securities Act any additional shares it may elect to
sell to Dutchess before the Company can sell such additional shares.
23
LoPresti
Law Group, P.C.
On
April 4, 2014, 137,500
8
shares of the
Company’s Common Stock were issued to Marc X. LoPresti, Esq. pursuant to the
exercise of warrants issued to Mr. LoPresti in March 2009, in his individual
capacity, for legal services rendered.
The aforementioned shares are still held by Mr. LoPresti and reflect the
total holdings of the Company’s stock by Mr. LoPresti as of the date of this
Prospectus.
The Company is registering
325,000 shares of Common Stock, to be issued to LoPresti Law Group, PC (“LLG”)
in exchange for legal services rendered, in order to permit LLG to offer the
shares for resale from time to time.
LLG’s offices are located at 45 Broadway, Suite 610, New York, NY
10006. The firm’s managing partner,
Marc X. LoPresti, has sole voting and investment power over the shares being
offered by LLG under this Prospectus.
The 325,000 shares to be issued to LLG reflect the total number of
shares to be held by LLG as of the date of this Prospectus.
PLAN OF DISTRIBUTION
This
prospectus relates to the resale of up to 10,325,000Shares of the Company’s
common stock by Dutchess and LLG(“Selling Stockholders”), including (i) up to
10,000,000 Shares that the Company may put to Dutchess, pursuant to the
Investment Agreement; and (ii) 325,000shares of the Company’s common stock to
be paid to LLG for the provision of legal services for the Company.
The
Selling Stockholders and any of their pledgees, donees, assignees and other
successors-in-interest may, from time to time sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
|
|
|
|
|
|
•
|
ordinary brokerage
transactions and transactions in which the broker-dealer solicits the
purchaser;
|
|
|
|
|
|
|
•
|
block trades in which
the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal;
|
|
|
|
|
|
|
•
|
facilitate the
transaction;
|
|
|
|
|
|
|
•
|
purchases by a
broker-dealer as principal and resale by the broker-dealer for its account;
|
|
|
|
|
|
|
•
|
an exchange
distribution in accordance with the rules of the applicable exchange;
|
|
|
|
|
|
|
•
|
privately negotiated
transactions;
|
|
|
|
|
|
|
•
|
broker-dealers may
agree with the Selling Stockholder to sell a specified number of such shares
at a stipulated price per share;
|
|
|
|
|
|
|
•
|
through the writing of
options on the shares
|
|
|
|
|
|
|
•
|
a combination of any
such methods of sale; and
|
|
|
|
|
|
|
•
|
any other method
permitted pursuant to applicable law.
|
The
Selling Stockholders shall have the sole and absolute discretion not to accept
any purchase offer or make any sale of shares if it deems the purchase price to
be unsatisfactory at any particular time.
The
Selling Stockholders may also sell the shares directly to market makers acting
as principals and/or broker-dealers acting as agents for themselves or their
customers. Such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholder and/or the purchasers
of shares for whom such broker-dealers may act as agents or to whom they sell
as principal or both, which compensation as to a particular broker-dealer might
be in excess of customary commissions. Market makers and block purchasers
purchasing the shares will do so for their own account and at their own risk.
It is possible that the Selling Stockholders will attempt to sell shares of
common stock in block transactions to market makers or other purchasers at a
price per share which may be below the then existing market price. The Company
cannot assure that all or any of the shares offered in this prospectus will be
issued to, or sold by, the Selling Stockholders. The Selling Stockholders and
any broker-dealers or agents, upon completing the sale of any of the shares
offered in this prospectus, may be deemed to be “underwriters” as that term is
defined under the Securities Act, the Exchange Act and the rules and regulations
of such acts. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
The
Company is required to pay all fees and expenses incident to the registration
of the shares. The Selling Stockholders, alternatively, may sell all or any
part of the shares offered in this prospectus through an underwriter. The
Selling Stockholders have not entered into any agreement with a prospective
underwriter and there is no assurance that any such agreement will be entered
into.
|
|
|
|
|
|
|
|
8
|
Prior to this offering,
such shares constituted 0.27% of the outstanding shares of the Company’s
Common Stock
|
24
The
Selling Stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If the Selling Stockholders default on a
margin loan, the broker may, from time to time, offer and sell the pledged
shares. The Selling Stockholders and any other persons participating in the
sale or distribution of the shares will be subject to applicable provisions of
the Exchange Act, and the rules and regulations under such act, including,
without limitation, Regulation M. These provisions may restrict certain
activities of, and limit the timing of purchases and sales of any of the shares
by, the Selling Stockholders or any other such person. The Selling Stockholders
are not permitted to engage in short sales of common stock. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distributions, subject to specified exceptions or
exemptions. All of these limitations may affect the marketability of the
shares.
Dutchess,
and LLG,the underwriters herein, may offer for sale up to 10,325,000 shares of
the Company’s common stock. Dutchess will originally acquire shares pursuant to
the terms of the Investment Agreement. Dutchess will be offering such shares
for its own account. The Company does not know for certain how or when
Dutchess will choose to sell their shares of common stock. However, it can sell
such shares at any time or through any manner set forth in this plan of
distribution, at such time as the Company has “put” the shares to them. The
Company may request Dutchess to purchase shares by delivering a put request to
Dutchess. A Notice may not be sent until the drawdown on the prior notice is
completed.
To
permit Dutchess and LLG, to resell their common stock, the Company agreed to
file a registration statement, of which this prospectus is a part, and all
necessary amendments and supplements with the SEC for the purpose of
registering and maintaining the registration of such shares. The Company will
bear all costs relating to the registration of the common stock offered by this
prospectus. The Company will keep the registration statement effective until
the earlier of (i) the date after which all of the shares of common stock held
by the Selling Stockholders that are covered by the registration statement have
been sold by the Selling Stockholders pursuant to such registration statement
and (ii) the first day of the month next following the 36-month anniversary of
the date the registration statement, to which this prospectus is made a part,
is declared effective by the SEC.
USE OF PROCEEDS
The
Company will not receive any of the proceeds from the Selling Stockholders’
sale of the shares of Common Stock covered by this Prospectus. However, the
Company may receive up to $5million in proceeds from the sale of shares of
Common Stock to Dutchess pursuant to the terms of the Investment Agreement. The
Company anticipates that the net proceeds it receives under the Investment
Agreement will be used for research and development, general corporate and
working capital purposes and acquisitions or assets, businesses or operations
or for other purposes that the Board of Directors, in its good faith, deems to
be in the best interest of the Company
LISTING OF COMMON SHARES
Natcore
became a publicly traded company on the TSX-V, the TSX Venture Exchange, on
March 7, 2008. (Symbol: NXT.V)
Natcore
became a publicly traded company on the Frankfurt Stock Exchange in June 2013.
(Symbol: 8NT)
Natcore
is traded on the OTCQB® marketplace
(Symbol NTCXF).
DIVIDEND POLICY
Natcore
has never paid cash dividends on its common shares and does not anticipate
paying cash dividends in the foreseeable future.
DILUTION
If
one invests in Natcore’s common shares, an investor’s interest will be diluted
to the extent of the difference between the public offering price per ordinary
share and the pro forma as adjusted net tangible book value per ordinary share
if any of the outstanding options or warrants are exercised.
25
Natcore’s
net tangible book value as of June 30, 2015 was approximately $415,190, or
$0.01 per share. Net tangible book value per share represents the amount of
Natcore’s total tangible assets less its total liabilities, divided by
50,810,614, the number of its common shares outstanding upon consummation of
this offering.
This
registration statement is for the purpose of registering additional shares
(10,325,000) to raise additional monies (up to $5,000,000) through the issuance
of10,000,000 of these shares. To the extent these shares are all issued for
capital, investors will sustain future dilution. If all these shares were
issued as of June 30, 2015 for the full amount of $5,000,000 the proforma
tangible book value per share would be $0.09 and the proforma loss per share
(basic and diluted) for the six months ended June 30, 2015 would be ($0.02). If
all these shares were issued as of December 31, 2014 the proforma loss per
share (basic and diluted) for the year ended December 31, 2014 would be ($0.04).
As
of July 31, 2015, the Company had outstanding options to purchase a total of
5,447,000 of its common shares at a weighted average exercise price of CDN$0.80
per share. Also as of July 31, 2015, the Company had outstanding warrants to
purchase a total of 10,263,126 of its common shares at a weighted average
exercise price of CDN$0.87 per share and had outstanding warrants to purchase a
total of 6,083,240 of its common shares at a weighted average exercise price of
US$0.62 per share. To the extent these options or warrants are ultimately
exercised, investors will sustain future dilution.
Below
are details of Natcore’s outstanding options and warrants as of July 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Details
of options outstanding as of
July31, 2015
|
|
Details
of warrants outstanding as of
July31, 2015
|
|
|
|
|
|
|
|
Exercise price
|
|
Expiry date
|
|
Number of outstanding
|
|
Exercise price
|
|
Expiry date
|
|
Number of outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.97
|
|
February 8, 2016
|
|
|
1,830,000
|
|
CDN$ 0.90
|
|
20-Jul-15
|
|
|
3,840,700
|
|
|
CDN$ 0.79
|
|
June 1, 2016
|
|
|
100,000
|
|
CDN$ 1.00
|
|
22-Dec-15
|
|
|
1,134,667
|
|
|
CDN$ 0.59
|
|
August 16, 2016
|
|
|
400,000
|
|
CDN$ 1.00
|
|
4-Jan-16
|
|
|
429,867
|
|
|
CDN$ 0.51
|
|
April 17, 2017
|
|
|
120,000
|
|
CDN$ 0.70
|
|
23-Jan-18
|
|
|
1,356,312
|
|
|
CDN$ 1.11
|
|
September 4, 2017
|
|
|
200,000
|
|
CDN$ 0.95
|
|
14-Apr-18
|
|
|
1,209,080
|
|
|
CDN$ 0.80
|
|
December 20, 2017
|
|
|
337,000
|
|
CDN$ 0.95
|
|
27-Apr-18
|
|
|
397,000
|
|
|
CDN$ 0.57
|
|
December 20, 2017
|
|
|
80,000
|
|
CDN$ 0.74
|
|
31-Jul-18
|
|
|
1,895,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.80
|
|
January 4, 2018
|
|
|
20,000
|
|
|
|
|
|
|
10,263,126
|
|
|
CDN$ 0.71
|
|
April 5, 2018
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
CDN$ 0.83
|
|
June 3, 2018
|
|
|
25,000
|
|
US$ 0.62
|
|
23-27 Aug-16
|
|
|
6,083,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.58
|
|
July 31, 2018
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
CDN$ 1.08
|
|
January 10, 2019
|
|
|
345,000
|
|
|
|
Grand Total
|
|
|
16,346,366
|
|
|
CDN$ 0.99
|
|
February 3, 2019
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
CDN$ 0.75
|
|
December 17, 2019
|
|
|
525,000
|
|
|
|
|
|
|
|
|
|
CDN$ 0.58
|
|
April 30, 2020
|
|
|
1,250,000
|
|
|
|
|
|
|
|
|
|
CDN$ 0.58
|
|
June 15, 2020
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,447,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
SELECTED
FINANCIAL DATA
The
following tables set forth the Company’s summary consolidated financial data.
Investors should read the following summary consolidated financial data in
conjunction with “
Management’s Discussion
and Analysis of Financial Condition and Results of Operations
” and
Natcore’s consolidated financial statements and related notes included
elsewhere in this prospectus. Historical results are not indicative of the
results to be expected in the future. Natcore’s consolidated financial
statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) issued by the International Accounting Standards
Board (“IASB”) and interpreted by the International Financial Reporting
Interpretations Committee (“IFRIC”).
As
a result of the Accounting Standards Board of Canada’s decision to adopt IFRS
for publicly accountable entities for financial reporting periods beginning on
or after January 1, 2011, the Company has adopted IFRS for the 2011 and 2010
annual financial statements. The December 31, 2010 financial statements are
restated to conform to IFRS.
Since
Natcore began preparing its financial statements in accordance with IFRS,
having reviewed significant transactions and compared them to United States
generally accepted accounting principles (“GAAP”), Natcore concluded that there
are no material differences that would impact the users of the accompanying
financial statements other than terminology and headings.
The
Company has derived the consolidated statements of financial position as of
June 30, 2015 and December 31, 2014 from its unaudited and unreviewed June 30,
2015 quarterly financial statements and the 2014 audited consolidated financial
statements (both are included elsewhere in this prospectus), respectively. The
Company has derived the summary consolidated statements of comprehensive income
data for each of the six months ended June 30, 2015 and 2014 from its unaudited
and unreviewed consolidated June 30, 2015 financial statements (included
elsewhere in this prospectus) and for the years ended December 31, 2014 and
2013 from its audited consolidated financial statements (included elsewhere in
this prospectus).
CONSOLIDATED
STATEMENT OF COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2015
(six months ended)
(unaudited)
|
|
June
30, 2014
(six months ended)
(unaudited)
|
|
December
31, 2014
(year ended)
(audited)
|
|
December
31, 2013
(year ended)
(audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
95,707
|
|
|
126,185
|
|
|
229,792
|
|
|
108,657
|
|
|
Depreciation and
amortization
|
|
|
182,555
|
|
|
198,874
|
|
|
412,492
|
|
|
359,178
|
|
|
Filing fees
|
|
|
—
|
|
|
—
|
|
|
34,090
|
|
|
32,082
|
|
|
Foreign exchange
(gain)/loss
|
|
|
92,339
|
|
|
4,658
|
|
|
41,344
|
|
|
90,060
|
|
|
Interest and
bank charges
|
|
|
1,034
|
|
|
580
|
|
|
1,581
|
|
|
1,269
|
|
|
Marketing
|
|
|
89,245
|
|
|
19,090
|
|
|
81,401
|
|
|
96,641
|
|
|
Office and other
operational
|
|
|
133,994
|
|
|
282,841
|
|
|
273,264
|
|
|
267,532
|
|
|
Professional
fees
|
|
|
74,920
|
|
|
210,924
|
|
|
213,888
|
|
|
129,499
|
|
|
Research and
development
|
|
|
439,522
|
|
|
561,032
|
|
|
1,634,864
|
|
|
1,480,058
|
|
|
Stock-based
compensation
|
|
|
195,222
|
|
|
147,906
|
|
|
301,732
|
|
|
325,686
|
|
|
Travel
|
|
|
30,138
|
|
|
35,280
|
|
|
73,922
|
|
|
126,668
|
|
|
Wages and
salaries
|
|
|
420,664
|
|
|
359,496
|
|
|
770,105
|
|
|
855,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,755,340
|
)
|
|
(1,946,866
|
)
|
|
(4,068,475
|
)
|
|
(3,873,183
|
)
|
|
Other
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income,
net
|
|
|
576
|
|
|
16,462
|
|
|
32,626
|
|
|
13,708
|
|
|
Fair value
adjustment on warrants
|
|
|
112,246
|
|
|
1,201,216
|
|
|
1,842,317
|
|
|
(79,353
|
)
|
|
Net
and Comprehensive Loss
|
|
|
(1,642,518
|
)
|
|
(729,188
|
)
|
|
(2,193,532
|
)
|
|
(3,938,828
|
)
|
|
Loss
income attributable per share - Basic and Diluted
|
|
|
(0.03
|
)
|
$
|
0.02
|
|
|
(0.05
|
)
|
|
(0.10
|
)
|
|
Weighted
average number of shares outstanding: Basic and Diluted
|
|
|
49,706,536
|
|
|
41,724,468
|
|
|
42,294,310
|
|
|
41,097,726
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2015
|
|
December
31, 2014
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Financial
Position:
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
284,630
|
|
$
|
548,387
|
|
|
Receivables
|
|
|
4,731
|
|
|
5,939
|
|
|
Prepaid expenses
|
|
|
75,396
|
|
|
60,395
|
|
|
|
|
|
|
|
|
|
|
|
Total Current assets
|
|
|
364,757
|
|
|
614,721
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
449,941
|
|
|
582,503
|
|
|
Intangible Assets
|
|
|
—
|
|
|
36,568
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Current Assets
|
|
|
449,941
|
|
|
619,071
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
814,698
|
|
|
1,233,792
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
386,931
|
|
|
289,688
|
|
|
Derivative liabilities
|
|
|
12,577
|
|
|
124,823
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
399,508
|
|
|
414,511
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
399,508
|
|
|
414,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
15,330,566
|
|
|
13,977,256
|
|
|
Share-based payment reserve
|
|
|
3,155,954
|
|
|
2,956,964
|
|
|
Share subscriptions received
|
|
|
—
|
|
|
313,874
|
|
|
Deficit
|
|
|
(18,071,331
|
)
|
|
(16,428,813
|
)
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
415,190
|
|
|
819,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
814,698
|
|
$
|
1,233,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital (Deficit)
|
|
|
(34,751
|
)
|
|
200,210
|
|
28
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
following information should be read together with Natcore’s selected
consolidated financial and operating data and the consolidated financial
statements and notes included elsewhere in this prospectus. The following
discussion contains forward-looking statements that reflect Natcore’s plans,
estimates and beliefs. The Company’s actual results could differ materially
from those discussed in these forward-looking statements. Factors that could
cause or contribute to these differences include, but are not limited to, those
discussed below and elsewhere in this prospectus particularly in “Risk Factors”
and “Note Regarding Forward-looking Statements.”
Overview
This
Management Discussion and
Analysis (“MD&A”) of Natcore Technology, Inc. (“Natcore”
or the “Company”) should be read in conjunction
with the consolidated financial statements of the Company
for the unaudited and unreviewed
quarter ended March 31, 2015 and related notes and the audited year ended
December 31, 2014 and related notes.
The Company’s reporting currency is the United States (“US”)
dollar and all amounts in this
MD&A are expressed in US dollars
unless otherwise noted. The Company
prepares its financial statements in accordance with International
Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”) and Interpretations of the International
Financial Reporting Interpretations Committee
(“IFRIC”). The Company’s Board of Directors have reviewed and approved this
MD&A.
This
MD&A may contain “forward-looking
statements” which reflect the Company’s current expectations regarding the
future results of operations, performance and achievements. The Company
has tried, wherever possible, to identify these forward-looking statements
by, among other things, using words
such as “anticipate”, “believe”, “estimate”,
“expect” and similar expressions. The
statements reflect the current
beliefs of the management of the Company,
and are based on currently available information.
Accordingly, these statements
are subject to known and unknown risks, uncertainties and other factors, which
could cause the actual results,
performance, or achievements of the Company to differ materially
from those expressed in, or implied
by, these statements.
The
Company undertakes
no obligation to publicly update or review the forward-looking statements
whether as a result of new information, future events or otherwise.
Historical results of operations and trends that may be inferred from the
following discussions and analysis may not necessarily indicate future
results from operations.
All
figures in this MD&A are in United States dollars, unless otherwise noted.
Revenue resources:
Natcore has four planned sources of revenue.
|
|
|
|
1.
|
License agreements
|
|
|
Each customer, before having access to the technology, will be required to have some
type of non-exclusive license agreement or an exclusive license agreement unique to some specific jurisdiction.
|
|
|
|
|
2.
|
Royalties
|
|
|
Royalty rights will entitle the Company to benefit
from residual income on each product that utilizes the Company’s technology
|
|
|
|
|
3.
|
Equipment sales
|
|
|
Natcore will sub-contract the manufacturing of wet-bench equipment necessary
for the Liquid Phase Deposition
process. There will be a mark-up to Natcore on each piece of
equipment.
|
|
|
|
|
4.
|
Chemical sales
|
|
|
Natcore will engage a third-party chemical
company to mix
and drop-ship the patented chemical
mixture for the various applications. This will be a source of recurring
revenue.
|
|
|
|
|
|
The Company understands that there may be
situations where all four
sources of revenue may not be available given market conditions
and the appetite of different
customers.
|
29
Financial
Performance
For the
Six Months Ended June 30, 2015
As the Company is in the
development stage, it is expected the Company will continue to generate losses
for the upcoming fiscal year.
During the six months
ended June 30, 2015, the Company did not generate any revenue. The principal
activity of the Company during the six months ended 2015 and the six months
ended 2014 was that of research giving rise to normal recurring costs.
The Company reported a
net loss of $1,642,518 for the six months ended June 30, 2015 compared to a net
loss of $729,188 for the prior six months ended June 30, 2014. The primary
reason for the change was a result of non-cash revaluations of our derivative
liabilities (income of $112,246 in the six months ended June 30, 2015 compared
to income of $1,201,216 in the prior six months ended June 30, 2014). The
change in income from the derivative liability resulted from a decrease in the
stock price at June 30, 2015 and 2014 compared to the stock price at the close
of the previous year, December 31, 2014 and 2013. There was a larger decrease
in the prior period than the current period resulting in larger income in the
prior period than the current period.
Our operational expenses
for the six months ended June 30, 2015 were $1,755,340 compared to $1,946,866
for the prior six months ended June 30, 2014. Significant expense changes in
the six months ended June 30, 2015 compared to prior six months ended June 30,
2014 are as follows:
|
|
|
|
|
|
•
|
an increase in marketing expenses of approximately
$70,000
|
|
|
|
|
|
|
•
|
an increase in wages and salaries of approximately
$61,000
|
|
|
|
|
|
|
•
|
an increase in the foreign exchange loss of
approximately $88,000
|
|
|
|
|
|
|
•
|
an increase in stock-based compensation of
approximately $47,000
|
|
|
|
|
|
|
•
|
a decrease in office and other operational expenses
of approximately $149,000
|
|
|
|
|
|
|
•
|
a decrease in professional fees of approximately
$136,000
|
|
|
|
|
|
|
•
|
a decrease in research and development of
approximately $122,000
|
|
|
|
|
|
|
•
|
a decrease in consulting expenses of approximately
$30,000
|
|
|
|
|
|
|
•
|
a decrease in depreciation and amortization of
approximately $16,000
|
30
Significant
expense changes in the three and six months ended June 30, 2015 from 2014 were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Six Months
Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Six
Month Change
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
95,707
|
|
|
126,185
|
|
|
(30,478
|
)
|
|
Depreciation and amortization
|
|
|
182,555
|
|
|
198,874
|
|
|
(16,319
|
)
|
|
Foreign exchange (gain) loss
|
|
|
92,339
|
|
|
4,658
|
|
|
87,681
|
|
|
Interest and bank charges
|
|
|
1,034
|
|
|
580
|
|
|
454
|
|
|
Marketing
|
|
|
89,245
|
|
|
19,090
|
|
|
70,155
|
|
|
Office and miscellaneous
|
|
|
133,994
|
|
|
282,841
|
|
|
(148,847
|
)
|
|
Professional fees
|
|
|
74,920
|
|
|
210,924
|
|
|
(136,004
|
)
|
|
Research and development
|
|
|
439,522
|
|
|
561,032
|
|
|
(121,510
|
)
|
|
Stock-based compensation
|
|
|
195,222
|
|
|
147,906
|
|
|
47,316
|
|
|
Travel
|
|
|
30,138
|
|
|
35,280
|
|
|
(5,142
|
)
|
|
Wages and salaries
|
|
|
420,664
|
|
|
359,496
|
|
|
61,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,755,340
|
|
|
1,946,866
|
|
|
(191,526
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on warrants
|
|
|
112,246
|
|
|
1,201,216
|
|
|
(1,088,970
|
)
|
|
Interest income
|
|
|
576
|
|
|
16,462
|
|
|
(15,886
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and Comprehensive Income (Loss)
|
|
|
(1,642,518
|
)
|
|
(729,188
|
)
|
|
(913,330
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the year ended December 31, 2014, the Company did not generate any revenue. The
principal activity of the Company during year ended 2014 and the year ended
2013 was that of research giving rise to normal recurring costs.
31
The
Company reported a net loss of ($2,193,532) for the year ended December 31,
2014 compared to a net loss of ($3,938,828) for the year ended December 31,
2013. The primary reason for the change was a result of non-cash revaluations
of our derivative liabilities resulting from a decrease in our stock price at
December 31, 2014 compared to December 31, 2013.
Our
operational expenses for year ended December 31, 2014 were $4,068,475 compared
to $3,873,183 for the prior year ended December 31, 2013.
Significant expense
changes in 2014 compared to 2013 are as follows:
|
|
|
|
|
|
•
|
an increase in
consulting expenses of approximately $121,000 resulting from the addition of
marketing consultants
|
|
|
|
|
|
|
•
|
an increase in
depreciation and amortization of approximately $53,000
|
|
|
|
|
|
|
•
|
an increase in
professional fees of approximately $84,000 resulting from increased costs
relating to patents and accounting, and legal fees relating to this filing.
|
|
|
|
|
|
|
•
|
an increase in research
and development expenses of approximately $155,000
|
|
|
|
|
|
|
•
|
a decrease in the
foreign exchange loss of approximately $49,000
|
|
|
|
|
|
|
•
|
a decrease in travel
expenses of approximately $53,000
|
|
|
|
|
|
|
•
|
a decrease in wages and
salaries of approximately $86,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2014
|
|
Year
Ended December 31, 2013
|
|
Variance
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
$
|
229,792
|
|
$
|
108,657
|
|
$
|
121,135
|
|
|
Depreciation and amortization
|
|
|
412,492
|
|
|
359,178
|
|
|
53,314
|
|
|
Filing fees
|
|
|
34,090
|
|
|
32,082
|
|
|
2,008
|
|
|
Foreign exchange (gain)/loss
|
|
|
41,344
|
|
|
90,060
|
|
|
(48,716
|
)
|
|
Interest and bank charges
|
|
|
1,581
|
|
|
1,269
|
|
|
312
|
|
|
Marketing
|
|
|
81,401
|
|
|
96,641
|
|
|
(15,240
|
)
|
|
Office and other operational expenses
|
|
|
273,264
|
|
|
267,532
|
|
|
5,732
|
|
|
Professional fees
|
|
|
213,888
|
|
|
129,499
|
|
|
84,389
|
|
|
Research and development
|
|
|
1,634,864
|
|
|
1,480,058
|
|
|
154,806
|
|
|
Stock-based compensation
|
|
|
301,732
|
|
|
325,686
|
|
|
(23,954
|
)
|
|
Travel
|
|
|
73,922
|
|
|
126,668
|
|
|
(52,746
|
)
|
|
Wages and salaries
|
|
|
770,105
|
|
|
855,853
|
|
|
(85,748
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(4,068,475
|
)
|
$
|
(3,873,183
|
)
|
$
|
(195,292
|
)
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on warrants
|
|
|
1,842,317
|
|
|
(79,353
|
)
|
|
1,921,670
|
|
|
Interest income
|
|
|
32,626
|
|
|
13,708
|
|
|
18,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and Comprehensive Loss
|
|
$
|
(2,193,532
|
)
|
$
|
(3,938,828
|
)
|
$
|
1,745,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
a result of the acquisitions of Natcore US and the Company’s operations in the
United States, the Company and its financial results are exposed to
fluctuations between the Canadian and United States dollars. The foreign
exchange (gains) or loss present for the periods above, results from certain
monetary items, primarily cash equivalents, being denominated in Canadian
dollars.
Stock-based
compensation relates to options granted under the Company’s stock option plan
to directors, officers, employees and consultants. Compensation expense is
recorded using the fair value method over the vesting periods of the options.
The fair value of each option granted is estimated as at the date of grant
using the Black-Scholes Option Pricing Model.
32
Recent
Financial Events
On
August 21, 2015, the Company entered into an Investment Agreement (the
“Investment Agreement”) and Registration Rights Agreement (the “Registration
Rights Agreement”) with Dutchess Opportunity Fund, II, LP (“Dutchess”).
Pursuant to the Investment Agreement, Dutchess committed to purchase, subject
to certain restrictions and conditions, up to $5million of the Company’s Common
Stock upon issuance by the company of a Put to Dutchess at a price equal to
ninety five percent (95%) of the lowest daily VWAP (volume weighted average
price) of the Company’s Common Stock during the five (5) consecutive Trading
Days beginning on the Put Notice Date and ending on and including the date that
is four (4) Trading Days after such Put Notice Date. Pursuant to the terms of
the Registration Rights Agreement, the Company is obligated to file one or more
registration statements with the SEC to register the resale by Dutchess of
shares of Common Stock issued or issuable under the Investment Agreement.
On
July 28, 2015, the Company completed a non-brokered private placement
exclusively in Canada pursuant to Sections 2.3 and 2.10 of National Market
Instrument 45-106. The Company issued 1,822,000 units at a price of CDN$0.54
per unit for gross proceeds of $754,104.39 (CDN$983,880). Each unit is
comprised of one common share and one share purchase warrant, with each warrant
exercisable at a price of $0.74 per share for a period of 36 months from the
date of closing.
On
June 15, 2015, the Company granted 15,000 stock options to employees. 50% of
the options on September 15, 2015 and the remaining options vest eighteen
months from the grant date. The options are exercisable at CDN$0.54 and expire
June 15, 2020. The options had a grant date fair value of $4,621 (CDN$5,691)
determined using the Black-Scholes Option Pricing Model with the following
assumptions: Risk free rate of 0.98%; Expected life of 5 years; Volatility of
92%; and a Dividend yield of 0%.
On
April 30, 2015, the Company issued 1,250,000 options to employees. The options
have an exercise price of CDN$0.58 and an expiration date of April 30, 2020.
On
April27, 2015, the Company completed a non-brokered private placement and
issued 1,597,050 units at a price of CDN$0.70 per unit for gross proceeds of
$891,686 (CDN$1,117,935). Each unit comprised one common share and one share
purchase warrant, with each warrant exercisable at a price of $0.70 per share
for a period of three years from the date of closing. The Company also issued
9,250 finders’ warrants in connection with this private placement exercisable
at a price of CDN$0.95 per share for a period of three years from the date of closing
and $6,321.
On
January 23, 2015 the Company issued 95,278 common shares at a price of CDN$0.43
per share and 95,278 warrants eligible to purchase 95,278 common shares at a
price of CDN$0.70 per share for a period of 36 months.
On
January 21, 2015 we issued 1,256,784 common shares at a price of CDN$0.43 per
share and 1,256,784 warrants eligible to purchase 1,256,784 common shares at a
price of CDN$0.70 per share for a period of 36 months.
In
December 2014, the Company issued 525,000 stock options at an exercise price of
CDN$0.75 per share.
In
November 2014, the Company issued 80,000 stock options at an exercise price of
CDN$0.57 per share.
In
July 2014, 166,850 common shares were issued for the exercise of warrants.
14,850 of these warrants were issued with an exercise price of US$0.62 per
share for cash proceeds of $9,207 (CDN$9,812) and 152,000 of these warrants
were issued with an exercise price of CDN$0.60 per share, for cash proceeds of
$91,200.
During
March 2014 through May 8, 2014, the Company issued 1,328,620 shares of common
stock for cash proceeds of $487,945 (CND $531,448) in connection with exercise
of 225,000 warrants that had an exercise price of CND $0.40.
In
May 2014, 100,000 common shares were issued for the exercise of options with an
exercise price of CDN$0.40 per share, for cash proceeds of $36,726
(CDN$40,000).
On
February 3, 2014, we granted 60,000 stock options eligible for purchase 60,000
common shares at a price of US$0.99 per share for a period of five years. Som
Dahal was granted 60,000 shares. The grants were approved in the Stock Option
Plan by shareholders on June 17, 2013. Issuer relied upon Section 2.24 of
National Instrument 45-106.
33
On
January 10, 2014, we granted 345,000 stock options eligible for purchase
345,000 common shares at a price of US$1.08 per share for a period of five
years. 11 purchasers were granted 345,000 shares, including: Wendy Ahearn,
David Levy, Evangeline Parsons, Liz Provini, Helen Rudich, David Rutkin, Tom
Scarpa, Rich Topel, Pat Zubil, Ted Zubil and Brian Zucker. The grants were
approved in the Stock Option Plan by shareholders on June 17, 2013. Issuer
relied upon Section 2.24 of National Instrument 45-106.
On
January 7, 2014, and March 9, 2014 the Company issued a total 100,000 shares of
common stock for cash proceeds of $62, in connection with exercise of 100,000
warrants that had an exercise price of $0.62
On
January 6, 2014, the Company issued 70,913 shares of common stock for cash
proceeds of $66,644 (CND $70,913) in connection with exercise of 70,913
warrants that had an exercise price of CND $1.00.
In
December 2013, the Company issued 150,000 shares of common stock for cash
proceeds of $93,000 USD in connection with exercise of 150,000 warrants that
had an exercise price of USD $0.62 per share.
During
October through November 2013, the Company issued 225,000 shares of common
stock for cash proceeds of $96,246 (CND $90,000) in connection with exercise of
225,000 options that had an exercise price of CND $0.40.
During
October, through December 2013, the Company issued 655,530 shares of common
stock for cash proceeds of $484,414 (CND $452,977) in connection with exercise
of 655,530 warrants that had an exercise price between CND $0.40 and CND $1.00
per share.
On
August 20, 2013, The Company completed a private placement of 6,290,740 shares
at a price of $0.50 per share for gross proceeds of $3,145,370. Each unit
comprised one common share and one share purchase warrant, with each whole
warrant exercisable at a price of USD$0.62 per share and expiring August 20,
2016. The Company paid finder’s fees of $82,022 for the financing. A total of
59,850 finder’s warrants were issued.
In
April 2013, the Company issued 25,000 shares of common stock for cash proceeds
of $10,694 (CND $10,000) in connection with exercise of 25,000 warrants that
had an exercise price of CND $0.40.
In
January 2013, the Company issued 168,000 shares of common stock for cash
proceeds of $161,693 (CND $151,200) in connection with exercise of 168,000
warrants that had an exercise price of CND $0.90.
On
July 20, 2012, The Company completed a private placement of 4,166,700 units at
a price of CDN $0.60 per unit generating aggregate gross proceeds of $2,478,020
(CDN$2,500,000). Each unit comprised one common share and one share purchase
warrant, with each whole warrant exercisable at a price of CDN$0.90 per share
until July 20, 2014. In the event that the Company’s common shares close at
over CDN$1.60 for 20 consecutive trading days, the warrants will be subject to
accelerated conversion within 30 days’ notice of the Company disseminating a
press release providing notice of that circumstance. Finder’s fees were paid on
a portion of the financing, such that an aggregate of $102,815 was paid in cash
and 22,516 finder’s warrants were issued, having the same terms as the warrants
forming part of the units and 152,000 finder’s unit warrants were issued
exercisable to acquire units on the same terms as the units issued in the
financing at an exercise price of CDN$0.60 per unit for until July 20, 2014. An
additional 152,000 finder’s warrants were issued with an exercise price of
CDN$0.90 until July 20, 2014.
On August
16, 2013 the Company granted 400,000 stock options to a consultant. The options
vest immediately. The options are exercisable at CDN$0.59 and expire August 16,
2016.
On July 31,
2013 the Company granted 100,000 stock options to two consultants. The options
vest 50% in six month, and 50% in eighteen months thereafter.
On June 3,
2013 the Company granted 25,000 stock options to an employee. The options vest
50% on September 3, 2013 and 50% on September 3, 2014. The options are
exercisable at CDN$0.83 and expire June 4, 2018.
On June 1,
2013 the Company granted 100,000 stock options to an employee. The options vest
25% immediately, and 25% every three months thereafter. The options are
exercisable at CDN$0.79 and expire June 1, 2016.
On April 5,
2013 the Company granted 40,000 stock options to an employee. The options vest
immediately at the grant date. The options are exercisable at CDN$0.71 and
expire April 5, 2018.
On January
4, 2013 the Company granted 20,000 stock options to an employee. The options
vest immediately at the grant date. The options are exercisable at CDN$0.80 and
expire January 4, 2018.
34
On December
20, 2012 the Company granted 80,000 stock options to employees. 50% of the
options vest six months following the grant date and the remaining 18 months
from the grant date.
On December
20, 2012 the Company granted 272,000 stock options to employees and consultants
of the Company which vested immediately. The options are exercisable at
CDN$0.80 and expire December 20, 2017.
On
April 17, 2012, the Company granted 120,000 stock options to employees. 50% of
the options vested on October 17, 2012 and the remaining vest on October 17,
2013. The options are exercisable at CDN$0.51 and expire on April 17, 2017.
On
August 16, 2012, the Company granted 200,000 stock options to an employee. 50%
of the options vest six months following the grant date and the remaining in
twelve months from the grant date. The options are exercisable at CDN$1.11 and
expire September 4, 2017.
On
February 8, 2011, the Company granted 2,190,000 stock options to directors,
employees and consultants. The options vest over a three year period, and are
exercisable at CDN$0.97 expiring in five years. During fiscal year 2012 117,000 of the options
were forfeited.
Selling
and Marketing Expenses
The
Company currently has not recognized any revenue, as it is still in the
development stage for many of its applications. The Company plans to have its
black silicon technology available to the solar industry in the next 30-36
months; Natcore will not need a direct sales force in the foreseeable future.
Natcore will market its technology though the industry with its current
management staff. As the company moved through the proof of concept phase and
closer to commercialization for our applications, it began making more
presentations to manufacturers and potential customers as well as equipment
builders who would adapt existing machinery to accommodate Natcore’s process.
General
and Administrative Expenses
Natcore’s
general and administrative expenses consist primarily of costs associated with
marketing activities, outside professional fees, travel costs, facilities costs
and other corporate expenses.
For
the six months ended June 30, 2015, our professional and consulting fees
decreased approximately $136,000 over the prior year period resulting from
decreased costs relating to patents and accounting, legal fees relating to a
previous filing and the Company using additional consultants for marketing
purposes. Our office and other operational expenses decreased approximately
$149,000 from the prior year period. Travel expenses decreased approximately
$5,000 compared to prior year period as a result of the Company consolidating
laboratories in Rochester. The Company closed the facility in Ohio which
reduced the need for travel between several locations as well as reducing
office expenses. Additionally there was no overseas travel to China and Europe
since the infrastructure in those locations was already established and
precluded the need for several visits. See schedule above which summarize
changes by expense line for our operating expenses.
For
the year ended December 31, 2014, our professional and consulting fees
increased approximately $205,000 over the prior year ended resulting from
increased costs relating to patents and accounting, legal fees relating to a
previous filing and the Company using additional consultants for marketing
purposes. Our office and other operational expenses decreased approximately
$6,000 from the prior year. Travel expenses decreased approximately $53,000
compared to prior year ended as a result of the Company consolidating
laboratories in Rochester. The Company closed the facility in Ohio which
reduced the need for travel between several locations as well as reducing
office expenses. Additionally there was no overseas travel to China and Europe
since the infrastructure in those locations was already established and
precluded the need for several visits. See schedule above which summarize
changes by expense line for our operating expenses.
Wages
and Salaries Expenses
Natcore’s
wages and salaries expenses consist of compensation costs for management,
finance and other administrative personnel, these costs also include payroll
taxes and benefits associated with its personnel functions.
For
the six months ended June 30, 2015 compared to the prior year period, the
changes in wages and salaries expense versus the prior year increased
approximately $61,000. This increase is a result of personnel “headcount”
adjustments.
35
For
the year ended December 31, 2014 compared to the prior year, the changes in
wages and salaries expense versus the prior year decreased approximately $86,000.
This decrease is a result of some personnel “headcount” adjustments.
Research
and Development Expenses
Natcore’s
research and development expenses consist of all expenses incurred in research
and development activities, including compensation associated with its research
staff.
For
the six months ended June 30, 2015research and development expenses decreased
approximately $126,000 over the prior year period due to fewer R&D
projects.
For
the year ended December 31, 2014 research and development expenses increased
approximately $155,000 over the prior year due to an increase R&D projects
and additional staff.
Stock
Based Compensation Expense
Natcore’s
stock based compensation expense consists of fair value costs associated with
the issuance of stock, stock options and warrants for services that were
preformed or to be performed.
For
the six months ended June 30, 2015 stock based compensation increased
approximately $47,000 over the prior year period.
For
the year ended December 31, 2014 stock based compensation decreased
approximately $24,000 over the prior year.
Depreciation
and Amortization Expenses
Natcore’s
depreciation and amortization expenses are costs for the depreciation and
amortization of its equipment and intangible assets. Natcore computes
depreciation using the straight-line method over the useful lives of the
related assets, which range from three to seven years. Intangible assets with
finite useful lives are amortized on a straight-line basis over their estimated
useful lives. The estimated useful life and amortization method are reviewed at
the end of each reporting period, with the effect of any changes in estimate
being accounted for on a prospective basis.
For
the six months ended June 30, 2015 depreciation and amortization expense
decreased approximately $16,000 over the prior year quarter. The variance is
due to a decrease in amortization due to some intangible assets becoming fully
depreciated during 2015.
For
the year ended December 31, 2014 depreciation and amortization expense
increased approximately $53,000 over the prior year because of purchases in
2013 and 2014 were put into operation and have more depreciation to expense.
Other
Income (Expense)
Other
income (expense) primarily consists of gains and losses related to Natcore’s
investment activities from its cash equivalent investments and other
non-recurring items.
Operating
(Loss)
Natcore
currently does not have any sales revenue, consequently it has generated only
operating losses. Natcore’s operating expenses consist of general and
administrative expenses, wages and salaries expenses, research and development
expenses, depreciation and amortization costs and stock-based compensation
expenses discussed above.
Critical
Accounting Policies and Estimates
Statement of compliance with International Financial
Reporting Standards
The
consolidated financial statements of the Company, as provided in this
prospectus, have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) issued by the International Accounting Standards
Board (“IASB”) and interpreted by the International Financial Reporting Interpretations
Committee (“IFRIC”).
36
As
a result of the Accounting Standards Board of Canada’s decision to adopt IFRS
for publicly accountable entities for financial reporting periods beginning on
or after January 1, 2011, the Company has adopted IFRS for the 2011 and 2010
annual financial statements. The December 31, 2010 financial statements were
restated to conform to IFRS.
Since
Natcore began preparing its financial statements in accordance with IFRS, having
reviewed significant transactions and compared them to United States generally
accepted accounting principles (“GAAP”), Natcore concluded that there are no
material differences that would impact the users of the accompanying financial
statements other than terminology and headings.
Basis of preparation
The
consolidated financial statements of the Company have been prepared on an
accrual basis and are based on historical costs, modified where applicable. The
consolidated financial statements are presented in United States dollars unless
otherwise noted.
Consolidation
The
consolidated financial statements include the accounts of the Company and its
controlled entities. Details of controlled entities are as follows:
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Percentage
owned*
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Jurisdiction
of incorporation
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June30,
2015
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December
31,
2014
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|
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Natcore Technology, Inc.
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United States
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100
|
%
|
|
100
|
%
|
|
Newcyte, Incorporated
|
|
United States
|
|
|
100
|
%
|
|
100
|
%
|
|
Vanguard Solar, Inc.
|
|
United States
|
|
|
100
|
%
|
|
100
|
%
|
|
Natcore Asia Technology, Limited
|
|
Hong Kong
|
|
|
100
|
%
|
|
100
|
%
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*Percentage of voting power is in proportion to
ownership.
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Inter-company balances are eliminated on
consolidation.
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Significant accounting judgments, estimates and assumptions
The
preparation of consolidated financial statements in accordance with IFRS
requires the Company to make estimates and assumptions concerning the future.
The Company’s management reviews these estimates and underlying assumptions on
an ongoing basis, based on experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
Revisions to estimates are adjusted for prospectively in the period in which
the estimates are revised.
Estimates
and assumptions where there is significant risk of material adjustments to
assets and liabilities in future accounting periods include the useful lives of
equipment, impairment considerations for equipment and intangible assets,
determination of fair value for stock-based compensation and other share-based
payments, valuations and assumptions used to determine deferred income taxes
and the fair value of financial instruments.
Foreign currency translation
The
functional currency of each of the Company’s entities is measured using the
currency of the primary economic environment in which that entity operates. The
consolidated financial statements are presented in United States dollars, which
is the functional currency of the Company and its subsidiaries.
Transactions
and balances
Foreign
currency transactions are translated into functional currency using the
exchange rates prevailing at the date of the transaction. Foreign currency
monetary items are translated at the period-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate
at the date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were determined.
Exchange
differences arising on the translation of monetary items or on settlement of
monetary items are recognized in profit or loss in the statement of
comprehensive loss in the period in which they arise, except where deferred in
equity as a qualifying cash flow or net investment hedge.
Exchange
differences arising on the translation of non-monetary items are recognized in
other comprehensive loss in the statement of comprehensive loss to the extent
that gains and losses arising on those non-monetary items are also recognized
in other comprehensive loss. Where the non-monetary gain or loss is recognized
in profit or loss, the exchange component is also recognized in profit or loss.
The
financial results and position of foreign operations whose functional currency
is different from the Company’s presentation currency are translated as
follows:
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•
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assets and liabilities are
translated at period-end exchange rates prevailing at that reporting date;
and
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•
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income and expenses are
translated at average exchange rates for the period.
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Intangible
assets
Intangible
assets acquired separately
Intangible
assets with finite useful lives that are acquired separately are carried at
cost less accumulated amortization and accumulated impairment losses.
Amortization is recognized on a straight-line basis over their estimated useful
lives. The estimated useful life and amortization method are reviewed at the
end of each reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis. Intangible assets with indefinite useful
lives that are acquired separately are carried at cost less accumulated
impairment losses.
Internally-generated
intangible assets - Research and development expenditure
Expenditure
on research activities is recognized as an expense in the period in which it is
incurred. An internally-generated intangible asset arising from development (or
from the development phase of an internal project) is recognized if, and only
if, all of the following have been demonstrated:
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1.
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The technical feasibility of completing the
intangible asset so that it will be available for use or sale;
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2.
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The intention to complete the intangible asset and
use or sell it;
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3.
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The ability to use or sell the intangible asset;
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4.
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How the intangible asset will generate probable
future economic benefits;
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5.
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The availability of
adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset; and
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6.
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The ability to measure reliably the expenditure
attributable to the intangible asset during its development.
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The
amount initially recognized for internally-generated intangible assets is the
sum of the expenditure incurred from the date when the intangible asset first
meets the recognition criteria listed above. Where no internally-generated
intangible asset can be recognized, development expenditure is recognized in
loss in the period in which it is incurred.
Subsequent
to initial recognition, internally-generated intangible assets are reported at
cost less accumulated amortization and accumulated impairment losses, on the
same basis as intangible assets that are acquired separately.
As
of June 30, 2015 and December 31, 2014, the Company has not recognized any
internally-generated intangible assets.
Share-based payments
The Company
operates a stock option plan. Share-based payments to employees are measured at
the fair value of the instruments issued and amortized over the vesting
periods. Share-based payments to non-employees are measured at the fair value
of goods or services received or the fair value of the equity instruments
issued, if it is determined the fair value of the goods or services cannot be
reliably measured, and are recorded at the date the goods or services are
received. The corresponding amount is recorded to the share-based payment
reserve. The fair value of options is determined using the Black–Scholes Option
Pricing Model. The number of shares and options expected to vest is reviewed
and adjusted at the end of each reporting period such that the amount
recognized for services received as consideration for the equity instruments
granted shall be based on the number of equity instruments that eventually
vest.
Financial instruments
The
Company classifies its financial instruments in the following categories: at
fair value through profit or loss, loans and receivables, held-to-maturity
investments, available-for-sale and financial liabilities. The classification
depends on the purpose for which the financial instruments were acquired.
Management determines the classification of its financial instruments at
initial recognition.
38
Financial
assets are classified at fair value through profit or loss when they are either
held for trading for the purpose of short-term profit taking, derivatives not
held for hedging purposes, or when they are designated as such to avoid an
accounting mismatch or to enable performance evaluation where a group of
financial assets is managed by key management personnel on a fair value basis
in accordance with a documented risk management or investment strategy. Such
assets are subsequently measured at fair value with changes in carrying value
being included in profit or loss.
Loans
and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market and are subsequently measured
at amortized cost. They are included in current assets, except for maturities
greater than 12 months after the end of the reporting period. These are
classified as non-current assets.
Held-to-maturity
investments are non-derivative financial assets that have fixed maturities and
fixed or determinable payments, and it is the Company’s intention to hold these
investments to maturity. They are subsequently measured at amortized cost.
Held-to-maturity investments are included in non-current assets, except for those
which are expected to mature within 12 months after the end of the reporting
period.
Available-for-sale
financial assets are non-derivative financial assets that are designated as
available-for-sale or are not suitable to be classified as financial assets at
fair value through profit or loss, loans and receivables or held-to-maturity
investments and are subsequently measured at fair value. These are included in
current assets. Unrealized gains and losses are recognized in other comprehensive
loss, except for impairment losses and foreign exchange gains and losses.
Non-derivative
financial liabilities (excluding financial guarantees) are subsequently
measured at amortized cost. Derivative financial liabilities are classified at
fair value through profit and loss and are subsequently measured at fair value
with changes in carrying value being included in profit or loss.
Regular
purchases and sales of financial assets are recognized on the trade-date – the
date on which the Company commits to purchase the asset.
Financial
assets are derecognized when the rights to receive cash flows from the
investments have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
At each
reporting date, the Company assesses whether there is objective evidence that a
financial instrument has been impaired. In the case of available-for-sale
financial instruments, a significant and prolonged decline in the value of the
instrument is considered to determine whether an impairment has arisen.
Impairment of long-lived assets
The
carrying amount of the Company’s long-lived assets (which include equipment and
intangible assets) is reviewed at each reporting date to determine whether
there is any indication of impairment. If such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss. An impairment loss is recognized whenever the carrying
amount of an asset or its cash generating unit exceeds its recoverable amount.
Impairment losses are recognized in the statement of comprehensive loss.
The
recoverable amount of assets is the greater of an asset’s fair value less cost
to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that
reflects the current market assessments of the time value of money and the
risks specific to the asset. For an asset that does not generate cash inflows
largely independent of those from other assets, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
An
impairment loss is only reversed if there is an indication that the impairment
loss may no longer exist and there has been a change in the estimates used to
determine the recoverable amount, however, not to an amount higher than the
carrying amount that would have been determined had no impairment loss been
recognized in previous years.
Assets
that have an indefinite useful life are not subject to amortization and are
tested annually for impairment.
39
Cash and cash equivalents
Cash and
cash equivalents include cash on hand, deposits held at call with banks and
other short-term highly liquid investments with original maturities of three
months or less.
Income taxes
Current
income tax:
Current
income tax assets and liabilities for the current period are measured at the
amount expected to be recovered from, or paid to the taxation authorities. The
tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date, in the countries where the Company
operates and generates taxable income.
Current
income tax relating to items recognized directly in other comprehensive loss or
equity is recognized in other comprehensive loss or equity and not in profit or
loss. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
Deferred
income tax:
Deferred
income tax is provided using the asset and liability method on temporary
differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
The
carrying amount of deferred income tax assets is reviewed at the end of each
reporting period and recognized only to the extent that it is probable that
sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilized.
Deferred
income tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred
income tax assets and deferred income tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current income tax
liabilities and the deferred income taxes relate to the same taxable entity and
the same taxation authority.
Equipment
Equipment
is stated at historical cost less accumulated depreciation and accumulated
impairment losses.
Subsequent
costs are included in the asset’s carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can
be measured reliably. The carrying amount of the replaced part is derecognized.
All other repairs and maintenance are charged to the statement of comprehensive
loss during the financial period in which they are incurred.
Gains
and losses on disposals are determined by comparing the proceeds with the
carrying amount and are recognized in profit or loss.
Depreciation
and amortization are calculated on a straight-line method to write off the cost
of the assets to their residual values over their estimated useful lives.
Liquidity and Capital Resources
The
Company is exposed in varying degrees to a variety of financial instrument
related risks. The Board of Directors approves and monitors the risk management
processes, inclusive of documented investment policies, counterparty limits,
and controlling and reporting structures. The type of risk exposure and the way
in which such exposure is managed is provided as follows:
40
Credit risk
Credit
risk is the risk that one party to a financial instrument will fail to
discharge an obligation and cause the other party to incur a financial loss.
The Company’s primary exposure to credit risk is on its cash held in bank
accounts. The majority of cash is deposited in bank accounts held with major
banks in Canada and the United States. As most of the Company’s cash is held by
two banks there is a concentration of credit risk. This risk is managed by
using major banks that are high credit quality financial institutions as determined
by rating agencies. The Company’s exposure to credit risk on its receivables is
considered minimal as the balances are not significant.
Liquidity
risk
Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they fall due. The Company has a planning and budgeting process
in place to help determine the funds required to support the Company’s normal
operating requirements on an ongoing basis. The Company ensures that there are
sufficient funds to meet its short-term business requirements, taking into
account its anticipated cash flows from operations and its holdings of cash and
cash equivalents.
Historically,
the Company’s sole source of funding has been the issuance of equity securities
for cash, primarily through private placements. The Company’s access to
financing is always uncertain. There can be no assurance of continued access to
significant equity funding. All of the Company’s non-derivative financial
liabilities are due within one year.
The
following is an analysis of the contractual maturities of the Company’s
non-derivative financial liabilities as at June 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within
one year
|
|
Between
one and five years
|
|
More
than five years
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables and accrued liabilities
|
|
$
|
386,931
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
exchange risk
Foreign
currency risk is the risk that the fair values of future cash flows of a
financial instrument will fluctuate because they are denominated in currencies
that differ from the respective functional currency. The Company does not hedge
its exposure to fluctuations in foreign exchange rates.
The
following is an analysis of the United States dollar equivalent of financial
assets and liabilities that are denominated in Canadian dollars:
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2015
(unaudited)
|
|
December
31, 2014
(audited)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
186,107
|
|
$
|
432,656
|
|
Based on the above net
exposures, as of June 30, 2015, a 1% change in the Canadian dollar to United
States dollar exchange rate would impact the Company’s net loss by $1,861.
Interest
rate risk
Interest
rate risk is the risk that the fair value of future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The
Company is exposed to interest rate risk on its cash equivalents as these
instruments have original maturities of three months or less and are therefore
exposed to interest rate fluctuations on renewal. A 1% change in market
interest rates would have an impact on the Company’s net loss of approximately
$1,000.
Capital
Management
The
Company’s policy is to maintain a strong capital base so as to maintain
investor and creditor confidence and to sustain future development of the
business. The capital structure of the Company consists of equity, comprising
share capital, net of accumulated deficit. There were no changes in the
Company’s approach to capital management during the period. The Company is not
subject to any externally imposed capital requirements.
41
Fair
Value
The
fair value of the Company’s financial assets and liabilities approximates the
carrying amount. Financial instruments measured at fair value are classified
into one of three levels in the fair value hierarchy according to the relative
reliability of the inputs used to estimate the fair values. The three levels of
the fair value hierarchy are:
|
|
|
|
•
|
Level 1 – Unadjusted quoted prices in active markets
for identical assets or liabilities;
|
|
|
|
|
•
|
Level 2 – Inputs other than quoted prices that are
observable for the asset or liability either directly or indirectly; and
|
|
|
|
|
•
|
Level 3 – Inputs that are not based on observable
market data.
|
Financial
liabilities measured at fair value at June30, 2015 and December 31, 2014
consists of the derivative financial liability. These are classified as Level
3.
Classification
of financial instruments
Financial
assets included in the statement of financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
2015
(unaudited)
|
|
December
31,
2014
(audited)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
284,630
|
|
$
|
548,387
|
|
|
GST receivable *
|
|
|
4,731
|
|
|
5,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
289,361
|
|
$
|
554,326
|
|
|
|
|
|
|
|
|
|
|
__________________
*The Goods and Services (“GST”) receivable is comprised of input taxes the
Company has been charged by vendors on purchases of goods and services obtained
in Canada. The Company is entitled to a refund of these input taxes from the
Canada Revenue Agency, which is receives on a quarterly basis.
Financial liabilities
included in the statement of financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
2015
(unaudited)
|
|
December
31,
2014
(audited)
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
$
|
386,931
|
|
$
|
289,688
|
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
Derivative
financial liability - warrants
|
|
|
12,577
|
|
|
124,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
399,508
|
|
$
|
414,511
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows
The following table
summarizes the Company’s cash flows by activity and cash on hand:
|
|
|
|
|
|
|
|
|
|
Activity
|
|
June
30,
2015
(six months ended)
(unaudited)
|
|
December
31, 2014
(year ended)
(audited)
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(1,293,537
|
)
|
$
|
(3,179,776
|
)
|
|
Net cash used in investing activities
|
|
|
(13,425
|
)
|
|
(179,587
|
)
|
|
Net cash from financing activities
|
|
|
1,043,205
|
|
|
1,058,728
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(263,757
|
)
|
|
(2,300,635
|
)
|
|
Cash at the beginning of the period
|
|
|
548,387
|
|
|
2,849,022
|
|
|
|
|
|
|
|
|
|
|
|
Cash at the end of the period
|
|
$
|
284,630
|
|
$
|
548,387
|
|
|
|
|
|
|
|
|
|
|
42
The
Company reported working capital (deficit) of ($22,233) as of June 30, 2015 and
$200,210 at December 31, 2014. As of June 30, 2015, the Company had cash of
$284,630 compared to cash of $548,387 as of December 31, 2014. The increase of
$263,757 for the period ended June 30, 2015 is the result of a net loss for
operational expenses and cash paid for equipment which are offset by proceeds
of $1,043,205 from private placements. Subsequent to June 30, 2015, the Company
received an additional $982,227 as part of the July private placement and has
up to $5,000,000 available under the Dutchess agreement. The Company
anticipates its current cash and cash equivalents will be sufficient to fund
operations for the next six months and is currently pursuing additional
financing alternatives, including completing another private placement, to fund
operations beyond one year.
Current
assets excluding cash and cash equivalents at June 30, 2015 consisted of
receivables of $4,731 and prepaid expenses of $75,396.
Current
liabilities at June 30, 2015 consisted of accounts payable and accrued
liabilities of $386,932 and the derivative financial liability of $12,577.
The
Company may continue to have capital requirements in excess of its currently
available resources. In the event the Company’s plans change, its assumptions
change or prove inaccurate, or its capital resources in addition to projected
cash flow, if any, prove to be insufficient to fund operations, the Company may
be required to seek additional financing. There can be no assurance that the
Company will have sufficient financing to meet its future capital requirements
or that additional financing will be available on terms acceptable to the
Company in the future.
Commitments
Employment
Agreement
The
Company has an agreement (the “Employment Agreement”) dated October 1, 2007,
and amended July 31, 2008, with an officer of the Company under which the
Company pays a fee for employee services at a base salary of $220,000 per
annum. On April 30, 2010, the Board of Directors passed a resolution to
increase this to $250,000 per annum and on May 13, 2011 passed a resolution to
increase this to $275,000 per annum. The employee is entitled to receive
options under the terms and conditions of the Company’s stock option plan. The
employee will serve as the President and Chief Executive Officer of the
Company. On April 5, 2012, the employment agreement was extended for an
additional two years under the same terms. On April 5, 2014 the employment
agreement was extended for an additional three years under the same terms.
The
employee has the right, upon 30 days’ notice, to terminate the Employment
Agreement. The Company may terminate the Employment Agreement on 10 days’
notice if for cause or on 60 days’ notice if without cause. Should the Company
terminate the contract without cause, it is obligated to pay the employee an
amount equal to three month’s base salary.
License
Agreement
On
March 31, 2004 the Company entered into a License Agreement with Rice
University under which the University is entitled to receive: (i) 2% of the
Company’s adjusted gross sales as defined in the License Agreement, and (ii) 2%
of the adjusted gross sales of any sublicense as defined in the License
Agreement. Upon effectiveness of the agreement, the University also received
common shares that corresponded to 10% of the Company’s outstanding capital stock
on that date. To date, the Company has not generated any revenue; as such, the
University has yet to receive compensation from the terms of the License
Agreement. As per the agreement, the University was initially issued 1,000
shares at par value. Later, the Company subsidiary split its stock 555 to 1. As
such, the University was issued a new certificate for 555,556 Natcore Delaware
shares on October 5, 2007. Additionally, pursuant to the Company’s acquisition
agreement regarding Syracuse Capital Group, the Company allowed shareholders to
convert their Natcore Delaware shares into Syracuse shares at a ratio of 1 to
1.1. As a result, the University was issued 611,112 Syracuse shares, which
eventually became the Company’s current shares after the corresponding name
change. The License Agreement gives the Company an exclusive license to a
certain United States patent and the related technology for low temperature
growth of inorganic materials from solution using catalyzed growth and
re-growth. The U.S. Provisional Patent Application for “Method for Low
Temperature Growth of Inorganic Materials from Solution using Growth and
Re-Growth” was filed on November 19, 2002 under Serial No. 60/427,392.
43
The
following milestones were set forth in the preceding License Agreement. It was
stipulated that first round funding would be secured within six months after
the agreement was signed. Additionally, a milestone was set to award product
development contract within nine months. Specifically, the milestone states
that Phase 1, which involves the demonstration of film growth on large area
wafers and the improvement of purity, should be completed in seven months. In
addition, Phase 2, which involves the development of multiple wafer, high
throughput process within two and a half years. Milestone 3 dictates that
second round funding should be secured within two and a half years. Finally,
milestones 4 and 5 detail certain staffing requirements. Milestone 4 requires
that a Director of Product Development and Manufacturing, three in-house
R&D staff and two business/operations managers, on the premise that money
is available. Milestone 5 requires that a product qualification program be
initiated within two and a half years, in which Natcore R&D personnel would
be located on-site at performing organization. In turn, the qualification
program should be completed within three years. While Milestones 1, 2 and 3
have been met, the milestones in all the license agreements with Rice University
are considered best efforts projected to be achieved within the business and
economic environment at the time they were formulated and are eligible to be
renegotiated at any time.
Sponsored
Research Agreement
On
September 1, 2009, the Company has entered into a sponsored research agreement
with Rice University to develop thin films incorporating silicon quantum dots.
The initial term of the agreement is one year and the proposed budget is
$100,000. Both the term and the funding can be extended by mutual agreement. As
of the date of this filing the agreement has not been extended and no money has
been paid to Rice University beyond the original $100,000.
China
Joint Venture
On
June 22, 2010 the Company formed a joint venture (“Natcore Technology (Zhuzhou)
Co., Ltd.”) with a consortium in China to develop and manufacture film-growth
equipment and materials using the Company’s proprietary Liquid Phase Deposition
technology licensed from Rice University. Natcore Technology (Zhuzhou) Co.,
Ltd. will be 55% owned by the Company, with the Zhuzhou Hi-Tech Industrial
Development Zone and a Chinese firm that is currently a producer of polysilicon
and a manufacturer of industrial equipment used in the solar industry
(together, the “Chinese Partnership”) holding the remaining 45% ownership
position. Natcore Technology (Zhuzhou) Co., Ltd. will be funded by an initial
$3 million investment consisting of $500,000 contributed by the Company and
$2,500,000 contributed by the Chinese Partnership. Natcore Technology (Zhuzhou)
Co., Ltd. will have the exclusive right to develop, manufacture and sell AR
film-growth equipment in China, and a five-year exclusive right to manufacture
such equipment for sale outside of China. Our Board of Directors has not
approved funding for the joint venture consequently no funding has been made,
the joint venture has not taken place as of this filing.
Research
and Development Facility
On
June 1, 2013, the Company entered into a new two year lease for its research
and development facility in Rochester, New York. The Company will pay a base
rent of $103,596 per year in monthly installments of $8,633. The lease was set
to expire on June 30, 2015. On June 26, 2015, the Company extended the lease from
July 1, 2015 to June 30, 2017 at a base rent of $105,212 per year in monthly
installments of $8,768.
Administrative
Office Lease
On
August 1, 2013, the Company entered into a new three year lease agreement for
its administrative office. The Company will pay a base rent of $22,000 per year
in monthly installments of $1,833. After year one the annual rent will increase
3% for each year of the lease, the lease expires on July 31, 2016.
Patent
License Agreement
On
December 12, 2011 the Company entered into a Patent License Agreement with the
National Renewable Energy Laboratory (“NREL”) to use certain licensed patents
for technologies for creating a black silicon antireflection layer integrated
into high efficiency solar cells. The patents include: “Nanoparticle-Based
Etching of Silicon Surfaces” under Patent Application No. 8,075,792;
“Anti-reflection Etching of Silicon Surfaces Catalyzed with Ionic Metal
Solutions” under Application No. 12/053,445; “Wet-Chemical Systems and Methods
for Producing Black Silicon Substrates” under Application No. PCT/US10/56417;
“Forming High-Efficiency Silicon Solar Cells Using Density-Graded
Anti-Reflection Surfaces” under Application No. 12/797,590; “Efficient Black
Silicon Photovoltaic Devices with Enhanced Blue Response” under Application No.
PCT/US11/27479; and “Copper-Assisted, Anti-Reflection Etching of Silicon
Surfaces under Application No. 13/423,745.The Company agrees to pay a running
royalty of two and one half percent (2.5%) on all Net Sales of Licensed
Products (excluding Licensed Chemicals) sold by or on behalf of Licensee. The
Company also agrees to pay an annual running royalty of ten percent (10%) of
Net Sales of Licensed Chemicals sold by or on behalf of Licensee. Should the
running royalty not achieve $25,000, then the Company would have to pay the
difference up to $25,000. The License Agreement estimates that the Company’s
estimated contribution is $100,000 a year. NREL’s estimated in-kind
contribution is $50,000, conditioned on available funding. While neither party
will have an obligation to continue performance of its work at a contribution
in excess of the estimated amount, each party shall provide at least thirty
days’ notice if complete performance will exceed the estimated costs.
44
The
License Agreement was amended on July 27, 2012 in order to modify a section of
the License pertaining to Licensed Intellectual Property. The modification
entailed the specific titles and application numbers of the licensed patents.
The License Agreement was further amended on January 30, 2014 to delete and
replace Exhibit C, 2) Market Milestones.
The
License Agreement gives the Company an exclusive license to the aforementioned
patents for the development of a commercial manufacturing process for both
multicrystalline and monocrystalline solar cells that combines the Company’s
passivation technology. All patent license agreements are for the duration of
the life of the patent as established by the USPTO when the patent is granted.
The
License Agreement is subject to early termination. Either the Company or NREL
has the right to terminate the License Agreement with cause and without
judicial resolution upon written notice to the other in the case of a breach of
the License Agreement. The Company shall provide NREL will sufficient advance
funds to maintain approximately 90-day advance of funds during the entire
period of work. No work shall begin before the receipt of a sufficient
cash-advance. If the Company fails to provide the necessary advance funds is
cause for termination by NREL. Further, the License Agreement shall terminate
automatically upon a final adjudication of invalidity, unenforceability, or the
extinguishment of all Licensed Patents, for any reason. In addition, NREL may
terminate the License Agreement if the Company fails to satisfy the
requirements set forth in Exhibit B and C of the License Agreement, attempts to
transfer the Company’s rights under the License Agreement or the Company
becomes a party to a Bankruptcy proceeding. Exhibit B outlines the financial
considerations of the License Agreement: specifically concerning the Fields of
Use, the Upfront Fee of $20,000, the Continuous Royalty Rate Structure due by
the Company, the Subleasing Royalties due by potential Sub-Licensees, and
states the minimum annual payment must be at least $25,000.Exhibit C outlines
the technical and marketing milestones pursuant to this agreement.
Specifically, the agreement also outlines certain market milestones for the
parties. The first milestone stipulates the achievement of cumulative Net Sales
of Licensed Products in excess of $1 million on or before December 1, 2014.
This milestone has not been met by the company. Milestones for cumulative Net
Sales of Licensed Products in excess of $2 million and $3 million are set for
December 1, 2015 and December 1, 2016, respectively. The Company believes,
based on conversation with representatives from NREL, that all such milestones
are eligible for renegotiation as desired by the Company. The technical
milestones include: (1) Achieve an AMI .5G efficiency of 17.5% or more on a 4
inch diameter silicon solar cell using black silicon antireflection control
technology, coupled with LPD passivation, by March 1, 2012; (2) Achieve an
average reflectance of 2% or less on 156 x 156 mm monocrystalline silicon
wafers using black silicon antireflection control technology coupled with LPD
passivation by April 1,2012.; (3) Achieve an AM1.5G efficiency of 17.0% or more
on a 156 x 156 mm monocrystalline silicon solar cell using black silicon
antireflection control technology coupled with LPD passivation and screen
printed contacts by August 1,2012; (4) Achieve an AM1.5G efficiency of 18.5% or
more on multiple 156 x 156 mm monocrystalline silicon solar cell by July
1,2013. The License Agreement shall automatically terminate if the Company
attempts to pledge its rights under the License Agreement as collateral to a
third party. The Company may terminate the License Agreement upon sixty days
prior notice to NREL provided that all outstanding fees, reimbursements and
royalties (as detailed in the License Agreement) are satisfied.
Cooperative
Research and Development Agreement
On
February 21, 2012, the Company entered into a Cooperative Research and
Development Agreement (“CRADA”) with NREL. As outlined in the Joint Work
Statement referenced in Appendix A, the parties are collaborating on the
development of a commercial manufacturing process for both multicrystalline and
monocrystalline solar cells that combines Natcore’s patent pending passivation
technology. Natcore’s initial contribution was an estimated $100,000 while
NREL’s estimated in kind contribution would be $50,000, subject to available
funding.
The
Joint Work Statement outlines what tasks should be performed during the
12-month lifecycle of the CRADA. The first task pertains to the development of
processes and parameters that will ensure precise control of the distribution
of black silicon pore depths and widths that reduce reflection while still
minimizing recombination. Approaches may include electroless deposition,
electroplating or dissolution plating, among other options. The second task
regards investigating the impact on cell performance of black silicon layer
formation on the back and side surfaces of the wafer and develop low cost means
to control (or eliminate) its formation as required to maintain optimum cell
performance. The third task pertains to the development of metal nanoparticle
removal and wafer rinsing techniques that can be incorporated in a wet bench
designed for high volume cell production. The fourth task requires the
development of an optimized screen printing chemistry and technique for front
contact formation on a black silicon/silica coated cell front surface. Lastly,
the fifth task pertains to the design of a maximum efficiency cell structure
incorporating a combined black silicon/LPD passivation technology.
45
Each
party agrees not to disclose proprietary information provided by the other to
anyone other than the parties to this Agreement without party approval. This
provision does not apply to Government employees who are subject to the Trade
Secrets Act. All proprietary information shall be protected for a period of
five years from the effective date of the agreement.
While
the parties are prohibited from disclosing proprietary information, there are
several exceptions. Each party may designate certain general information to be
considered proprietary during the course of the License Agreement. The parties
may not disclose this information except in reports or requests for the
Department of Education, to existing and potential licensees, affiliates,
customers or suppliers. The disclosure must be agreed upon by both the Company
and NREL before its release.
The
parties may assert copyright claims in any of their generated information. The
Company and NREL will have the first option to assert copyrights on the work of
their respective employees. Should the generated information be co-authored by
the Company and NREL’s employees, the copyright will be jointly held. The
parties agree that, with respect to any copyrighted software produced during
this Agreement, the DOE has the right to request the Parties to furnish a
non-exclusive, partially-exclusive, or exclusive license to a responsible
applicant under reasonable terms, provided it does not eliminate any previous
licenses to the software.
With
respect to patents, the parties agree to disclose to each other each subject
invention that may be patentable or protectable under the Patent Act. The
Company and NREL agree that they will disclose their respective subject
inventions to each other and the DOE within two months of the inventor
disclosing their invention in writing to their employer. The Company will have
the first right of title to inventions made by their employees, provided they
disclose their election to retain title within the first twelve months. If the
Company forfeits that right, then NREL has the second right of title to
inventions and can disclose their election within twelve months. Should both
parties forfeit their patentable right to the invention, the DOE has the right
of title to the invention.
Depiction
of Contractual Obligations -
Tabular disclosure of
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
by periods as of
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
less
than 1 year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
> 5
years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease
|
|
$
|
235,656
|
|
$
|
128,495
|
|
$
|
107,161
|
|
|
|
|
|
|
|
|
Contract payments obligations
|
|
|
150,000
|
|
|
25,000
|
|
|
50,000
|
|
|
50,000
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
285,656
|
|
$
|
153,495
|
|
$
|
157,161
|
|
$
|
50,000
|
|
$
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type
|
|
Description
of Commitment
|
|
Amount
|
|
Exhibit
|
|
|
|
|
|
|
|
|
|
Employment Agreement
|
|
President and CEO’s
employment agreement
|
|
$275,000/year plus
stock options
|
|
10.1
|
|
|
|
|
|
|
|
|
|
License Agreement &
Amendments
|
|
Gives Company exclusive
license from Rice University for certain patents.
|
|
2% Company’s adjusted
Gross Sales under License and Sublicense agreement
|
|
10.2, 10.3
|
|
|
|
|
|
|
|
|
|
Sponsored Research
Agreement & Amendments
|
|
Rice University to
develop products.
|
|
$100,000/year
|
|
10.4, 10.5
|
|
|
|
|
|
|
|
|
|
Research &
Development Facility Lease
|
|
Two (2) year renewable
lease for facility beginning June 1, 2013 and expiring June 30, 2015.
Extended effective July 1, 2015 through June 30, 2017
|
|
$103,596/year through
June 30, 2015$105,212 from July 1, 2015 though June 30, 2017
|
|
10.6, 10.7, 10.18
|
|
|
|
|
|
|
|
|
|
Administrative Office
Lease
|
|
Three (3) year lease
beginning August 1, 2013 and expiring on July 31, 2016
|
|
$22,000 per year with a
3% increase each year
|
|
10.15
|
|
|
|
|
|
|
|
|
|
Exclusive Patent
License Agreement& Amendments
|
|
Agreement to use
certain licensed patents. Agreement with National Renewable Energy Laboratory
for exclusive use of patent.
|
|
$25,000 per annum plus
royalties
|
|
10.8, 10.9, 10.10
|
|
|
|
|
|
|
|
|
|
Cooperative Research
and Development Agreement
|
|
Agreement to develop a
commercial manufacturing process for both multicrystalline and
monocrystalline solar cells
|
|
$100,000 initial
contribution
|
|
10.11
|
|
|
|
|
|
|
|
|
|
China Joint Venture
|
|
Agreement to develop
and manufacture film-growth equipment and materials
|
|
Not Applicable at this
time
|
|
10.12, 10.13
|
46
Related
party transactions and balances
As
at June 30, 2015 there was $91,360 owed to directors (Brian Lundin - $45,000),
officers (Dennis Flood - $29,760), and companies controlled by directors (Tanum
Holdings owned and controlled by John Meekison, CFO - $16,600) that has been
included in trade payables and accrued liabilities.
As
at December 31, 2014 there was $60,760 owed to directors (Brian Lundin -
$15,000), officers (Dennis Flood - $29,761), and companies controlled by
directors (Tanum Holdings owned and controlled by John Meekison, CFO - $16,000)
that has been included in trade payables and accrued liabilities.
Key Management Personnel Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2015
|
|
|
December
31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Administrative fees
|
|
$
|
30,000
|
|
$
|
60,000
|
|
|
Consulting
|
|
|
54,000
|
|
|
108,000
|
|
|
Wages and benefits
|
|
|
178,750
|
|
|
558,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
262,750
|
|
$
|
726,500
|
|
|
|
|
|
|
|
|
|
|
Quantitative and Qualitative
Disclosure about Market Risk
Natcore
is exposed to market risks arising from its normal business activities. These
market risks, which are beyond the Company’s control, principally involve the
possibility that changes in interest rates, exchange rates or commodity prices
will adversely affect the value of its financial assets and liabilities or
future cash flows and earnings. Market risk is the potential loss arising from
adverse changes in market rates and prices.
Impact of Inflation and Currency Fluctuations
Because
the majority of Natcore’s revenue is paid in or linked to the U.S. dollar,
Natcore believes that inflation and fluctuation in the CAD/dollar exchange rate
has limited effect on its results of operations. However, a portion of the cost
of its Canadian operations, mainly personnel, is incurred in CAD. Because some
of Natcore’s costs are in CAD, inflation in CAD/dollar exchange rate
fluctuations does have some impact on our expenses and, as a result, on its net
income. Natcore’s CAD costs, as expressed in dollars, are influenced by the
extent to which any increase in the rate of inflation in Canada is not offset,
or is offset on a delayed basis, by a devaluation of the CAD in relation to the
dollar.
Natcore
does not engage in any hedging or other transactions intended to manage risks
relating to foreign currency exchange rate or interest rate fluctuations.
However, Natcore may in the future undertake hedging or other similar
transactions or invest in market risk-sensitive instruments if its management
determines that it is necessary or advisable to offset these risks.
BUSINESS
Overview
Natcore
Technology, Inc. (“Natcore” or “the Company”) is a corporation organized under
the laws of British Columbia, Canada organized on August 9, 2007 for the
purpose of commercializing technology that intends to make solar energy
cost-competitive with energy derived from fossil fuels. More specifically,
Natcore has technologies which 1) enable the controlled deposition of silicon
dioxide and mixed silicon oxides from an aqueous solution at ambient
temperatures and pressures; 2) creates a nanostructured, porous surface called
black silicon on a silicon wafer; and 3) will enable low temperature manufacturing
of silicon solar cells at low cost by means of laser processing. The first
technology is called liquid phase deposition and Natcore is the exclusive
licensee from Rice University. Natcore is also the exclusive licensee of the
black silicon process developed and patented by the National Renewable Energy
Laboratory (NREL). Natcore is developing its own laser processing technology,
as well as working with several universities with whom the Company will have
first refusal rights to patentable technology, for low temperature solar cell
processing. Using our Liquid Phase Deposition (“LPD”), black silicon, and laser
technology, we will enable making a solar cell with low cost, low temperature
and non-vacuum process steps. We believe our technology is the future of solar
and that it will result in solar cells of higher quality, that are safer,
cleaner and less expensive to produce than current industry processes. In
connection with the LPD license agreement, Rice University is a Natcore
shareholder and continues to hold a stake in the company.
47
Silicon
dioxide, or silica, is a fundamental building block in semiconductors, fiber
optics and solar cells. It is an essential element in all these applications.
It is currently deposited onto silicon through a process called thermal oxide
growth. Traditional solar cell manufacture involves an expensive chemical vapor
deposition (CVD) method. CVD uses complicated, multi-million-dollar vacuum
furnaces to grow the necessary anti-reflective (AR) thin-film coating on a
silicon substrate. CVD also uses highly toxic and flammable silane and other
dangerous chemicals, and requires silicon wafers of sufficient thickness to
withstand the high-temperature firing. Thinner wafers often warp in this harsh
environment. Conversely, Natcore offers a liquid phase deposition (LPD), or wet
chemistry process that grows the AR coating in a relatively mild chemical bath
at ambient temperatures. It uses low-cost equipment. It eradicates the need for
silane and dramatically reduces energy requirements. It enables the development
of advanced materials and devices that would be destroyed during the standard
thermal oxide growth process. Moreover, LPD can utilize the waste materials
from the initial production of the silicon wafers; and the effluents from the
LPD process can be recycled or can be mixed with lime and sold to cement
manufacturers for use in their production process.
LPD
represents a potential breakthrough in cost that could spawn dramatic growth
not only in solar energy but in other important markets as well. Because it
requires no vacuum or high-temperature processing, for example, Natcore’s film
growth technology could enable low-cost production of planar light wave
circuits that are necessary in fiber optic networks. Surface passivation is the
final piece of the LPD process. Surface passivation is the process of filling
the dangling atomic bonds at the surface of the solar cell. Successful
passivation of the wafer surface is critical to enabling production of
long-term, high-performance silicon solar cells. In Natcore’s refined LPD
process, this necessary passivation is achieved using the same production steps
normally applied to the solar cell to create its top and bottom metal contacts;
no additional heating cycles are required. The Company believes that the
synergistic nature of Natcore’s technology with existing cell fabrication steps
will greatly simplify the standard silicon solar cell manufacturing process.
Natcore’s LPD process has been independently tested and validated in an
industrial laboratory setting at Battelle Memorial Institute. The technology is
now ready to be tailored to specific applications and Natcore is currently
focusing on solar energy. Natcore does not plan to manufacture solar cells.
Instead, we plan to sell materials, deposition systems and licenses based on
our technology to companies that do so.
Natcore
seeks to become a global leader in the growth of thin and thick films of
dielectric and semiconductor materials using non-vacuum, room temperature
processes. The Company’s first specific aim is to enter and gain market share
in the antireflective coating market for solar cells by selling what the
Company believes is a paradigm-shifting, low-cost technology to solar cell
manufacturers that will enable those companies to realize lower capital costs
and higher profit margins from their own sales. Natcore currently has 22
granted patents and 42 pending patents surrounding this technology.
Our History and
Development
Natcore
was a Capital Pool Company until it completed a Qualifying Transaction on May
8, 2009. The Qualified Transaction involved a reverse takeover of Syracuse
Capital Corp by Natcore Technology, Inc., a private Delaware company that is
now a wholly owned subsidiary of the Company. Syracuse Capital Corp. was a
company incorporated under the British Columbia Business Corporations Act and a
Capital Pool Company, having its common shares listed on the TSX Venture
Exchange under the trading symbol “SYU.P”.
On
May 8, 2009, Natcore completed its ‘Qualifying Transaction’ by acquiring all of
the issued and outstanding securities of Natcore Technology, Inc. a private
Delaware company in consideration of the issuance of 12,960,686 common shares
of the Company having a deemed price of CDN$0.40 per share and the issuance of
2,145,000 share purchase warrants, each warrant exercisable into one additional
common share at a price of CDN$0.40 per share for a period of five years
expiring May 9, 2014.
48
The
Common Shares of the Company are listed for trading on the TSX Venture Exchange
under the symbol “NXT” and traded on the OTC
Pink® marketplace under symbol “NTCXF” until July 2015, when the Common Shares
began trading on the OTCQB®.
On
December 11, 2009, Natcore completed the acquisition of NewCyte, Inc.
(“NewCyte”), a private Delaware company. NewCyte’s portfolio of intellectual
property included issued and pending patents covering the coating of fullerenes
(including carbon nanotubes) with silica, dielectric and semiconducting films
for a variety of potential applications, including photon, chemical and
biomolecule sensing. As consideration for the purchase of NewCyte, Natcore
issued NewCyte shareholders 200,000 share purchase warrants entitling the
holders to acquire Natcore shares at strike prices ranging from CDN$0.75/share
to CDN$2.00/share; all of these warrants have since expired.
On
May 19, 2010, the Company completed the acquisition of Vanguard Solar, Inc.
(“Vanguard”), a private Delaware company controlling key intellectual property
in the field of solar energy. Vanguard had been focused on the development of a
flexible, thin-film photovoltaic material capable of silicon solar cell-like
efficiency performance. Vanguard employed a proprietary chemical bath process
similar to Natcore’s Liquid Phase Deposition technology, although Vanguard grew
II-VI compound semiconductor thin films on carbon nanotubes at room temperature
and ambient pressure, while Natcore has thus far concentrated on growing
silicon dioxide films on silicon substrates. As consideration for the purchase
of Vanguard, Natcore issued to Vanguard shareholders an aggregate of 375,236
common shares of Natcore.
In
March 2012, the Company opened its Research and Development Center in
Rochester, NY. The R&D Center is enabling Natcore to develop applications
based on the Company’s proprietary Liquid Phase Deposition technology.
The
Company also entered into an exclusive worldwide licensing agreement with
National Renewable Energy Laboratory (NREL) to commercialize Black Silicon.
NREL and the Company are working together to reduce solar cell costs.
On
October 25, 2012, the Company announced that its scientists had created what it
believed to be the world’s first Black Silicon solar cell using processes
amenable to low-cost mass production. After having previously treating a wafer
to make it the “blackest” silicon solar cell surface ever recorded, Natcore’s
technicians used their scalable Liquid Phase Deposition process to create the
Black Silicon solar cell, from wafer to finished cell, in their R&D Center
in Rochester, NY.
On
March 9, 2015 the Company entered into a Joint Development Agreement (“JDA”)
with Eurotron, B.V. seeking to form a collaborative alliance by way of the JDA
to reflect their mutual desire to collaborate to realize proof of concept with
regard to the synchronized use of Eurotron Backcontact Modu!e Technology and
Natcore’s cell production technology in order to create a new cell design.
Natcore and Eurotron will work together toward the earliest demonstration of
Natcore’s cell technology in modules at the Eurotron Competence Center.
On
March 13, 2015 the Company entered into a Memorandum of Understanding with
Fraunhofer-Gesellschaft zur Forderung der angewandten Forschung e. V. on behalf
of Fraunhofer lnstitut fur Solare Energiesysteme (“Fraunhofer”) to conduct
research, demonstration, pilot and industrial projects between Natcore,
Fraunhofer and potential third parties in “mutually identified areas” after
detailed deliberations.
Competitive
Landscape
Given
the complex nature and cost of the systems now in use by the solar cell
industry, Natcore expects to offer value to its customers. Natcore’s black
silicon technology is expected to replace an expensive, energy and manpower
intensive, thermal vacuum process with a simple wet chemistry process that will
make an improved antireflection surface on silicon solar cells. The Company is
unaware of any competing room temperature antireflective coating technology in
commercial use or in development.
The
Company expects to see a growing demand for low-temperature, non-vacuum,
roll-to-roll antireflective coating systems for the emerging thin film solar
cell market. Manufacture of these flexible thin film solar cells should create
new demand for Natcore’s low temperature film growth processes. The Company may
decide to develop roll-to-roll Liquid Phase Deposition processing technology
for this market at some near-future date. As such, this would be a separate
process from that described earlier for thin film and tandem solar cells. No
timeline has been estimated for bringing such technology to market, and no
development by Natcore of such technology has been started as of the date of
this filing. It is included here only because it represents a future
development opportunity, based on the Company’s core competence, for the
company to pursue.
49
Although
there are approximately 100 solar cell companies worldwide, the present world
market is dominated by just a handful of producers. The present world silicon
solar cell market is dominated by just a handful of producers. They are: Yingli
Green Energy, JA Solar, Trina Solar, Neo Solar Power, Motech, Jinko Solar,
Gintech, Canadian Solar and Hareon Solar Technology. Although the list keeps
changing, the top five silicon solar cell producers account for nearly 40% of
global silicon cell production. Many of them are preparing to introduce
Generation 2 (thin film solar cells) in the coming few years. Natcore believes
the follow-on move to Generation 3 silicon cells can be expected to gain
momentum during the next five to eight years, and should become the dominant
technology for new plant expansion thereafter (2019-2022).
Given
the increasing demand for solar cell technology, competition can be expected to
increase substantially. Accordingly, there can be no assurances that the
Company will compete successfully with existing or new competitors, or that the
competition will not have a material adverse effect on the business, operating
results or financial condition of the Company (See “RISK FACTORS”).
Competitive
Strengths
Natcore
has focused the development of its Liquid Phase Deposition process on four (4)
applications:
Selective emitter by Liquid
Phase Deposition, Black Silicon, Liquid Phase Deposition Passivation and Tandem
Quantum Dot Solar Cell
(described below). Management believes that
these applications should have the greatest impact on the solar industry and
the most direct impact to commercialization, consistent revenue and growth.
Selective
Emitter by Liquid Phase Deposition
The
top surface of a solar cell, known as the emitter, consists of silicon doped
with the element phosphorous. Current commercial cells have a uniform
concentration of phosphorous across the surface, but it is well understood that
enhanced performance can be obtained by having phosphorous concentration high
near the electrical contacts and low elsewhere. This approach is known as
selective emitter Liquid Phase Deposition films, patterned by a proprietary
Natcore approach, could simplify the process for producing selective emitter
cells with minimal cost increase. At this time the Company has no estimate of
when this process could be ready for pilot line.
Black
Silicon
Natcore
has an exclusive patent license from the U.S. Department of Energy’s National
Renewable Energy Laboratory (NREL) to develop and commercialize a line of black
silicon products–including equipment, chemicals, and solar cells—based on NREL
patents. Natcore’s exclusivity covers the field of diffused emitters with
liquid phase passivation. “Black silicon” refers to the apparent color of the
surface of a silicon wafer after it has been etched with nano-scale pores. The
etching takes place in a matter of a few minutes in a liquid solution at room
temperature; the black color is not a color at all but results from the absence
of reflected light from the porous wafer surface. The reflectivity of a
polished silicon wafer surface approaches 40%, giving the wafer its shiny
appearance. Adding the typical solar cell industry antireflective coating
reduces the average reflectivity to approximately 6% and gives the cells their
distinctive dark blue color. The black silicon process has been shown by
Natcore scientists and researchers at NREL to further reduce the average
reflectivity to less than 1.5%. A key impediment to turning a solar cell’s
increased light absorption into increased power output; however, is a
significantly increased area of exposed silicon on the sidewalls of the pores and
on the small mesas that remain at the top surface of the wafer itself. This
increased area must be passivated, or treated to keep it from trapping the
light-generated electric charges as they migrate toward the contacts of the
solar cell, a process that robs the cell of output power. Passivation is the
process of filling the dangling atomic bonds at the surface of the solar cell,
as well as reducing the numbers of defects that always exist in the upper
region of the cell body. It is critical to enabling production of long-term,
high-performance silicon solar cells. Natcore has patent pending technology to
passivate the entire black silicon surface of a conventionally processed
silicon solar cell without the need for additional vacuum thermal steps once the
wafer has undergone
Dopant Diffusion
.
Dopant Diffusion
is a necessary
first step for silicon solar cells and is a process in which the wafer is
heated in the presence of a gaseous mixture of elements, one of which is the
element phosphorous. The phosphorous diffuses into the top of the wafer and
creates the negative terminal of the solar cell. Once the top negative terminal
surface has been created, Natcore’s black silicon and passivation technologies
enable top and bottom contacts to be put on the cell directly. Potentially
eliminating the currently used thermal vacuum processing for putting on the
silicon nitride antireflective coating could reduce the cost of cell
fabrication
Natcore
expects to undertake one or more joint venture developments of the deposition
equipment. The Company anticipates that the joint venture partner would be an
existing solar cell production equipment company with an established
manufacturing and marketing capability and that such a joint development would
require at least 12 months to complete once signed. The output of the joint
development would be a complete processing unit operating at pilot line levels;
“pilot line levels” means that the processing would occur at production line
speeds, but for limited periods of time to allow for evaluation of the output
of the run and make adjustments to the unit to improve yield and quality.
50
Liquid
Phase Deposition Passivation
Current
solar cell fabrication deposits hydrogenated silicon nitride on the front of a
solar cell to provide both surface passivation and antireflection control. This
approach is effective only for n-type silicon surfaces used in today’s solar
cells. Two strong new directions are emerging in the solar cell industry. The
first is to passivate the back surface of the cell and not use full area
contacts and the second is to invert the cell structure to have the emitter
(top layer) be a p-type silicon material. Cell manufacturers are now searching
for a low-cost way to passivate p-type silicon surfaces and have found that a
thin silicon oxide layer under the silicon nitride layer creates the
passivation they need for the p-type silicon surfaces, whether they are at the
front or rear. The passivated emitter rear contact cell has been shown to
increase cell output and switching to the p-on-n cell structure has eliminated
the unavoidable light induced degradation that occurs in conventional n-on-p
cells. Thermal oxides are too expensive and chemical vapor deposition oxides
are not effective because of their less-than-theoretical film densities.
Natcore believes that the Liquid Phase Deposition oxide can be a solution to
this problem. The Liquid Phase Deposition passivation process could be
implemented in the same equipment that would be developed by the joint venture
for making black silicon.
Tandem
Quantum Dot Solar Cell
Standard
silicon solar cells by their physics waste some of the energy coming from
shorter wavelength light, notably green, blue, and ultraviolet light. The
solution is to build a solar cell comprised of three different absorbing
materials, one for each approximately one third of the solar spectrum from the
near infrared to the ultraviolet. These complex cells are currently very
expensive and thus historically suitable only for applications such as
satellite space power systems. However, Natcore has developed a technology that
combines quantum dots with its LPD-grown silicon dioxide layers to produce a
“tandem” layer that can be deposited on a conventional silicon solar cell to
better harvest the shorter wavelength light. Natcore envisions its LPD process
allowing the manufacture of a tandem cell consisting of up to three cells
arranged one on top the other, starting with an ordinary silicon solar cell on
the bottom. Something called a cell interconnect comes next, then a second cell
made of quantum dots. This solar cell is tuned to absorb light in the middle of
the spectrum. A second cell interconnect follows and a third cell, another
quantum dot device, sits on top. This uppermost cell is tuned to absorb the
blue end of the spectrum. Replacing the expensive and exotic materials used in
space with cells made using quantum dots could reduce or even eliminate the
above mentioned expense. Natcore’s LPD technology could enable the cells to be
made at low cost because it will utilize roll-to-roll manufacturing
technology.Natcore’s edge in this process is the ability to embed the two types
of quantum dots in LPD silicon dioxide using our liquid-phase film growth
process. Many current and recent attempts to create viable tandem cells have
used vacuum deposition techniques that are expensive and do not allow
independent control over the formation of the quantum dots and the way they are
arranged.
Strategies
The
semiconductor industry standard to produce thin films, found in semiconductor
wafer components, is chemical vapor deposition in which the solar wafer is exposed to volatile originators,
which react and decompose on the wafer surface to produce
anticipated deposits. However, volatile resultants occur which require removal by gas flow through the
reaction chamber resulting in increased cost and toxicity concerns.
Natcore’s
Liquid Phase Deposition technology will enable the growth of inorganic
materials, specifically silicon dioxide-based films that are essential
components of solar cells, in an environmentally friendly chemical bath that
occurs at room temperature. Liquid Phase Deposition technology will reduce the
cost of production while facilitating the growth of materials and devices that
would be destroyed when subjected to the harsher chemical vapor deposition
process. The implementation of the Liquid Phase Deposition process will result
in the following anticipated cost saving and revenue producing benefits of the
four applications of the Liquid Phase Deposition process (detailed above):
Selective
Emitter
Selective
emitter technology has not gained widespread use in today’s solar cell
production lines because current production techniques using laser and/or
thermal/vacuum processes have not been cost effective, or are marginally so.
The additional cell output comes with an increased cost. The standard metric
for manufacturing effectiveness is cell cost per watt and the addition of the
selective emitter production technology now available does not lower cost per
watt. Natcore’s technology requires only the use of wet chemical processes and
the Company believes it will actually lower the cell cost per watt.
51
Black
Silicon
The
Company is working with a major solar cell manufacturer in China to understand
and resolve issues related to scaling the process for making black silicon from
a few hundred wafers per day in a development laboratory to over 2000 wafers
per hour in an automated production line.
Liquid
Phase Deposition Passivation
Front
side passivation of a p-on-n cell and backside passivation of an n-on-p cell
both require about 12 nm to 15 nm of Liquid Phase Deposition oxide. No
additional thermal processing is needed for either layer, since both can be
annealed as a normal part of cell contact formation and fire-through.
Tandem
Quantum Dot Solar Cell
Tandem
cells made of standard semiconducting materials such as aluminum gallium
arsenide were first proposed shortly after the first commercially useful solar
cell was invented in 1956. Solid theoretical understanding of how such solar
cells work and how to construct them was developed by the early 1970’s and they
are now commercial products for earth-orbiting satellite power systems
Natcore’s tandem solar cell technology uses
Liquid Phase Deposition layers containing quantum dots to fabricate “stacked”
solar cell layers on top of one another, each layer engineered to capture
different bands of light. Natcore expects the quantum dot tandem Solar Cell to
increase efficiency over traditional solar cells, as discussed previously.
The
Company anticipates the following potential sources of revenue from the implementation
of its Liquid Phase Deposition process:
License
agreements & Royalties
Customers
will be required to execute non-exclusive license agreements or exclusive
license agreement unique to specified jurisdictions. Royalty rights will entitle
the company to benefit from residual income on each product that utilizes the
company’s technology.
Equipment
sales
Natcore
intends to sub-contract the manufacturing of wet-bench equipment necessary for
the Liquid Phase Deposition process. There will be a mark-up to Natcore on each
piece of equipment.
Chemical
sales
The
Company intends to produce recurring revenue by engaging third-parties to mix
and ship the patented chemical mixture for the various applications.
THERE
MAY BE SITUATIONS WHERE ALL FOUR SOURCES OF REVENUE (OR ANY REVENUE AT ALL) MAY
NOT BE AVAILABLE GIVEN MARKET CONDITIONS AND CUSTOMER REQUIREMENTS.
Intellectual
Property Assets
The
Company has 22 granted patents and 42 patents pending, including but not
limited to the following:
Patent 2340039- Expiration date: 11/18/2023
Method
for Low Temperature Growth of Inorganic Materials from Solution Using Catalytic
Growth and Re-growth. (PCT/RUSSIAN FEDERATION)
The
present invention involves a method and apparatus for depositing a silicon
oxide onto a substrate from solution at low temperatures in a manner that
produces homogeneous growth of the silicon oxide. The method generally
comprises the following steps: (a) chemically treating a substrate to activate
it for growth of the silicon oxide, (b) immersing the treated substrate into a
bath with a reactive solution, (c) regenerating the reactive solution to allow
for continued growth of the silicon oxide. In another embodiment of the present
invention, the apparatus includes a first container holding a reactive
solution, a substrate on which the silicon oxide is deposited, a second
container holding silica, and a means for adding silica to the reactive
solution.
52
Patent 7,718,550- Expiration date: 1/16/2026
Method
for Low Temperature Growth of Inorganic Materials from Solution Using Catalytic
Growth and Re-growth.
The
present invention involves a method and apparatus for depositing a silicon
oxide onto a substrate from solution at low temperatures in a manner that
produces homogeneous growth of the silicon oxide. The method generally
comprises the following steps: (a) chemically treating a substrate to activate
it for growth of the silicon oxide, (b) immersing the treated substrate into a
bath with a reactive solution, (c) regenerating the reactive solution to allow
for continued growth of the silicon oxide. In another embodiment of the present
invention, the apparatus includes a first container holding a reactive
solution, a substrate on which the silicon oxide is deposited, a second
container holding silica, and a means for adding silica to the reactive solution.
Patent 7,253,014: Expiration date: 11/19/2023
Fabrication
of light emitting film coated fullerenes and their application for in-vivo
light emission
A
nanoparticle coated with a semiconducting material and a method for making the
same. In one embodiment, the method comprises making a semiconductor coated
nanoparticle comprising a layer of at least one semiconducting material
covering at least a portion of at least one surface of a nanoparticle,
comprising: (A) dispersing the nanoparticle under suitable conditions to
provide a dispersed nanoparticle; and (B) depositing at least one
semiconducting material under suitable conditions onto at least one surface of
the dispersed nanoparticle to produce the semiconductor coated nanoparticle. In
other embodiments, the nanoparticle comprises a fullerene. Further embodiments
include the semiconducting material comprising Cadmium Sulfide (CdS) or Cadmium
Selenide (CdSe).
Patent 7,682,527- Expiration date: 11/19/2023
Fabrication
of light emitting film coated fullerenes and their application for in-vivo
light emission
A
nanoparticle coated with a semiconducting material and a method for making the
same. In one embodiment, the method comprises making a semiconductor coated
nanoparticle comprising a layer of at least one semiconducting material
covering at least a portion of at least one surface of a nanoparticle,
comprising: (A) dispersing the nanoparticle under suitable conditions to
provide a dispersed nanoparticle; and (B) depositing at least one semiconducting
material under suitable conditions onto at least one surface of the dispersed
nanoparticle to produce the semiconductor coated nanoparticle. In other
embodiments, the nanoparticle comprises a fullerene. Further embodiments
include the semiconducting material comprising Cadmium Sulfide (CdS) or Cadmium
Selenide (CdSe).
Patent 7,491,376- Expiration date: 3/5/2027
Chemical
derivatization of silica coated fullerenes and use of derivatized silica coated
fullerenes
This
invention is directed to a new composition of matter in the form of chemically
derivatized silica coated fullerenes, including silica coated C.sub.60
molecules and silica coated carbon nanotubes, processes for making the same and
to uses for the derivatized silica coated fullerenes. (Dervitization of silica
coated fullerenes refers to chemically modifying surface of the silica to have
a similar chemical structure but different chemical reactions with specifically
chosen reagents.) Included among many uses in chemical, physical or biological
fields of use, but not limited thereto, are high speed, low loss electrical
interconnects for nanoscale electronic devices, components and circuits. In one
embodiment, this invention also provides a method for preparing silica coated
fullerenes having substituents attached to the surface of silica coated
fullerenes by reacting silica coated fullerenes with a wide range of organic or
inorganic chemical species in a gaseous or liquid state. Preferred substituents
include but are not limited to organic groups and organic groups containing
heteroatoms (i.e. non-carbon atoms) such as oxygen, nitrogen, sulfur, and
halogens. The identity of the surface functional group is chosen to provide
desirable properties to the silica coated fullerenes including but not limited
to solubility, miscibility, stickiness, and melting point. The present
invention also describes the application of surface functionalized silica
coated fullerenes as components of polymer blends and composites (i.e. the
surface is treated with certain substances that allow the silica to react to
certain other specific materials).
53
Patent 7,692,218- Expiration date: 8/21/2025
Method
for creating a functional interface between a nanoparticle, nanotube or
nanowire, and a biological molecule or system
A
field effect transistor and a method for making the same. In one embodiment,
the field effect transistor comprises a source; a drain; a gate; at least one
carbon nanotube on the gate; and a dielectric layer that coats the gate and a
portion of the at least one carbon nanotube, wherein the at least one carbon
nanotube has an exposed portion that is not coated with the dielectric layer,
and wherein the exposed portion is functionalized with at least one indicator
molecule (i.e. has a specific molecule attached to the nanoparticle that will
attach only to certain desired molecules out of a broad mixture of molecules).
In other embodiments, the field effect transistor is a biochem-FET.
Research and Development
Natcore’s
research and development efforts have produced technological advancements in
the solar wafer production arena as detailed in other parts of this prospectus.
The Company has spent $0.2 and $0.3 million for the quarters ended March 31,
2015 and 2014, respectively, and $1.6 and $1.5 million for the years ended
December 31, 2014 and 2013, respectively on research and development. These
amounts were spent on the development or improvement of its technologies
primarily in Selective Emitter, Black Silicon, Liquid Phase Deposition
Passivation and Tandem Quantum Dot Solar Cells. The Company intends to continue
to research and develop these technologies for the next 36-48 months. There can
be no assurance that the Company can achieve any or all of its research and
development goals.
Sales
and Marketing
At
this time Natcore’s focus is primarily on research and development as described
in other parts of this prospectus. The Company currently has not produced any
products that have recognized any revenue, as it is still in the development stage
for many of its applications. The Company plans to continue to research and
develop these various technologies to commercial readiness in stages over the
next 24 months to 5 years; as a result the Company does not need a direct sales
force in the foreseeable future. Natcore will market its technology though the
industry with its current management and R&D staff.
Government Regulation
The
Company may be subject to regulation by county, state and federal governments,
governmental agencies, and regulatory authorities from several different
countries. Failure to obtain regulatory approvals or delays in obtaining
regulatory approvals by the Company, its collaborators, customers, vendors or
service providers would adversely affect the marketing of products and services
developed by the Company, and the Company’s ability to generate product and
service revenues. Further, there can be no assurance that the Company, its
customers, vendors, or service providers will be able to obtain necessary
regulatory approvals. Although the Company does not anticipate problems
satisfying any of the regulations involved, the Company cannot foresee the
possibility of new regulations, which could adversely affect the business of
the Company. While the Company anticipates that all regulatory approvals
required will be granted, violations by the Company and/or its customers of,
and/or non-compliance with, such regulations and approvals may adversely affect
the Company’s ability to acquire capital, or adversely affect the Company’s
ability to conduct its business as intended.
Any
new government regulation that affects solar power products and technologies,
whether at the foreign, federal, state, or local level, including any
regulations relating to installation and service of these systems, may increase
its costs and the price of its systems. As a result, these regulations may have
a negative impact on the Company’s revenue and profitability and thereby harm
its business, prospects, results of operations, or financial condition.
Employees
As
of March 31, 2015 and December 31, 2014 the Company had 14 full-time employees.
Natcore’s ability to succeed depends, among other things, upon the Company’s
continuing ability to attract and retain highly qualified technical
specialists, administrative and managerial personnel.
54
Facilities
The
Company’s administrative offices are located at 189 N. Water Street, Rochester,
NY 14604-1163. The Company also maintains a research and development laboratory
in the Eastman Kodak Company’s Eastman Business Park, in the City of Rochester,
New York.
Environmental
Natcore
believes that its operations comply in all material respects with applicable
laws and regulations concerning the environment. While it is impossible to
predict accurately the future costs associated with environmental compliance
and potential remediation activities, compliance with environmental laws is not
expected to require significant capital expenditures and has not had, and is
not expected to have, a material adverse effect on our earnings or competitive
position.
Legal Proceedings
The
Company is not currently involved in any litigation believed to be material to
the development of the Company’s business objectives or the Offering. To the
best of the Company’s knowledge, no litigation is pending or threatened.
Administrative
Proceedings
The
Company is not currently involved in any administrative proceedings to be
material to the development of the Company’s business objectives or the
Offering. To the best of the Company’s knowledge, no such proceedings are
pending or threatened.
MANAGEMENT
British
Columbia Law as it Relates to Directors
The
Business Corporations Act
(British
Columbia) (the “BCBCA”) requires that every director who is a party to a
material contract or transaction or a proposed material contract or transaction
with a corporation, or who is a director or officer of, or has a material
interest in, any person who is a party to a material contract or transaction or
a proposed material contract or transaction with the corporation, shall
disclose in writing to the corporation or request to have entered in the
minutes of the meetings of directors the nature and extent of his or her
interest, and shall refrain from voting in respect of the material contract or
transaction or proposed material contract or transaction unless the contract or
transaction is: (a) an arrangement by way of security for money lent to or obligations
undertaken by the director for the benefit of the corporation or an affiliate;
(b) one relating primarily to his or her remuneration as a director, officer,
employee or agent of the corporation or an affiliate; (c) one for indemnity of
or insurance for directors as contemplated under the BCBCA; (d) one relating to
a loan to the corporation and the director or senior office, or person in whom
the director or senior officer has a material interest is or is to be a
guarantor of some of all of the loan; or (e) one with an affiliate. However, a
director who is prohibited by the BCBCA from voting on a material contract or
proposed material contract may be counted in determining whether a quorum is
present for the purpose of the resolution, if the director disclosed his or her
interest in accordance with the BCBCA and the contract or transaction was
reasonable and fair to the corporation at the time it was approved.
Natcore’s
articles of incorporation provide that the directors shall from time to time
determine by resolution the remuneration to be paid to the directors, which
shall be in addition to the salary paid to any officer or employee who is also
a director. The directors may also by resolution award special remuneration to
any director in undertaking any special services on its behalf other than the
normal work ordinarily required of a director of Natcore.
Natcore’s
articles of incorporation also provide that the Company may, if authorized by
the directors: (a) borrow money upon the credit of our company; (b) issue,
reissue, sell or pledge bonds, debentures, notes or other evidences of
indebtedness or guarantee, whether secured or unsecured; (c) to the extent
permitted by the BCBCA, guarantee the repayment of money by any other person or
the performance of the obligation of any other person; and (d) mortgage, charge
or otherwise create a security interest in the whole or any part of the present
and future assets and undertaking of the Company.
55
Directors
and Executive Officers of Natcore Technology, Inc.
The
directors and executive officers of the Company, as of the date of this
Prospectus, as well as their positions, are listed below:
Charles
Provini,
Director,
President & Chief Executive Officer
Mr.
Provini holds an Engineering degree from The U.S. Naval Academy in Annapolis,
Maryland and a Masters from the University of Oklahoma. Previously, he was the
President of Ladenburg Thalmann Asset Management and a Director of Ladenburg
Thalmann, Inc., one of the oldest members of the New York Stock Exchange from
11/1997- 10/2000. He served as President of Laidlaw Asset Management as well as
Chairman and Chief Investment Officer of Howe & Rusling, Laidlaw’s
Portfolio Management Advisory Group from 11/1995- 09/1997. Prior to this, he
served as President of Rodman & Renshaw’s Advisory Services from 02/1994-
08/1995 and President of LaSalle Street Corporation, a wholly-owned subsidiary
of Donaldson, Lufkin & Jenrette from 01/1983-04/1985. Mr. Provini has been
a leadership instructor at the U.S. Naval Academy, Chairman of the U.S. Naval
Academy’s Honor Board, and is a former Marine Corp. officer. Mr. Provini has
been a director, President and Chief Executive officer of the Company since May
8, 2009.
John
Meekison
, Director
and Chief Financial
Officer
Mr.
Meekison has been a director of the Company since August 9, 2007 and is a
founder and Chief Financial Officer of Vancouver based iCo Therapeutics Inc.
(“iCo”) (from 03/2005- Present), a biopharmaceutical company developing
clinical stage drugs for ophthalmic (eye) diseases. In his capacity as Chief
Financial Officer, he manages all accounting, finance, risk management,
investor relations and human resource activities for iCo. He also works closely
with the rest of the iCo’s executive team in business strategy, license
renegotiations and merger and acquisitions activities. Mr. Meekison was an
investment banker with a specialization in both the life sciences and
technology sector at Haywood Securities Inc. (10/1991-02/2000), Diouhy Merchant
Group Inc. (10/2001-12/2002), and Pacific International Securities Inc., now PI
Financial group (03/2004-03/2005). He has also acted as the Chief Financial
Officer for a TSX listed company developing a novel clinical diagnostic
platform from 02/2003-2004, where Mr. Meekison supervised all public reporting
functions and accounting and finance functions. He is also the director of
Pacific Cascade Minerals Inc. and a member of the audit committee and the Chief
Financial Officer, a director, and member of the audit committee for Sojourn
Ventures, Inc. Mr. Meekison received his Bachelor of Arts from the University
of British Columbia and is a certified Investment Manager and Professional
Logistician.
Brien
F. Lundin
, Chairman of the
Board
Brien
Lundin has been a director of the Company since May 8, 2009. He was appointed
as Chairman of the Board on September 30, 2013. The president/CEO of Jefferson
Financial, Inc. since 2003, Mr. Lundin is a marketer, investor and investment
banker with experience in financing and advising early-stage technology and
natural resource enterprises. Mr. Lundin has been the operator of the New
Orleans Investment Conference since 2003. Mr. Lundin is also a director and
member of the audit committee for Thunderstruck Resources Ltd. and Sojourn
Ventures, Inc.
John
C. Calhoun
, Director
Mr.
Calhoun has over 20 years of experience in corporate finance. Mr.
Calhoun has served as managing director of Fort Hill Resources since 1997,
president/director of North American Water from 1998-2004, president/director
of Grammercy Investments from 2000-presemt, president/director of Vignette
Publications, treasurer/director of Computer Wholesale Corporation from
1995-2001, and managing director of the Shadows Bend Court long-term care
facility from 2001-present. He is the founder/director of FNBC Bank
(2005-present), the largest,
De Novo
bank in Louisiana and the founder and managing director of the Suites at Sugar
Mill Point and Oak Grove Senior Living (2002-present), long term care
facilities. Mr. Calhoun has been a director of the Company since May 8, 2009.
Dennis
J. Flood,
Chief Technology
Officer
Dennis
Flood, PhD, is a co-founder of and technical consultant to Natcore. He is also
President and CEO of North Coast Initiatives, Ltd. (05/2001-present), a
consulting firm providing management and technical services to the photovoltaic
(PV) energy conversion industry. Dr. Flood has more than 30 years of experience
in developing solar cell and array technology. Prior, Dr. Flood was Chief of
the Photovoltaic and Space Environments Branch at the NASA Glenn Research
Center in Cleveland, Ohio (from 06/1985-06/2000), where he lead Agency programs
in advanced photovoltaic systems development. He served as Chair of the
Institute of Electrical and Electronics Engineers (IEEE) Photovoltaic Devices
Technical Committee from 1998-2005. And he currently serves on the International
Advisory Committees of the European, the U.S., the Japan/Asia and the World
Photovoltaic Conference organizing committees (from 1992-present).
56
Shauna
Hartman
,
Corporate
Secretary.
Shauna
Hartman obtained her law degree from the University of British Columbia in 2001
and holds a Bachelor of Commerce from Saint Mary’s University. She has
practiced corporate and securities law for Canadian listed companies with
Armstrong Simpson since 2003. She also held the title of corporate secretary at
International Enexco Ltd. (02/2008-06/2014), Elissa Resources
Ltd.(03/2011-present), and Doxa Energy Ltd.(04/2010-present), all listed on the
TSX Venture Exchange.
Interests
of Directors, Executive Officers, Promoters and Principal Holders
The
following table provides the specified information about each director,
executive officer and promoter of the Issuer and each person who directly or
indirectly beneficially owns or control 10% or more of any class of voting
securities of the Company.
|
|
|
|
|
|
|
|
Name and Municipality of Principal
Residence
|
|
Positions
held with the Issuer
|
|
Number
of Common Shares
(1)
|
|
|
|
|
|
|
|
|
|
Charles Provini, Delray Beach, Florida, USA
|
|
Director, President and CEO
|
|
1,353,000
|
|
|
John Meekison, Vancouver, B.C., Canada
|
|
Director and CFO
|
|
40,000
|
(2)
|
|
Brien Lundin, Metairie, LA, USA
|
|
Chairman of the Board
|
|
3,006,223
|
(3)
|
|
John Calhoun, New Orleans, LA, USA
|
|
Director
|
|
640,900
|
|
|
Dennis Flood, Columbus, OH, USA
|
|
Chief Technology Officer
|
|
985,500
|
(4)
|
|
Shauna Hartman, Surrey, B.C., Canada
|
|
Corporate Secretary
|
|
Nil
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
(1)
|
Does not include options or warrants held by
directors and officers of the Company.
|
|
|
|
|
(2)
|
Of which 30,000 shares are held directly and 10,000
shares are held by Mr. Meekison’s spouse.
|
|
|
|
|
(3)
|
Of which 1,906,223 shares are held directly and
1,100,000 shares are held through Jefferson Financial Inc.
|
|
|
|
|
(4)
|
Of which 15,500 shares are held directly and 970,000
shares are held through North Coast Initiatives Ltd.
|
There
are no loans or debentures due to or from the directors, management, promoters
and principal holders of the Company.
Corporate
Governance Practices
General
The
Board
believes that good
corporate governance
improves
corporate performances
and benefits all
shareholders. The
Canadian Securities
Administrators (the “CSA”)
have adopted NP58-201, which
provides non-prescriptive
guidelines on
corporate governance
practices for reporting issuers such as
the Company.
In addition, the
CSA have implemented NI58-101, which
prescribes certain disclosure by the
Company of its
corporate
governance practices.
This section
sets out the Company’s
approach to corporate governance
and addresses the Company’s compliance with NI
58-101.
B
oard of Directors
The
Board
of Directors (the “Board”)
facilitates its exercise of
independent
supervision
over
management by ensuring
that the Board is composed of a majority
of independent directors.
Directors are
considered to
be independent if
they have no direct or indirect material
relationship with
the
Company. A “material
relationship” is a relationship
which
could,
in the
view of the Company’s
board of directors, be reasonably expected
to interfere
with the exercise of a director’s independent
judgment. The Board is
comprised of four directors,
three of which are considered to be independent.
Mr. Lundin, Calhoun and
Meekison are considered
to
be independent directors
for the purposes of NI
58-101and the Company’s president and CEO,
Mr. Provini, is not considered
to be independent.
The
mandate of the Board
is to
act in the best interests of the Company
and to supervise management. The
Board
is responsible for
approving long-term strategic
plans and annual operating budgets recommended by management.
Board
consideration and
approval
is also required for
material contracts and business
transactions, and all
debt and equity financing transactions.
Any responsibility which is
not delegated to management or to
the committees of the
Board
remains
with the Board.
The Board meets
on a regular basis consistent with
the state of the Company’s affairs and also from time to
time as deemed
necessary to
enable it to fulfill
its responsibilities.
57
The
number of directors of the
Company
is fixed at four. If there are more
nominees for election then
there are vacancies to
fill, those nominees receiving the greatest
number of
votes will be elected
until all such
vacancies have been
filled. Each director of the
Company is
elected annually and
holds
office until the
next Annual General Meeting
of the
Shareholders unless that
person
ceases to be a director before
then. In the absence of instructions to
the
contrary, the shares represented by proxy
will, on a poll, be voted for
the nominees here enlisted.
Directorship
The
following
is a list of each director
of the
Company who
is also a director of other reporting
issuers (or equivalent) in
a Canadian or foreign jurisdiction:
|
|
|
|
|
Name
of Director
|
|
Other Reporting
Issuer
|
|
|
|
|
|
John Meekison
|
|
Pacific Cascade Minerals Inc.
|
|
|
|
Sojourn Ventures
Inc.
|
|
Brien Lundin
|
|
Thunderstuck Resources
Ltd.
|
|
|
|
Sojourn Ventures
Inc.
|
Orientatio
n and
Continuing Education
When new
directors are appointed, they receive
orientation, commensurate with
their previous experience,
on the
Company’s
properties, business and
industry, and
on the responsibilities
of directors. Board meetings may also
include presentations
by the Company’s management and employees to
give the directors additional insight
into
the Company’s business.
Ethica
l
Business Conduct
The
Board
has found that the fiduciary
duties placed
on individual directors by the Company’s governing corporate legislation,
the common law and the
restrictions
placed by the applicable corporate legislation on
an individual directors’
participation in
decisions of the
Board
in which the director has an interest have
been sufficient to
ensure that the Board
operates independently of management and
in the
best
interests of
the
Company.
Nominatio
n
of Directors
The
Board
considers
its size each year when it considers
the number of directors to
recommend to the shareholders
for election at the annual meeting
of shareholders, taking into
account the number required
to carry out the Board’s duties effectively
and to maintain a diversity
of views and experience.
The
Board
does
not have a nominating
committee. The Board currently performs those functions as a whole. However, if
there
is a change in the
number of directors required by the Company, this policy
will be reviewed.
Compensation
The
Board determines the compensation for the directors
and
CEO. A summary
of the compensation received by the
Named
Executive Officers of the Company for the financial year
ended
December 31, 2014is provided
in this
management section under the
heading: “Statement
of Executive Compensation.” A summary of the compensation
received by the directors for the financial year ended December 31, 2014is provided in
this management section under the heading:
“Compensation to
Directors”
Other Board Committees
Other than
the audit committee described
in this Management section under the
heading “Audit
Committee”, the Board has
no other committees.
Assessments
The
Board regularly assesses its own effectiveness and
the
effectiveness and contribution
of each Board committee and Director.
58
Statement of Executive Compensation
Compensation Discussion and Analysis
This compensation discussion
and analysis describes and
explains
the Company’s policies and
practices with respect to the compensation of
its named executive officers,
being its President and
Chief
Executive Officer
(the
“CEO”), Charles
Provini, and the
former
Chief
Financial
Officers (the “CFO”) of the
Corporation, Richard Childs and Brian Zucker (each, a “Named
Executive Officer” or “NEO”).
Executive
compensation is
based
upon the need to provide a compensation package that will
allow the Company
to attract and retain qualified
and experienced executives, balanced with
a pay-for performance
philosophy. Compensation
for this fiscal year and prior fiscal
years have historically
been based upon a negotiated salary,
with stock options and bonuses
potentially being issued
and paid as an incentive for performance.
Option-based Awards
The
Board
recognizes that the
Company operates in
a competitive environment and
that
its performance
depends on
the quality of its employees.
The board has the
responsibility to administer compensation
policies
related to executive management
of the Company, including option-based awards.
Shareholders have approved a stock
option plan pursuant
to which the Board has granted
stock options to executive
officers. The stock option plan provides
compensation
to participants and
an additional
incentive to
work toward long-term company performance.
Executive
compensation is
based
upon the need to provide a compensation package that will
allow the Company
to attract and retain qualified and
experienced executives,
balanced
with a pay-for-performance
philosophy. The
stock
option plan has been and
will
be used to provide share purchase
options that are granted
in consideration
of the level of responsibility of the
executive, as
well as his or her impact
and/or
contribution
to the
longer-term operating performance
of the
Company. In
determining the number
of options to be granted
to the
executive officers,
the Board
takes into account the
number of options, if any, previously granted to each executive officer
and the exercise price of any
outstanding options to
ensure that such
grants
are in accordance with the policies
of the TSX Ventures
Exchange, and closely align
the
interests of the executive
officers with the interests of the Company’s shareholders.
Summary Compensation Table
In
accordance with
the provisions of applicable
securities legislation, the Company
had three
“Named Executive
Officers” during the financial year
ended December 31, 2014, namely Charles Provini, President and CEO,
Richard Childs and Brian
Zucker,
former CFOs. For the purpose
of this information
management section:
“CEO”
of the Company means an
individual who acted
as Chief Executive
Officer of the Company, or acted in
a similar capacity,
for any part of the most recently completed financial
year;
“CFO”
of the Company means an
individual who acted
as Chief Financial Officer
of the Company, or acted in
a similar capacity,
for any part of the most recently completed financial
year;
“Executive
Officer” of an entity
means
an individual
who is:
|
|
|
|
|
|
a.
|
the chair
of the Company, if any;
|
|
|
|
|
|
|
b.
|
the vice-chair of the
Company, if
any;
|
|
|
|
|
|
|
c.
|
the president
of the Company;
|
|
|
|
|
|
|
d.
|
a vice-president of
the Company
in charge of a principal
business unit, division
or function including
sales, finance or production;
|
|
|
|
|
|
|
e.
|
an officer of
the Company
(or subsidiary,
if any) who performs a policy-making function
in respect of the Company; or
|
|
|
|
|
|
|
f.
|
any other individual
who performs a policy-making function
in respect of the Company;
|
59
“Named Executive
Officers or NEOs” means:
|
|
|
|
|
|
|
|
|
a.
|
|
the CEO
of the Company;
|
|
|
|
|
|
|
|
|
|
b.
|
|
the
CFO of the Company;
|
|
|
|
|
|
|
|
|
|
|
i.
|
each
of the Company’s
three most highly
compensated executive
officers, or the three
most highly compensated individuals acting in a similar
capacity, other than the CEO and
CFO, at the end of the most recently
completed financial
year whose total compensation was, individually, more than $150,000;
|
|
|
|
|
|
|
|
|
|
|
ii.
|
any
additional individuals
for whom disclosure would
have been provided
under paragraph (i)
above except that the individual
was not serving as
an executive officer
of the Company, nor in a similar capacity,
as at the end
of the most
recently
completed financial year
end.
|
Al
l amounts
presented in this
section are presented in US dollars.
The following table
sets forth all
annual and
long-term compensation
for services in all
capacities
to the
Company for the years ended December
31, 2014, 2013, 2012, and 2011.
Summary
Compensation Table
Years Ended December31, 2014,
2013, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-equity
incentive plan compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
and Principal Position
|
|
Period
Ended
|
|
Salary
($)(1)
|
|
Share-based
awards ($)
|
|
Option-based
awards ($)(2)
|
|
Annual
incentive plans ($)
|
|
Long term
incentive plans ($)
|
|
Pension
value ($)
|
|
All
other compensation ($)
|
|
Total
compensation ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Provini
President/
Chief Executive Officer (6)
|
|
|
December 31, 2014
|
|
$
|
275,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
60,000
|
|
$
|
335,000
|
|
|
|
|
December 31, 2013
|
|
$
|
275,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
60,000
|
|
$
|
335,000
|
|
|
|
|
December 31, 2012
|
|
$
|
275,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
60,000
|
|
$
|
335,000
|
|
|
|
|
December 31, 2011
|
|
$
|
366,666
|
|
|
Nil
|
|
$
|
226,116
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
592,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
Childs
Former
Chief Financial Officer (4)
|
|
|
December 31, 2014
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
3,000
|
|
$
|
3,000
|
|
|
|
|
December 31, 2013
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
10,000
|
|
$
|
10,000
|
|
|
|
|
December 31, 2012
|
|
$
|
16,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
8,200
|
|
$
|
24,200
|
|
|
|
|
December 31, 2011
|
|
$
|
28,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
28,000
|
|
|
|
|
December 31, 2014
|
|
$
|
48,000
|
|
|
Nil
|
|
$
|
18,300
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
66,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian
Zucker
(3) Former
Chief Financial Officer
|
|
|
December 31, 2013
|
|
$
|
48,000
|
|
$
|
12,450
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
60,450
|
|
|
|
|
December 31, 2012
|
|
$
|
48,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
48,000
|
|
|
|
|
December 31, 2011
|
|
$
|
48,000
|
|
|
Nil
|
|
$
|
67,836
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
115,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
Meekison
(5) Chief Financial Officer
|
|
|
December 31, 2014
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
48,000
|
|
$
|
48,000
|
|
|
|
|
December 31, 2013
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
28,000
|
|
$
|
28,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis
Flood
Chief
Technology Officer
|
|
|
December 31, 2014
|
|
$
|
165,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
165,000
|
|
|
|
|
December 31, 2013
|
|
$
|
165,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
165,000
|
|
|
|
|
December 31, 2012
|
|
$
|
123,750
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
123,750
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
1.
|
The value of perquisites and benefits, if any, for each Named Executive
Officer was less than the
lesser of $50,000 and 10% of the total
annual salary and bonus.
|
|
|
|
|
2.
|
The value of the option-based
award was determined using the Black-Scholes option-pricing model.
|
|
|
|
|
3.
|
Appointed as Chief Financial Officer on April 27, 2012; Resigned as Chief
Financial Officer on June 7, 2013. After resignation as CFO, Mr. Zucker
continues to perform tax and administrative functions for which he is
compensated $4,000 per month.
|
|
|
|
|
4.
|
Resigned as Chief Financial Officer on April 27, 2012. After resignation as CFO, Mr. Childs has
continues to perform consulting services for the Company, on an as needed
basis, specifically in the area of performing due diligence.
|
|
|
|
|
5.
|
Appointed as Chief
Financial Officer on June 7, 2013. Certain payments were requested by Mr.
Meekison to go to Tanum Holdings of which he is an owner, instead of directly
to him
|
|
|
|
|
6.
|
Mr. Provini has an employment
agreement for $275,000 per year. He also receives $60,000 in other
compensation for administrative functions performed for NewCyte, which is a
subsidiary that gets consolidated in the financial statements.
|
60
The
Company
has calculated the “grant date
fair value” amounts
in the
‘Option-based
Awards’
column using
the Black-Scholes model, a mathematical
valuation model that ascribes a value
to a stock option based
on a number of factors
in valuing the option-based
awards,
including the
exercise price of the
options, the price
of the
underlying security on
the date the option was
granted, and assumptions with
respect to the volatility of the price of the
underlying security and the
risk-free
rate of return. Calculating the
value of stock options
using this methodology is
very different from simple
“in-the-money” value calculation. Stock options that
are well out-of-the-money can still have a significant
“grant
date
fair value” based on a Black-Scholes valuation. Accordingly, caution must
be exercised in comparing grant date
fair value amounts with
cash compensation or an in-the-money
option value calculation. The
total
compensation
show in the last column
is total compensation
of each NEO reported in
the other columns. The
value of the in-the-money options currently held by each
director (based on share price less
option exercise price) is set forth
in the ‘Value of Unexercised
in-the-money Options’
column
of the “Outstanding
Share-
Based and Option-Based Awards”
table below.
Incentive Plan Awards
Outstanding share-based
awards
and
option-based awards
The
Plan has been established
to attract and
retain employees,
consultants, officers or
directors to
the
Company
and to
motivate
them to
advance
the
interests
of the Company
by affording
them
with the opportunity
to acquire
an equity interest in
the
Company. The
directors and Compensation Committee of the
Company administer the Plan. The Plan
provides
that the number of
Shares issuable under
the
Plan, together
with
all of
the
Company’s
other
previously established or
proposed share compensation
arrangements may not exceed
10% of
the
total number
of issued
and outstanding shares
of the Company. All options
expire on
a date not later than
five years
after the date
of grant
of such option.
The
following table
sets for the details
of all awards outstanding as
of July 31, 2015, including
awards granted subsequent to the most recently completed financial year to the Named
Executive Officers (“NEOs”).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option-Based
Awards
|
|
Share-Based
Awards
|
|
|
|
|
|
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#)
|
|
Option
Exercise Price ($)
|
|
Option
Expiration
Date
|
|
Value
of Unexercised In-the-Money Options
1
($)
|
|
Number
of Shares or Units of Shares That Have Not Vested (#)
|
|
Market
or Payout Value of Share-Based Awards That Have Not Vested ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Provini
|
|
300,000
|
|
0.97
|
|
February 8, 2016
|
|
|
|
|
|
|
|
President and CEO
|
|
300,000
|
|
0.58
|
|
April 30, 2020
|
|
Nil
|
|
300,000
|
|
174,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
|
0.97
|
|
February 6, 2016
|
|
|
|
|
|
|
|
Brian
Zucker
|
|
20,000
|
|
0.80
|
|
January 4, 2018
|
|
|
|
|
|
|
|
Former CFO
|
|
10,000
|
|
1.08
|
|
January 10, 2019
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
10,000
|
|
0.75
|
|
December 17, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
Meekison.
|
|
300,000
|
|
0.97
|
|
February 8, 2016
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
300,000
|
|
0.58
|
|
April 30, 2020
|
|
Nil
|
|
300,000
|
|
174,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis
Flood
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Technology
Officer
|
|
90,000
|
|
0.97
|
|
February 6, 2016
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
|
1.
|
This
amount is based on the difference
between the market
value of the Company’s
common shares underlying the options as at July31, 2015 and the exercise price
of the option.
|
61
Value Vested
or Earned During the 7 Months
Ended July 31. 2015
|
|
|
|
|
|
|
|
|
Name
|
|
Option-based
awards – Value vested during the period ($)
|
|
Share-based
awards – Value vested during the period($)
|
|
Non-equity
incentive plan compensation – Value earned during the period($)
|
|
|
|
|
|
|
|
|
|
Charles
Provini
President and CEO
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
|
|
Brian
Zucker
Former CFO
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
|
|
John
Meekison
Chief Financial Officer
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
|
|
Dennis
Flood
Chief Technology Officer
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
|
1.
|
Dollar value that would
have been realized if calculated
by determining the difference
between the market price
of the underlying securities at exercise and the exercise or base price of the
options under the option-based award on the vesting date.
|
Option-based
Awards Exercised During the
7Months Ended July 31, 2015
|
Name
|
|
Securities
Acquired on Exercise (#)
|
|
Exercise
Price$
|
|
Date of
Exercise (m/d/y)
|
|
Aggregate
Value Realized (1) ($)
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Provini
President and CEO
|
|
Nil
|
|
N/A
|
|
N/A
|
|
Nil
|
|
|
|
|
|
|
|
|
|
|
|
Brian
Zucker
Former CFO
|
|
Nil
|
|
N/A
|
|
N/A
|
|
Nil
|
|
|
|
|
|
|
|
|
|
|
|
John
Meekison
Chief Financial Officer
|
|
Nil
|
|
N/A
|
|
N/A
|
|
Nil
|
|
|
|
|
|
|
|
|
|
|
|
Dennis
Flood
Chief Technology Officer
|
|
Nil
|
|
N/A
|
|
N/A
|
|
Nil
|
|
|
|
|
|
|
|
|
1.
|
Calculated using the
closing market price of the common shares on the
date(s) of exercise less the
exercise price of the stock options multiplied by
the number of shares
acquired.
|
62
Option-based Awards Granted During the 7Months Ended July31, 2015
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Date of
Grant
|
|
Number
of Option-Based Awards Granted
|
|
Exercise
Price
|
|
Expiry
Date (m/d/y)
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Provini
President and CEO
|
|
April 30, 2015
|
|
300,000
|
|
0.58
|
|
April 30, 2020
|
|
Brian
Zucker
Former CFO
|
|
N/A
|
|
Nil
|
|
Nil
|
|
N/A
|
|
John
Meekison
Chief Financial Officer
|
|
April 30, 2015
|
|
300,000
|
|
0.58
|
|
April 30, 2020
|
|
Dennis
Flood
Chief Technology Officer
|
|
N/A
|
|
Nil
|
|
Nil
|
|
N/A
|
Pensio
n Plan
Benefits
The
Company
does not have a pension plan
that provides for
payments or benefits to the Named Executive Officers at,
following or in
connection with retirement.
Termination of Employment, Change in Responsibilities and
Employment
Contracts
Other
than disclosed below,
the Company does not
have an employment contract with
any of its Named Executive Officers. Each Named
Executive Officer devotes a portion of his or
her time to the Company
and a portion of his or her time to other companies
where he or she is a director and/or officer.
Accordingly, the Named
Executive
Officers invoice the Company
based on the percentage of
time
devoted to the
Company.
Other
than
as disclosed below,
neither the Company nor
any of its subsidiaries
have any plan or arrangement with
respect to compensation
to its
executive officers which would result from the
resignation, retirement or any
other
termination
of the executive officers’
employment with
the
Company and its subsidiaries or from
a change of control of the
Company or any
subsidiary of the
Company
or a change in the executive officers’
responsibilities following
a change in control.
63
The Company
entered
into
an Employment Agreement
dated April 5, 2012
with Charles Provini for
his services as President
and Chief Executive Officer
and such other
capacities
as the board of directors
of the Company may designate from
time
to time. Pursuant to
the Employment Agreement, Mr.
Provini is be paid a base
salary of US $275,000 per
year. After the first
anniversary of
the date of the Employment Agreement,
the base salary of US $275,000 per
year may be reviewed periodically
and increases in such base salary may be granted
at the sole discretion of
the Company’s board of
directors. The Employment Agreement ends on the earliest of two
years from the date of the
Employment Agreement
or any extension thereafter.
On April 5, 2014, the employment agreement was extended for an additional three
years. Mr. Provini is entitled to
certain option grants upon the achievement of certain
revenue
milestones by the
Company. Mr. Provini shall also be entitled to
receive options to purchase up to Five Hundred Thousand (500,000) shares of the
Company’s common stock (the “Stock Options”) as follows: He shall receive Stock
Options to purchase One Hundred Thousand (100,000) shares of the Company’s
common stock upon the Company’s receipt of One Million Dollars ($1,000,000) of
net revenue during the Term of his employment, and he shall receive Stock
Options to purchase One Hundred Thousand (100,000) shares of the Company’s
common stock for each additional One Million Dollars ($1,000,000) of net
revenue received by the Company during the Term of his employment (up to a
maximum of Five Hundred Thousand (500,000) shares of the Company’s common
stock). Options granted under this incentive plan will be priced at the lowest
possible strike price approved by the TSX Venture Exchange at the time of the
grant. Mr. Provini may
terminate
the Employment Agreement at any time upon
30 days’ written notice to
the Company or
immediately for cause. Should the
Company terminate the Employment Agreement
without cause, it
is obligated
to pay to Mr. Provini a lump
sum payment of an
amount equal to
three month’s base salary, plus one year’s
benefits. The Employment
Agreement contains certain
non-competition and non-solicitation
provisions during
the employment term. For
a period of one
year following
the employment
term,
Mr. Provini cannot solicit business from
current or
potential clients or customers
of Natcore or induce employees, consultants, etc. of the Company to
terminate
or not renew with the
Company
and may not directly or indirectly,
engage in any business in
the state of New Jersey
or any other location in
which
the Company is then
doing
business, for
the development,
sale, service or distribution
of process or equipment for the
manufacture of solar panels
(or any component thereof)
or other alternative energy technology
products or
any similar business that
is competitive with
the business of the
Company or its
affiliates, including
as a proprietor, principal, agent,
partner, officer,
director, shareholder,
employee, member,
consultant or otherwise.
This
Space Intentionally Left Blank
64
Compensation
of Directors
The
following table sets
forth
all amounts of compensation
provided to directors who
were not NEOs of the Company during
the 6months ended June 30, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees
Earned
($)
|
|
Share-Based
Awards
($)
|
|
Option-Based
Awards
($)
|
|
Non-Equity
Incentive Plan Compensation
($)
|
|
Pension
Value
($)
|
|
All
Other Compensation
($)
|
|
Total
Compensation
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Calhoun
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brien Lundin
1
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
30,000
|
|
$
|
30,000
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
1.
|
Chairman of the Board
|
Directors
are also eligible
to participate in the
Plan. Directors are
entitled
to be reimbursed for
expenses
incurred by them in their capacity
as directors.
Outstanding share-based
awards
and
option-based awards
The following table
sets forth information
concerning all awards outstanding under
share-based or option-based
incentive plans of the Company as
of July31, 2015, including
awards granted prior
to the
most
recently completed financial
year to each of the Directors
of the Company who were not Named
Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option-Based
Awards
|
|
Share-Based
Awards
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#)
|
|
Option
Exercise Price
1
($)
|
|
Option
Expiration Date
|
|
Value(1)
of Unexercised In- The-Money Options
1
($)
|
|
Number
of Shares or Units of Shares That Have Not Vested (#)
|
|
Market
or Payout Value
1
of Share-Based Awards That Have Not Vested ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brien
|
|
300,000
|
|
$
|
0.97
|
|
February 8, 2016
|
|
Nil
|
|
300,000
|
|
174,000
|
|
|
Lundin
|
|
300,000
|
|
$
|
0.58
|
|
April 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
|
|
300,000
|
|
$
|
0.97
|
|
February 8, 2016
|
|
Nil
|
|
300,000
|
|
174,000
|
|
|
Calhoun
|
|
300,000
|
|
$
|
0.58
|
|
April 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
This
amount is based on the difference
between the market
value of the Company’s
common shares underlying the options as at July 31, 2015, which was $0.48,
and the exercise price of the option.
|
65
Value Vested
or Earned During the7Months
Ended July 31, 2015
|
|
|
|
|
|
|
|
|
|
Name
|
|
Option-based
awards – Value vested during the year
1
($)
|
|
Share-based
awards – Value vested during the year ($)
|
|
Non-equity
incentive plan compensation – Value earned during the year ($)
|
|
|
|
|
|
|
|
|
|
|
|
Brien Lundin
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
John Calhoun
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Option-based
Awards Exercised During the
7Months Ended July31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Securities
Acquired on Exercise (#)
|
|
Exercise
Price
|
|
Date of
Exercise (m/d/y)
|
|
Aggregate
Value Realized
1
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Calhoun
|
|
Nil
|
|
N/A
|
|
N/A
|
|
0
|
|
|
Brien Lundin
|
|
Nil
|
|
N/A
|
|
N/A
|
|
0
|
|
Option-based Awards Granted During the 7Months Ended July 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Date of
Grant
|
|
Number
of Option-Based Awards Granted
|
|
Exercise
Price
|
|
Expiry
Date
(m/d/y)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brien Lundin
|
|
April 30, 2015
|
|
300.000
|
|
0.58
|
|
April 30, 2020
|
|
|
John Calhoun
|
|
April 30, 2015
|
|
300.000
|
|
0.58
|
|
April 30, 2020
|
|
Securities Authorized for Issuance Under Equity Compensation
Plans
The
only equity compensation
plan
that the Company has in place is its stock option plan (the “Plan”), which was previously adopted by the
Company. As of July 31, 2015 and December 31,
2014, the Stock Option Plan reserves a maximum of 9,538,930
Common Shares for issuance upon
the exercise of options.
Options
granted under the
Stock
Option
Plan will comply
with the rules and regulations
of the Exchange regarding
share incentive arrangements.
The
purpose
of the
Stock Option Plan is
to attract and retain employees, consultants, officers and directors to
the Company and
to motivate
them
to advance
the interests of the
Company by affording
them
with the opportunity, through share options, to
acquire an equity
interest
in the
Company and
benefit from
its growth. The
Stock
Option
Plan authorizes
the Board to grant, in
its absolute discretion,
stock options to
directors, officers,
employees or consultants on such terms, limitations, conditions
and restrictions,
as it deems necessary and advisable, subject
to terms of the
Plan and regulatory and TSX Venture Exchange
approval.
66
Equity Compensation
Plan Information
as of July31, 2015
|
Plan
Category
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants and
rights
|
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column (a))
|
|
|
|
|
|
|
|
|
|
Equity compensation
plans approved by security holders
|
|
5,447,000 common shares
|
|
$0.87
|
|
5,447,000 common shares
|
|
Equity compensation
plans not approved by security holders
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Total
|
|
5,447,000 common shares
|
|
$0.87
|
|
5,447,000 common shares
|
Audit
Committee
Item
306 of Regulation S-K requires the Company’s
audit committee (in this section
the “Audit Committee”) to meet certain
requirements. It
also requires the Company
to disclose in this Management
section certain information
regarding
the Audit Committee.
That information is disclosed
below.
Overview
The
Audit
Committee is principally
responsible for:
|
|
|
|
|
|
i.
|
recommending to
the Board the external
audit
or to be nominated for election
by the shareholders
at each annual general meeting
and negotiating the compensation of such external
auditor,
|
|
|
|
|
|
|
ii.
|
overseeing the work of the external auditor,
|
|
|
|
|
|
|
iii.
|
reviewing the Company’s annual and
interim financial statements,
MD&A and press releases regarding
earnings
before they are reviewed and
approved by the
Board and publicly disseminated
by the Company,
and
|
|
|
|
|
|
|
iv.
|
reviewing the
Company’s financial
reporting procedures and internal controls to ensure adequate
procedures are in place for the Company’s
public disclosure of financial
information extracted or derived from its financial
statements, other than disclosure
described in the previous paragraph.
|
Th
e
Audit Committee’s Charter
The
Audit
Committee has
various responsibilities
as set
forth
in Item 306 of Regulation S-K. The
Board has adopted a Charter
for the Audit Committee which sets
out the Audit Committee’s
mandate, organization, powers
and
responsibilities. The
complete Charter is
below:
67
Purpose
of the Committee
The
Audit Committee represents the Board
in discharging its responsibility relating
to the accounting, reporting and financial practices of the Company and its
subsidiaries, and has general responsibility for
oversight of internal controls, accounting and auditing activities, and legal compliance of the Company and its subsidiaries.
Members
of the Committee
The
Audit Committee shall consist
of no less than three Directors a majority of whom shall be “independent” as defined under Exchange Act Rule
10A-3, while the Company is in the
developmental stage of its business.
The members of the Committee
shall
be selected annually by
the Board and shall serve
at the pleasure of the Board.
At
least one Member of the Audit Committee must be “financially literate”
as defined
under Canadian private placement law, National Instrument 52-110, having
sufficient accounting or related financial management
expertise to read and understand a
set of financial statements,
including the related notes, that present
a breadth and level of complexity
of the accounting issues that
are generally comparable to the breadth
and complexity of the issues that can reasonably
be expected to be raised by
the Company’s financial
statements.
Meeting
Requirements/Quorum
The
Committee will, where possible,
meet on a regular basis at least once every quarter, and will
hold special meetings as it deems necessary
or appropriate. Meetings may be held in person or telephonically, and shall be at such times and places as the Committee determines.
Without meeting, the Committee
may act by unanimous written consent of all members, which shall constitute a meeting
for the purposes of this charter.
A
majority of the members of the Committee shall constitute a quorum.
Duties
and Responsibilities
The
Audit Committee’s function is one of
oversight only and shall not relieve the Company’s management of its responsibilities for
preparing financial statements that accurately and fairly
present the Company’s
financial results and conditions or
the responsibilities of the external
auditors relating to the auditor
review of financial statements. Specifically, the Audit Committee will:
|
|
|
|
|
|
(a)
|
have the authority
with respect to the appointment, retention or discharge of the independent public accountants as auditors of the Company
(the “Auditors”) who perform the annual
audit in accordance with applicable
securities laws, and who
shall be ultimately
accountable to the Board through the Audit Committee;
|
|
|
|
|
|
|
(b)
|
review with the Auditors the scope of the audit and the results of the annual audit examination
by the auditors,
including any reports of the auditors prepared in connection
with the annual audit;
|
|
|
|
|
|
|
(c)
|
review information,
including written statements
from the Auditors, concerning
any relationships between
the Auditors and the Company, or any
other relationships
that may adversely affect
the independence of the Auditors and assess the independence of the Auditors;
|
|
|
|
|
|
|
(d)
|
review and discuss with management and the Auditors the Company’s
audited financial
statements and accompanying
Management’s Discussion and Analysis of Financial Conditions (“MD&A”),
including a discussion with the
Auditors of their judgments as to the quality of the Company’s accounting
principles and report on them to
the Board;
|
|
|
|
|
|
|
(e)
|
review
and discuss with management
the Company’s interim financial
statements and interim MD&A and report on them to the Board;
|
68
|
|
|
|
|
|
(f)
|
pre-approve all
auditing services and non-audit services
provided to the
Company by the Auditors
to the extent and
in the manner required by applicable law or regulation. In no circumstances
shall the Auditors provide any non-audit
services to the Company that are prohibited by applicable law or regulation;
|
|
|
|
|
|
|
(g)
|
evaluate the
external Auditor’s performance
for the preceding fiscal
year, reviewing their fees
and making recommendations to the
Board;
|
|
|
|
|
|
|
(h)
|
periodically
review the adequacy of
the Company’s internal controls and ensure that such internal controls are effective;
|
|
|
|
|
|
|
(i)
|
review changes in the accounting policies of the Company
and accounting and financial
reporting proposals that are
provided by the Auditors that may
have a significant impact on the Company’s financial
reports, and report on them to the Board;
|
|
|
|
|
|
|
(j)
|
oversee and annually review the Company’s
Code of Business Conduct and
Ethics;
|
|
|
|
|
|
|
(k)
|
approve material contracts where the Board
of Directors determines
that it has a conflict;
|
|
|
|
|
|
|
(l)
|
establish procedures
for the receipt, retention and
treatment of complaints received by the Company regarding
the audit or other accounting matters;
|
|
|
|
|
|
|
(m)
|
where unanimously considered necessary by
the Audit Committee, engage independent
counsel and/or other advisors at the Company’s expense
to advise on material issues
affecting the Company
which the Audit Committee considers are not appropriate for the full Board;
|
|
|
|
|
|
|
(n)
|
satisfy itself that management has put into place
procedures that facilitate
compliance with the provisions of applicable securities laws and regulation
relating to insider trading,
continuous disclosure and financial reporting;
|
|
|
|
|
|
|
(o)
|
review and monitor all
related party transactions
which may be entered into by the Company; and
|
|
|
|
|
|
|
(p)
|
periodically
review the adequacy of its
charter and recommending any changes thereto
to the Board.
|
Miscellaneous
Nothing
contained in this Charter is
intended to extend applicable standards of liability
under statutory or regulatory
requirements for the directors of the
Company or members
of the Committee. The purposes and responsibilities
outlined in this Charter are meant
to serve as guidelines rather
than as in flexible rules
and the Committee is encouraged
to adopt such additional procedures and standards
as it deems necessary from time to time
to fulfill its responsibilities.
Co
m
position of the
Audit Committee
The
Audit
Committee consists of three
directors. Unless a company
is a ‘venture issuer’ (an
issuer the securities
of which are not
listed or quoted
on any of the TSX Venture Exchange, a market
in the United States of America other
than the over-the-counter market,
or a market outside
of Canada
and the
U.S.A.)
as of the end of its last
financial year, Exchange Act Rule 10A-3 requires each of the members
of the
Committee
to be
independent and financially
literate. Since the Company is
a ‘venture issuer’ (its
securities are listed on
the TSX Venture Exchange, but
are not listed or quoted on
any other exchange or market)
it is
exempt from this requirement.
In addition, the Company’s
governing corporate legislation requires the
Company to
have an Audit Committee composed of a minimum of three directors, a majority of whom are not officers or employees of the
Company.
As
noted above, the members of the audit committee are John
Meekison, John Calhoun and Brien
Lundin. All of the
members
of the
Audit
Committee
are considered independent. All
members
are considered financially
literate.
69
A
member
of the audit committee
is
independent
if
the member
has no direct or indirect
material relationship
with
the Company. A material relationship
means
a relationship that could,
in the
view
of the Company’s board of
directors, reasonably interfere
with the exercise of
a member’s
independent
judgment.
A
member of the audit committee is considered
financially
literate
if he or she has
the ability to read and
understand a set of financial statements that present a breadth and level of
complexity of
accounting issues that are generally comparable to
the breadth and complexity of
the issues that can reasonably be expected
to be raised by the Company.
There
are no other management functions
of the Company, which are
to any substantial degree performed by a person or company other than the
directors or senior officers of the
Company.
Pursuant
to the
provisions of the
Business Corporations
Act
of British Columbia, the
Company is
required to have an
audit committee, which at the present time,
is comprised
of Brien Lundin, John
Calhoun and John Meekison. For
additional information
regarding
the Company’s
Audit
Committee, please see below.
The Company does not have
an executive committee.
As
at the
date of this Information
Management section and within
the ten years before the
date of this Information
Management section, no proposed
director:
|
|
|
|
|
|
(a)
|
is or has been a
director or executive officer of any company (including
the Company),
that while that person
was acting
in that capacity:
|
|
|
|
|
|
|
•
|
was
the subject of a cease
trade order or similar
order or an order that denied the
relevant company access
to any exemption under
securities legislation, for a period of more
than 30 consecutive
days;
|
|
|
|
|
|
|
•
|
was
subject
to an event that resulted,
after the director or
executive officer ceased
to be a director or executive
officer, in the company being the subject of a cease trade or similar order
or an order that denied
the relevant company
access to any exemption under
securities legislation, for a period of more
than30 consecutive
days;
|
|
|
|
|
|
|
•
|
within a year of that
person ceasing to act in that
capacity, became
bankrupt, made a proposal under any legislation
relating to bankruptcy
or insolvency or was subject to
or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed
to hold its assets; or
|
|
|
|
|
|
|
(b)
|
has within 10 years before the date of the Information Management section became bankrupt,
made
a proposal under any legislation relating to bankruptcy or insolvency
or was subject to
or instituted any proceedings, arrangement
or compromise with creditors or had a receiver,
receiver manager or trustee
appointed to hold the assets of the
director, officers
or shareholders.
|
RELATED PARTY TRANSACTIONS
Registration Rights
The
Company entered into an investment agreement(“Investment Agreement”) on August
21, 2015, with Dutchess Opportunity Fund, II, LP (“Dutchess”). Said agreement
is subject to certain contingencies, including, but not limited to, the
Company’s filing of a registration statement registering the shares of its
Common Stock, issued under the Investment Agreement, with the US Securities and
Exchange Commission, such registration statement being declared effective, as
well as the Company’s Common Stock continuing to be listed for trading. There
are no assurances that the registration statement will be deemed effective.
This registration statement shall serve as a fulfillment of the Company’s
obligation pursuant to said Investment Agreement.
70
Transactions with Related Parties
The
Company has an agreement (the “Provini Employment Agreement”) dated October 1,
2007, and amended July 31, 2008, with Mr. Charles Provini under which the
Company pays a fee for employee services at a base salary of $220,000 per
annum. On April 30, 2010, the Board of Directors passed a resolution to
increase this to $250,000 per annum and on May 13, 2011 the Board of Directors
passed a resolution to increase this to $275,000 per annum. The Company was not
obligated to commence payments until the Company raised at least $1,000,000,
which occurred during the year ended December 31, 2009. Mr. Provini is entitled
to receive options under the terms and conditions of the Company’s stock option
plan. Mr. Provini will serve as the President and Chief Executive Officer of
the Company. On April 5, 2012, the employment agreement was extended for an
additional two years under the same terms. On April 5, 2014, the agreement was
extended for an additional three years under the same terms.
Mr.
Provini has the right, upon 30 days’ notice, to terminate the Employment
Agreement. The Company may terminate the Employment Agreement on 10 days’
notice if for cause or on 30 days’ notice if without cause. Should the Company
terminate the contract without cause, it is obligated to pay Mr. Provini an
amount equal to three months base salary.
In
addition to his employment agreement, Mr. Provini, receives $60,000 per year
for various administrative functions performed for the NewCyte subsidiary which
is consolidated in the financial statements.
On
June 1, 2013, the Company entered into a consulting agreement with Mr. John
Meekison under which the Company pays a fee for consulting services in relation
to Mr. Meekison’s appointment as Chief Financial Officer of the Company at a
rate of CDN$4,000 per month. The consulting agreement has a three-month term,
extendable by the parties. Either party may terminate the agreement on 30 days’
notice unless there is a material breach, in which case the agreement may be
terminated on seven days’ notice.
Mr.
Brian Zucker personally received a salary of $48,000 for the year 2012 and
2013. On May 8, 2009, Mr. Zucker bought 50,000 shares of common stock at
CDN$0.40 through the exercise of stock options. After his resignation as CFO,
Mr. Zucker continues to perform tax and administrative functions for which he
receives annual compensation of $48,000.
Armstrong
Simpson, the Law Firm for which Ms. Shauna Hartman is an employee received
$84,467 during 2012 and $6,516 during 2013. On May 8, 2009, the Law Firm bought
50,000 shares of common stock at CDN$0.40 through the exercise of stock
options.
Finally,
each of Charles Provini, President, Chief Executive Officer and a director of
the Company and Brien Lundin and John Calhoun, directors of the Company
participated in the acquisition of shareholders of Natcore US and Brien Lundin
participated in the concurrent as well as the recent private financing as a
subscriber for units. Natcore (Canadian parent company) used to be called
Syracuse Capital Corp. and was a capital pool company on the TSX Venture
Exchange.
On
May 8, 2009, Syracuse Capital Corp. acquired all of the shares of Natcore
Technology, Inc. (the Delaware now subsidiary company). At the time, each of
John Calhoun, Brien Lundin and Charles Provini were shareholders, either
directly or indirectly, of the Delaware Company and received consideration from
Natcore parent.
John
Calhoun (as the controlling shareholder of Fort Hill Resources Inc.) held
1,000,000 shares of the Delaware company and received in consideration
therefore 1,100,000 Natcore parent shares (at a deemed price of CDN$0.40 per
share). Mr. Calhoun had also held at the time warrants to acquire shares in the
Delaware company (225,000 to be specific) which were exchanged for 247,500
warrants of Natcore parent. The warrants were exercisable at CDN$0.40 per share
and were all exercised on May 5, 2014.
Brien
Lundin held 926,112 shares of the Delaware company directly and a further
1,000,000 shares through Jefferson Direct, LLC. As a result, he received
1,018,723 common shares of Natcore parent directly and 1,100,000 common shares
of Natcore parent indirectly through Jefferson (at a deemed price of CDN$0.40
per share). Mr. Lundin had also held at the time warrants to acquire shares in
the Delaware company (225,000 to be specific) which were exchanged for 247,500
warrants of Natcore parent. The warrants were exercisable at CDN$0.40 per share
and were all exercised on May 2, 2014.
71
Charles
Provini (as the controlling shareholder of Hawk Partnership LP) held 1,050,000
shares of the Delaware company which were exchanged for 1,155,000 common shares
of Natcore parent (at a deemed price of CDN$0.40 per share). Mr. Provini had
also held at the time warrants to acquire shares in the Delaware company
(225,000 to be specific) which were exchanged for 247,500 warrants of Natcore
parent. The warrants were exercisable at CDN$0.40 per share and were all
exercised on May 7, 2014. Since that time, neither Mr. Provini nor Mr. Calhoun
have subscribed for shares in a Natcore placement. Mr. Lundin, however, has
bought in Natcore private placements as follows:
On
May 9, 2009 – as part of a financing completed in conjunction with the
‘Qualifying Transaction’ noted above – Mr. Lundin, in his individual capacity,
purchased 300,000 units of Natcore parent at a price of CDN$0.40 per unit. This
entitled him to 300,000 shares and 300,000 warrants exercisable until May 9,
2011 at a price of CDN$0.75 per share. The warrants were exercised on April 11,
2014.
On
December 22, 2010, Mr. Lundin, in his individual capacity, bought 40,000 units
of Natcore (at a price of CDN$0.75 per unit). This entitled him to 40,000
shares and 20,000 warrants (exercisable until December 22, 2015 at a price of
$1.00 per share – originally the expiry date was December 22, 2013, but we
extended the term of all the then outstanding warrants in that batch to
December 22, 2015). The warrants are still outstanding as of the date of this
filing.
Pursuant
to the Company’s registration statement, to which this prospectus is made a
part, the Company is registering 325,000 shares of Common Stock to be issued to
LoPresti Law Group, P.C. (“LLG”) in exchange for the provision of legal
services rendered.
This
Space Intentionally Left Blank
72
PRINCIPAL SHAREHOLDERS
Disclosure
of Share Ownership
Natcore’s
securities are recorded on the books of our transfer agent in registered form.
The majority of the shares are, however, registered in the name of
intermediaries such as brokerage houses and clearing-houses and clearing-houses
on behalf of their respective clients. Beneficial ownership of shares is
determined under the rules of the SEC and generally includes any shares over which
a person exercises sole or shared voting or investment power. Natcore does not
have knowledge of all the beneficial owners due to adopted policies and
instruments under Canadian securities legislation which allows shareholders
owning less than 10% beneficial ownership to provide instructions to an
intermediary holding the securities in an account on behalf of the beneficial
owner that the beneficial owner objects, for that account, to the intermediary
disclosing ownership information about the beneficial owner. Natcore is
incorporated in British Columbia, Canada and subject to the laws thereof.
Multilateral Instrument 62-104 of the Canadian Securities Administrations, in
Section 5.2 requires that shareholders holding beneficial ownership, control,
or direction over, voting or equity securities of any class of a reporting
issuer, or securities convertible into voting or equity securities of any class
of a reporting issuer, constituting ten-percent (10%) or more of the
outstanding shares of that class disclose such holdings. MI 62-104 also
provides that a person or company that acquires (whether or not by way of a
take-over bid, issuer bid or offer to acquire) beneficial ownership of voting
or equity securities or securities convertible into voting or equity securities
of a reporting issuer that, together with previously held securities brings the
total holdings of such holder to 10% or more of the outstanding securities of
that class, must (a) issue and file forthwith a news release containing the
prescribed information and (b) file a report within two business days
containing the same information set out in the news release. The acquiring
person or company must also issue a press release and file a report each time
it acquires an additional 2% or more of the outstanding securities of the same
class and every time there is a “material change” to the contents of the news
release and report previously issued and filed.
The
Company is not aware of any beneficial shareholder of ten (10%) percent or more
nor is it aware of any beneficial shareholder of five (5%) percent or more.
The following table
provides the specified information about each director, executive officer and
promoter of the Issuer.
|
|
|
|
|
|
|
Name
and Municipality of
Principal Residence
|
|
Positions
held with the Issuer
|
|
Number
of Common Shares,
Options and Warrants
|
|
|
|
|
|
|
|
Charles Provini
,
Delray Beach,
Florida, USA
|
|
Director, President and CEO
|
|
1,392,500
(1)
common
shares,
600,000 options
|
|
|
|
|
|
|
|
John Meekison
,
Vancouver, B.C., Canada
|
|
Director and CFO
|
|
40,000
(2)
common
shares,
600,000 options
|
|
|
|
|
|
|
|
Brien Lundin
,
Metairie, LA, USA
|
|
Director
|
|
3,006,223
(3)
common
shares,
600,000 options, 20,000 warrants
|
|
|
|
|
|
|
|
John Calhoun
, New
Orleans, LA, USA
|
|
Director
|
|
640,900 common shares,
and
600,000 options
|
|
|
|
|
|
|
|
Dennis Flood
,
Columbus, OH, USA
|
|
Chief Technology Officer
|
|
985,500common shares,
340,000 options
|
|
|
|
|
|
|
|
Shauna Hartman
,
Surrey, B.C., Canada
|
|
Corporate Secretary
|
|
140,000 options
|
|
|
|
|
|
Note:
|
|
|
|
|
|
(1)
|
Of which 30,000 shares
are held directly and 10,000 shares are held by Mr. Meekison’s spouse.
|
|
|
|
|
(2)
|
Of which 1,906,223
shares are held directly and 1,100,000 shares are held through Jefferson
Direct Inc.
|
|
|
|
|
(3)
|
Of which 15,500 shares
are held directly and 970,000 shares are held through North Coast Initiatives
Ltd.
|
Currently there
are 45 U.S. Shareholders representing 13.73% of the outstanding shares.
73
Authorized
Capital
The
Company’s authorized capital consists of an unlimited number of shares of one
class designated as common shares. The directors may create any class or series
of shares by resolution but may not make any modification to the provisions
attaching to our common shares without the affirmative vote of two-thirds of
the votes cast by the holders of the common shares. Natcore’s common shares do
not have pre-emptive rights to purchase additional shares.
As
of the date of this filing, the Company had an unlimited number of authorized
common shares of which 52,632,614 common shares were issued and outstanding. As
of this date, the Company had outstanding options to purchase a total of
5,447,000 of its common shares at a weighted average exercise price of CDN$0.80
per share. Also as of July 31, 2015, the Company had outstanding warrants to
purchase a total of 10,263,126 of its common shares at a weighted average
exercise price of CDN$0.87 per share and had outstanding warrants to purchase a
total of 6,083,240 of its common shares at a weighted average exercise price of
US$0.62 per share. To the extent these options or warrants are ultimately
exercised, investors will sustain future dilution.
Dividend Rights
Dividends
are payable only when declared by the Board, and in accordance with the
applicable laws of British Columbia, Canada. The Company will declare cash
dividends when the funds are legally available, and the Board has determined,
in its sole discretion, that dividends should be paid.
Annual Meetings
The
Business Corporations Act
(British Columbia) (the “BCBCA”) requires the Company to call an annual
shareholders’ meeting at least once in every calendar year and not later than
15 months after holding the last preceding annual meeting and permits us to
call a special shareholders’ meeting at any time. A shareholder’s meeting may
be held at any location determined by the directors. In addition, in accordance
with the BCBCA, the holders of no less than 5% of Natcore’s shares carrying the
right to vote at a meeting sought to be held may requisition Natcore’s
directors to call a special shareholders’ meeting for the purposes stated in
the requisition. The Company is required to mail a notice of meeting and
management information circular to registered shareholders no less than 21 days
and not more than two months prior to the date of any annual or special
shareholders’ meeting. These materials also are filed with Canadian securities
regulatory authorities. Natcore’s articles provide that a quorum of one or more
shareholders in person or represented by proxy is required to transact business
at a shareholders’ meeting. Shareholders, and their duly appointed proxies and
corporate representatives are entitled to be admitted to the Company’s annual
and special shareholders’ meetings.
Voting
Rights
Each
shareholder of the Company is entitled to one vote for each common share held.
The approval threshold required for any resolution required to be approved by
the shareholder varies in accordance with the requirements of the BCBCA, but
pursuant to Natcore’s articles, any matter requiring the approval of the
Company’s shareholders with an approval requirement not specified by the BCBCA
must be passed by simple majority of the votes cast, other than in the case of
any amendments to the special rights and restrictions of a class or series of
shares which must receive the approval of at least two-thirds of the votes
cast. Under the BCBCA, matters which require the approval of at least
two-thirds of the votes cast by shareholders, including, but are not limited
to, amalgamations (other than certain short form amalgamations with subsidiary
companies), continuations into a foreign jurisdictions, plans of arrangement,
disposal of all or substantially all of the Company’s undertaking and voluntary
dissolution.
Access
to Corporate Records
Under
the BCBCA and Natcore’s articles, shareholders are provided access during
statutory business hours to the following corporate records: Natcore’s
certificate of incorporation and any certificates of conversion, amalgamation,
continuation, name change or restoration, our central securities register, our
register of directors; copies of each consent to act as a director or written
resignation received by the Company, minutes of the Company’s shareholder
meetings or copies of any shareholder consent resolutions; the Company’s
audited financial statements and certain other documents that are outlined in
the BCBCA.
74
Restrictions
on Share Ownership by Non-Canadians
There
are no limitations under the laws of Canada or in our constitutive documents on
the right of foreigners to hold or vote our securities, except that the
Investment Canada Act (Canada) may require review and approval by the Minister
of Industry (Canada) of certain acquisitions of “control” of our company by a
“non-Canadian”. The threshold for acquisitions of control is generally defined
as being one-third or more of the voting shares. “Non-Canadian” generally means
an individual who is not a Canadian citizen, or a corporation, partnership,
trust or joint venture that is ultimately controlled by non-Canadians.
Transfer
of Common shares and Notices
Fully
paid common shares are issued in registered form and may be freely transferred
under our articles unless the transfer is restricted or prohibited by another
instrument, United States Federal or State law or the rules of a stock exchange
on which the shares are traded.
Transfer Agent and
Registrar
The
transfer agent and registrar for our common shares is Computershare Investor
Services Inc. Canada, 510 Burrard Street, 2nd
Floor Vancouver, British Columbia V6C 3B9.
Listing
The
Company’s Common Stock is quoted on the TSX Venture Exchange under the ticker
symbol “NXT and on the OTCQB® marketplace under
symbol “NTCXF”.
TAXATION AND GOVERNMENT PROGRAMS
The
following description is not intended to constitute a complete analysis of all
tax consequences relating to the acquisition, ownership and disposition of
Natcore common shares. Investors should consult his or her own tax advisor
concerning the tax consequences of the investor’s particular situation, as well
as any tax consequences that may arise under the laws of any state, local,
foreign or other taxing jurisdiction.
Canadian
Income Taxation
The
following is a general discussion of all material Canadian federal income tax
consequences under current law, generally applicable to U.S. Holders (as
defined below) in respect of purchasing, owning and disposition of Natcore
common shares. This discussion is not a complete analysis or listing of all of
the possible Canadian federal income tax consequences and does not address all
tax considerations that may be relevant to investors in light of their
particular circumstances.
This
summary applies only to U.S. Holders who at all times for the purposes of the
Income Tax Act (Canada) (the “Tax Act”) is a non-resident of Canada, does not
hold his shares in the course of carrying on a business in Canada, holds his
common shares as capital property and deals at arm’s length with the Company
and is restricted to such circumstances. In addition, the summary does not
describe all of the Canadian federal income tax consequences that may be
relevant to U.S. Holders subject to special rules, such as:
|
|
|
|
|
|
-
|
Bank and other financial institutions,
|
|
|
|
|
|
|
-
|
Insurance companies,
|
|
|
|
|
|
|
-
|
Traders and dealers in securities, or
|
|
|
|
|
|
|
-
|
Tax-exempt organizations or entities.
|
75
This
summary is based on the current provisions of the Tax Act and the regulations
there under, all specific proposals to amend the Tax Act and the regulations
there under publicly announced by or on behalf of the Minister of Finance
(Canada) prior to the date hereof (the “Proposed Amendments”), and the current
published administrative practices and assessing policies of the Canada Revenue
Agency.
This
summary assumes that the Proposed Amendments will be enacted as currently
proposed, although no assurance can be given that the Proposed Amendments will
be enacted in the form proposed or at all. Except for the Proposed Amendments,
this summary does not take into account nor anticipate any changes in law or
administrative practice, whether by judicial, legislative, governmental or
administrative decisions or action, nor does it take into account any
provincial, territorial or foreign tax considerations, which may differ
significantly from the Canadian federal income tax considerations discussed herein.
This
summary is not and is not intended to be, nor should it be construed to be,
legal or tax advice to any particular U.S. Holder. Prospective U.S. Holders
should consult their own tax advisors regarding the Canadian tax consequences
to them of purchasing, owning and disposing of common shares in their
particular circumstances.
Dividends
A
U.S. Holder will be subject to Canadian withholding tax (“Part XIII Tax”) equal
to 25%, or such lower rate as may be available under a tax treaty, of the gross
amount of any dividend paid or deemed to be paid on the common shares. Under
the Canada-U.S. Income Tax Convention (1980) (the “Treaty”) the rate of Part
XIII Tax applicable to a dividend on common shares paid to a U.S. Holder who is
a resident of the United States and a “qualifying person” for purposes of the
Treaty is reduced from the 25% rate. Under the Treaty, the Company will be
required to withhold Part XIII Tax at a rate of 15% from each
dividend so paid and will be required to remit the amount withheld
directly to the Receiver General of Canada on behalf of the U.S. Holder. The
15% rate is further reduced to 5% if the Holder is a company owning
at least 10% of the voting shares of the Company.
Disposition
of Common Shares
A
U.S. Holder who disposes of a common share, including a deemed disposition on
death, will not be subject to Canadian tax on any capital gain (or capital
loss) thereby realized unless the common share constitutes “taxable Canadian
property” as defined by the Act. Generally, a common share will not constitute
taxable Canadian property of a U.S. Holder unless the U.S. Holder held the
common shares as property used by the U.S. Holder in carrying on
a business in Canada, or at any time within 60 months preceding the
disposition, 25% or more of the issued shares of any class of stock of the
Company were owned by or belonged to the U.S. Holder, persons with whom the
U.S. Holder did not deal at arm’s length and/or partnerships in which the U.S.
Holder and non-arm’s length persons held a membership interest, and more than
50% of the value of the common share is derived from real property situated in
Canada, Canadian resource properties, timber resource properties or any
option or interest in respect of such property.
A
U.S. Holder who is a resident of the United States and realizes a capital gain
on the disposition of a common share that is taxable Canadian
property will nevertheless, by virtue of the Treaty, generally be exempt from
Canadian tax thereon unless (a) more than 50% of the value of the common
share is derived from real property situated in Canada (including any option or
similar right in respect thereof), rights to explore for or exploit
Canadian mineral deposits, sources and other natural resources and rights
to amounts computed by reference to the amount or value of production from such
resources, (b) the common share formed part of the business property of a
permanent establishment that the U.S. Holder has or had in Canada within the 12
months preceding the disposition, or (c) the Holder (i) is an
individual who was a resident of Canada at any time within the ten years
immediately preceding, and for a total of 120 months during the 20 years
preceding the disposition, (ii) owned the common share when the individual
ceased to be resident in Canada, and (iii) was not a property that the
individual was deemed to have disposed of when the individual ceased to be a
resident of Canada and became a resident of the United States.
A
Holder who is subject to Canadian tax in respect of a capital gain realized on
disposition of a common share must include one half of the capital gain
(taxable capital gain) in computing the Holder’s taxable income earned in
Canada. This Holder may, subject to certain limitations, deduct one half of any
capital loss (allowable capital loss) arising on the disposition
of other taxable Canadian property (other than treaty protected
property) realized in the year of disposition and may deduct the
capital loss (after taking into account any difference
in inclusion rates between the particular year and year of
disposition) realized in any preceding year or any of the
three subsequent years from dispositions of other taxable Canadian
property (other than treaty protected property) to the extent the capital
loss was not deducted in any other year.
76
United
States federal income taxation
The
following discussion sets forth the material U.S. federal income tax
consequences to U.S. Holders (as defined below) of purchasing, owning, and
disposing of common shares as of the date hereof. This discussion is not a
complete analysis or listing of all of the possible tax consequences and does
not address all tax considerations that may be relevant to investors in light
of their particular circumstances. This summary applies only to U.S. Holders
that hold common shares as capital assets for U.S. federal income tax purposes
(generally, property held for investment), and it does not describe all of the
U.S. federal income tax consequences that may be relevant to U.S. Holders
subject to special rules, such as:
|
|
|
|
1.
|
banks and other
financial institutions;
|
|
|
|
|
2.
|
insurance
companies;
|
|
|
|
|
3.
|
regulated investment
companies;
|
|
|
|
|
4.
|
real estate investment
trusts;
|
|
|
|
|
5.
|
dealers and traders in
securities that use mark-to-market accounting for U.S. federal income tax
purposes;
|
|
|
|
|
6.
|
U.S. Holders holding
common shares as part of a hedging transaction, straddle, conversion
transaction or other integrated transaction;
|
|
|
|
|
7.
|
U.S. Holders whose
functional currency for U.S. federal income tax purposes is not the U.S.
dollar;
|
|
|
|
|
8.
|
U.S. Holders liable for
the alternative minimum tax;
|
|
|
|
|
9.
|
tax-exempt
organizations or entities, including an “individual retirement account” or
“Roth IRA” as defined in Section 408 or 408A of the Code,
respectively;
|
|
|
|
|
10.
|
U.S. Holders that
received the common shares as compensation for the performance of
services;
|
|
|
|
|
11.
|
U.S. Holders holding
common shares that own or are deemed to own 10% or more of the voting shares
of the Company; or
|
|
|
|
|
12.
|
former citizens and
residents of the United States subject to tax as expatriates.
|
This
summary is based on the Internal Revenue Code of 1986, as amended (the “Code”),
administrative pronouncements, judicial decisions and final, temporary and
proposed Treasury regulations, all as currently in effect and available. These
authorities are subject to change, possibly with retroactive effect. U.S.
Holders should consult their own tax advisers concerning the U.S. federal,
state, local, and foreign tax consequences of purchasing, owning and disposing
of common shares in their particular circumstances.
For
purposes of this summary, a “U.S. Holder” is a beneficial owner of common
shares who is, for U.S. federal income tax purposes:
|
|
|
|
1.
|
a citizen or individual
resident of the United States;
|
|
|
|
|
2.
|
a corporation, or other
entity taxable as a corporation for U.S. federal income tax purposes, created
or organized in or under the laws of the United States, any state thereof or
the District of Columbia;
|
|
|
|
|
3.
|
an estate, the income
of which is subject to U.S. federal income taxation regardless of its source;
or
|
|
|
|
|
4.
|
a trust that
(1) is subject to the primary supervision of a U.S. court and one or
more U.S. persons that have the authority to control all substantial
decisions of the trust or (2) has a valid election in effect under
applicable Treasury regulations to be treated as a U.S. person.
|
If
a partnership (or other entity treated as a partnership for U.S. federal income
tax purposes) holds the common shares, the tax treatment of a partner in such
partnership generally will depend upon the status of the partner and upon the
activities of the partnership. Prospective investors who are partners in a
partnership should consult their tax advisers as to the particular U.S. federal
income tax consequences of purchasing, owning and disposing of common shares in
their particular circumstances.
77
This
summary does not address the U.S. federal estate and gift, state, local or
non-U.S. tax consequences to U.S. Holders of purchasing, owning, and disposing
of common shares. Prospective investors should consult their own tax advisors
regarding the U.S. federal, state and local, as well as non-U.S. income and
other tax consequences of purchasing, owning and disposing of common shares in
their particular circumstances.
Taxation of distributions
Distributions
paid on common shares will be treated as dividends to the extent paid out of our
current or accumulated earnings and profits (as determined under U.S. federal
income tax principles). Such dividends paid to a U.S. Holder with respect to
common shares generally will be taxable as ordinary income at the time of
receipt by a U.S. Holder. Distributions in excess of our current and
accumulated earnings and profits will be treated first as a non-taxable return
of capital, thereby reducing such U.S. Holder’s adjusted tax basis in common
shares (but not below zero), and thereafter as either long-term or short-term
capital gain depending upon whether the U.S. Holder has held common shares for
more than one year as of the time such distribution is received. Because we do
not maintain calculations of our earnings and profits under U.S. federal income
tax principles, it is expected that distributions generally will be reported to
U.S. Holders as dividends. Distributions of additional common shares to U.S.
Holders that are part of a pro rata distribution to all of our shareholders
generally will not be subject to U.S. federal income tax. The amount of any
distribution of property other than cash will be the fair market value of such
property on the date of distribution. As used below, the term “dividend” means
a distribution that constitutes a dividend for U.S. federal income tax
purposes.
With
respect to non-corporate U.S. Holders, dividends received may be subject to
reduced rates of taxation provided that our common shares are readily tradable
on a qualifying U.S. securities market and that (i) such U.S. Holder holds
such common shares for 61 days or more during the 121-day period beginning
on the date which is 60 days before the date on which such shares become
ex-dividend with respect to such dividends and (ii) the U.S. Holder is not
under an obligation (whether pursuant to a short sale or otherwise) to make
related payments with respect to existing or substantially similar or related
property. Our common shares are expected to be readily tradable 12
months after this registration.
Dividends
received on the common shares will be treated as foreign source income and will
not be eligible for the dividends-received deduction generally allowed to U.S.
corporations under the Code.
Sale or other taxable disposition of shares
For
U.S. federal income tax purposes, gain or loss realized on the sale or other
taxable disposition of common shares will be capital gain or loss, and will be
long-term capital gain or loss if a U.S. Holder held common shares for more
than one year. Non-corporate U.S. Holders may be eligible for preferential
rates of U.S. federal income tax in respect of long-term capital gains. The
deductibility of capital losses is subject to limitations under the Code.
The
amount of the gain or loss realized will be equal to the difference between a
U.S. Holder’s adjusted tax basis in the common shares disposed of and the
amount realized on the disposition. Such gain or loss generally will be
U.S.-source gain or loss for U.S. foreign tax credit purposes. A U.S. Holder’s
initial tax basis in its common shares will be the amount paid for the common
shares.
Medicare tax
Certain
U.S. Holders that are individuals, estates or trusts are subject to a 3.8% tax
on all or a portion of their “net investment income,” which may include all or
a portion of their dividend income and net gains from the disposition of common
shares. Each U.S. Holder that is an individual, estate or trust is urged to
consult its tax advisors regarding the applicability of the Medicare tax to its
income and gains in respect of its investment in the common shares.
78
Information reporting and backup withholding
Payments
of dividends and proceeds from the sale or other taxable disposition that are
made within the United States or through certain U.S.-related financial
intermediaries generally are subject to information reporting, and may be
subject to backup withholding, unless (1) the U.S. Holder is a corporation
or other exempt recipient or (2) in the case of backup withholding, the
U.S. Holder provides a correct taxpayer identification number and certifies
that it is not subject to backup withholding.
The
amount of any backup withholding from a payment to a U.S. Holder will be
allowed as a credit against a U.S. Holder’s U.S. federal income tax liability
and may entitle such holder to a refund, provided that the required information
is timely furnished to the United States Internal Revenue Service.
Foreign asset reporting
Certain
U.S. Holders who are individuals are required to report information relating to
an interest in common shares, subject to certain exceptions (including an
exception for common shares held in accounts maintained by U.S. financial
institutions). U.S. Holders are urged to consult their tax advisors regarding
their information reporting obligations, if any, with respect to their
ownership and disposition of common shares.
LEGAL MATTERS
Certain
legal matters in connection with this offering relating to United States law
will be passed upon for us by LoPresti Law Group, P.C., New York, New York.
Certain legal matters in connection with this offering relating to British
Columbia, Canadian law will be passed upon for us by S. Paul Simpson Law
Corporation, Vancouver, Canada.
EXPERTS
The
financial statements for the years ended December 31, 2014 and 2013, included
in this prospectus have been audited by Dale Matheson Carr-Hilton Labonte LLP,
an independent registered public accounting firm, as stated in their report
appearing herein. Such financial statements are included in reliance upon the
report of such firm given upon their authority as experts in accounting.
ENFORCEABILITY OF CIVIL LIABILITIES
We
are incorporated under the laws of the Province of British Columbia, Canada.
Service of process upon us and upon our directors and officers and the Canadian
experts named in this Prospectus, many of whom reside outside the United
States, may be difficult to obtain within the United States. Furthermore, some
of our assets and some of our directors and officers are located outside the
United States, any judgment obtained in the United States against us or any of
our directors and officers, including one predicated on the civil liability
provisions of the U.S. federal securities laws, may not be collectible within
the United States.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
You
may read and copy any document we file or furnish with the SEC at the reference
facilities located at the SEC Headquarters at 100 F Street, NE, , Washington,
DC 20549. You may also obtain copies of the documents at prescribed rates by
writing to the U.S. Securities and Exchange Commission, Office of FOIA/PA
Operations at100 F Street, NE, Washington, DC 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
facilities. You can review our SEC filings and the registration statement by
accessing the SEC’s internet site at http://www.sec.gov.
79
INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS
Natcore
Technology Inc.
Unaudited
and Unreviewed Consolidated Financial Statements
(Expressed in United States Dollars)
Three and six months ended June 30, 2015 and 2014
|
|
|
|
Consolidated Statements of
Financial Position
|
F-6
|
|
Nature and Continuance of
Operations
|
F-11
|
|
Significant Accounting
Policies and Basis of Preparation
|
F-11
|
|
Accounting standards issued
but not yet effective
|
F-16
|
|
Cash and Cash Equivalents
|
F-16
|
|
Receivables
|
F-17
|
|
Equipment
|
F-17
|
|
Intangible Assets
|
F-18
|
|
Trade Payables and Accrued
Liabilities
|
F-18
|
|
Derivative Financial
Liability
|
F-18
|
|
Share Capital
|
F-20
|
|
Reserves
|
F-24
|
|
Financial Risk and Capital
Management
|
F-24
|
|
Commitments
|
F-26
|
|
Related Party Transactions
and Balances
|
F-27
|
|
Subsequent Event
|
F-28
|
Audited
Consolidated Financial Statements
(Expressed in United States Dollars)
Years ended December 31, 2014 and 2013
|
|
|
|
Independent Auditor’s
Report for 2014
|
F-29
|
|
Consolidated Statements of
Financial Position
|
F-30
|
|
Nature and Continuance of
Operations
|
F-34
|
|
Significant Accounting
Policies and Basis of Preparation
|
F-34
|
|
Accounting standards issued
but not yet effective
|
F-39
|
|
Cash and Cash Equivalents
|
F-39
|
|
Receivables
|
F-40
|
|
Equipment
|
F-40
|
|
Intangible Assets
|
F-41
|
|
Trade Payables and Accrued
Liabilities
|
F-41
|
|
Derivative Financial
Liability
|
F-41
|
|
Share Capital
|
F-43
|
|
Reserves
|
F-47
|
|
Financial Risk and Capital
Management
|
F-47
|
|
Commitments
|
F-49
|
|
Related Party Transactions
and Balances
|
F-50
|
|
Income Taxes
|
F-50
|
|
Research and Development
Expense
|
F-51
|
|
Subsequent Event
|
F-51
|
Audited
Consolidated Financial Statements
(Expressed in United States Dollars)
Years ended December 31, 2013 and 2012
|
|
|
|
Independent Auditor’s
Report for 2013
|
F-52
|
|
Consolidated Statements of
Financial Position
|
F-53
|
|
Nature and Continuance of
Operations
|
F-57
|
|
Significant Accounting
Policies and Basis of Preparation
|
F-57
|
|
Accounting standards issued
but not yet effective
|
F-62
|
|
Cash and Cash Equivalents
|
F-62
|
|
Receivables
|
F-63
|
|
Equipment
|
F-63
|
|
Intangible Assets
|
F-64
|
|
Trade Payables and Accrued
Liabilities
|
F-64
|
|
Derivative Financial
Liability
|
F-64
|
|
Share Capital
|
F-69
|
|
Reserves
|
F-70
|
|
Financial Risk and Capital
Management
|
F-70
|
|
Commitments
|
F-73
|
|
Related Party Transactions
and Balances
|
F-73
|
|
Income Taxes
|
F-74
|
|
Subsequent Event
|
F-74
|
Audited
Consolidated Financial Statements
(Expressed in United States Dollars)
Years ended December 31, 2012 and 2011
|
|
|
|
Independent
Auditor’s Report for 2012
|
F-75
|
|
Consolidated
Statements of Financial Position
|
F-76
|
|
Nature and
Continuance of Operations
|
F-80
|
|
Significant
Accounting Policies and Basis of Preparation
|
F-80
|
|
Accounting
standards issued but not yet effective
|
F-85
|
|
Cash and
Cash Equivalents
|
F-87
|
|
Receivables
|
F-87
|
|
Equipment
|
F-87
|
|
Intangible
Assets
|
F-88
|
|
Trade
Payables and Accrued Liabilities
|
F-88
|
|
Derivative
Financial Liability
|
F-88
|
|
Share
Capital
|
F-90
|
|
Reserves
|
F-93
|
|
Financial
Risk and Capital Management
|
F-94
|
|
Segmented
information
|
F-96
|
|
Commitments
|
F-96
|
|
Related
Party Transactions and Balances
|
F-97
|
|
Income Taxes
|
F-98
|
|
Restatement
|
F-99
|
|
Subsequent
Event
|
F-99
|
NATCORE TECHNOLOGY INC.
Condensed Consolidated Financial Statements
For Three and Six Months Ended June 30, 2015 and 2014
Expressed in United States Dollars
NOTICE
TO READER
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an
auditor has not performed a review of the interim financial statements, they
must be accompanied by a notice indicating that the financial statements have
not been reviewed by an auditor.
The accompanying unaudited interim condensed consolidated financial
statements have been prepared by and are the responsibility of management.
The Company’s independent auditor has not performed a review of these
financial statements in accordance with the standards established by the
Canadian Institute of Chartered Accountants for a review of interim financial
statements by an entity’s auditor.
F-5
Natcore Technology Inc.
Consolidated Statements of Financial Position
(Expressed in United States Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
(Unaudited)
June 30,
2015
|
|
(Audited)
December 31,
2014
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
4
|
|
$
|
284,630
|
|
$
|
548,387
|
|
|
Receivables
|
|
|
5
|
|
|
4,731
|
|
|
5,939
|
|
|
Prepaid
expenses
|
|
|
|
|
|
75,396
|
|
|
60,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
364,757
|
|
|
614,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
6
|
|
|
449,941
|
|
|
582,503
|
|
|
Intangible
assets
|
|
|
7
|
|
|
—
|
|
|
36,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
449,941
|
|
|
619,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
|
$
|
814,698
|
|
$
|
1,233,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Trade
payables and accrued liabilities
|
|
|
8
|
|
$
|
386,931
|
|
$
|
289,688
|
|
|
Derivative
liability
|
|
|
9
|
|
|
12,577
|
|
|
124,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
|
|
399,508
|
|
|
414,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
10
|
|
|
15,330,566
|
|
|
13,977,256
|
|
|
Share-based
payment reserve
|
|
|
10,11
|
|
|
3,155,954
|
|
|
2,956,964
|
|
|
Share
subscriptions received
|
|
|
10
|
|
|
—
|
|
|
313,874
|
|
|
Deficit
|
|
|
|
|
|
(18,071,331
|
)
|
|
(16,428,813
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
|
|
|
415,190
|
|
|
819,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
|
|
|
$
|
814,698
|
|
$
|
1,233,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nature and continuance of operations
|
1
|
|
Commitments
|
13
|
|
Subsequent events
|
15
|
Approved on
behalf of the Board:
|
|
|
|
|
“John Calhoun”
|
|
“Brien Lundin”
|
|
|
|
|
|
|
|
|
|
– Director
|
|
– Director
|
F-6
Natcore Technology Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Expressed in United States Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Six Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
|
|
$
|
95,707
|
|
$
|
126,185
|
|
|
Depreciation and amortization
|
|
|
6,7
|
|
|
182,555
|
|
|
198,874
|
|
|
Foreign exchange (gain) loss
|
|
|
|
|
|
92,339
|
|
|
4,658
|
|
|
Interest and bank charges
|
|
|
|
|
|
1,034
|
|
|
580
|
|
|
Marketing
|
|
|
|
|
|
89,245
|
|
|
19,090
|
|
|
Office and other operational expenses
|
|
|
|
|
|
133,994
|
|
|
282,841
|
|
|
Professional fees
|
|
|
|
|
|
74,920
|
|
|
210,924
|
|
|
Research and development
|
|
|
16
|
|
|
439,522
|
|
|
561,032
|
|
|
Stock-based compensation
|
|
|
10
|
|
|
195,222
|
|
|
147,906
|
|
|
Travel
|
|
|
|
|
|
30,138
|
|
|
35,280
|
|
|
Wages and salaries
|
|
|
|
|
|
420,664
|
|
|
359,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,755,340
|
|
|
1,946,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on warrants
|
|
|
9
|
|
|
112,246
|
|
|
1,201,216
|
|
|
Interest income
|
|
|
|
|
|
576
|
|
|
16,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive income (loss) for the period
|
|
|
|
|
$
|
(1,642,518
|
)
|
$
|
(729,188
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share – basic and diluted
|
|
|
10
|
|
$
|
(0.03
|
)
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – basic and diluted
|
|
|
10
|
|
|
49,706,536
|
|
|
41,724,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-7
Natcore Technology Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Expressed in United States Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
|
|
$
|
52,228
|
|
$
|
77,547
|
|
|
Depreciation and amortization
|
|
|
6,7
|
|
|
87,826
|
|
|
103,783
|
|
|
Foreign exchange (gain) loss
|
|
|
|
|
|
122,723
|
|
|
(17,482
|
)
|
|
Interest and bank charges
|
|
|
|
|
|
621
|
|
|
392
|
|
|
Marketing
|
|
|
|
|
|
35,807
|
|
|
6,608
|
|
|
Office and other operational expenses
|
|
|
|
|
|
84,079
|
|
|
183,238
|
|
|
Professional fees
|
|
|
|
|
|
56,151
|
|
|
131,245
|
|
|
Research and development
|
|
|
16
|
|
|
233,239
|
|
|
252,579
|
|
|
Stock-based compensation
|
|
|
10
|
|
|
115,268
|
|
|
74,070
|
|
|
Travel
|
|
|
|
|
|
21,031
|
|
|
22,155
|
|
|
Wages and salaries
|
|
|
|
|
|
195,675
|
|
|
165,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,004,648
|
|
|
999,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on warrants
|
|
|
9
|
|
|
102,229
|
|
|
15,081
|
|
|
Interest income
|
|
|
|
|
|
275
|
|
|
7,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive income (loss) for the period
|
|
|
|
|
$
|
(902,144
|
)
|
$
|
(977,187
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share – basic and diluted
|
|
|
10
|
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding –basic and diluted
|
|
|
10
|
|
|
50,508,200
|
|
|
42,215,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-8
Natcore Technology Inc.
Consolidated Statement of Changes in Equity
(Expressed in United States Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
Number of shares
|
|
Amount
|
|
Share-based payment reserve
|
|
Share subscriptions received
|
|
Deficit
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2013
|
|
|
|
|
46,095,119
|
|
|
13,030,362
|
|
|
2,857,272
|
|
|
—
|
|
|
(14,235,281
|
)
|
|
1,652,353
|
|
|
Comprehensive loss for the year
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,193,532
|
)
|
|
(2,193,532
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash – options exercise
|
|
|
|
|
100,000
|
|
|
62,624
|
|
|
(25,898
|
)
|
|
—
|
|
|
—
|
|
|
36,726
|
|
|
Shares issued for cash – warrants exercise
|
|
|
|
|
1,666,383
|
|
|
884,270
|
|
|
(176,142
|
)
|
|
—
|
|
|
—
|
|
|
708,128
|
|
|
Subscriptions received on pending private placement
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313,874
|
|
|
—
|
|
|
313,874
|
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
301,732
|
|
|
—
|
|
|
—
|
|
|
301,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2014
|
|
|
|
|
47,861,502
|
|
|
13,977,256
|
|
|
2,956,964
|
|
|
313,874
|
|
|
(16,428,813
|
)
|
|
819,281
|
|
|
Comprehensive loss for the period
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,642,518
|
)
|
|
(1,642,518
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash – private placement
|
|
|
|
|
2,949,112
|
|
|
1,365,938
|
|
|
—
|
|
|
(313,874
|
)
|
|
—
|
|
|
1,052,064
|
|
|
Issuance costs – warrants
|
|
|
|
|
—
|
|
|
(3,768
|
)
|
|
3,768
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance costs - cash
|
|
|
|
|
—
|
|
|
(8,859
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,859
|
)
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
195,222
|
|
|
—
|
|
|
—
|
|
|
195,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
June 30, 2015
|
|
|
|
|
50,810,614
|
|
$
|
15,330,567
|
|
$
|
3,155,954
|
|
$
|
—
|
|
$
|
(18,071,331
|
)
|
$
|
415,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-9
Natcore Technology Inc.
Consolidated Statements of Cash Flows
(Expressed in United States Dollars - Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the
Six Months Ended
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net income(loss)
|
|
$
|
(1,642,518
|
)
|
$
|
(729,188
|
)
|
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
182,555
|
|
|
198,874
|
|
|
Fair value adjustment on warrants
|
|
|
(112,246
|
)
|
|
(1,201,216
|
)
|
|
Stock-based compensation
|
|
|
195,222
|
|
|
147,906
|
|
|
Changes in non-cash working capital items:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
1,208
|
|
|
(29,945
|
)
|
|
Prepaid expenses
|
|
|
(15,001
|
)
|
|
50,000
|
|
|
Trade payables and accrued liabilities
|
|
|
97,243
|
|
|
(134,949
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in operating activities
|
|
|
(1,293,537
|
)
|
|
(1,698,518
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Expenditures on equipment
|
|
|
(13,425
|
)
|
|
(159,675
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in investing activities
|
|
|
(13,425
|
)
|
|
(159,675
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds on issuance of common shares –
exercise of warrants
|
|
|
—
|
|
|
613,354
|
|
|
Proceeds on issuance of common shares –
exercise of options
|
|
|
—
|
|
|
36,726
|
|
|
Proceeds on issuance of common shares – net
of issuance costs
|
|
|
1,043,205
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows provided by financing activities
|
|
|
1,043,205
|
|
|
650,080
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents
|
|
|
(263,757
|
)
|
|
(1,208,113
|
)
|
|
Cash and cash equivalents, beginning
|
|
|
548,387
|
|
|
2,849,022
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, ending
|
|
$
|
284,630
|
|
$
|
1,649,909
|
|
|
|
|
|
|
|
|
|
|
F-10
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
1.
|
Nature and Continuance of
Operations
|
|
|
|
|
|
Natcore
Technology Inc. (the “Company”) was incorporated under the British Columbia
Business Corporations Act on August 9, 2007. The Company’s common shares are
listed on the TSX Venture Exchange (the “Exchange”) under the symbol NXT.
Effective May 26, the Company became a fully-reporting issuer in the United
States. The Company develops and owns technology for the manufacturing of
solar cells.
|
|
|
|
|
|
The
Company’s head office address is 87 Maple Avenue, 1
st
Floor, Red
Bank, New Jersey, 07701. The Company’s registered office is 2080 - 777 Hornby
Street, Vancouver British Columbia V6Z 1S4.
|
|
|
|
|
|
These
unaudited condensed consolidated interim financial statements have been
prepared on the assumption that the Company will continue as a going concern,
meaning it will continue in operation for the foreseeable future and will be able
to realize assets and discharge liabilities in the ordinary course of
operations. Different bases of measurement may be appropriate if the Company
is not expected to continue operations for the foreseeable future. As at June
30, 2015 the Company has had recurring losses from operations and a
cumulative deficit of $18,071,331. The Company’s continuation as a going
concern is dependent upon its ability to attain profitable operations and
generate funds there from and/or raise equity capital or borrowings
sufficient to meet current and future obligations. These conditions indicate
the existence of a material uncertainty that may cast significant doubt about
the Company’s ability to continue as a going concern. Management intends to
finance operating costs over the next twelve months with existing cash
resources and the private placement of common shares.
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation
|
|
|
|
|
|
Statement of
Compliance with International Financial Reporting Standards
|
|
|
|
|
|
These
condensed consolidated interim financial statements of the Company have been
prepared in accordance with International Financial Reporting Standards
(“IFRS”) issued by the International Accounting Standards Board (“IASB”) and
interpretations of the International Financial Reporting Interpretations
Committee (“IFRIC”). Therefore, these condensed consolidated financial
statements comply with International Accounting Standard (“IAS”) 34, Interim
Financial Statements.
|
|
|
|
|
|
This interim financial report does not include
all of the information required of a full annual financial report and is
intended to provide users with an update in relation to events and
transactions that are significant to an understanding of the changes in
financial position and performance of the Company since the end of the last
annual reporting period. It is therefore recommended that this financial
report be read in conjunction with the annual financial statements of the
Company for the year ended December 31, 2014.
|
|
|
|
|
|
The condensed consolidated interim financial
statements were authorized for issue by the Board of Directors on August 28,
2015.
|
|
|
|
|
|
Basis of
Preparation
|
|
|
|
|
|
The
condensed consolidated financial statements of the Company have been prepared
on an accrual basis and are based on historical costs, modified where
applicable. The condensed consolidated financial statements are presented in
United States dollars unless otherwise noted.
|
F-11
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Consolidation
|
|
|
|
|
|
The
condensed consolidated financial statements include the accounts of the
Company and its controlled entities. Details of controlled entities are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
Owned*
|
|
|
|
|
|
|
|
|
|
|
|
|
Jurisdiction
of
Incorporation
|
|
June 30,
2015
|
|
December
31,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natcore
Technology, Inc.
|
|
|
United States
|
|
|
100%
|
|
|
100%
|
|
|
Newcyte,
Incorporated
|
|
|
United States
|
|
|
100%
|
|
|
100%
|
|
|
Vanguard
Solar, Inc.
|
|
|
United States
|
|
|
100%
|
|
|
100%
|
|
|
Natcore Asia
Technology, Limited
|
|
|
Hong Kong
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
*Percentage
of voting power is in proportion to ownership.
|
|
|
|
Inter-company balances are
eliminated on consolidation.
|
|
|
|
|
|
Significant
Accounting Judgments, Estimates and Assumptions
|
|
|
|
|
|
The
preparation of condensed consolidated financial statements in accordance with
IFRS requires the Company to make estimates and assumptions concerning the
future. The Company’s management reviews these estimates and underlying
assumptions on an ongoing basis, based on experience and other factors,
including expectations of future events that are believed to be reasonable
under the circumstances. Revisions to estimates are adjusted for
prospectively in the period in which the estimates are revised.
|
|
|
|
|
|
Estimates
and assumptions where there is significant risk of material adjustments to
assets and liabilities in future accounting periods include the useful lives
of equipment, impairment considerations for equipment and intangible assets,
determination of fair value for stock-based compensation and other
share-based payments, valuations and assumptions used to determine deferred
income taxes and the fair value of financial instruments.
|
|
|
|
|
|
Foreign
Currency Translation
|
|
|
|
|
|
The functional currency of each of the
Company’s entities is measured using the currency of the primary economic
environment in which that entity operates. The condensed consolidated
financial statements are presented in United States dollars which is the
functional currency of the Company and its subsidiaries.
|
|
|
|
|
|
Transactions
and Balances:
|
|
|
|
|
|
Foreign currency transactions are translated
into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the
period-end exchange rate. Non-monetary items measured at historical cost continue
to be carried at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported at the exchange rate
at the date when fair values were determined.
|
|
|
|
|
|
Exchange differences arising on the
translation of monetary items or on settlement of monetary items are
recognized in profit or loss in the statement of comprehensive loss in the
period in which they arise, except where deferred in equity as a qualifying
cash flow or net investment hedge.
|
|
|
|
|
|
Exchange differences arising on the
translation of non-monetary items are recognized in other comprehensive loss
in the statement of comprehensive loss to the extent that gains and losses
arising on those non-monetary items are also recognized in other
comprehensive loss. Where the non-monetary gain or loss is recognized in
profit or loss, the exchange component is also recognized in profit or loss.
|
F-12
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Intangible
Assets
|
|
|
|
|
|
Intangible
Assets Acquired Separately
|
|
|
|
|
|
Intangible
assets with finite useful lives that are acquired separately are carried at
cost less accumulated amortization and accumulated impairment losses.
Amortization is recognized on a straight-line basis over their estimated
useful lives. The estimated useful life and amortization method are reviewed
at the end of each reporting period, with the effect of any changes in
estimate being accounted for on a prospective basis. Intangible assets with
indefinite useful lives that are acquired separately are carried at cost less
accumulated impairment losses.
|
|
|
|
|
|
Internally-Generated
Intangible Assets - Research and Development Expenditure
|
|
|
|
|
|
Expenditure
on research activities is recognized as an expense in the period in which it
is incurred.
|
|
|
|
|
|
An
internally-generated intangible asset arising from development (or from the
development phase of an internal project) is recognized if, and only if, all
of the following have been demonstrated:
|
|
|
|
|
|
•
|
The
technical feasibility of completing the intangible asset so that it will be
available for use or sale;
|
|
|
|
|
|
|
•
|
The
intention to complete the intangible asset and use or sell it;
|
|
|
|
|
|
|
•
|
The
ability to use or sell the intangible asset;
|
|
|
|
|
|
|
•
|
How
the intangible asset will generate probable future economic benefits;
|
|
|
|
|
|
|
•
|
The
availability of adequate technical, financial and other resources to complete
the development and to use or sell the intangible asset; and
|
|
|
|
|
|
|
•
|
The
ability to measure reliably the expenditure attributable to the intangible
asset during its development.
|
|
|
|
|
|
|
The
amount initially recognized for internally-generated intangible assets is the
sum of the expenditure incurred from the date when the intangible asset first
meets the recognition criteria listed above. Where no internally-generated
intangible asset can be recognized, development expenditure is recognized in
loss in the period in which it is incurred.
|
|
|
|
|
|
Subsequent
to initial recognition, internally-generated intangible assets are reported
at cost less accumulated amortization and accumulated impairment losses, on
the same basis as intangible assets that are acquired separately.
|
|
|
|
|
|
At
June 30, 2015 and December 31, 2014, the Company has not recognized any
internally-generated intangible assets.
|
|
|
|
|
|
Share-Based
Payments
|
|
|
|
|
|
The Company operates a stock option plan.
Share-based payments to employees are measured at the fair value of the
instruments issued and amortized over the vesting periods. Share-based
payments to non-employees are measured at the fair value of goods or services
received or the fair value of the equity instruments issued, if it is
determined the fair value of the goods or services cannot be reliably
measured, and are recorded at the date the goods or services are received.
The corresponding amount is recorded to the share-based payment reserve. The
fair value of options is determined using the Black–Scholes Option Pricing
Model. The number of shares and options expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognized
for services received as consideration for the equity instruments granted
shall be based on the number of equity instruments that eventually vest.
|
F-13
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Financial
Instruments
|
|
|
|
|
|
The
Company classifies its financial instruments in the following categories: at
fair value through profit or loss, loans and receivables, held-to-maturity
investments, available-for-sale and financial liabilities. The classification
depends on the purpose for which the financial instruments were acquired.
Management determines the classification of its financial instruments at
initial recognition.
|
|
|
|
|
|
Financial assets are classified at fair value
through profit or loss when they are either held for trading for the purpose
of short-term profit taking, derivatives not held for hedging purposes, or
when they are designated as such to avoid an accounting mismatch or to enable
performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented
risk management or investment strategy. Such assets are subsequently measured
at fair value with changes in carrying value being included in profit or
loss.
|
|
|
|
|
|
Loans
and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and are
subsequently measured at amortized cost. They are included in current assets,
except for maturities greater than 12 months after the end of the reporting
period. These are classified as non-current assets.
|
|
|
|
|
|
Held-to-maturity investments are
non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Company’s intention to hold these
investments to maturity. They are subsequently measured at amortized cost.
Held-to-maturity investments are included in non-current assets, except for
those which are expected to mature within 12 months after the end of the
reporting period.
|
|
|
|
|
|
Available-for-sale
financial assets are non-derivative financial assets that are designated as
available-for-sale or are not suitable to be classified as financial assets
at fair value through profit or loss, loans and receivables or
held-to-maturity investments and are subsequently measured at fair value.
These are included in current assets. Unrealized gains and losses are
recognized in other comprehensive loss, except for impairment losses and
foreign exchange gains and losses.
|
|
|
|
|
|
Non-derivative financial liabilities
(excluding financial guarantees) are subsequently measured at amortized cost.
Derivative financial liabilities are classified at fair value through profit
and loss and are subsequently measured at fair value with changes in carrying
value being included in profit or loss.
|
|
|
|
|
|
Regular
purchases and sales of financial assets are recognized on the trade-date –
the date on which the Company commits to purchase the asset.
|
|
|
|
|
|
Financial
assets are derecognized when the rights to receive cash flows from the
investments have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
|
|
|
|
|
|
At each reporting date, the Company assesses
whether there is objective evidence that a financial instrument has been
impaired. In the case of available-for-sale financial instruments, a
significant and prolonged decline in the value of the instrument is
considered to determine whether impairment has arisen.
|
|
|
|
|
|
Impairment of
Long-Lived Assets
|
|
|
|
|
|
The
carrying amount of the Company’s long-lived assets (which include equipment
and intangible assets) is reviewed at each reporting date to determine
whether there is any indication of impairment. If such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss. An impairment loss is recognized whenever the
carrying amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognized in the statement of
comprehensive loss.
|
F-14
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Impairment of
Long-Lived Assets (cont’d)
|
|
|
|
|
|
The
recoverable amount of assets is the greater of an asset’s fair value less
cost to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax
discount rate that reflects the current market assessments of the time value
of money and the risks specific to the asset. For an asset that does not
generate cash inflows largely independent of those from other assets, the
recoverable amount is determined for the cash-generating unit to which the
asset belongs.
|
|
|
|
|
|
An
impairment loss is only reversed if there is an indication that the
impairment loss may no longer exist and there has been a change in the
estimates used to determine the recoverable amount, however, not to an amount
higher than the carrying amount that would have been determined had no
impairment loss been recognized in previous years.
|
|
|
|
|
|
Assets
that have an indefinite useful life are not subject to amortization and are
tested annually for impairment.
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
|
|
|
|
Cash and cash equivalents include cash on
hand, deposits held at call with banks and other short-term highly liquid
investments, such as guaranteed investment certificates with original
maturities of three months or less. Guaranteed investment certificates are investments
with Canadian banks that are the equivalent of a certificate of deposit.
|
|
|
|
|
|
Income Taxes
|
|
|
|
|
|
Current Income Tax:
|
|
|
|
|
|
Current
income tax assets and liabilities for the current period are measured at the
amount expected to be recovered from or paid to the taxation authorities. The
tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted, at the reporting date, in the countries where the
Company operates and generates taxable income.
|
|
|
|
|
|
Current
income tax relating to items recognized directly in other comprehensive loss
or equity is recognized in other comprehensive loss or equity and not in
profit or loss. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
|
|
|
|
|
|
Deferred Income Tax:
|
|
|
|
|
|
Deferred
income tax is provided using the asset and liability method on temporary
differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
|
|
|
|
|
|
The
carrying amount of deferred income tax assets is reviewed at the end of each
reporting period and recognized only to the extent that it is probable that
sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilized.
|
|
|
|
|
|
Deferred
income tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
|
|
|
|
|
|
Deferred
income tax assets and deferred income tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current income
tax liabilities and the deferred income taxes relate to the same taxable
entity and the same taxation authority.
|
F-15
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
Equipment
is stated at historical cost less accumulated depreciation and accumulated
impairment losses.
|
|
|
|
|
|
Subsequent
costs are included in the asset’s carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item
can be measured reliably. The carrying amount of the replaced part is
derecognized. All other repairs and maintenance are charged to the statement
of comprehensive loss during the financial period in which they are incurred.
|
|
|
|
|
|
Gains
and losses on disposals are determined by comparing the proceeds with the
carrying amount and are recognized in profit or loss.
|
|
|
|
|
|
Depreciation
and amortization are calculated on a straight-line method to write off the
cost of the assets to their residual values over their estimated useful
lives.
|
|
|
|
|
|
Comparative
Information
|
|
|
|
|
|
Certain
expenses have been reclassified to conform with the presentation in the
current year.
|
|
|
|
|
3.
|
Accounting Standards Issued But
Not Yet Effective
|
|
|
|
|
|
New Standard
IFRS 9 “Financial Instruments”
|
|
|
|
|
|
This
new standard is a partial replacement of International Accounting Standard
(“IAS”) 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 uses
a single approach to determine whether a financial asset is measured at
amortized cost or fair value, replacing the multiple rules in IAS 39. The
approach in IFRS 9 is based on how an entity manages its financial
instruments in the context of its business model and the contractual cash
flow characteristics of the financial assets. The new standard also requires
a single impairment method to be used, replacing the multiple impairment
methods in IAS 39. IFRS 9 is effective for annual periods beginning on after
December 31, 2018. Early adoption is permitted.
|
|
|
|
|
|
The
Company has not early adopted this new standard and is currently assessing
the impact that these standards will have on its condensed consolidated
financial statements.
|
|
|
|
|
|
Other
accounting standards or amendments to existing accounting standards that have
been issued but have future effective dates are either not applicable or are
not expected to have a significant impact on the Company’s condensed
consolidated financial statements.
|
|
|
|
|
4.
|
Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Cash at Bank
|
|
$
|
199,174
|
|
$
|
412,996
|
|
|
Savings
Certificates in Banks
|
|
|
85,456
|
|
|
18,731
|
|
|
Guaranteed
Investment Certificates
|
|
|
—
|
|
|
116,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
284,630
|
|
$
|
548,387
|
|
|
|
|
|
|
|
|
|
|
F-16
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31,
2014
|
|
|
|
|
|
|
|
|
|
GST
Receivable
|
|
$
|
4,731
|
|
$
|
5,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,731
|
|
$
|
5,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture
and
Office
Equipment
|
|
Production
Equipment
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2013
|
|
$
|
345,168
|
|
$
|
741,610
|
|
$
|
1,086,778
|
|
|
Additions
|
|
|
9,850
|
|
|
169,737
|
|
|
179,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
|
355,018
|
|
|
911,347
|
|
|
1,266,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2013
|
|
|
114,556
|
|
|
291,869
|
|
|
406,425
|
|
|
Charge for
the Period
|
|
|
102,562
|
|
|
174,875
|
|
|
277,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
|
217,118
|
|
|
466,744
|
|
|
683,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2014
|
|
$
|
137,900
|
|
$
|
444,603
|
|
$
|
582,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
$
|
355,018
|
|
$
|
911,347
|
|
$
|
1,266,365
|
|
|
Additions
|
|
|
3,709
|
|
|
9,716
|
|
|
13,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30,
2015
|
|
|
358,727
|
|
|
921,063
|
|
|
1,279,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
|
217,118
|
|
|
466,744
|
|
|
683,862
|
|
|
Charge for
the Period
|
|
|
55,125
|
|
|
90,862
|
|
|
145,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30,
2015
|
|
|
272,243
|
|
|
557,606
|
|
|
829,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2015
|
|
$
|
86,484
|
|
$
|
363,457
|
|
$
|
449,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-17
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and
Pending Patents
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
At December
31, 2014, 2013 and 2012
|
|
$
|
711,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization:
|
|
|
|
|
|
At December
31, 2013
|
|
|
540,191
|
|
|
Charge for
the Period
|
|
|
135,055
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
|
675,246
|
|
|
Charge for
the Period
|
|
|
36,568
|
|
|
|
|
|
|
|
|
At June 30,
2015
|
|
|
711,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value:
|
|
|
|
|
|
At December 31, 2014
|
|
$
|
36,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2015
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
Trade Payables and Accrued Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31,
2014
|
|
|
|
|
|
|
|
|
|
Trade
Payables and Accrued Liabilities
|
|
$
|
386,931
|
|
$
|
289,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.
|
Derivative Financial Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
2015
|
|
Year Ended
December 31,
2014
|
|
|
|
|
|
|
|
|
|
Balance,
Beginning
|
|
$
|
124,823
|
|
$
|
1,967,140
|
|
|
Fair value
of warrants exercised during the year
|
|
|
—
|
|
|
—
|
|
|
Change in
fair value of warrants outstanding
|
|
|
(112,246
|
)
|
|
(1,842,317
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance,
Ending
|
|
$
|
12,577
|
|
$
|
124,823
|
|
|
|
|
|
|
|
|
|
|
F-18
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
9.
|
Derivative Financial Liability
(cont’d)
|
|
|
|
|
|
The
derivative financial liability consists of the fair value of share purchase
warrants that have exercise prices that differ from the functional currency
of the Company and are within the scope of IAS 32 “Financial Instruments:
Presentation”. Details of these warrants and their fair values are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration Date
|
|
Exercise
Price
|
|
Number of
Warrants
Outstanding at
June 30, 2015
|
|
Fair Value
at
June 30,
2015
|
|
Number of
Warrants
Outstanding at
December 31,
2014
|
|
Fair Value
at
December 31,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDN $
|
|
|
|
US $
|
|
|
|
US $
|
|
|
December 22,
2015
|
|
|
1.00
|
|
|
1,134,667
|
|
|
8,826
|
|
|
1,134,667
|
|
|
29,943
|
|
|
January 4,
2016
|
|
|
1.00
|
|
|
429,867
|
|
|
3,751
|
|
|
429,867
|
|
|
9,579
|
|
|
July 20,
2015
|
|
|
0.90
|
|
|
3,840,700
|
|
|
—
|
|
|
3,840,700
|
|
|
85,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,405,234
|
|
|
12,577
|
|
|
5,405,234
|
|
|
124,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
fair values of these warrants were estimated using the Black-Scholes Option
Pricing Model using the following assumptions.
|
|
|
|
|
|
•
|
The
stock price was based upon the publicly traded price at the time of issuance;
|
|
|
|
|
|
|
•
|
The
risk-free interest rate assumption is based on the government of Canada
marketable bonds for a period consistent with the expected term of the option
in effect at the time of the grant;
|
|
|
|
|
|
|
•
|
The
Company does not pay dividends on common stock and does not anticipate paying
dividends on its common stock in the foreseeable future. Therefore, the
expected dividend rate was 0%;
|
|
|
|
|
|
|
•
|
The
expected life of the warrants was estimated to be 75% of the remaining
contractual term which is based on the historical exercise patterns of
warrant holders; and
|
|
|
|
|
|
|
•
|
The
expected volatility was based off of the historical trading prices of the
Company’s common stock price over a period equivalent to the expected life of
the warrants.
|
|
|
|
|
|
|
The
fair values of these warrants as at June 30, 2015 were estimated using the
Black-Scholes Option Pricing Model using the following inputs:
|
|
|
|
|
|
|
Expiration Date
|
December 22, 2015
|
January 4, 2016
|
July 20, 2015
|
|
|
|
|
|
|
Exercise
price
|
CDN$1.00
|
CDN$1.00
|
CDN$0.90
|
|
Share price
|
CDN$0.50
|
CDN$0.50
|
CDN$0.50
|
|
Expected
volatility
|
77%
|
77%
|
61%
|
|
Expected
life
|
0.36 years
|
0.39 years
|
0.23 years
|
|
Dividends
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
0.68%
|
0.68%
|
0.00%
|
|
|
|
|
|
F-19
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
9.
|
Derivative Financial Liability
(cont’d)
|
|
|
|
|
|
The
fair values of these warrants as at December 31, 2014 were estimated using
the Black-Scholes Option Pricing Model using the following inputs.
|
|
|
|
|
|
|
Expiration Date
|
December 22, 2015
|
January 4, 2016
|
July 20, 2014*
|
|
|
|
|
|
|
Exercise
price
|
CDN$1.00
|
CDN$1.00
|
CDN$0.90
|
|
Share price
|
CDN$0.46
|
CDN$1.11
|
CDN$1.11
|
|
Expected
volatility
|
81%
|
76%
|
94%
|
|
Expected
life
|
0.73 years
|
0.76 years
|
0.41 years
|
|
Dividends
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
0.96%
|
0.96%
|
1.00%
|
|
|
|
|
|
|
|
|
_______________
|
|
*During
the year ended December 31, 2014, the expiration date of these warrants was
extended to July 20, 2015.
|
|
|
|
|
10.
|
Share Capital
|
|
|
|
|
|
Authorized
Share Capital
|
|
|
|
|
|
Unlimited
number of common shares without par value.
|
|
|
|
|
|
Issued Share
Capital
|
|
|
|
|
|
At
June 30, 2015, there were 50,810,614issued and fully paid common shares
(December 31, 2014 – 47,861,502).
|
|
|
|
|
|
Private
Placements
|
|
|
|
|
|
In
January 2015, the Company completed a non-brokered private placement and
issued 1,352,062 units at a price of CDN$0.43 per unit for gross proceeds of
$471,479 (CDN$581,387). Each unit comprised one common share and one share
purchase warrant, with each warrant exercisable at a price of CDN$0.70 per
share for a period of three years from the date of closing. The Company also
issued 4,250 finders’ warrants with a fair value of $885 in connection with
this private placement exercisable at a price of CDN$0.43 per share for a
period of three years from the date of closing, and incurred issuance costs
of $2,538.
|
|
|
|
|
|
In
April 2015, the Company completed a non-brokered private placement and issued
1,200,050 units at a price of CDN$0.70 per unit for gross proceeds of
$672,028 (CDN$840,035). Each unit comprised one common share and one share
purchase warrant, with each warrant exercisable at a price of $0.70 per share
for a period of three years from the date of closing. The Company also issued
9,250 finders’ warrants in connection with this private placement exercisable
at a price of CDN$0.95 per share for a period of three years from the date of
closing and $6,321.
|
|
|
|
|
|
In
July 2015, the Company completed a non-brokered private placement and issued
1,822,000 units at a price of CDN$0.54 per unit for gross proceeds of
$982,227 (CDN$1,275,400). Each unit comprised one common share and one
purchase warrant, with each warrant exercisable at a price of CDN$0.74 per
share for a period of three years from the date of closing. The Company also
issued 73,500 finders’ warrants in connection with this private placement
exercisable at a price of CDN$0.74 per share for a period of three years from
the date of closing.
|
F-20
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
|
10.Share Capital (cont’d)
|
|
|
|
|
|
Share
Subscriptions Received
|
|
|
|
|
|
As
part of a private placement closed in January 2015 (above), the Company had
received subscriptions of $313,874 at December 31, 2014. The shares for these
subscriptions were issued in the close of the January private placement.
|
|
|
|
|
|
Basic and
Diluted Loss Per Share
|
|
|
|
|
|
The
calculation of basic and diluted loss per share for the three and six months
ended June 30, 2015 was based on the loss attributable to common shareholders
of ($902,144) and ($1,642,518), respectively, and the weighted average number
of common shares outstanding of 50,508,200 and 49,706,536, respectively,for
basic and diluted. Diluted loss per share did not include the effect of stock
options and warrants as the effect would be anti-dilutive.
|
|
|
|
|
|
The
calculation of basic and diluted loss per share for the three and six months
ended June 30, 2014 was based on the loss attributable to common shareholders
of ($977,187) and ($729,188), respectively, and the weighted average number
of common shares outstanding of 42,215,128 and 41,724,468, respectively,for
basic and diluted. Diluted loss per share did not include the effect of stock
options and warrants as the effect would be anti-dilutive.
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
The
Company has adopted an incentive stock option plan, which provides that the
Board of Directors of the Company may from time to time, at its discretion,
and in accordance with the Exchange requirements, grant to directors,
officers, employees and technical consultants to the Company,
non-transferable options to purchase common shares, provided that the number
of common shares reserved for issuance will not exceed 6,779,255 common
shares. Such options will be exercisable for a period of up to 10 years from
the date of grant. In connection with the foregoing, the number of common
shares reserved for issuance to any one optionee will not exceed five percent
(5%) of the issued and outstanding common shares and the number of common
shares reserved for issuance to all technical consultants will not exceed two
percent (2%) of the issued and outstanding common shares. Options may be
exercised no later than 90 days following cessation of the optionee’s
position with the Company or 30 days following cessation of an optionee
conducting investor relations activities’ position.
|
|
|
|
|
|
Stock-based
compensation expense has been calculated using the Black-Scholes option
pricing model. The expected life of the options has been estimated to be the
contractual term of the option given the limited history of early exercise.
Future volatility has been determined based on historical volatility for a
period equivalent to the expected life of the option.
|
|
|
|
|
|
During
the six months ended June 30, 2015 and 2014, the Company recorded stock-based
compensation expense of $195,222and $147,906, respectively.
|
|
|
|
|
|
On
January 10, 2014, the Company granted 345,000 stock options to employees. 50%
of the options vest six months following the grant date and the remaining in
eighteen months from the grant date. The options are exercisable at CDN$1.08
and expire January 10, 2019. The options had a grant date fair value of
$259,224 (CDN$282,995) determined using the Black-Scholes Option Pricing
Model with the following assumptions: Risk free rate of
1.73%; Expected life of 5 years; Volatility of 103%; and a Dividend yield of
0%.
|
|
|
|
|
|
On
February 3, 2014, the Company granted 60,000 stock options to employees. 50%
of the options vest six months following the grant date and the remaining in
eighteen months from the grant date. The options are exercisable at CDN$0.99
and expire February 3, 2019. The options had a grant date fair value of
$40,706 (CDN$45,084) determined using the Black-Scholes Option Pricing Model
with the following assumptions: Risk free rate of
1.51%; Expected life of 5 years; Volatility of 103%; and a Dividend yield of
0%.
|
F-21
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
10.
|
Share Capital (cont’d)
|
|
|
|
|
|
Stock Options
(cont’d)
|
|
|
|
|
|
On
November 14, 2014, the Company granted 80,000 stock options to a consultant.
50% of the options vest six months following the grant date and the remaining
in eighteen months from the grant date. The options are exercisable at
CDN$0.57 and expire December 20, 2017. The options had a grant date fair
value of $24,108 (CDN$27,229) determined using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of
1.14%; Expected life of 3.10 years; Volatility of 94%; and a Dividend yield
of 0%.
|
|
|
|
|
|
On
December 17, 2014, the Company granted 525,000 stock options to employees.
50% of the options vest six months following the grant date and the remaining
in eighteen months from the grant date. The options are exercisable at
CDN$0.75 and expire December 17, 2019. The options had a grant date fair
value of $140,026 (CDN$162,840) determined using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of
1.73%; Expected life of 5 years; Volatility of 93%; and a Dividend yield of
0%.
|
|
|
|
|
|
The
weighted average grant date fair value of options granted during the year
ended December 31, 2014 was $0.46 per option (2013 - $0.36).
|
|
|
|
|
|
On
April 30, 2015, the Company granted 1,250,000 stock options to directors. The
options vest 1/3 each calendar year from the grant date. The options are
exercisable at CDN$0.58 and expire April 30, 2020. The options had a grant
date fair value of $427,310 (CDN$513,742) determined using the Black-Scholes
Option Pricing Model with the following assumptions: Risk
free rate of 0.98%; Expected life of 5 years; Volatility of 93%; and a
Dividend yield of 0%.
|
|
|
|
|
|
On
June 15, 2015, the Company granted 15,000 stock options to employees. 50% of
the options on September 15, 2015 and the remaining options vest eighteen
months from the grant date. The options are exercisable at CDN$0.54 and
expire June 15, 2020. The options had a grant date fair value of $4,621
(CDN$5,691) determined using the Black-Scholes Option Pricing Model with the
following assumptions: Risk free rate of 0.98%; Expected life of 5
years; Volatility of 92%; and a Dividend yield of 0%.
|
|
|
|
|
|
The
changes in options during the six months ended June 30, 2015 and the year
ended December 31, 2014 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Number of
options
|
|
Weighted
average exercise price
|
|
Number of
options
|
|
Weighted
average exercise price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
outstanding, beginning
|
|
|
4,182,000
|
|
|
CDN$0.97
|
|
|
3,772,000
|
|
|
CDN$0.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
granted
|
|
|
1,265,000
|
|
|
CDN$0.58
|
|
|
1,010,000
|
|
|
CDN$0.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
exercised
|
|
|
—
|
|
|
—
|
|
|
(100,000
|
)
|
|
CDN$0.40
|
|
|
Options
forfeited
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
expired
|
|
|
—
|
|
|
—
|
|
|
(500,000
|
)
|
|
CDN$1.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
outstanding, ending
|
|
|
5,447,000
|
|
|
CDN$0.80
|
|
|
4,182,000
|
|
|
CDN$0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
exercisable, ending
|
|
|
3,637,000
|
|
|
CDN$0.89
|
|
|
3,324,500
|
|
|
CDN$0.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
weighted average remaining life of the options outstanding as at June 30,
2015 is 2.53 years.
|
F-22
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
10.
|
Share Capital (cont’d)
|
|
|
|
|
|
Stock Options
(cont’d)
|
|
|
|
|
|
Details
of options outstanding as of June 30, 2015 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise Price
|
|
|
Expiration Date
|
|
|
Number of Options
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.97
|
|
|
February 8, 2016
|
|
|
1,830,000
|
|
|
CDN$ 0.79
|
|
|
June 1, 2016
|
|
|
100,000
|
|
|
CDN$ 0.59
|
|
|
August 16, 2016
|
|
|
400,000
|
|
|
CDN$ 0.51
|
|
|
April 17, 2017
|
|
|
120,000
|
|
|
CDN$ 1.11
|
|
|
September 4, 2017
|
|
|
200,000
|
|
|
CDN$ 0.80
|
|
|
December 20, 2017
|
|
|
337,000
|
|
|
CDN$ 0.57
|
|
|
December 20, 2017
|
|
|
80,000
|
|
|
CDN$ 0.80
|
|
|
January 4, 2018
|
|
|
20,000
|
|
|
CDN$ 0.71
|
|
|
April 5, 2018
|
|
|
40,000
|
|
|
CDN$ 0.83
|
|
|
June 3, 2018
|
|
|
25,000
|
|
|
CDN$ 0.58
|
|
|
July 31, 2018
|
|
|
100,000
|
|
|
CDN$ 1.08
|
|
|
January 10, 2019
|
|
|
345,000
|
|
|
CDN$ 0.99
|
|
|
February 3, 2019
|
|
|
60,000
|
|
|
CDN$ 0.75
|
|
|
December 17, 2019
|
|
|
525,000
|
|
|
CDN$ 0.58
|
|
|
April 30, 2020
|
|
|
1,250,000
|
|
|
CDN$ 0.54
|
|
|
June 15, 2020
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,447,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Each
option entitles the holder to purchase one common share of the Company.
|
|
|
|
|
|
Warrants
|
|
|
|
|
|
The
changes in warrants during the six months ended June 30, 2015 and the year
ended December 31, 2014are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Warrants
|
|
Weighted
Average Exercise Price
|
|
Number of
Warrants
|
|
Weighted
Average Exercise Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, beginning
|
|
|
11,488,474
|
|
|
CDN$0.77
|
|
|
13,517,067
|
|
|
CDN$0.72
|
|
|
Warrants
issued
|
|
|
2,962,392
|
|
|
CDN$0.84
|
|
|
—
|
|
|
—
|
|
|
Warrants
expired
|
|
|
—
|
|
|
—
|
|
|
(362,210
|
)
|
|
CDN$0.65
|
|
|
Warrants
exercised
|
|
|
—
|
|
|
—
|
|
|
(114,850
|
)
|
|
US$0.62
|
|
|
Warrants
exercised
|
|
|
—
|
|
|
—
|
|
|
(1,551,533
|
)
|
|
CDN$0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, ending
|
|
|
14,450,866
|
|
|
CDN$0.78
|
|
|
11,488,474
|
|
|
CDN$0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
weighted average remaining life of the warrants outstanding as at June 30,
2015 is 1.10 years.
|
F-23
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
10.
|
Share Capital (cont’d)
|
|
|
|
|
|
Warrants
(cont’d)
|
|
|
|
|
|
Details
of warrants outstanding as June 30, 2015 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise Price
|
|
|
Expiration Date
|
|
|
Number of Warrants
Outstanding and
Exercisable
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.90
|
|
|
July 20, 2015
|
|
|
3,840,700
|
|
|
CDN$ 1.00
|
|
|
December 22, 2015
|
|
|
1,134,667
|
|
|
CDN$ 1.00
|
|
|
January 4, 2016
|
|
|
429,867
|
|
|
US$ 0.62
|
|
|
August 20, 2016
|
|
|
6,083,240
|
|
|
CDN$ 0.70
|
|
|
January 21, 2018
|
|
|
1,356,312
|
|
|
CDN$ 0.95
|
|
|
April 14, 2018
|
|
|
1,209,080
|
|
|
CDN$ 0.95
|
|
|
April 27, 2018
|
|
|
397,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,450,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.
|
Reserves
|
|
|
|
|
|
Share-Based
Payment Reserve
|
|
|
|
|
|
The
share-based payment reserve records the fair value of options and warrants
recorded in accordance with IFRS 2 “Share-based payments” until such time
that the stock options or warrants are exercised, at which time the
corresponding amount will be transferred to share capital.
|
|
|
|
|
12.
|
Financial Risk and Capital
Management
|
|
|
|
|
|
The
Company is exposed in varying degrees to a variety of financial instrument
related risks. The Board of Directors approves and monitors the risk
management processes, inclusive of documented investment policies,
counterparty limits, and controlling and reporting structures. The type of
risk exposure and the way in which such exposure is managed is provided as
follows:
|
|
|
|
|
|
Credit Risk
|
|
|
|
|
|
Credit
risk is the risk that one party to a financial instrument will fail to
discharge an obligation and cause the other party to incur a financial loss.
The Company’s primary exposure to credit risk is on its cash, and cash
equivalents. The majority of cash is deposited in bank accounts held with
major banks in Canada and the United States. As most of the Company’s cash is
held by two banks there is a concentration of credit risk. This risk is
managed by using major banks that are high credit quality financial
institutions as determined by rating agencies. The Company’s secondary
exposure to risk is on its receivables. The risk is considered to be minimal.
|
|
|
|
|
|
Liquidity Risk
|
|
|
|
|
|
Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they fall due. The Company has a planning and budgeting
process in place to help determine the funds required to support the
Company’s normal operating requirements on an ongoing basis. The Company
ensures that there are sufficient funds to meet its short-term business
requirements, taking into account its anticipated cash flows from operations
and its holdings of cash and cash equivalents.
|
|
|
|
|
|
Historically,
the Company’s sole source of funding has been the issuance of equity
securities for cash, primarily through private placements. The Company’s
access to financing is always uncertain. There can be no assurance of
continued access to significant equity funding.
|
F-24
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
12.
|
Financial Risk and Capital
Management (cont’d)
|
|
|
|
|
|
The
following is an analysis of the contractual maturities of the Company’s
non-derivative financial liabilities as at June 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within One
Year
|
|
Between
One
and Five Years
|
|
More Than
Five Years
|
|
|
|
|
|
|
|
|
|
|
|
Trade Payables
and Accrued Liabilities
|
|
$
|
386,931
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Exchange Risk
|
|
|
|
|
|
Foreign exchange risk is the risk that the fair values of future cash
flows of a financial instrument will fluctuate because they are denominated
in currencies that differ from the respective functional currency. The
Company does not hedge its exposure to fluctuations in foreign exchange
rates.
|
|
|
|
|
|
The following is an analysis of the United States dollar equivalent
of financial assets and liabilities that are denominated in Canadian dollars:
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31,
2014
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
186,107
|
|
$
|
432,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on the above net exposures, a 1% change in the Canadian dollar
to United States dollar exchange rate would impact the Company’s net loss by
$1,861 and $4,327at June 30, 2015 and December 31, 2014, respectively.
|
|
|
|
|
|
Interest Rate
Risk
|
|
|
|
|
|
Interest rate risk is the risk that the fair value of future cash
flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company is exposed to interest rate risk on its cash
equivalents as these instruments have original maturities of three months or
less and are therefore exposed to interest rate fluctuations on renewal. A 1%
change in market interest rates would have an impact on the Company’s net
loss of approximately $1,000.
|
|
|
|
|
|
Capital Management
|
|
|
|
|
|
The
Company’s policy is to maintain a strong capital base so as to maintain
investor and creditor confidence and to sustain future development of the
business. The capital structure of the Company consists of equity, comprising
share capital, net of accumulated deficit. There were no changes in the
Company’s approach to capital management during the period.
|
|
|
|
|
|
The
Company is not subject to any externally imposed capital requirements.
|
|
|
|
|
|
Classification of Financial Instruments
|
|
|
|
|
|
Financial assets included in the statement of
financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31,
2014
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Loans and
receivables
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
284,630
|
|
$
|
548,387
|
|
|
Receivables
|
|
|
4,731
|
|
|
5,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
289,361
|
|
$
|
554,326
|
|
|
|
|
|
|
|
|
|
|
F-25
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
12.
|
Financial Risk and Capital
Management (cont’d)
|
|
|
|
|
|
Financial liabilities
included in the statement of financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31,
2014
|
|
|
|
|
|
|
|
|
|
Non-derivative
financial liabilities:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
$
|
386,931
|
|
$
|
289,688
|
|
|
Derivative
liabilities
|
|
|
|
|
|
|
|
|
Derivative financial liability – warrants
|
|
|
12,577
|
|
|
124,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
399,508
|
|
$
|
414,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
|
The
fair value of the Company’s financial assets and liabilities approximates the
carrying amount.
|
|
|
|
|
|
Financial
instruments measured at fair value are classified into one of three levels in
the fair value hierarchy according to the relative reliability of the inputs
used to estimate the fair values. The three levels of the fair value
hierarchy are:
|
|
|
|
|
|
•
|
Level
1 – Unadjusted quoted prices in active markets for identical assets or
liabilities;
|
|
|
|
|
|
|
•
|
Level
2 – Inputs other than quoted prices that are observable for the asset or
liability either directly or indirectly; and
|
|
|
|
|
|
|
•
|
Level
3 – Inputs that are not based on observable market data.
|
|
|
|
|
|
|
Financial
liabilities measured at fair value at June 30, 2015 and December 31, 2014
consisted of the derivative financial liability, which is measured using
level 3 inputs.
|
|
|
|
|
|
|
The
fair value of the derivative liability is determined by the Black-Scholes option
pricing model using the historical volatility as an estimate of future
volatility. At June 30, 2015, if the volatility used was increased by 10% the
impact would be an increase to the derivative liability of $7,910 with a
corresponding decrease to comprehensive loss.
|
|
|
|
|
13.
|
Commitments
|
|
|
|
|
|
Employment
Agreement
|
|
|
|
|
|
The
Company has an agreement (the “Employment Agreement”) dated October 1, 2007,
and amended July 31, 2008, with an officer of the Company under which the
Company pays a fee for employee services at a base salary of $220,000 per
annum. On April 30, 2010, the Board of Directors passed a resolution to
increase this to $250,000 per annum and on May 13, 2011 passed a resolution
to increase this to $275,000 per annum. The employee is entitled to receive
options under the terms and conditions of the Company’s stock option plan.
The employee will serve as the President and Chief Executive Officer of the
Company. On April 5, 2012, the employment agreement was extended for an
additional two years under the same terms. On April 5, 2014, the employment
agreement was extended for an additional three years under the same terms.
|
|
|
|
|
|
Pursuant
to the Employment Agreement, the Company has committed to granting 500,000
stock options based on the Company achieving certain consolidated net revenue
targets. The exercise price and term of the options will be set at time the
targets are met.
|
|
|
|
|
|
The
employee has the right, upon 30 days notice, to terminate the Employment
Agreement. The Company may terminate the Employment Agreement on 10 days
notice if for cause or on 60 days notice if without cause. Should the Company
terminate the contract without cause, it is obligated to pay the employee an
amount equal to three month’s base salary.
|
F-26
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
13.
|
Commitments (cont’d)
|
|
|
|
|
|
License
Agreement
|
|
|
|
|
|
In
2004, the Company entered into a License Agreement with a university under
which the university is entitled to receive: (i) 2% of the Company’s adjusted
gross sales as defined in the License Agreement, and (ii) 2% of the adjusted
gross sales of any sublicensee as defined in the License Agreement. The
License Agreement gives the Company an exclusive license to a certain United
States patent and the related technology for low temperature growth of
inorganic materials from solution using catalyzed growth and re-growth.
|
|
|
|
|
|
Research and
Development Facility Lease
|
|
|
|
|
|
On
June 1, 2013, the Company entered into a new two year lease for its research
and development facility in Rochester, New York. The Company will pay a base
rent of $103,596 per year in monthly installments of $8,633. The lease was
set to expire on June 30, 2015. On June 26, 2015, the Company extended the
lease from July 1, 2015 to June 30, 2017 at a base rent of $105,212 per year
in monthly installments of $8,768.
|
|
|
|
|
|
Administrative
Office Lease
|
|
|
|
|
|
On
August 1, 2013, the Company entered into a new three year lease agreement for
its administrative office. The Company will pay a base rent of $22,000 per
year in monthly installments of $1,833. After year one the annual rent will
increase 3% for each year of the lease, the lease expires on July 31, 2016.
|
|
|
|
|
|
Patent License
Agreement
|
|
|
|
|
|
On
December 9, 2011, the Company entered into a Patent License Agreement to use
certain licensed patents. The Company is required to pay an annual fee of
$25,000 for as long as the Company uses the patents.
|
|
|
|
|
14.
|
Related Party Transactions and
Balances
|
|
|
|
|
|
Related Party
Balances
|
|
|
|
|
|
As
of June 30, 2015 and December 31, 2014 there was $91,360 and $60,760,
respectively, owed to directors, officers, and companies controlled by
directors that has been included in trade payables and accrued liabilities.
|
|
|
|
|
|
Key Management
Personnel Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December
31,
2014
|
|
|
|
|
|
|
|
|
|
Administrative
fees
|
|
$
|
30,000
|
|
$
|
60,000
|
|
|
Consulting
|
|
|
54,000
|
|
|
108,000
|
|
|
Wages and
benefits
|
|
|
178,750
|
|
|
558,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
262,750
|
|
$
|
726,500
|
|
|
|
|
|
|
|
|
|
|
F-27
|
|
|
Natcore Technology Inc.
|
|
Notes to the Condensed Consolidated
Financial Statements
(Expressed in United States Dollars)
For the Three and Six Months Ended June 30, 2015 and 2014
|
|
|
|
|
|
|
15.
|
Subsequent Events
|
|
|
|
|
|
In
July 2015, the Company completed a non-brokered private placement and issued
1,822,000 units at a price of CDN$0.54 per unit for gross proceeds of
$982,227 (CDN$1,275,400). Each unit comprised one common share and one
purchase warrant, with each warrant exercisable at a price of CDN$0.74 per
share for a period of three years from the date of closing. The Company also
issued 73,500 finders’ warrants in connection with this private placement
exercisable at a price of CDN$0.74 per share for a period of three years from
the date of closing.
|
|
|
|
|
|
On
August 21, 2015, the Company entered into an Investment Agreement (the
“Investment Agreement”) and Registration Rights Agreement (the “Registration
Rights Agreement”) with Dutchess Opportunity Fund, II, LP (“Dutchess”).
Pursuant to the Investment Agreement, Dutchess committed to purchase, subject
to certain restrictions and conditions, up to $5 million of the Company’s
Common Stock upon issuance by the company of a Put to Dutchess at a price
equal to ninety five percent (95%) of the lowest daily VWAP (volume weighted
average price) of the Company’s Common Stock during the five (5) consecutive
Trading Days beginning on the Put Notice Date and ending on and including the
date that is four (4) Trading Days after such Put Notice Date. Pursuant to
the terms of the Registration Rights Agreement, the Company is obligated to
file one or more registration statements with the SEC to register the resale
by Dutchess of shares of Common Stock issued or issuable under the Investment
Agreement.
|
F-28
INDEPENDENT
AUDITOR’S REPORT
To the Shareholders of Natcore Technology Inc.
We have audited the accompanying consolidated financial statements of
Natcore Technology Inc., which comprise of the consolidated statements of
financial position as at December 31, 2014 and 2013, and the consolidated
statements of comprehensive loss, changes in equity and cash flows for the
years then ended, and a summary of significant accounting policies and other
explanatory information.
Management’s Responsibility for the
Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of
these consolidated financial statements in accordance with International
Financial Reporting Standards as issued by the International Accounting
Standards Board, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We conducted our audits in accordance
with Canadian generally accepted auditing standards and the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the consolidated financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair
presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained in our audits is
sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of Natcore Technology Inc. as
at December 31, 2014 and 2013, and its financial performance and its cash flows
for the years then ended in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 1 in the
consolidated financial statements which describes certain conditions that
indicate the existence of a material uncertainty that cast substantial doubt
about the Company’s ability to continue as a going concern.
|
|
|
|
|
|
|
|
DALE MATHESON CARR-HILTON
LABONTE LLP
|
|
|
CHARTERED ACCOUNTANTS
|
Vancouver, Canada
April 20, 2015
Natcore Technology Inc.
Consolidated Statements of Financial Position
(Expressed in United States Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
4
|
|
$
|
548,387
|
|
$
|
2,849,022
|
|
|
Receivables
|
|
|
5
|
|
|
5,939
|
|
|
26,016
|
|
|
Prepaid
expenses
|
|
|
|
|
|
60,395
|
|
|
94,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
614,721
|
|
|
2,969,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
6
|
|
|
582,503
|
|
|
680,353
|
|
|
Intangible
assets
|
|
|
7
|
|
|
36,568
|
|
|
171,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
619,071
|
|
|
851,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
|
$
|
1,233,792
|
|
$
|
3,821,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Trade
payables and accrued liabilities
|
|
|
8
|
|
$
|
289,688
|
|
$
|
201,521
|
|
|
Derivative
liability
|
|
|
9
|
|
|
124,823
|
|
|
1,967,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
|
|
414,511
|
|
|
2,168,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
10
|
|
|
13,977,256
|
|
|
13,030,362
|
|
|
Share-based
payment reserve
|
|
|
10,11
|
|
|
2,956,964
|
|
|
2,857,272
|
|
|
Share
subscriptions received
|
|
|
10
|
|
|
313,874
|
|
|
—
|
|
|
Deficit
|
|
|
|
|
|
(16,428,813
|
)
|
|
(14,235,281
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
|
|
|
819,281
|
|
|
1,652,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
|
|
|
$
|
1,233,792
|
|
$
|
3,821,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nature and continuance of operations
|
1
|
|
Commitments
|
13
|
|
Subsequent events
|
17
|
Approved on behalf of the Board:
|
|
|
|
|
“John Calhoun”
|
|
“Brien Lundin”
|
|
|
|
|
|
|
|
|
|
– Director
|
|
– Director
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-30
Natcore Technology Inc.
Consolidated Statements of Comprehensive Loss
(Expressed in United States Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Years Ended
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
|
|
$
|
229,792
|
|
$
|
108,657
|
|
|
Depreciation
and amortization
|
|
|
6,7
|
|
|
412,492
|
|
|
359,178
|
|
|
Filing fees
|
|
|
|
|
|
34,090
|
|
|
32,082
|
|
|
Foreign
exchange loss
|
|
|
|
|
|
41,344
|
|
|
90,060
|
|
|
Interest and
bank charges
|
|
|
|
|
|
1,581
|
|
|
1,269
|
|
|
Marketing
|
|
|
|
|
|
81,401
|
|
|
96,641
|
|
|
Office and
other operational expenses
|
|
|
|
|
|
273,264
|
|
|
267,532
|
|
|
Professional
fees
|
|
|
|
|
|
213,888
|
|
|
129,499
|
|
|
Research and
development
|
|
|
16
|
|
|
1,634,864
|
|
|
1,480,058
|
|
|
Stock-based
compensation
|
|
|
10
|
|
|
301,732
|
|
|
325,686
|
|
|
Travel
|
|
|
|
|
|
73,922
|
|
|
126,668
|
|
|
Wages and
salaries
|
|
|
|
|
|
770,105
|
|
|
855,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,068,475
|
)
|
|
(3,873,183
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
adjustment on warrants
|
|
|
9
|
|
|
1,842,317
|
|
|
(79,353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
32,626
|
|
|
13,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive loss for the year
|
|
|
|
|
$
|
(2,193,532
|
)
|
$
|
(3,938,828
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share – basic and diluted
|
|
|
10
|
|
$
|
(0.05
|
)
|
$
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – basic and diluted
|
|
|
10
|
|
|
42,294,310
|
|
|
41,097,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-31
Natcore Technology Inc.
Consolidated Statement of Changes in Equity
(Expressed in United States Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
Number of shares
|
|
Amount
|
|
Share-based payment
reserve
|
|
Share subscriptions received
|
|
Deficit
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2012
|
|
|
|
|
38,580,849
|
|
$
|
8,970,743
|
|
$
|
2,616,511
|
|
$
|
—
|
|
$
|
(10,296,453
|
)
|
$
|
1,290,801
|
|
|
Comprehensive loss for the year
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,938,828
|
)
|
|
(3,938,828
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash – private placement
|
|
10
|
|
|
6,290,740
|
|
|
3,145,370
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,145,370
|
|
|
Shares issued for cash – options exercise
|
|
|
|
|
225,000
|
|
|
144,589
|
|
|
(58,272
|
)
|
|
—
|
|
|
—
|
|
|
86,317
|
|
|
Shares issued for cash – warrants exercise
|
|
|
|
|
998,530
|
|
|
728,685
|
|
|
(43,437
|
)
|
|
—
|
|
|
—
|
|
|
685,248
|
|
|
Issuance costs – cash
|
|
10
|
|
|
—
|
|
|
(82,022
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(82,022
|
)
|
|
Issuance costs – warrants
|
|
10
|
|
|
—
|
|
|
(16,784
|
)
|
|
16,784
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Derivative liability – warrants exercised
|
|
9,
10
|
|
|
—
|
|
|
139,781
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139,781
|
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
325,686
|
|
|
—
|
|
|
—
|
|
|
325,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2013
|
|
|
|
|
46,095,119
|
|
|
13,030,362
|
|
|
2,857,272
|
|
|
—
|
|
|
(14,235,281
|
)
|
|
1,652,353
|
|
|
Comprehensive loss for the year
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,193,532
|
)
|
|
(2,193,532
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash – options exercise
|
|
|
|
|
100,000
|
|
|
62,624
|
|
|
(25,898
|
)
|
|
—
|
|
|
—
|
|
|
36,726
|
|
|
Shares issued for cash – warrants exercise
|
|
|
|
|
1,666,383
|
|
|
884,270
|
|
|
(176,142
|
)
|
|
—
|
|
|
—
|
|
|
708,128
|
|
|
Subscriptions received
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313,874
|
|
|
—
|
|
|
313,874
|
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
301,732
|
|
|
—
|
|
|
—
|
|
|
301,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2014
|
|
|
|
|
47,861,502
|
|
$
|
13,977,256
|
|
$
|
2,956,964
|
|
$
|
313,874
|
|
$
|
(16,428,813
|
)
|
$
|
819,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-32
Natcore Technology Inc.
Consolidated Statements of Cash Flows
(Expressed in United States Dollars - Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the
Year Ended
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,193,532
|
)
|
$
|
(3,938,828
|
)
|
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
412,492
|
|
|
359,178
|
|
|
Fair value adjustment on warrants
|
|
|
(1,842,317
|
)
|
|
79,353
|
|
|
Stock-based compensation
|
|
|
301,732
|
|
|
325,686
|
|
|
Changes in non-cash working capital items:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
20,077
|
|
|
7,195
|
|
|
Prepaid expenses
|
|
|
33,605
|
|
|
(49,282
|
)
|
|
Trade payables and accrued liabilities
|
|
|
88,167
|
|
|
118,839
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in operating activities
|
|
|
(3,179,776
|
)
|
|
(3,097,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Expenditures on equipment
|
|
|
(179,587
|
)
|
|
(176,702
|
)
|
|
Research and development equipment tax
credit
|
|
|
—
|
|
|
82,961
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in investing activities
|
|
|
(179,587
|
)
|
|
(93,741
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds on issuance of common shares – net
of issuance costs
|
|
|
744,854
|
|
|
3,834,913
|
|
|
Subscriptions received for pending private
placement
|
|
|
313,874
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows provided by financing activities
|
|
|
1,058,728
|
|
|
3,834,913
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents
|
|
|
(2,300,635
|
)
|
|
643,313
|
|
|
Cash and cash equivalents, beginning
|
|
|
2,849,022
|
|
|
2,205,709
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, ending
|
|
$
|
548,387
|
|
$
|
2,849,022
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-33
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
1.
|
Nature and Continuance of
Operations
|
|
|
|
|
|
Natcore
Technology Inc. (the “Company”) was incorporated under the British Columbia
Business Corporations Act on August 9, 2007. The Company’s common shares are
listed on the TSX Venture Exchange (the “Exchange”) under the symbol NXT. The
Company develops and owns technology for the manufacturing of solar cells.
|
|
|
|
|
|
The
Company’s head office address is 189 N. Water Street, Rochester, NY
14604-1163. The Company’s registered office is 2080 - 777 Hornby Street, Vancouver
British Columbia V6Z 1S4.
|
|
|
|
|
|
These
consolidated financial statements have been prepared on the assumption that
the Company will continue as a going concern, meaning it will continue in
operation for the foreseeable future and will be able to realize assets and
discharge liabilities in the ordinary course of operations. Different bases
of measurement may be appropriate if the Company is not expected to continue
operations for the foreseeable future. As at December 31, 2014, the Company
has had recurring losses from operations and a cumulative deficit of
$16,428,813. The Company’s continuation as a going concern is dependent upon
its ability to attain profitable operations and generate funds there from
and/or raise equity capital or borrowings sufficient to meet current and
future obligations. These conditions indicate the existence of a material
uncertainty that cast substantial doubt about the Company’s ability to
continue as a going concern. Management intends to finance operating costs
over the next twelve months with existing cash resources and the private
placement of common shares.
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation
|
|
|
|
|
|
Statement of
Compliance with International Financial Reporting Standards
|
|
|
|
|
|
These
consolidated financial statements of the Company have been prepared in
accordance with International Financial Reporting Standards (“IFRS”) issued
by the International Accounting Standards Board (“IASB”) and interpretations
of the International Financial Reporting Interpretations Committee (“IFRIC”).
|
|
|
|
|
|
The consolidated financial statements were
authorized for issue by the Board of Directors on April 20, 2015.
|
|
|
|
|
|
Basis of
Preparation
|
|
|
|
|
|
The
consolidated financial statements of the Company have been prepared on an accrual
basis and are based on historical costs, modified where applicable. The
consolidated financial statements are presented in United States dollars
unless otherwise noted.
|
|
|
|
|
|
Consolidation
|
|
|
|
|
|
The
consolidated financial statements include the accounts of the Company and its
controlled entities. Details of controlled entities are as follows:
|
|
|
|
|
|
|
|
|
Percentage
Owned*
|
|
|
|
|
|
|
Jurisdiction
of
Incorporation
|
December
31,
2014
|
December
31,
2013
|
|
|
|
|
|
|
Natcore
Technology, Inc.
|
United States
|
100%
|
100%
|
|
Newcyte,
Incorporated
|
United States
|
100%
|
100%
|
|
Vanguard
Solar, Inc.
|
United States
|
100%
|
100%
|
|
Natcore Asia
Technology, Limited
|
Hong Kong
|
100%
|
100%
|
|
|
|
|
|
|
|
|
_______________
|
|
*Percentage
of voting power is in proportion to ownership.
|
|
|
|
Inter-company balances are
eliminated on consolidation.
|
F-34
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Significant
Accounting Judgments, Estimates and Assumptions
|
|
|
|
|
|
The
preparation of consolidated financial statements in accordance with IFRS
requires the Company to make estimates and assumptions concerning the future.
The Company’s management reviews these estimates and underlying assumptions
on an ongoing basis, based on experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances. Revisions to estimates are adjusted for prospectively in the
period in which the estimates are revised.
|
|
|
|
|
|
Estimates
and assumptions where there is significant risk of material adjustments to
assets and liabilities in future accounting periods include the useful lives
of equipment, impairment considerations for equipment and intangible assets,
determination of fair value for stock-based compensation and other
share-based payments, valuations and assumptions used to determine deferred
income taxes and the fair value of financial instruments.
|
|
|
|
|
|
Foreign
Currency Translation
|
|
|
|
|
|
The functional currency of each of the
Company’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial
statements are presented in United States dollars which is the functional
currency of the Company and its subsidiaries.
|
|
|
|
|
|
Transactions
and Balances:
|
|
|
|
|
|
Foreign currency transactions are translated
into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the
period-end exchange rate. Non-monetary items measured at historical cost
continue to be carried at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported at the exchange rate
at the date when fair values were determined.
|
|
|
|
|
|
Exchange differences arising on the
translation of monetary items or on settlement of monetary items are
recognized in profit or loss in the statement of comprehensive loss in the
period in which they arise, except where deferred in equity as a qualifying
cash flow or net investment hedge.
|
|
|
|
|
|
Exchange differences arising on the
translation of non-monetary items are recognized in other comprehensive loss
in the statement of comprehensive loss to the extent that gains and losses
arising on those non-monetary items are also recognized in other
comprehensive loss. Where the non-monetary gain or loss is recognized in
profit or loss, the exchange component is also recognized in profit or loss.
|
|
|
|
|
|
Intangible
Assets
|
|
|
|
|
|
Intangible
Assets Acquired Separately
|
|
|
|
|
|
Intangible
assets with finite useful lives that are acquired separately are carried at
cost less accumulated amortization and accumulated impairment losses. Amortization
is recognized on a straight-line basis over their estimated useful lives. The
estimated useful life and amortization method are reviewed at the end of each
reporting period, with the effect of any changes in estimate being accounted
for on a prospective basis. Intangible assets with indefinite useful lives
that are acquired separately are carried at cost less accumulated impairment
losses.
|
F-35
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Intangible
Assets (cont’d)
|
|
|
|
|
|
Internally-Generated
Intangible Assets - Research and Development Expenditure
|
|
|
|
|
|
Expenditure
on research activities is recognized as an expense in the period in which it
is incurred.
|
|
|
|
|
|
An
internally-generated intangible asset arising from development (or from the
development phase of an internal project) is recognized if, and only if, all
of the following have been demonstrated:
|
|
|
|
|
|
•
|
The
technical feasibility of completing the intangible asset so that it will be
available for use or sale;
|
|
|
|
|
|
|
•
|
The
intention to complete the intangible asset and use or sell it;
|
|
|
|
|
|
|
•
|
The
ability to use or sell the intangible asset;
|
|
|
|
|
|
|
•
|
How
the intangible asset will generate probable future economic benefits;
|
|
|
|
|
|
|
•
|
The
availability of adequate technical, financial and other resources to complete
the development and to use or sell the intangible asset; and
|
|
|
|
|
|
|
•
|
The
ability to measure reliably the expenditure attributable to the intangible
asset during its development.
|
|
|
|
|
|
|
The
amount initially recognized for internally-generated intangible assets is the
sum of the expenditure incurred from the date when the intangible asset first
meets the recognition criteria listed above. Where no internally-generated
intangible asset can be recognized, development expenditure is recognized in
loss in the period in which it is incurred.
|
|
|
|
|
|
Subsequent
to initial recognition, internally-generated intangible assets are reported
at cost less accumulated amortization and accumulated impairment losses, on
the same basis as intangible assets that are acquired separately.
|
|
|
|
|
|
At
December 31, 2014 and 2013, the Company has not recognized any
internally-generated intangible assets.
|
|
|
|
|
|
Share-Based
Payments
|
|
|
|
|
|
The Company operates a stock option plan.
Share-based payments to employees are measured at the fair value of the
instruments issued and amortized over the vesting periods. Share-based
payments to non-employees are measured at the fair value of goods or services
received or the fair value of the equity instruments issued, if it is
determined the fair value of the goods or services cannot be reliably
measured, and are recorded at the date the goods or services are received.
The corresponding amount is recorded to the share-based payment reserve. The
fair value of options is determined using the Black–Scholes Option Pricing
Model. The number of shares and options expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognized
for services received as consideration for the equity instruments granted
shall be based on the number of equity instruments that eventually vest.
|
F-36
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Financial
Instruments
|
|
|
|
|
|
The
Company classifies its financial instruments in the following categories: at
fair value through profit or loss, loans and receivables, held-to-maturity
investments, available-for-sale and financial liabilities. The classification
depends on the purpose for which the financial instruments were acquired.
Management determines the classification of its financial instruments at
initial recognition.
|
|
|
|
|
|
Financial assets are classified at fair value
through profit or loss when they are either held for trading for the purpose
of short-term profit taking, derivatives not held for hedging purposes, or
when they are designated as such to avoid an accounting mismatch or to enable
performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented
risk management or investment strategy. Such assets are subsequently measured
at fair value with changes in carrying value being included in profit or loss.
|
|
|
|
|
|
Loans
and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and are
subsequently measured at amortized cost. They are included in current assets,
except for maturities greater than 12 months after the end of the reporting
period. These are classified as non-current assets.
|
|
|
|
|
|
Held-to-maturity investments are
non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Company’s intention to hold these
investments to maturity. They are subsequently measured at amortized cost.
Held-to-maturity investments are included in non-current assets, except for
those which are expected to mature within 12 months after the end of the reporting
period.
|
|
|
|
|
|
Available-for-sale
financial assets are non-derivative financial assets that are designated as
available-for-sale or are not suitable to be classified as financial assets
at fair value through profit or loss, loans and receivables or held-to-maturity
investments and are subsequently measured at fair value. These are included
in current assets. Unrealized gains and losses are recognized in other
comprehensive loss, except for impairment losses and foreign exchange gains
and losses.
|
|
|
|
|
|
Non-derivative financial liabilities
(excluding financial guarantees) are subsequently measured at amortized cost.
Derivative financial liabilities are classified at fair value through profit
and loss and are subsequently measured at fair value with changes in carrying
value being included in profit or loss.
|
|
|
|
|
|
Regular
purchases and sales of financial assets are recognized on the trade-date –
the date on which the Company commits to purchase the asset.
|
|
|
|
|
|
Financial
assets are derecognized when the rights to receive cash flows from the
investments have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
|
|
|
|
|
|
At each reporting date, the Company assesses
whether there is objective evidence that a financial instrument has been
impaired. In the case of available-for-sale financial instruments, a
significant and prolonged decline in the value of the instrument is
considered to determine whether impairment has arisen.
|
|
|
|
|
|
Impairment of
Long-Lived Assets
|
|
|
|
|
|
The
carrying amount of the Company’s long-lived assets (which include equipment
and intangible assets) is reviewed at each reporting date to determine
whether there is any indication of impairment. If such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss. An impairment loss is recognized whenever the
carrying amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognized in the statement of
comprehensive loss.
|
F-37
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Impairment of
Long-Lived Assets (cont’d)
|
|
|
|
|
|
The
recoverable amount of assets is the greater of an asset’s fair value less
cost to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax
discount rate that reflects the current market assessments of the time value
of money and the risks specific to the asset. For an asset that does not
generate cash inflows largely independent of those from other assets, the
recoverable amount is determined for the cash-generating unit to which the
asset belongs.
|
|
|
|
|
|
An
impairment loss is only reversed if there is an indication that the
impairment loss may no longer exist and there has been a change in the estimates
used to determine the recoverable amount, however, not to an amount higher
than the carrying amount that would have been determined had no impairment
loss been recognized in previous years.
|
|
|
|
|
|
Assets
that have an indefinite useful life are not subject to amortization and are
tested annually for impairment.
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
|
|
|
|
Cash and cash equivalents include cash on
hand, deposits held at call with banks and other short-term highly liquid
investments, such as guaranteed investment certificates with original
maturities of three months or less. Guaranteed investment certificates are
investments with Canadian banks that are the equivalent of a certificate of
deposit.
|
|
|
|
|
|
Income Taxes
|
|
|
|
|
|
Current Income Tax:
|
|
|
|
|
|
Current
income tax assets and liabilities for the current period are measured at the
amount expected to be recovered from or paid to the taxation authorities. The
tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted, at the reporting date, in the countries where the
Company operates and generates taxable income.
|
|
|
|
|
|
Current
income tax relating to items recognized directly in other comprehensive loss
or equity is recognized in other comprehensive loss or equity and not in
profit or loss. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
|
|
|
|
|
|
Deferred Income Tax:
|
|
|
|
|
|
Deferred
income tax is provided using the asset and liability method on temporary
differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
|
|
|
|
|
|
The
carrying amount of deferred income tax assets is reviewed at the end of each
reporting period and recognized only to the extent that it is probable that
sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilized.
|
|
|
|
|
|
Deferred
income tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
|
|
|
|
|
|
Deferred
income tax assets and deferred income tax liabilities are offset, if a
legally enforceable right exists to set off current tax assets against
current income tax liabilities and the deferred income taxes relate to the
same taxable entity and the same taxation authority.
|
F-38
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
2.
|
Significant Accounting Policies
and Basis of Preparation (cont’d)
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
Equipment
is stated at historical cost less accumulated depreciation and accumulated
impairment losses.
|
|
|
|
|
|
Subsequent
costs are included in the asset’s carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item
can be measured reliably. The carrying amount of the replaced part is
derecognized. All other repairs and maintenance are charged to the statement
of comprehensive loss during the financial period in which they are incurred.
|
|
|
|
|
|
Gains
and losses on disposals are determined by comparing the proceeds with the
carrying amount and are recognized in profit or loss.
|
|
|
|
|
|
Depreciation
and amortization are calculated on a straight-line method to write off the
cost of the assets to their residual values over their estimated useful
lives.
|
|
|
|
|
|
Comparative
Information
|
|
|
|
|
|
Certain
expenses for the year ended December 31, 2013 have been reclassified to
conform with the presentation in the current year.
|
|
|
|
|
3.
|
Accounting Standards Issued But
Not Yet Effective
|
|
|
|
|
|
New Standard
IFRS 9 “Financial Instruments”
|
|
|
|
|
|
This
new standard is a partial replacement of International Accounting Standard
(“IAS”) 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 uses
a single approach to determine whether a financial asset is measured at
amortized cost or fair value, replacing the multiple rules in IAS 39. The
approach in IFRS 9 is based on how an entity manages its financial
instruments in the context of its business model and the contractual cash
flow characteristics of the financial assets. The new standard also requires
a single impairment method to be used, replacing the multiple impairment
methods in IAS 39. IFRS 9 is effective for annual periods beginning on after
December 31, 2018. Early adoption is permitted.
|
|
|
|
|
|
The
Company has not early adopted this new standard and is currently assessing
the impact that these standards will have on its financial statements.
|
|
|
|
|
|
Other
accounting standards or amendments to existing accounting standards that have
been issued but have future effective dates are either not applicable or are
not expected to have a significant impact on the Company’s financial
statements.
|
|
|
|
|
4.
|
Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
Cash at Bank
|
|
$
|
412,996
|
|
$
|
877,147
|
|
|
Savings
Certificates in Banks
|
|
|
18,731
|
|
|
1,906,141
|
|
|
Guaranteed
Investment Certificates
|
|
|
116,660
|
|
|
65,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
548,387
|
|
$
|
2,849,022
|
|
|
|
|
|
|
|
|
|
|
F-39
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
GST
Receivable
|
|
$
|
5,939
|
|
$
|
15,458
|
|
|
Due From
Related Party (Note 14)
|
|
|
—
|
|
|
10,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,939
|
|
$
|
26,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture
and
Office
Equipment
|
|
Production
Equipment
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2012
|
|
$
|
285,050
|
|
$
|
707,988
|
|
$
|
993,038
|
|
|
Additions
|
|
|
60,118
|
|
|
116,584
|
|
|
176,702
|
|
|
Government
Tax Credit
|
|
|
—
|
|
|
(82,962
|
)
|
|
(82,692
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2013
|
|
|
345,168
|
|
|
741,610
|
|
|
1,086,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2012
|
|
|
52,584
|
|
|
131,144
|
|
|
183,728
|
|
|
Charge for
the Period
|
|
|
61,972
|
|
|
160,725
|
|
|
222,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2013
|
|
|
114,556
|
|
|
291,869
|
|
|
406,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2013
|
|
$
|
230,612
|
|
$
|
449,741
|
|
$
|
680,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2013
|
|
$
|
345,168
|
|
$
|
741,610
|
|
$
|
1,086,778
|
|
|
Additions
|
|
|
9,850
|
|
|
169,737
|
|
|
179,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
|
355,018
|
|
|
911,347
|
|
|
1,266,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2013
|
|
|
114,556
|
|
|
291,869
|
|
|
406,425
|
|
|
Charge for
the Period
|
|
|
102,562
|
|
|
174,875
|
|
|
277,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
|
217,118
|
|
|
466,744
|
|
|
683,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2014
|
|
$
|
137,900
|
|
$
|
444,603
|
|
$
|
582,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-40
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
|
|
|
|
|
Issued and
Pending Patents
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
At December
31, 2014, 2013 and 2012
|
|
$
|
711,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization:
|
|
|
|
|
|
At December
31, 2012
|
|
|
403,710
|
|
|
Charge for
the Period
|
|
|
136,481
|
|
|
|
|
|
|
|
|
At December
31, 2013
|
|
|
540,191
|
|
|
Charge for
the Period
|
|
|
135,055
|
|
|
|
|
|
|
|
|
At December
31, 2014
|
|
|
675,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value:
|
|
|
|
|
|
At December 31, 2013
|
|
$
|
171,623
|
|
|
|
|
|
|
|
|
At December 31, 2014
|
|
$
|
36,568
|
|
|
|
|
|
|
|
|
|
|
|
|
The balance will be fully amortized during the year ended December
31, 2015.
|
|
|
|
|
8.
|
Trade Payables and Accrued Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
Trade
Payables and Accrued Liabilities
|
|
$
|
289,688
|
|
$
|
201,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.
|
Derivative Financial Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
2014
|
|
Year Ended
December 31,
2013
|
|
|
|
|
|
|
|
|
|
Balance,
Beginning
|
|
$
|
1,967,140
|
|
$
|
2,027,568
|
|
|
Fair value
of warrants exercised during the year
|
|
|
—
|
|
|
(139,781
|
)
|
|
Change in
fair value of warrants outstanding
|
|
|
(1,842,317
|
)
|
|
79,353
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
Ending
|
|
$
|
124,823
|
|
$
|
1,967,140
|
|
|
|
|
|
|
|
|
|
|
F-41
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
9.
|
Derivative Financial Liability
(cont’d)
|
|
|
|
|
|
The
derivative financial liability consists of the fair value of share purchase
warrants that have exercise prices that differ from the functional currency
of the Company and are within the scope of IAS 32 “Financial Instruments:
Presentation”. Details of these warrants and their fair values are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration Date
|
|
Exercise
Price
|
|
Number of
Warrants
Outstanding at
December 31, 2014
|
|
Fair Value
at
December 31,
2014
|
|
Number of
Warrants
Outstanding at
December 31,
2013
|
|
Fair Value
at
December 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDN $
|
|
|
|
US $
|
|
|
|
US $
|
|
|
December 22,
2015
|
|
|
1.00
|
|
|
1,134,667
|
|
|
29,943
|
|
|
1,134,667
|
|
|
583,399
|
|
|
January 4,
2016
|
|
|
1.00
|
|
|
429,867
|
|
|
9,579
|
|
|
429,867
|
|
|
163,634
|
|
|
July 20,
2015
|
|
|
0.90
|
|
|
3,840,700
|
|
|
85,301
|
|
|
3,840,700
|
|
|
1,220,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,405,234
|
|
|
124,823
|
|
|
5,405,234
|
|
$
|
1,967,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
fair values of these warrants were estimated using the Black-Scholes Option
Pricing Model using the following assumptions.
|
|
|
|
|
|
•
|
The
stock price was based upon the publicly traded price at the time of issuance;
|
|
|
|
|
|
|
•
|
The
risk-free interest rate assumption is based on the government of Canada
marketable bonds for a period consistent with the expected term of the option
in effect at the time of the grant;
|
|
|
|
|
|
|
•
|
The
Company does not pay dividends on common stock and does not anticipate paying
dividends on its common stock in the foreseeable future. Therefore, the
expected dividend rate was 0%;
|
|
|
|
|
|
|
•
|
The
expected life of the warrants was estimated to be 75% of the remaining
contractual term which is based on the historical exercise patterns of
warrant holders; and
|
|
|
|
|
|
|
•
|
The
expected volatility was based off of the historical trading prices of the
Company’s common stock price over a period equivalent to the expected life of
the warrants.
|
|
|
|
|
|
|
The
fair values of these warrants as at December 31, 2014 were estimated using
the Black-Scholes Option Pricing Model using the following inputs:
|
|
|
|
|
|
|
Expiration Date
|
December 22, 2015
|
January 4, 2016
|
July 20, 2015
|
|
|
|
|
|
|
Exercise
price
|
CDN$1.00
|
CDN$1.00
|
CDN$0.90
|
|
Share price
|
CDN$0.46
|
CDN$0.46
|
CDN$0.46
|
|
Expected
volatility
|
81%
|
76%
|
94%
|
|
Expected life
|
0.73 years
|
0.76 years
|
0.41 years
|
|
Dividends
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
0.96%
|
0.96%
|
1.00%
|
|
|
|
|
|
F-42
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
9.
|
Derivative Financial Liability
(cont’d)
|
|
|
|
|
|
The
fair values of these warrants as at December 31, 2013 were estimated using
the Black-Scholes Option Pricing Model using the following inputs.
|
|
|
|
|
|
|
Expiration Date
|
December 22, 2015
|
January 4, 2016
|
July 20, 2014*
|
|
|
|
|
|
|
Exercise
price
|
CDN$1.00
|
CDN$1.00
|
CDN$0.90
|
|
Share price
|
CDN$1.11
|
CDN$1.11
|
CDN$1.11
|
|
Expected
volatility
|
91%
|
96%
|
86%
|
|
Expected
life
|
1.48 years
|
1.51 years
|
0.42 years
|
|
Dividends
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
1.07%
|
1.01%
|
1.02%
|
|
|
|
|
|
|
|
|
______________
|
|
*During
the year ended December 31, 2014, the expiration date of these warrants was
extended to July 20, 2015.
|
|
|
|
|
10.
|
Share Capital
|
|
|
|
|
|
Authorized
Share Capital
|
|
|
|
|
|
Unlimited
number of common shares without par value.
|
|
|
|
|
|
Issued Share
Capital
|
|
|
|
|
|
At
December 31, 2014, there were 47,861,502 issued and fully paid common shares
(December 31, 2013 – 46,095,119).
|
|
|
|
|
|
Private
Placements
|
|
|
|
|
|
On
August 20, 2013, the Company completed a private placement of 6,290,740 units
at a price of $0.50 per unit for gross proceeds of $3,145,370. Each unit
comprised one common share and one share purchase warrant, with each whole
warrant exercisable at a price of USD$0.62 per share and expiring August 20,
2016. The Company paid finder’s fees of $16,313 for the financing as well as
incurring other share issuance costs of $65,709. A total of 59,850 finders’
warrants were issued with a fair value of $16,784 determined using the
Black-Scholes Option Pricing Model with the following assumptions: Risk free
rate of 0.70%; Expected life of 3 years; Volatility of 90.6%; and a Dividend
yield of 0%.
|
|
|
|
|
|
Share
Subscriptions Received
|
|
|
|
|
|
As
part of a private placement closed in January 2015, the Company had received subscriptions
of $313,874 at December 31, 2014 (Note 17).
|
|
|
|
|
|
Basic and
Diluted Loss Per Share
|
|
|
|
|
|
The
calculation of basic and diluted loss per share for the year ended December
31, 2014 and 2013 was based on the loss attributable to common shareholders
of $2,193,532 and $3,938,828 and the weighted average number of common shares
outstanding of 42,294,310 and 41,097,726, respectively.
|
|
|
|
|
|
Diluted
loss per share did not include the effect of stock options and warrants as
the effect would be anti-dilutive.
|
F-43
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
10.
|
Share Capital (cont’d)
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
The
Company has adopted an incentive stock option plan, which provides that the
Board of Directors of the Company may from time to time, at its discretion,
and in accordance with the Exchange requirements, grant to directors,
officers, employees and technical consultants to the Company,
non-transferable options to purchase common shares, provided that the number
of common shares reserved for issuance will not exceed 6,779,255 common
shares. Such options will be exercisable for a period of up to 10 years from
the date of grant. In connection with the foregoing, the number of common
shares reserved for issuance to any one optionee will not exceed five percent
(5%) of the issued and outstanding common shares and the number of common
shares reserved for issuance to all technical consultants will not exceed two
percent (2%) of the issued and outstanding common shares. Options may be
exercised no later than 90 days following cessation of the optionee’s
position with the Company or 30 days following cessation of an optionee
conducting investor relations activities’ position.
|
|
|
|
|
|
Stock-based
compensation expense has been calculated using the Black-Scholes option
pricing model. The expected life of the options has been estimated to be the
contractual term of the option given the limited history of early exercise.
Future volatility has been determined based on historical volatility for a
period equivalent to the expected life of the option.
|
|
|
|
|
|
During
the year ended December 31, 2014, the Company recorded stock-based
compensation expense of $301,732 (2013 - $325,686) relating to options that
vested during the year.
|
|
|
|
|
|
On
January 4, 2013 the Company granted 20,000 stock options to an employee. The
options vested immediately. The options are exercisable at CDN$0.80 and
expire January 4, 2018. The options had a fair value of $12,847 (CDN$12,665)
determined using the Black-Scholes Option Pricing Model with the following
assumptions: Risk free rate of 0.27%; Expected life of 5 years; Volatility of
107%; and a Dividend yield of 0%.
|
|
|
|
|
|
On April 5, 2013 the Company granted 40,000
stock options to an employee. 50% of the options vest six months following the grant date and the
remaining in twelve months from the grant date. The options are
exercisable at CDN$0.71 and expire April 5, 2018. The options had a grant
date fair value of $21,496 (CDN$21,801) determined using the Black-Scholes
Option Pricing Model with the following assumptions: Risk free rate of 0.71%;
Expected life of 5 years; Volatility of 106%; and a Dividend yield of 0%.
|
|
|
|
|
|
On June 1, 2013 the Company granted 100,000
stock options to an employee. 25% of the options vested immediately, and 25%
vest every three months thereafter. The options are exercisable at CDN$0.79
and expire June 1, 2016. The options had a grant date fair value of $48,167
(CDN$49,755) determined using the Black-Scholes Option Pricing Model with the
following assumptions: Risk free rate of 0.71%; Expected life of 3 years;
Volatility of 94%; and a Dividend yield of 0%.
|
|
|
|
|
|
On June 3, 2013 the Company granted 25,000 stock
options to an employee. 50%
of the options vest six months following the grant date and the remaining in
twelve months from the grant date. The options are exercisable at CDN$0.83 and
expire June 3, 2018. The options had a grant date fair value of $15,416
(CDN$15,981) determined using the Black-Scholes Option Pricing Model with the
following assumptions: Risk free rate of 1.20%; Expected life of 5 years;
Volatility of 106%; and a Dividend yield of 0%.
|
|
|
|
|
|
On July 31, 2013 the Company granted 100,000
stock options to two consultants. 50% of the options vest six months following the grant date and the
remaining in twelve months from the grant date. The options are
exercisable at CDN$0.58 and expire July 18, 2018. The options had a grant
date fair value of $42,209 (CDN$43,757) determined using the Black-Scholes
Option Pricing Model with the following assumptions: Risk free rate of 1.40%;
Expected life of 5 years; Volatility of 102%; and a Dividend yield of 0%.
|
F-44
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
10.
|
Share Capital (cont’d)
|
|
|
|
|
|
Stock Options
(cont’d)
|
|
|
|
|
|
On August 16, 2013 the Company granted
400,000 stock options to a consultant. The options vested immediately. The
options are exercisable at CDN$0.59 and expire August 16, 2016. The options
had a grant date fair value of $128,191 (CDN$132,332) determined using the
Black-Scholes Option Pricing Model with the following assumptions: Risk free
rate of 1.20%; Expected life of 3 years; Volatility of 90%; and a Dividend
yield of 0%.
|
|
|
|
|
|
On
January 10, 2014, the Company granted 345,000 stock options to employees. 50%
of the options vest six months following the grant date and the remaining in
eighteen months from the grant date. The options are exercisable at CDN$1.08
and expire January 10, 2019. The options had a grant date fair value of
$259,224 (CDN$282,995) determined using the Black-Scholes Option Pricing
Model with the following assumptions: Risk free rate of
1.73%; Expected life of 5 years; Volatility of 103%; and a Dividend yield of
0%.
|
|
|
|
|
|
On
February 3, 2014, the Company granted 60,000 stock options to employees. 50%
of the options vest six months following the grant date and the remaining in
eighteen months from the grant date. The options are exercisable at CDN$0.99
and expire February 3, 2019. The options had a grant date fair value of
$40,706 (CDN$45,084) determined using the Black-Scholes Option Pricing Model
with the following assumptions: Risk free rate of
1.51%; Expected life of 5 years; Volatility of 103%; and a Dividend yield of
0%.
|
|
|
|
|
|
On
November 14, 2014, the Company granted 80,000 stock options to a consultant.
50% of the options vest six months following the grant date and the remaining
in eighteen months from the grant date. The options are exercisable at
CDN$0.57 and expire December 20, 2017. The options had a grant date fair
value of $24,108 (CDN$27,229) determined using the Black-Scholes Option Pricing
Model with the following assumptions: Risk free rate of
1.14%; Expected life of 3.10 years; Volatility of 94%; and a Dividend yield
of 0%.
|
|
|
|
|
|
On
December 17, 2014, the Company granted 525,000 stock options to employees.
50% of the options vest six months following the grant date and the remaining
in eighteen months from the grant date. The options are exercisable at
CDN$0.75 and expire December 17, 2019. The options had a grant date fair
value of $140,026 (CDN$162,840) determined using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of
1.73%; Expected life of 5 years; Volatility of 93%; and a Dividend yield of
0%.
|
|
|
|
|
|
The
weighted average grant date fair value of options granted during the year
ended December 31, 2014 was $0.46 per option (2013 - $0.36).
|
|
|
|
|
|
The
changes in options during years ended December 31, 2014 and 2013 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
outstanding, beginning
|
|
|
3,772,000
|
|
|
CDN$0.90
|
|
|
3,507,000
|
|
|
CDN$0.93
|
|
|
Options
granted
|
|
|
1,010,000
|
|
|
CDN$0.86
|
|
|
685,000
|
|
|
CDN$0.64
|
|
|
Options
exercised
|
|
|
(100,000
|
)
|
|
CDN$0.40
|
|
|
(225,000
|
)
|
|
CDN$0.40
|
|
|
Options
forfeited
|
|
|
—
|
|
|
—
|
|
|
(195,000
|
)
|
|
CDN$0.96
|
|
|
Options
expired
|
|
|
(500,000
|
)
|
|
CDN$1.20
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
outstanding, ending
|
|
|
4,182,000
|
|
|
CDN$0.87
|
|
|
3,772,000
|
|
|
CDN$0.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
exercisable, ending
|
|
|
3,324,500
|
|
|
CDN$0.89
|
|
|
3,562,000
|
|
|
CDN$0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
weighted average remaining life of the options outstanding as at December 31,
2014 is 2.33 years.
|
F-45
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
10.
|
Share Capital (cont’d)
|
|
|
|
|
|
Stock Options
(cont’d)
|
|
|
|
|
|
Details
of options outstanding as at December 31, 2014 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise Price
|
|
|
Expiration Date
|
|
|
Number of Options
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.97
|
|
|
February 8, 2016
|
|
|
1,830,000
|
|
|
CDN$ 0.79
|
|
|
June 1, 2016
|
|
|
100,000
|
|
|
CDN$ 0.59
|
|
|
August 16, 2016
|
|
|
400,000
|
|
|
CDN$ 0.51
|
|
|
April 17, 2017
|
|
|
120,000
|
|
|
CDN$ 1.11
|
|
|
September 4, 2017
|
|
|
200,000
|
|
|
CDN$ 0.80
|
|
|
December 20, 2017
|
|
|
337,000
|
|
|
CDN$ 0.57
|
|
|
December 20, 2017
|
|
|
80,000
|
|
|
CDN$ 0.80
|
|
|
January 4, 2018
|
|
|
20,000
|
|
|
CDN$ 0.71
|
|
|
April 5, 2018
|
|
|
40,000
|
|
|
CDN$ 0.83
|
|
|
June 3, 2018
|
|
|
25,000
|
|
|
CDN$ 0.58
|
|
|
July 31, 2018
|
|
|
100,000
|
|
|
CDN$ 1.08
|
|
|
January 10, 2019
|
|
|
345,000
|
|
|
CDN$ 0.99
|
|
|
February 3, 2019
|
|
|
60,000
|
|
|
CDN$ 0.75
|
|
|
December 17, 2019
|
|
|
525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,182,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Each
option entitles the holder to purchase one common share of the Company.
|
|
|
|
|
|
Warrants
|
|
|
|
|
|
The
changes in warrants during the year ended December 31, 2014 and 2013 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Warrants
|
|
Weighted
Average
Exercise
Price
|
|
Number of
Warrants
|
|
Weighted
Average
Exercise
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, beginning
|
|
|
13,517,067
|
|
|
CDN$0.72
|
|
|
8,362,107
|
|
|
CDN$0.80
|
|
|
Warrants
issued
|
|
|
—
|
|
|
—
|
|
|
6,350,590
|
|
|
US$0.62
|
|
|
Warrants
expired
|
|
|
(362,210
|
)
|
|
CDN$0.65
|
|
|
(197,100
|
)
|
|
CDN$1.00
|
|
|
Warrants
exercised
|
|
|
(114,850
|
)
|
|
US$0.62
|
|
|
(150,000
|
)
|
|
US$0.62
|
|
|
Warrants
exercised
|
|
|
(1,551,533
|
)
|
|
CDN$0.45
|
|
|
(848,530
|
)
|
|
CDN$0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, ending
|
|
|
11,488,474
|
|
|
CDN$0.77
|
|
|
13,517,067
|
|
|
CDN$0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
weighted average remaining life of the warrants outstanding as at December
31, 2014 is 1.19 years.
|
|
|
|
|
|
Details
of warrants outstanding as December 31, 2014 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise Price
|
|
|
Expiration Date
|
|
|
Number of Warrants
Outstanding and
Exercisable
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.90
|
|
|
July 20, 2015
|
|
|
3,840,700
|
|
|
CDN$ 1.00
|
|
|
December 22, 2015
|
|
|
1,134,667
|
|
|
CDN$ 1.00
|
|
|
January 4, 2016
|
|
|
429,867
|
|
|
US$ 0.62
|
|
|
August 20, 2016
|
|
|
6,083,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,488,474
|
|
|
|
|
|
|
|
|
|
|
F-46
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
11.
|
Reserves
|
|
|
|
|
|
Share-Based
Payment Reserve
|
|
|
|
|
|
The
share-based payment reserve records the fair value of options and warrants
recorded in accordance with IFRS 2 “Share-based payments” until such time
that the stock options or warrants are exercised, at which time the
corresponding amount will be transferred to share capital.
|
|
|
|
|
12.
|
Financial Risk and Capital
Management
|
|
|
|
|
|
The
Company is exposed in varying degrees to a variety of financial instrument
related risks. The Board of Directors approves and monitors the risk
management processes, inclusive of documented investment policies,
counterparty limits, and controlling and reporting structures. The type of
risk exposure and the way in which such exposure is managed is provided as
follows:
|
|
|
|
|
|
Credit Risk
|
|
|
|
|
|
Credit
risk is the risk that one party to a financial instrument will fail to
discharge an obligation and cause the other party to incur a financial loss.
The Company’s primary exposure to credit risk is on its cash, and cash
equivalents. The majority of cash is deposited in bank accounts held with
major banks in Canada and the United States. As most of the Company’s cash is
held by two banks there is a concentration of credit risk. This risk is
managed by using major banks that are high credit quality financial
institutions as determined by rating agencies. The Company’s secondary
exposure to risk is on its receivables. The risk is considered to be minimal.
|
|
|
|
|
|
Liquidity Risk
|
|
|
|
|
|
Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they fall due. The Company has a planning and budgeting
process in place to help determine the funds required to support the
Company’s normal operating requirements on an ongoing basis. The Company
ensures that there are sufficient funds to meet its short-term business
requirements, taking into account its anticipated cash flows from operations
and its holdings of cash and cash equivalents.
|
|
|
|
|
|
Historically,
the Company’s sole source of funding has been the issuance of equity
securities for cash, primarily through private placements. The Company’s
access to financing is always uncertain. There can be no assurance of
continued access to significant equity funding.
|
|
|
|
|
|
The
following is an analysis of the contractual maturities of the Company’s
non-derivative financial liabilities as at December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within One
Year
|
|
Between
One
and Five Years
|
|
More Than
Five Years
|
|
|
|
|
|
|
|
|
|
|
|
Trade
Payables and Accrued Liabilities
|
|
$
|
289,688
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Exchange Risk
|
|
|
|
|
|
Foreign exchange risk is the risk that the fair values of future cash
flows of a financial instrument will fluctuate because they are denominated
in currencies that differ from the respective functional currency. The
Company does not hedge its exposure to fluctuations in foreign exchange
rates.
|
|
|
|
|
|
The following is an analysis of the United States dollar equivalent
of financial assets and liabilities that are denominated in Canadian dollars:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
432,656
|
|
$
|
558,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on the above net exposures, as at December 31, 2014, a 1%
change in the Canadian dollar to United States dollar exchange rate would
impact the Company’s net loss by $4,327 (2013 - $5,581).
|
F-47
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
12.
|
Financial Risk and Capital
Management (cont’d)
|
|
|
|
|
|
Interest
Rate Risk
|
|
|
|
|
|
Interest rate risk is the risk that the fair value of future cash
flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company is exposed to interest rate risk on its cash
equivalents as these instruments have original maturities of three months or
less and are therefore exposed to interest rate fluctuations on renewal. A 1%
change in market interest rates would have an impact on the Company’s net
loss of approximately $1,000.
|
|
|
|
|
|
Capital Management
|
|
|
|
|
|
The
Company’s policy is to maintain a strong capital base so as to maintain
investor and creditor confidence and to sustain future development of the
business. The capital structure of the Company consists of equity, comprising
share capital, net of accumulated deficit. There were no changes in the
Company’s approach to capital management during the period.
|
|
|
|
|
|
The
Company is not subject to any externally imposed capital requirements.
|
|
|
|
|
|
Classification of Financial Instruments
|
|
|
|
|
|
Financial assets included in the statement of
financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Loans and
receivables
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
548,387
|
|
$
|
2,849,022
|
|
|
Receivables
|
|
|
5,939
|
|
|
26,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
554,326
|
|
$
|
2,875,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
included in the statement of financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
Non-derivative
financial liabilities:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
$
|
289,688
|
|
$
|
201,521
|
|
|
Derivative
liabilities
|
|
|
|
|
|
|
|
|
Derivative financial liability – warrants
|
|
|
124,823
|
|
|
1,967,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
414,511
|
|
$
|
2,168,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
|
|
|
|
|
The
fair value of the Company’s financial assets and liabilities approximates the
carrying amount.
|
|
|
|
|
|
Financial
instruments measured at fair value are classified into one of three levels in
the fair value hierarchy according to the relative reliability of the inputs
used to estimate the fair values. The three levels of the fair value
hierarchy are:
|
|
|
|
|
|
•
|
Level
1 – Unadjusted quoted prices in active markets for identical assets or
liabilities;
|
|
|
|
|
|
|
•
|
Level
2 – Inputs other than quoted prices that are observable for the asset or
liability either directly or indirectly; and
|
|
|
|
|
|
|
•
|
Level
3 – Inputs that are not based on observable market data.
|
|
|
|
|
|
|
Financial
liabilities measured at fair value at December 31, 2014 and 2013 consisted of
the derivative financial liability, which is measured using level 3 inputs.
|
|
|
|
|
|
The
fair value of the derivative liability is determined by the Black-Scholes
option pricing model using the historical volatility as an estimate of future
volatility. At December 31, 2014, if the volatility used was increased by 10%
the impact would be an increase to the derivative liability of $45,395 with a
corresponding decrease to comprehensive loss.
|
F-48
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
13.
|
Commitments
|
|
|
|
|
|
Employment
Agreement
|
|
|
|
|
|
The
Company has an agreement (the “Employment Agreement”) dated October 1, 2007,
and amended July 31, 2008, with an officer of the Company under which the
Company pays a fee for employee services at a base salary of $220,000 per
annum. On April 30, 2010, the Board of Directors passed a resolution to
increase this to $250,000 per annum and on May 13, 2011 passed a resolution
to increase this to $275,000 per annum. The employee is entitled to receive
options under the terms and conditions of the Company’s stock option plan.
The employee will serve as the President and Chief Executive Officer of the
Company. On April 5, 2012, the employment agreement was extended for an
additional two years under the same terms. On April 5, 2014, the employment
agreement was extended for an additional three years under the same terms.
|
|
|
|
|
|
Pursuant
to the Employment Agreement, the Company has committed to granting 500,000
stock options based on the Company achieving certain consolidated net revenue
targets. The exercise price and term of the options will be set at time the
targets are met.
|
|
|
|
|
|
The
employee has the right, upon 30 days notice, to terminate the Employment
Agreement. The Company may terminate the Employment Agreement on 10 days
notice if for cause or on 60 days notice if without cause. Should the Company
terminate the contract without cause, it is obligated to pay the employee an
amount equal to three month’s base salary.
|
|
|
|
|
|
License
Agreement
|
|
|
|
|
|
In
2004, the Company entered into a License Agreement with a university under
which the university is entitled to receive: (i) 2% of the Company’s adjusted
gross sales as defined in the License Agreement, and (ii) 2% of the adjusted
gross sales of any sublicensee as defined in the License Agreement. The
License Agreement gives the Company an exclusive license to a certain United
States patent and the related technology for low temperature growth of
inorganic materials from solution using catalyzed growth and re-growth.
|
|
|
|
|
|
Research and
Development Facility Lease
|
|
|
|
|
|
On
June 1, 2013, the Company entered into a new two year lease for its research
and development facility in Rochester, New York. The Company will pay a base
rent of $103,596 per year in monthly installments of $8,633. The lease
expires on June 30, 2015.
|
|
|
|
|
|
Administrative
Office Lease
|
|
|
|
|
|
On
August 1, 2013, the Company entered into a new three year lease agreement for
its administrative office. The Company will pay a base rent of $22,000 per
year in monthly installments of $1,833. After year one the annual rent will
increase 3% for each year of the lease, the lease expires on July 31, 2016.
|
|
|
|
|
|
Patent License
Agreement
|
|
|
|
|
|
On
December 9, 2011, the Company entered into a Patent License Agreement to use
certain licensed patents. The Company is required to pay an annual fee of
$25,000 for as long as the Company uses the patents.
|
F-49
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
14.
|
Related Party Transactions and
Balances
|
|
|
|
|
|
Related Party
Balances
|
|
|
|
|
|
As
of December 31, 2014 there was $Nil (2013 - $10,558) owed from an officer of
the Company that has been included in receivables.
|
|
|
|
|
|
As
at December 31, 2014 there was $60,760 (2013 - $Nil) owing to directors,
officers, and companies controlled by directors that has been included in
trade payables and accrued liabilities.
|
|
|
|
|
|
Key Management
Personnel Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
Administrative
fees
|
|
$
|
60,000
|
|
$
|
60,000
|
|
|
Consulting
|
|
|
108,000
|
|
|
58,000
|
|
|
Stock-based
compensation
|
|
|
—
|
|
|
12,847
|
|
|
Wages and
benefits
|
|
|
558,500
|
|
|
488,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
726,500
|
|
$
|
618,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.
|
Income Taxes
|
|
|
|
|
|
A reconciliation of the expected income tax recovery to the actual
income tax recovery is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
2014
|
|
Year Ended
December 31,
2013
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,193,532
|
)
|
$
|
(3,938,828
|
)
|
|
Tax rate
|
|
|
34
|
%
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
Expected
income tax recovery
|
|
|
(745,801
|
)
|
|
(1,339,202
|
)
|
|
Derivative
liability
|
|
|
(646,622
|
)
|
|
123,034
|
|
|
Non-deductible
items and other
|
|
|
(572,181
|
)
|
|
(91,271
|
)
|
|
Effect of
share issuance costs not recognized
|
|
|
—
|
|
|
(27,786
|
)
|
|
Effect of
different foreign tax rates
|
|
|
(2,399
|
)
|
|
33,522
|
|
|
Temporary
differences not recognized
|
|
|
1,967,003
|
|
|
1,301,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has the following deductible temporary difference for
which no deferred tax asset has been recognized and that can be carried
forward indefinitely.
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
Non-capital
losses – Canada
|
|
$
|
1,456,057
|
|
$
|
1,507,061
|
|
|
Tax losses –
United States
|
|
|
15,065,669
|
|
|
12,003,312
|
|
|
Equipment
tax pools
|
|
|
713,064
|
|
|
391,418
|
|
|
Share
issuance costs
|
|
|
92,659
|
|
|
209,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
17,327,449
|
|
$
|
14,111,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Canadian and US non-capital losses expire between 2015 and 2034.
|
F-50
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States Dollars)
For the Year Ended December 31, 2014 and 2013
|
|
|
|
|
|
|
16.
|
Research and Development Expense
|
|
|
|
|
|
Details of this expense
account by nature are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
2014
|
|
Year Ended
December 31,
2013
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
$
|
136,753
|
|
$
|
83,280
|
|
|
Equipment
rental, rent and other facility costs
|
|
|
352,809
|
|
|
405,530
|
|
|
Professional
fees
|
|
|
257,856
|
|
|
222,459
|
|
|
Royalty and
other
|
|
|
103,562
|
|
|
143,965
|
|
|
Wages and
salaries
|
|
|
783,884
|
|
|
624,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,634,864
|
|
$
|
1,480,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.
|
Subsequent Events
|
|
|
|
|
|
Private
Placements
|
|
|
|
|
|
In
January 2015, the Company completed a non-brokered private placement and
issued 1,352,062 units at a price of CDN$0.43 per unit for gross proceeds of
$471,479 (CDN$581,387). Each unit comprised one common share and one share
purchase warrant, with each warrant exercisable at a price of CDN$0.70 per
share for a period of three years from the date of closing. The Company also
issued 4,250 finders’ warrants in connection with this private placement
exercisable at a price of CDN$0.43 per share for a period of three years from
the date of closing.
|
|
|
|
|
|
In
April 2015, the Company completed a non-brokered private placement and issued
1,200,050 units at a price of CDN$0.70 per unit for gross proceeds of
$672,028 (CDN$840,035). Each unit comprised one common share and one share
purchase warrant, with each warrant exercisable at a price of $0.70 per share
for a period of three years from the date of closing. The Company also issued
9,250 finders’ warrants in connection with this private placement exercisable
at a price of CDN$0.95 per share for a period of three years from the date of
closing and $6,321.
|
F-51
INDEPENDENT
AUDITOR’S REPORT
To
the Shareholders of Natcore Technology Inc.;
We
have audited the accompanying consolidated financial statements of Natcore
Technology Inc., which comprise of the consolidated statements of financial
position as at December 31, 2013 and 2012, and the consolidated statements of
comprehensive loss, changes in equity and cash flows for the years then ended,
and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Consolidated Financial Statements
Management
is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board, and for
such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits. We conducted our audits in accordance with
Canadian generally accepted auditing standards and the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free from material misstatement.
An
audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the consolidated financial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair
presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the consolidated financial
statements.
We
believe that the audit evidence that we have obtained in our audits is
sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In
our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of Natcore Technology Inc. as at
December 31, 2013 and 2012, and its financial performance and its cash flows for
the years then ended in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
Emphasis of Matter
Without
qualifying our opinion, we draw attention to Note 1 in the consolidated
financial statements which describes certain conditions that indicate the
existence of a material uncertainty that may cast significant doubt about the
Company’s ability to continue as a going concern.
|
|
|
|
|
DALE MATHESON CARR-HILTON LABONTE LLP
|
|
|
CHARTERED ACCOUNTANTS
|
|
|
|
Vancouver,
Canada
|
|
April 30, 2014
|
|
|
|
|
Natcore Technology Inc.
Consolidated Statements of Financial Position
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
4
|
|
$
|
2,849,022
|
|
$
|
2,205,709
|
|
|
Receivables
|
|
|
5
|
|
|
26,016
|
|
|
33,211
|
|
|
Prepaid expenses
|
|
|
|
|
|
94,000
|
|
|
44,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,969,038
|
|
|
2,283,638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
6
|
|
|
680,353
|
|
|
809,309
|
|
|
Intangible assets
|
|
|
7
|
|
|
171,623
|
|
|
308,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
851,976
|
|
|
1,117,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
|
$
|
3,821,014
|
|
$
|
3,401,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables and accrued liabilities
|
|
|
8
|
|
$
|
201,521
|
|
$
|
82,682
|
|
|
Derivative liability
|
|
|
9
|
|
|
1,967,140
|
|
|
2,027,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
|
|
|
2,168,661
|
|
|
2,110,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
10
|
|
|
13,030,362
|
|
|
8,970,743
|
|
|
Share-based payment reserve
|
|
|
10, 11
|
|
|
2,857,272
|
|
|
2,616,511
|
|
|
Deficit
|
|
|
|
|
|
(14,235,281
|
)
|
|
(10,296,453
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
|
|
|
1,652,353
|
|
|
1,290,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY
|
|
|
|
|
$
|
3,821,014
|
|
$
|
3,401,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nature and
continuance of operations
|
1
|
|
Commitments
|
13
|
|
Subsequent
events
|
16
|
Approved on behalf of the Board:
|
|
|
|
|
“John Calhoun”
|
|
“Brien Lundin”
|
|
|
|
|
|
|
|
|
|
– Director
|
|
– Director
|
The accompanying notes are an
integral part of these consolidated financial statements.
F-53
Natcore Technology Inc.
Consolidated Statements of Comprehensive Loss
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
years ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
Notes
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
14
|
|
$
|
108,657
|
|
$
|
70,410
|
|
|
Depreciation and amortization
|
|
|
6, 7
|
|
|
359,178
|
|
|
325,648
|
|
|
Filing fees
|
|
|
|
|
|
32,082
|
|
|
26,743
|
|
|
Foreign exchange (gain)/loss
|
|
|
|
|
|
90,060
|
|
|
(62,086
|
)
|
|
Interest and bank charges
|
|
|
|
|
|
1,269
|
|
|
2,056
|
|
|
Marketing
|
|
|
|
|
|
96,641
|
|
|
56,553
|
|
|
Office and miscellaneous
|
|
|
14
|
|
|
546,427
|
|
|
500,322
|
|
|
Professional fees
|
|
|
|
|
|
129,499
|
|
|
204,442
|
|
|
Research and development
|
|
|
|
|
|
1,161,691
|
|
|
781,042
|
|
|
Stock-based compensation
|
|
|
10, 14
|
|
|
325,686
|
|
|
609,400
|
|
|
Travel
|
|
|
|
|
|
166,140
|
|
|
216,725
|
|
|
Wages and salaries
|
|
|
14
|
|
|
855,853
|
|
|
821,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,873,183
|
)
|
|
(3,552,620
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on warrants
|
|
|
9
|
|
|
(79,353
|
)
|
|
1,690,715
|
|
|
Interest income
|
|
|
|
|
|
13,708
|
|
|
23,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive loss for the year
|
|
|
|
|
$
|
(3,938,828
|
)
|
$
|
(1,838,355
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share – basic and diluted
|
|
|
|
|
$
|
(0.10
|
)
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding– basic and diluted
|
|
|
10
|
|
|
41,097,726
|
|
|
36,014,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these consolidated financial statements.
F-54
Natcore Technology Inc.
Consolidated Statement of Changes in Equity
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
Number of shares
|
|
Amount
|
|
Share-based payment
reserve
|
|
Deficit
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2011
|
|
|
|
|
33,935,776
|
|
$
|
9,629,882
|
|
$
|
1,811,022
|
|
$
|
(8,458,098
|
)
|
$
|
2,982,806
|
|
|
Comprehensive loss for the year
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,838,355
|
)
|
|
(1,838,355
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash –
private placement
|
|
10
|
|
|
4,166,700
|
|
|
2,478,020
|
|
|
—
|
|
|
—
|
|
|
2,478,020
|
|
|
Derivative liability –
warrants granted
|
|
9,
10
|
|
|
—
|
|
|
(3,341,782
|
)
|
|
—
|
|
|
—
|
|
|
(3,341,782
|
)
|
|
Derivative liability –
warrants exercised
|
|
9,
10
|
|
|
—
|
|
|
89,052
|
|
|
—
|
|
|
—
|
|
|
89,052
|
|
|
Issuance costs – cash
|
|
10
|
|
|
—
|
|
|
(102,815
|
)
|
|
—
|
|
|
—
|
|
|
(102,815
|
)
|
|
Issuance costs – warrants
|
|
10
|
|
|
—
|
|
|
(273,617
|
)
|
|
273,617
|
|
|
—
|
|
|
—
|
|
|
Shares issued for cash – options exercise
|
|
|
|
|
110,000
|
|
|
136,138
|
|
|
(55,911
|
)
|
|
—
|
|
|
80,227
|
|
|
Shares issued for cash – warrants exercise
|
|
|
|
|
368,373
|
|
|
355,865
|
|
|
(21,617
|
)
|
|
—
|
|
|
334,248
|
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
609,400
|
|
|
—
|
|
|
609,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2012
|
|
|
|
|
38,580,849
|
|
$
|
8,970,743
|
|
$
|
2,616,511
|
|
$
|
(10,296,453
|
)
|
$
|
1,290,801
|
|
|
Comprehensive loss for the year
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,938,828
|
)
|
|
(3,938,828
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash –
private placement
|
|
10
|
|
|
6,290,740
|
|
|
3,145,370
|
|
|
—
|
|
|
—
|
|
|
3,145,370
|
|
|
Shares issued for cash – options exercise
|
|
|
|
|
225,000
|
|
|
144,589
|
|
|
(58,272
|
)
|
|
—
|
|
|
86,317
|
|
|
Shares issued for cash – warrants exercise
|
|
|
|
|
998,530
|
|
|
728,685
|
|
|
(43,437
|
)
|
|
—
|
|
|
685,248
|
|
|
Issuance costs – cash
|
|
10
|
|
|
—
|
|
|
(82,022
|
)
|
|
—
|
|
|
—
|
|
|
(82,022
|
)
|
|
Issuance costs – warrants
|
|
10
|
|
|
—
|
|
|
(16,784
|
)
|
|
16,784
|
|
|
—
|
|
|
—
|
|
|
Derivative liability –
warrants exercised
|
|
9,
10
|
|
|
—
|
|
|
139,781
|
|
|
—
|
|
|
—
|
|
|
139,781
|
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
325,686
|
|
|
—
|
|
|
325,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2013
|
|
|
|
|
46,095,119
|
|
$
|
13,030,362
|
|
$
|
2,857,272
|
|
$
|
(14,235,281
|
)
|
$
|
1,652,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-55
Natcore Technology Inc.
Consolidated statements of cash flows
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
For the
years ended
|
|
|
|
|
|
|
|
|
|
December
31,
2013
|
|
December
30,
2012
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,938,828
|
)
|
$
|
(1,838,355
|
)
|
|
Adjustments for non-cash
items:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
359,178
|
|
|
325,648
|
|
|
Fair value adjustment on
warrants
|
|
|
79,353
|
|
|
(1,690,715
|
)
|
|
Stock-based compensation
|
|
|
325,686
|
|
|
609,400
|
|
|
Changes in non-cash working
capital items:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
7,195
|
|
|
3,615
|
|
|
Prepaid expenses
|
|
|
(49,282
|
)
|
|
(3,061
|
)
|
|
Trade payables and accrued
liabilities
|
|
|
118,839
|
|
|
(85,160
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in operating activities
|
|
|
(3,097,859
|
)
|
|
(2,678,628
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Expenditures on equipment
|
|
|
(176,702
|
)
|
|
(266,195
|
)
|
|
Research and development
equipment tax credit
|
|
|
82,961
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in investing activities
|
|
|
(93,741
|
)
|
|
(266,195
|
)
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Proceeds on issuance of common shares - net
of share issue costs
|
|
|
3,834,913
|
|
|
2,789,680
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows provided by financing
activities
|
|
|
3,834,913
|
|
|
2,789,680
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash
and cash equivalents
|
|
|
643,313
|
|
|
(155,143
|
)
|
|
Cash and cash equivalents,
beginning
|
|
|
2,205,709
|
|
|
2,360,852
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, ending
|
|
$
|
2,849,022
|
|
$
|
2,205,709
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-56
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
1.
|
Nature and
continuance of operations
|
|
|
|
|
|
Natcore Technology Inc. (the “Company”) was incorporated under the
British Columbia Business Corporations Act on August 9, 2007. The Company’s
common shares are listed on the TSX Venture Exchange (the “Exchange”) under
the symbol NXT. The Company develops and owns technology for the
manufacturing of solar cells.
|
|
|
|
|
|
The Company’s head office address is 189 N. Water Street, Rochester,
NY 14604-1163. The Company’s registered office is 2080 - 777 Hornby Street,
Vancouver British Columbia V6Z 1S4.
|
|
|
|
|
|
These consolidated financial statements have been prepared on the
assumption that the Company will continue as a going concern, meaning it will
continue in operation for the foreseeable future and will be able to realize
assets and discharge liabilities in the ordinary course of operations.
Different bases of measurement may be appropriate if the Company is not
expected to continue operations for the foreseeable future. As at December
31, 2013 the Company has had recurring losses from operations and a
cumulative deficit of $14,235,281. The Company’s continuation as a going
concern is dependent upon its ability to attain profitable operations and
generate funds there from and/or raise equity capital or borrowings sufficient
to meet current and future obligations. These conditions indicate the
existence of a material uncertainty that may cast significant doubt about the
Company’s ability to continue as a going concern. Management intends to
finance operating costs over the next twelve months with existing cash
resources and the private placement of common shares.
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
|
|
|
|
|
|
Statement
of compliance with International Financial Reporting Standards
|
|
|
|
|
|
These consolidated financial statements of the Company have been
prepared in accordance with International Financial Reporting Standards
(“IFRS”) issued by the International Accounting Standards Board (“IASB”) and
interpretations of the International Financial Reporting Interpretations
Committee (“IFRIC”).
|
|
|
|
|
|
The consolidated financial
statements were authorized for issue by the Board of Directors on April 30,
2014.
|
|
|
|
|
|
Basis
of preparation
|
|
|
|
|
|
The consolidated financial statements of the Company have been
prepared on an accrual basis and are based on historical costs, modified
where applicable. The consolidated financial statements are presented in
United States dollars unless otherwise noted.
|
|
|
|
|
|
Consolidation
|
|
|
|
|
|
The consolidated financial statements include the accounts of the
Company and its controlled entities. Details of controlled entities are as
follows:
|
|
|
|
|
|
|
|
|
Percentage
owned*
|
|
|
|
|
|
|
Jurisdiction of
incorporation
|
December 31,
2013
|
December 31,
2012
|
|
|
|
|
|
|
Natcore Technology, Inc.
|
United States
|
100%
|
100%
|
|
Newcyte, Incorporated
|
United States
|
100%
|
100%
|
|
Vanguard Solar, Inc.
|
United States
|
100%
|
100%
|
|
Natcore Asia Technology, Limited
|
Hong Kong
|
100%
|
100%
|
|
|
|
|
|
|
|
|
_______________
|
|
*Percentage
of voting power is in proportion to ownership.
|
|
Inter-company balances are eliminated on consolidation.
|
F-57
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Significant
accounting judgments, estimates and assumptions
|
|
|
|
|
|
The preparation of consolidated financial statements in accordance
with IFRS requires the Company to make estimates and assumptions concerning
the future. The Company’s management reviews these estimates and underlying
assumptions on an ongoing basis, based on experience and other factors,
including expectations of future events that are believed to be reasonable
under the circumstances. Revisions to estimates are adjusted for
prospectively in the period in which the estimates are revised.
|
|
|
|
|
|
Estimates and assumptions where there is significant risk of material
adjustments to assets and liabilities in future accounting periods include
the useful lives of equipment, impairment considerations for equipment and
intangible assets, determination of fair value for stock-based compensation
and other share-based payments, valuations and assumptions used to determine
deferred income taxes and the fair value of financial instruments.
|
|
|
|
|
|
Foreign
currency translation
|
|
|
|
|
|
The functional currency of
each of the Company’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated
financial statements are presented in United States dollars which is the
functional currency of the Company and its subsidiaries.
|
|
|
|
|
|
Transactions and balances:
|
|
|
|
|
|
Foreign currency transactions
are translated into functional currency using the exchange rates prevailing
at the date of the transaction. Foreign currency monetary items are
translated at the period-end exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of
the transaction. Non-monetary items measured at fair value are reported at
the exchange rate at the date when fair values were determined.
|
|
|
|
|
|
Exchange differences arising
on the translation of monetary items or on settlement of monetary items are
recognized in profit or loss in the statement of comprehensive loss in the
period in which they arise, except where deferred in equity as a qualifying
cash flow or net investment hedge.
|
|
|
|
|
|
Exchange differences arising
on the translation of non-monetary items are recognized in other
comprehensive loss in the statement of comprehensive loss to the extent that
gains and losses arising on those non-monetary items are also recognized in
other comprehensive loss. Where the non-monetary gain or loss is recognized
in profit or loss, the exchange component is also recognized in profit or
loss.
|
|
|
|
|
|
Intangible
assets
|
|
|
|
|
|
Intangible assets acquired separately
|
|
|
|
|
|
Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated amortization and accumulated
impairment losses. Amortization is recognized on a straight-line basis over
their estimated useful lives. The estimated useful life and amortization
method are reviewed at the end of each reporting period, with the effect of
any changes in estimate being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are acquired separately
are carried at cost less accumulated impairment losses.
|
F-58
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Intangible
assets
(cont’d)
|
|
|
|
|
|
Internally-generated intangible assets - Research and development
expenditure
|
|
|
|
|
|
Expenditure on research activities is recognized as an expense in the
period in which it is incurred.
|
|
|
|
|
|
An internally-generated intangible asset arising from development (or
from the development phase of an internal project) is recognized if, and only
if, all of the following have been demonstrated:
|
|
|
|
|
|
•
|
The technical feasibility of completing the intangible asset so that
it will be available for use or sale;
|
|
|
|
|
|
|
•
|
The intention to complete the intangible asset and use or sell it;
|
|
|
|
|
|
|
•
|
The ability to use or sell the intangible asset;
|
|
|
|
|
|
|
•
|
How the intangible asset will generate probable future economic
benefits;
|
|
|
|
|
|
|
•
|
The availability of adequate technical, financial and other resources
to complete the development and to use or sell the intangible asset; and
|
|
|
|
|
|
|
•
|
The ability to measure reliably the expenditure attributable to the
intangible asset during its development.
|
|
|
|
|
|
|
The amount initially recognized for internally-generated intangible
assets is the sum of the expenditure incurred from the date when the
intangible asset first meets the recognition criteria listed above. Where no
internally-generated intangible asset can be recognized, development
expenditure is recognized in loss in the period in which it is incurred.
|
|
|
|
|
|
Subsequent to initial recognition, internally-generated intangible
assets are reported at cost less accumulated amortization and accumulated
impairment losses, on the same basis as intangible assets that are acquired
separately.
|
|
|
|
|
|
At December 31, 2013 and 2012, the Company has not recognized any
internally-generated intangible assets.
|
|
|
|
|
|
Share-based
payments
|
|
|
|
|
|
The Company operates a stock
option plan. Share-based payments to employees are measured at the fair value
of the instruments issued and amortized over the vesting periods. Share-based
payments to non-employees are measured at the fair value of goods or services
received or the fair value of the equity instruments issued, if it is
determined the fair value of the goods or services cannot be reliably measured,
and are recorded at the date the goods or services are received. The
corresponding amount is recorded to the share-based payment reserve. The fair
value of options is determined using the Black–Scholes Option Pricing Model.
The number of shares and options expected to vest is reviewed and adjusted at
the end of each reporting period such that the amount recognized for services
received as consideration for the equity instruments granted shall be based
on the number of equity instruments that eventually vest.
|
|
|
|
|
|
Financial
instruments
|
|
|
|
|
|
The Company classifies its financial instruments in the following
categories: at fair value through profit or loss, loans and receivables,
held-to-maturity investments, available-for-sale and financial liabilities. The
classification depends on the purpose for which the financial instruments
were acquired. Management determines the classification of its financial
instruments at initial recognition.
|
F-59
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Financial
instruments
(cont’d)
|
|
|
|
|
|
Financial assets are
classified at fair value through profit or loss when they are either held for
trading for the purpose of short-term profit taking, derivatives not held for
hedging purposes, or when they are designated as such to avoid an accounting
mismatch or to enable performance evaluation where a group of financial
assets is managed by key management personnel on a fair value basis in
accordance with a documented risk management or investment strategy. Such
assets are subsequently measured at fair value with changes in carrying value
being included in profit or loss.
|
|
|
|
|
|
Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market and are
subsequently measured at amortized cost. They are included in current assets,
except for maturities greater than 12 months after the end of the reporting
period. These are classified as non-current assets.
|
|
|
|
|
|
Held-to-maturity investments
are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Company’s intention to hold these
investments to maturity. They are subsequently measured at amortized cost.
Held-to-maturity investments are included in non-current assets, except for
those which are expected to mature within 12 months after the end of the
reporting period.
|
|
|
|
|
|
Available-for-sale financial assets are non-derivative financial
assets that are designated as available-for-sale or are not suitable to be
classified as financial assets at fair value through profit or loss, loans
and receivables or held-to-maturity investments and are subsequently measured
at fair value. These are included in current assets. Unrealized gains and
losses are recognized in other comprehensive loss, except for impairment
losses and foreign exchange gains and losses.
|
|
|
|
|
|
Non-derivative financial
liabilities (excluding financial guarantees) are subsequently measured at
amortized cost. Derivative financial liabilities are classified at fair value
through profit and loss and are subsequently measured at fair value with
changes in carrying value being included in profit or loss.
|
|
|
|
|
|
Regular purchases and sales of financial assets are recognized on the
trade-date – the date on which the Company commits to purchase the asset.
|
|
|
|
|
|
Financial assets are derecognized when the rights to receive cash
flows from the investments have expired or have been transferred and the
Company has transferred substantially all risks and rewards of ownership.
|
|
|
|
|
|
At each reporting date, the
Company assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial
instruments, a significant and prolonged decline in the value of the
instrument is considered to determine whether an impairment has arisen.
|
|
|
|
|
|
Impairment
of long-lived assets
|
|
|
|
|
|
The carrying amount of the Company’s long-lived assets (which include
equipment and intangible assets) is reviewed at each reporting date to
determine whether there is any indication of impairment. If such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss. An impairment loss is recognized
whenever the carrying amount of an asset or its cash generating unit exceeds
its recoverable amount. Impairment losses are recognized in the statement of
comprehensive loss.
|
F-60
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
2.
|
Significant accounting
policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Impairment
of long-lived assets
(cont’d)
|
|
|
|
|
|
The recoverable amount of assets is the greater of an asset’s fair
value less cost to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects the current market assessments of the
time value of money and the risks specific to the asset. For an asset that
does not generate cash inflows largely independent of those from other
assets, the recoverable amount is determined for the cash-generating unit to
which the asset belongs.
|
|
|
|
|
|
An impairment loss is only reversed if there is an indication that
the impairment loss may no longer exist and there has been a change in the
estimates used to determine the recoverable amount, however, not to an amount
higher than the carrying amount that would have been determined had no
impairment loss been recognized in previous years.
|
|
|
|
|
|
Assets that have an indefinite useful life are not subject to
amortization and are tested annually for impairment.
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
|
|
|
Cash and cash equivalents
include cash on hand, deposits held at call with banks and other short-term
highly liquid investments, such as guaranteed investment certificates with
original maturities of three months or less. Guaranteed investment
certificates are investments with Canadian banks that are the equivalent of a
certificate of deposit.
|
|
|
|
|
|
Income taxes
|
|
|
|
|
|
Current income tax:
|
|
|
|
|
|
Current income tax assets and liabilities for the current period are
measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted, at the reporting date, in the
countries where the Company operates and generates taxable income.
|
|
|
|
|
|
Current income tax relating to items recognized directly in other
comprehensive loss or equity is recognized in other comprehensive loss or
equity and not in profit or loss. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where
appropriate.
|
|
|
|
|
|
Deferred income tax:
|
|
|
|
|
|
Deferred income tax is provided using the asset and liability method
on temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes.
|
|
|
|
|
|
The carrying amount of deferred income tax assets is reviewed at the
end of each reporting period and recognized only to the extent that it is
probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax asset to be utilized.
|
|
|
|
|
|
Deferred income tax assets and liabilities are measured at the tax
rates that are expected to apply to the year when the asset is realized or
the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
|
F-61
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Income
taxes (cont’d)
|
|
|
|
|
|
Deferred income tax assets and deferred income tax liabilities are
offset, if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred income taxes relate
to the same taxable entity and the same taxation authority.
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
Equipment is stated at historical cost less accumulated depreciation
and accumulated impairment losses.
|
|
|
|
|
|
Subsequent costs are included in the asset’s carrying amount or
recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. The carrying amount of the
replaced part is derecognized. All other repairs and maintenance are charged
to the statement of comprehensive loss during the financial period in which
they are incurred.
|
|
|
|
|
|
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognized in profit or loss.
|
|
|
|
|
|
Depreciation and amortization are calculated on a straight-line
method to write off the cost of the assets to their residual values over
their estimated useful lives.
|
|
|
|
|
3.
|
Accounting
standards issued but not yet effective
|
|
|
|
|
|
New
standard IFRS 9 “Financial Instruments”
|
|
|
|
|
|
This new standard is a partial replacement of IAS 39 “Financial Instruments: Recognition and
Measurement”. IFRS 9 uses a single approach to determine whether a financial
asset is measured at amortized cost or fair value, replacing the multiple
rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its
financial instruments in the context of its business model and the
contractual cash flow characteristics of the financial assets.
|
|
|
|
|
|
The new standard also
requires a single impairment method to be used, replacing the multiple
impairment methods in IAS 39. The proposed effective date of IFRS 9 is for
annual periods beginning on or after January 31, 2018.
|
|
|
|
|
|
Amendments
to IAS 32 “Financial Instruments: Presentation”
|
|
|
|
|
|
These amendments address inconsistencies when applying the offsetting
requirements, and is effective for annual periods beginning on or after
January 1, 2014.
|
|
|
|
|
|
The Company has not early adopted these revised standards and is
currently assessing the impact that these standards will have on its
consolidated financial statements.
|
|
|
|
|
|
Other accounting standards or amendments to existing accounting
standards that have been issued but have future effective dates are either
not applicable or are not expected to have a significant impact on the
Company’s financial statements.
|
|
|
|
|
4.
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2013
|
|
December
31, 2012
|
|
|
|
|
|
|
|
|
|
Cash at bank
|
|
$
|
877,147
|
|
$
|
371,401
|
|
|
Saving
certificates in banks
|
|
|
1,906,141
|
|
|
—
|
|
|
Guaranteed
investment certificates
|
|
|
65,734
|
|
|
1,834,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,849,022
|
|
$
|
2,205,709
|
|
|
|
|
|
|
|
|
|
|
F-62
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2013
|
|
December
31, 2012
|
|
|
|
|
|
|
|
|
|
GST
receivable*
|
|
$
|
15,458
|
|
$
|
16,957
|
|
|
Due from
related party (Note 14)
|
|
|
10,558
|
|
|
5,097
|
|
|
Interest
receivable
|
|
|
—
|
|
|
11,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
26,016
|
|
$
|
33,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
*
The Goods and Services (“GST”) receivable is comprised of input taxes the
Company has been charged by vendors on purchases of goods and services
obtained in Canada. The Company is entitled to a refund of these input taxes
from the Canada Revenue Agency, which it receives on a quarterly basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture
and
office equipment
|
|
Production
equipment
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
$
|
123,389
|
|
$
|
603,453
|
|
$
|
726,842
|
|
|
Additions
|
|
|
161,661
|
|
|
104,534
|
|
|
266,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
285,050
|
|
|
707,987
|
|
|
993,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
|
14,561
|
|
|
—
|
|
|
14,561
|
|
|
Charge for the year
|
|
|
38,023
|
|
|
131,144
|
|
|
169,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
52,584
|
|
|
131,144
|
|
|
183,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
$
|
232,466
|
|
$
|
576,843
|
|
$
|
809,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
$
|
285,050
|
|
$
|
707,988
|
|
$
|
993,038
|
|
|
Additions
|
|
|
60,118
|
|
|
116,583
|
|
|
176,702
|
|
|
Government tax credit
|
|
|
—
|
|
|
(82,961
|
)
|
|
(82,961
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2013
|
|
|
345,168
|
|
|
741,610
|
|
|
1,086,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
52,584
|
|
|
131,144
|
|
|
183,728
|
|
|
Charge for the year
|
|
|
61,972
|
|
|
160,725
|
|
|
222,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2013
|
|
|
114,556
|
|
|
291,869
|
|
|
406,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2013
|
|
$
|
230,613
|
|
$
|
449,740
|
|
$
|
680,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-63
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
|
|
|
|
|
Issued and
pending patents
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
At
December 31, 2011
|
|
$
|
711,814
|
|
|
Additions
|
|
|
—
|
|
|
|
|
|
|
|
|
At
December 31, 2012
|
|
|
711,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization:
|
|
|
|
|
|
At
December 31, 2011
|
|
|
247,229
|
|
|
Charge
for the year
|
|
|
156,481
|
|
|
|
|
|
|
|
|
At
December 31, 2012
|
|
|
403,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
At December 31, 2012
|
|
$
|
308,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
At
December 31, 2012
|
|
$
|
711,814
|
|
|
Additions
|
|
|
—
|
|
|
|
|
|
|
|
|
At
December 31, 2013
|
|
|
711,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization:
|
|
|
|
|
|
At
December 31, 2012
|
|
|
403,710
|
|
|
Charge
for the year
|
|
|
136,481
|
|
|
|
|
|
|
|
|
At
December 31, 2013
|
|
|
540,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
At December 31, 2013
|
|
$
|
171,623
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
Trade
payables and accrued liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
|
Trade Payables
|
|
$
|
201,521
|
|
$
|
82,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31,
2013
|
|
Year ended
December 31,
2012
|
|
|
|
|
|
|
|
|
|
Balance, beginning
|
|
$
|
2,027,568
|
|
$
|
465,553
|
|
|
Fair value of warrants issued during the year
|
|
|
—
|
|
|
3,341,782
|
|
|
Fair value of warrants exercised during year
|
|
|
(139,781
|
)
|
|
(89,052
|
)
|
|
Change in fair value of warrants outstanding
|
|
|
79,353
|
|
|
(1,690,715
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance, ending
|
|
$
|
1,967,140
|
|
$
|
2,027,568
|
|
|
|
|
|
|
|
|
|
|
F-64
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
9.
|
Derivative
liability
(cont’d)
|
|
|
|
|
|
The derivative financial liability consists of the fair value of
share purchase warrants that have exercise prices that differ from the functional
currency of the Company and are within the scope of IAS 32 “Financial
Instruments: Presentation”. Details of these warrants and their fair values
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiry Date
|
|
Exercise
Price
|
|
Number of
warrants
outstanding at
December 31, 2013
|
|
Fair value at
December 31,
2013
|
|
Number of
warrants
outstanding at
December 31,
2012
|
|
Fair value at
December 31,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDN $
|
|
|
|
US $
|
|
|
|
US $
|
|
|
December
22, 2015
|
|
|
1.00
|
|
|
1,234,667
|
|
|
583,399
|
|
|
1,234,667
|
|
|
355,987
|
|
|
January
4, 2016
|
|
|
1.00
|
|
|
329,867
|
|
|
163,634
|
|
|
499,867
|
|
|
144,124
|
|
|
July
20, 2014
|
|
|
0.90
|
|
|
3,821,170
|
|
|
1,220,107
|
|
|
4,166,700
|
|
|
1,527,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,385,704
|
|
|
1,967,140
|
|
|
5,901,234
|
|
|
2,027,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair values of these
warrants were estimated using the Black-Scholes Option Pricing Model using
the following assumptions.
|
|
|
|
|
|
•
|
The stock price was based upon
the publicly traded price at the time of issuance
|
|
|
|
|
|
|
•
|
The risk-free interest rate
assumption is based on the U.S. Treasury yield for a period consistent with
the expected term of the option in effect at the time of the grant.
|
|
|
|
|
|
|
•
|
The Company does not pay
dividends on common stock and does not anticipate paying dividends on its
common stock in the foreseeable future. Therefore, the expected dividend rate
was 0%.
|
|
|
|
|
|
|
•
|
The expected life of the
warrants was estimated at 75% of the remaining term until expiry, which is
based on the length of time similar warrants have remained outstanding in the
past.
|
|
|
|
|
|
|
•
|
The expected volatility was
based off on the historical trading prices of the Company’s common stock
price over the expected life of the warrant.
|
|
|
|
|
|
|
•
|
The forfeiture rate is based
on the historical forfeiture rate for the Company’s unvested warrants, which
was 0%.
|
|
|
|
|
|
|
The fair values of these
warrants as at December 31, 2013 were estimated using the Black-Scholes
Option Pricing Model using the following inputs.
|
|
|
|
|
|
|
Expiry
Date
|
December 22, 2013
|
January 4, 2014
|
July 20, 2014
|
|
|
|
|
|
|
Exercise
price
|
CDN $1.00
|
CDN $1.00
|
CDN $0.90
|
|
Share price
|
CDN $1.11
|
CDN $1.11
|
CDN $1.11
|
|
Expected
volatility
|
91%
|
96%
|
86%
|
|
Expected
life
|
1.48 years
|
1.51 years
|
0.42 years
|
|
Dividends
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
1.07%
|
1.01%
|
1.02%
|
|
|
|
|
|
F-65
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
9.
|
Derivative
liability
(cont’d)
|
|
|
|
|
|
The fair values of these warrants as at December 31, 2012 were
estimated using the Black-Scholes Option Pricing Model using the following
inputs.
|
|
|
|
|
|
|
Expiry
Date
|
December 22, 2013
|
January 4, 2014
|
July 20, 2014
|
|
|
|
|
|
|
Exercise
price
|
CDN $1.00
|
CDN $1.00
|
CDN $0.90
|
|
Share price
|
CDN $0.79
|
CDN $0.79
|
CDN $0.79
|
|
Expected
volatility
|
113%
|
113%
|
106%
|
|
Expected
life
|
1.0 year
|
1.0 years
|
1.55 years
|
|
Dividends
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
1.07%
|
1.07%
|
1.12%
|
|
|
|
|
|
|
|
|
|
10.
|
Share capital
|
|
|
|
|
|
Authorized
share capital
|
|
|
|
|
|
Unlimited number of common shares without par value.
|
|
|
|
|
|
Issued
share capital
|
|
|
|
|
|
At December 31, 2013 there were 46,095,119 issued and fully paid
common shares (December 31, 2012 – 38,580,849).
|
|
|
|
|
|
Private
placements
|
|
|
|
|
|
On August 20, 2013, The Company completed a private placement of
6,290,740 shares at a price of $0.50 per share for gross proceeds of
$3,145,370. Each unit comprised one common share and one share purchase
warrant, with each whole warrant exercisable at a price of USD$0.62 per share
and expiring August 20, 2016. The Company paid finder’s fees of $16,313 for
the financing as well as incurring other share issuance costs of $65,709. A
total of 59,850 finder’s warrants were issued with a fair value of $16,784
determined using the Black-Scholes Option Pricing Model with the following
assumptions: Risk free rate of 0.70%; Expected life of 3 years; Volatility of
90.6%; and a Dividend yield of 0%.
|
|
|
|
|
|
On July 20, 2012, The Company completed a private placement of
4,166,700 units at a price of CDN $0.60 per unit for gross proceeds of
$2,478,020 (CDN$2,500,000). Each unit comprised one common share and one
share purchase warrant, with each whole warrant exercisable at a price of
CDN$0.90 and expire July 20, 2014. On issue the fair value of the warrants
was determined to be $3,341,782 using the Black-Scholes Option Pricing Model
with the following assumptions: Risk free rate of 0.97%; Expected life of 2
years; Volatility of 93%; and a Dividend yield of 0%. In the event that the
Company’s common shares close at over CDN$1.60 for 20 consecutive trading
days, the warrants will be subject to accelerated conversion within 30 days
notice of the Company disseminating a press release providing notice of that
circumstance. Finder’s fees were paid on a portion of the financing, such
that an aggregate of $102,815 was paid in cash and 22,516 finder’s warrants
were issued, having the same terms as the warrants forming part of the units
and 152,000 finder’s unit warrants were issued exercisable to acquire units
on the same terms as the units issued in the financing at an exercise price
of CDN$0.60 per unit for until July 20, 2014. An additional 152,000 finder’s
warrants were issued with an exercise price of CDN$0.90 until July 20, 2014.
The fair value of the finder’s warrants was $273,617 determined using the
Black-Scholes Option Pricing Model with the following assumptions: Risk free
rate of 0.97%; Expected life of 2 years; Volatility of 93%; and a Dividend
yield of 0%.
|
F-66
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
10.
|
Share capital
(cont’d)
|
|
|
|
|
|
Basic
and diluted loss per share
|
|
|
|
|
|
The calculation of basic and diluted loss per share for the years
ended December 31, 2013 and 2012 was based on the loss attributable to common
shareholders of $3,938,828 and $1,838,355 and the weighted average number of
common shares outstanding of 41,097,726 and 36,014,144, respectively.
|
|
|
|
|
|
Diluted loss per share did not include the effect of stock options
and warrants as the effect would be anti-dilutive.
|
|
|
|
|
|
Stock
options
|
|
|
|
|
|
The Company has adopted an incentive stock option plan, which
provides that the Board of Directors of the Company may from time to time, at
its discretion, and in accordance with the Exchange requirements, grant to
directors, officers, employees and technical consultants to the Company,
non-transferable options to purchase common shares, provided that the number
of common shares reserved for issuance will not exceed 6,779,255 common
shares. Such options will be exercisable for a period of up to 10 years from
the date of grant. In connection with the foregoing, the number of common
shares reserved for issuance to any one optionee will not exceed five percent
(5%) of the issued and outstanding common shares and the number of common
shares reserved for issuance to all technical consultants will not exceed two
percent (2%) of the issued and outstanding common shares. Options may be
exercised no later than 90 days following cessation of the optionee’s
position with the Company or 30 days following cessation of an optionee
conducting investor relations activities’ position.
|
|
|
|
|
|
|
Stock-based compensation expense has been calculated using the
Black-Scholes option pricing model. The measurement date fair values of the
stock options were estimated using the Black-Scholes Option Pricing Model
using the following assumptions.
|
|
|
|
|
|
•
|
The stock price was based upon the publicly traded price at the time
of issuance
|
|
|
|
|
|
|
•
|
The risk-free interest rate assumption is based on the U.S. Treasury
yield for a period consistent with the expected term of the option in effect
at the time of the grant.
|
|
|
|
|
|
|
•
|
The Company does not pay dividends on common stock and does not anticipate
paying dividends on its common stock in the foreseeable future. Therefore,
the expected dividend rate was 0%.
|
|
|
|
|
|
|
•
|
The expected life of the warrants was estimated at 75% of the
remaining term until expiry, which is based on the length of time similar
warrants have remained outstanding in the past.
|
|
|
|
|
|
|
•
|
The expected volatility was based off on the historical trading
prices of the Company’s common stock price over the expected life of the
warrant.
|
|
|
|
|
|
|
•
|
The forfeiture rate is based on the historical forfeiture rate for
the Company’s unvested warrants, which was 0%.
|
|
|
|
|
|
|
During the year ended December 31, 2013, the Company recorded stock
based compensation of $nil (2012 - $300,170) relating to the vesting of
options granted prior to January 1, 2012.
|
|
|
|
|
|
On April 17, 2012, the Company granted 120,000 stock options to
employees. 50% of the options vest six months following the grant date and
the remaining vest eighteen months from the grant date. The options are
exercisable at CDN$0.51 and expire on April 17, 2017. The options had a grant
date fair value of $43,545 (CDN$43,359) determined using the Black-Scholes
Option Pricing Model with the following assumptions: Risk free rate of 1.63%; Expected
life of 5 years; Volatility of 92%; and a Dividend yield of 0%. During the
years ended December 31, 2013 and 2012, the Company recorded stock-based
compensation expense of $11,523 and $32,022, respectively, relating to the
vesting of these options.
|
F-67
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
10.
|
Share capital
(cont’d)
|
|
|
|
|
|
Stock
options
(cont’d)
|
|
|
|
|
|
On August 16, 2012, the Company granted 200,000 stock options to an
employee. 50% of the options vest six months following the grant date and the
remaining in twelve months from the grant date. The options are exercisable
at CDN$1.11 and expire September 4, 2017. The options had a grant date fair
value of $170,047 (CDN$168,112) determined using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of 1.51%; Expected
life of 5 years; Volatility of 97%; and a Dividend yield of 0%. During the
years ended December 31, 2013 and 2012, the Company recorded stock-based
compensation expense of $53,111 and $116,936 relating to the vesting of these
options.
|
|
|
|
|
|
On December 20, 2012 the
Company granted 80,000 stock options to employees. 50% of the
options vest six months following the grant date and the remaining vest eighteen
months from the grant date. The options are exercisable at CDN$0.80 and expire December 20, 2017.
The options had a grant date fair value of $46,306 (CDN$45,780) determined
using the Black-Scholes Option Pricing Model with the following assumptions:
Risk free rate of 1.39%; Expected life of 5 years; Volatility of 97%; and a
Dividend yield of 0%. During the years ended December 31, 2013 and 2013, the
Company recorded stock-based compensation expense of $36,856 and $1,980
relating to the vesting of these options.
|
|
|
|
|
|
On December 20, 2012 the
Company granted 272,000 stock options to employees and consultants of the
Company which vested immediately. The options are exercisable at CDN$0.80 and
expire December 20, 2017. During the year ended December 31, 2012 the Company
recorded stock-based compensation of $158,292 (CDN$156,497) determined using
the Black-Scholes Option Pricing Model with the assumptions: Risk free rate
of 1.39%; Expected life of 5 years; Volatility of 97%; and a Dividend yield
of 0%. These options were fully expensed in 2012.
|
|
|
|
|
|
On January 4, 2013 the Company
granted 20,000 stock options to an employee. The options vested immediately.
The options are exercisable at CDN$0.80 and expire January 4, 2018. The
options had a fair value of $12,847 (CDN$12,665) determined using the
Black-Scholes Option Pricing Model with the following assumptions: Risk free
rate of 0.27%; Expected life of 5 years; Volatility of 107%; and a Dividend
yield of 0%.
|
|
|
|
|
|
On April 5, 2013 the Company
granted 40,000 stock options to an employee. 50% of the options
vest six months following the grant date and the remaining in twelve months
from the grant date.
The options are exercisable at CDN$0.71 and expire April 5, 2018. The options
had a grant date fair value of $21,496 (CDN$21,801) determined using the
Black-Scholes Option Pricing Model with the following assumptions: Risk free
rate of 0.71%; Expected life of 5 years; Volatility of 106%; and a Dividend
yield of 0%. During the year ended December 31, 2013 the
|
|
|
|
|
|
Company recorded stock-based
company recorded stock-based compensation expense of $16,048 relating to the
vesting of these options.
|
|
|
|
|
|
On June 1, 2013 the Company
granted 100,000 stock options to an employee. 25% of the options vested
immediately, and 25% vest every three months thereafter. The options are
exercisable at CDN$0.79 and expire June 1, 2016. The options had a grant date
fair value of $48,167 (CDN$49,755) determined using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of 0.71%;
Expected life of 3 years; Volatility of 94%; and a Dividend yield of 0%.
During the year ended December 31, 2013, the Company recorded stock-based
compensation expense of $45,503 relating to the vesting of these options.
|
F-68
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
10.
|
Share capital
(cont’d)
|
|
|
|
|
|
Stock
options
(cont’d)
|
|
|
|
|
|
On June 3, 2013 the Company
granted 25,000 stock options to an employee. 50% of the options
vest six months following the grant date and the remaining in twelve months
from the grant date. The
options are exercisable at CDN$0.83 and expire June 3, 2018. The options had
a grant date fair value of $15,416 (CDN$15,981) determined using the
Black-Scholes Option Pricing Model with the following assumptions: Risk free
rate of 1.20%; Expected life of 5 years; Volatility of 106%; and a Dividend
yield of 0%. During the year ended December 31, 2013, the Company recorded
stock-based compensation expense of $10,433 relating to the vesting of these
options.
|
|
|
|
|
|
On July 31, 2013 the Company
granted 100,000 stock options to two consultants. 50% of the
options vest six months following the grant date and the remaining in twelve
months from the grant date. The options are exercisable at CDN$0.58 and expire July 18, 2018. The
options had a grant date fair value of $42,209 (CDN$43,757) determined using
the Black-Scholes Option Pricing Model with the following assumptions: Risk
free rate of 1.40%; Expected life of 5 years; Volatility of 102%; and a
Dividend yield of 0%. During the year ended December 31, 2013, the Company
recorded stock-based compensation expense of $11,174 relating to the vesting
of these options.
|
|
|
|
|
|
On August 16, 2013 the Company
granted 400,000 stock options to a consultant. The options vested
immediately. The options are exercisable at CDN$0.59 and expire August 16,
2016. The options had a grant date fair value of $128,191 (CDN$132,332) determined
using the Black-Scholes Option Pricing Model with the following assumptions:
Risk free rate of 1.20%; Expected life of 3 years; Volatility of 90%; and a
Dividend yield of 0%.
|
|
|
|
|
|
The changes in options during the years ended December 31, 2013 and 2012
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, beginning
|
|
|
3,507,000
|
|
|
CDN$0.93
|
|
|
3,065,000
|
|
|
CDN$0.87
|
|
|
Options granted
|
|
|
685,000
|
|
|
CDN$0.64
|
|
|
672,000
|
|
|
CDN$0.84
|
|
|
Options exercised
|
|
|
(225,000
|
)
|
|
CDN$0.40
|
|
|
(110,000
|
)
|
|
CDN$0.72
|
|
|
Options forfeited
|
|
|
(195,000
|
)
|
|
CDN$0.96
|
|
|
(120,000
|
)
|
|
CDN$0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, ending
|
|
|
3,772,000
|
|
|
CDN$0.90
|
|
|
3,507,000
|
|
|
CDN$0.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, ending
|
|
|
3,562,000
|
|
|
CDN$0.92
|
|
|
2,497,000
|
|
|
CDN$0.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average measurement date fair value of the options
granted during the year ended December 31, 2013 was $0.39 (2012 - $0.62). The
weighted average remaining life of the options outstanding as at December 31,
2013 is 2.29 years.
|
F-69
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
10.
|
Share capital
(cont’d)
|
|
|
|
|
|
Stock options
(cont’d)
|
|
|
|
|
|
Details of options outstanding
as at December 31, 2013 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise price
|
|
|
Expiry date
|
|
|
Number of options outstanding
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.40
|
|
|
May 7,
2014
|
|
|
100,000
|
|
|
CDN$ 1.00
|
|
|
May 7,
2014
|
|
|
300,000
|
|
|
CDN$ 1.50
|
|
|
May 7,
2014
|
|
|
200,000
|
|
|
CDN$ 0.97
|
|
|
February
8, 2016
|
|
|
1,830,000
|
|
|
CDN$ 0.51
|
|
|
April
17, 2017
|
|
|
120,000
|
|
|
CDN$ 1.11
|
|
|
September
4, 2017
|
|
|
200,000
|
|
|
CDN$ 0.80
|
|
|
December
20, 2017
|
|
|
337,000
|
|
|
CDN$ 0.80
|
|
|
January
4, 2018
|
|
|
20,000
|
|
|
CDN$ 0.71
|
|
|
April
5, 2018
|
|
|
40,000
|
|
|
CDN$ 0.79
|
|
|
June
1, 2016
|
|
|
100,000
|
|
|
CDN$ 0.83
|
|
|
June
3, 2018
|
|
|
25,000
|
|
|
CDN$ 0.58
|
|
|
July
31, 2018
|
|
|
100,000
|
|
|
CDN$ 0.59
|
|
|
August
16, 2016
|
|
|
400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,772,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share purchase warrants
|
|
|
|
|
|
Each warrant entitles the
holder to purchase one common share of the Company.
|
|
|
|
|
|
The changes in warrants during
the years ended December 31, 2013 and 2012 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2013
|
|
December
31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Number of
warrants
|
|
Weighted
average
exercise price
|
|
Number of
warrants
|
|
Weighted
average
exercise price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, beginning
|
|
|
8,362,107
|
|
|
CDN$0.80
|
|
|
4,427,869
|
|
|
CDN$0.76
|
|
|
Warrants
issued
|
|
|
6,350,590
|
|
|
US$0.62
|
|
|
4,493,216
|
|
|
CDN$0.89
|
|
|
Warrants
expired
|
|
|
(197,100
|
)
|
|
CDN$1.00
|
|
|
(190,605
|
)
|
|
CDN$1.34
|
|
|
Warrants
exercised
|
|
|
(150,000
|
)
|
|
US$0.62
|
|
|
—
|
|
|
—
|
|
|
Warrants
exercised
|
|
|
(848,530
|
)
|
|
CDN$0.72
|
|
|
(368,373
|
)
|
|
CDN$0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, ending
|
|
|
13,517,067
|
|
|
CDN$0.72
|
|
|
8,362,107
|
|
|
CDN$0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average remaining life of the warrants outstanding as at
December 31, 2013 is 1.69 years.
|
|
|
|
|
|
Details of warrants outstanding as at December 31, 2013 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise price
|
|
|
Expiry date
|
|
|
Number of warrants outstanding and exercisable
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.40
|
|
|
May 7, 2014
|
|
|
1,512,500
|
|
|
CDN$ 1.00
|
|
|
December 22, 2015
|
|
|
1,234,667
|
|
|
CDN$ 1.00
|
|
|
January 4, 2014
|
|
|
91,760
|
|
|
CDN$ 1.00
|
|
|
January 4, 2016
|
|
|
329,867
|
|
|
CDN$ 0.90
|
|
|
July 20, 2014
|
|
|
3,995,683
|
|
|
CDN$ 0.60
|
|
|
July 20, 2014
|
|
|
152,000
|
|
|
US$ 0.62
|
|
|
August 20, 2016
|
|
|
6,200,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,517,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.
|
Reserves
|
|
|
|
|
|
Share-based
payment reserve
|
|
|
|
|
|
The share-based payment reserve records the fair value of options and
warrants recorded in accordance with IFRS 2 “Share-based payments” until such
time that the stock options or warrants are exercised, at which time the
corresponding amount will be transferred to share capital.
|
F-70
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
12.
|
Financial risk and
capital management
|
|
|
|
|
|
The Company is exposed in varying degrees to a variety of financial
instrument related risks. The Board of Directors approves and monitors the
risk management processes, inclusive of documented investment policies,
counterparty limits, and controlling and reporting structures. The type of
risk exposure and the way in which such exposure is managed is provided as
follows:
|
|
|
|
|
|
Credit
risk
|
|
|
|
|
|
Credit risk is the risk that one party to a financial instrument will
fail to discharge an obligation and cause the other party to incur a
financial loss. The Company’s primary exposure to credit risk is on its cash,
and cash equivalents. The majority of cash is deposited in bank accounts held
with major banks in Canada and the United States. As most of the Company’s
cash is held by two banks there is a concentration of credit risk. This risk
is managed by using major banks that are high credit quality financial
institutions as determined by rating agencies. The Company’s secondary
exposure to risk
is on its receivables. The risk is considered to be minimal.
|
|
|
|
|
|
Liquidity risk
|
|
|
|
|
|
Liquidity risk is the risk
that the Company will not be able to meet its financial obligations as they
fall due. The Company has a planning and budgeting process in place to help
determine the funds required to support the Company’s normal operating
requirements on an ongoing basis. The Company ensures that there are
sufficient funds to meet its short-term business requirements, taking into
account its anticipated cash flows from operations and its holdings of cash
and cash equivalents.
|
|
|
|
|
|
Historically, the Company’s
sole source of funding has been the issuance of equity securities for cash,
primarily through private placements. The Company’s access to financing is
always uncertain. There can be no assurance of continued access to significant
equity funding.
|
|
|
|
|
|
The following is an analysis
of the contractual maturities of the Company’s non-derivative financial
liabilities as at December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within one
year
|
|
Between one
and five years
|
|
More than
five years
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
$
|
201,521
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange risk
|
|
|
|
|
|
Foreign exchange risk is the
risk that the fair values of future cash flows of a financial instrument will
fluctuate because they are denominated in currencies that differ from the
respective functional currency. The Company does not hedge its exposure to
fluctuations in foreign exchange rates.
|
|
|
|
|
|
The following is an analysis
of the United States dollar equivalent of financial assets and liabilities that
are denominated in Canadian dollars:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
558,067
|
|
$
|
1,869,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on the above net
exposures, as at December 31, 2013, a 1% change in the Canadian dollar to
United States dollar exchange rate would impact the Company’s net loss by
$5,581 (2012 $18,691).
|
F-71
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
12.
|
Financial risk and capital management
(cont’d)
|
|
|
|
|
|
Interest rate risk
|
|
|
|
|
|
Interest rate risk is the risk
that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company is exposed
to interest rate risk on its cash equivalents as these instruments have
original maturities of three months or less and are therefore exposed to
interest rate fluctuations on renewal. A 1% change in market interest rates
would have an impact on the Company’s net loss of approximately $19,747.
|
|
|
|
|
|
Capital Management
|
|
|
|
|
|
The Company’s policy is to
maintain a strong capital base so as to maintain investor and creditor
confidence and to sustain future development of the business. The capital
structure of the Company consists of equity, comprising share capital, net of
accumulated deficit. There were no changes in the Company’s approach to
capital management during the period. The Company is not subject to any
externally imposed capital requirements.
|
|
|
|
|
|
Classification of financial instruments
|
|
|
|
|
|
Financial
assets included in the statement of financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
|
Loans and receivables:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,849,022
|
|
$
|
2,205,709
|
|
|
Receivables
|
|
|
26,016
|
|
|
33,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,875,038
|
|
$
|
2,238,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities included in the
statement of financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
|
Non-derivative financial liabilities:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
$
|
201,521
|
|
$
|
82,682
|
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
Derivative financial liability – warrants
|
|
|
1,967,140
|
|
|
2,027,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,168,661
|
|
$
|
2,110,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
|
|
|
|
|
|
The fair value of the
Company’s financial assets and liabilities approximates the carrying amount.
|
|
|
|
|
|
Financial instruments measured
at fair value are classified into one of three levels in the fair value
hierarchy according to the relative reliability of the inputs used to
estimate the fair values. The three levels of the fair value hierarchy are:
|
|
|
|
|
|
•
|
Level 1 – Unadjusted quoted
prices in active markets for identical assets or liabilities;
|
|
|
|
|
|
|
•
|
Level 2 – Inputs other than
quoted prices that are observable for the asset or liability either directly
or indirectly; and
|
|
|
|
|
|
|
•
|
Level 3 – Inputs that are not
based on observable market data.
|
|
|
|
|
|
|
Financial liabilities measured
at fair value at December 31, 2013 and 2012 consist of the derivative
liability, which is measured using level 3 inputs. The fair value of the
derivative liability is determined by the Black-Scholes option pricing model
using the historical volatility as an estimate of future volatility. At
December 31, 2013, if the volatility used was increased by 10% the impact
would be an increase to the derivative liability of $127,817 with a
corresponding increase to comprehensive loss.
|
F-72
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
13.
|
Commitments
|
|
|
|
|
|
Employment
Agreement
|
|
|
|
|
|
The Company has an agreement (the “Employment Agreement”) dated
October 1, 2007, and amended July 31, 2008, with an officer of the Company
under which the Company pays a fee for employee services at a base salary of
$220,000 per annum. On April 30, 2010, the Board of Directors passed a
resolution to increase this to $250,000 per annum and on May 13, 2011 passed
a resolution to increase this to $275,000 per annum. The employee is entitled
to receive options under the terms and conditions of the Company’s stock
option plan. The employee will serve as the President and Chief Executive
Officer of the Company. On April 5, 2012, the employment agreement was
extended for an additional two years under the same terms.
|
|
|
|
|
|
Pursuant to the Employment Agreement, the Company has committed to
granting 500,000 stock options based on the Company achieving certain
consolidated net revenue targets. The exercise price and term of the options
will be set at time the targets are met.
|
|
|
|
|
|
The employee has the right, upon 30 days’ notice, to terminate the
Employment Agreement. The Company may terminate the Employment Agreement on
10 days’ notice if for cause or on 60 days’ notice if without cause. Should
the Company terminate the contract without cause, it is obligated to pay the
employee an amount equal to three month’s base salary.
|
|
|
|
|
|
License
Agreement
|
|
|
|
|
|
In 2004 the Company entered into a License Agreement with a
university under which the university is entitled to receive: (i) 2% of the
Company’s adjusted gross sales as defined in the License Agreement, and (ii)
2% of the adjusted gross sales of any sub licensee as defined in the License
Agreement. The License Agreement gives the Company an exclusive license to a
certain United States patent and the related technology for low temperature
growth of inorganic materials from solution using catalyzed growth and
re-growth.
|
|
|
|
|
|
Research
and Development Facility Lease
|
|
|
|
|
|
On June 1, 2013, the Company entered into a new two year lease for
its research and development facility in Rochester, New York. The Company
will pay a base rent of $103,596 per year in monthly installments of $8,633.
The lease expires on June 30, 2015.
|
|
|
|
|
|
Administrative
Office Lease
|
|
|
|
|
|
On August 1, 2013, the Company entered into a new three year lease
agreement for its administrative office. The Company will pay a base rent of
$22,000 per year in monthly installments of $1,833. After year one the annual
rent will increase 3% for each year of the lease, the lease expires on July
31, 2016.
|
|
|
|
|
|
Patent
License Agreement
|
|
|
|
|
|
On December 9, 2011 the Company entered into a Patent License Agreement
to use certain licensed patents. The Company is required to pay an annual fee
of $25,000 for as long as the Company uses the patents.
|
|
|
|
|
14.
|
Related party
transactions and balances
|
|
|
|
|
|
Related
party balances
|
|
|
|
|
|
As at December 31, 2013, there was $10,558 (2012 - $5,097) owing from
an officer of the Company and has been included in receivables.
|
F-73
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years December 31, 2013 and 2012
|
|
|
|
|
|
|
14.
|
Related party transactions and balances
(cont’d)
|
|
|
|
|
|
Key management personnel compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
|
Administrative fees
|
|
$
|
60,000
|
|
$
|
60,000
|
|
|
Consulting
|
|
|
58,000
|
|
|
30,200
|
|
|
Stock-based compensation
|
|
|
12,847
|
|
|
28,768
|
|
|
Wages and benefits
|
|
|
488,000
|
|
|
446,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
618,847
|
|
$
|
565,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.
|
Income taxes
|
|
|
|
|
|
A reconciliation of the expected income tax recovery to the actual
income tax recovery is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2013
|
|
December
31,
2012
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,938,828
|
)
|
$
|
(1,838,355
|
)
|
|
Tax rate
|
|
|
34
|
%
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
Expected
income tax recovery
|
|
|
(1,339,202
|
)
|
|
(625,040
|
)
|
|
Derivative
liability
|
|
|
123,034
|
|
|
(574,843
|
)
|
|
Non-deductible
items and other
|
|
|
(91,271
|
)
|
|
58,361
|
|
|
Effect of
share issuance costs not recognized
|
|
|
(27,786
|
)
|
|
(35,246
|
)
|
|
Effect of
different foreign tax rates
|
|
|
33,522
|
|
|
24,897
|
|
|
Temporary
differences not recognized
|
|
|
1,301,703
|
|
|
1,151,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has the following deductible temporary difference for
which no deferred tax asset has been recognized and that can be carried
forward indefinitely.
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2013
|
|
December
31,
2012
|
|
|
|
|
|
|
|
|
|
Non-capital
losses – Canada
|
|
$
|
1,507,061
|
|
$
|
1,173,191
|
|
|
Tax losses –
United States
|
|
|
12,003,312
|
|
|
8,860,293
|
|
|
Equipment
tax pools
|
|
|
391,418
|
|
|
123,977
|
|
|
Share
issuance costs
|
|
|
209,992
|
|
|
257,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,111,783
|
|
$
|
10,414,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Canadian and US non-capital losses expired between 2015 and 2033.
|
|
|
|
|
16.
|
Subsequent events
|
|
|
|
|
|
In January 2014, 50,000 common
share purchase warrants with an exercise price of US$0.62 were exercised for
gross proceeds of $31,000.
|
|
|
|
|
|
In January 2014, 70,913 common
share purchase warrants with an exercise price of CDN$1.00 were exercised for
cash proceeds of $67,365 (CDN$70,913).
|
|
|
|
|
|
In March 2014, 137,500 common
share purchase warrants with an exercise price of CDN$0.40 were exercised for
cash proceeds of (CDN$55,000).
|
|
|
|
|
|
In March 2014, 50,000 common
share purchase warrants with an exercise price of US$0.62 were exercised for
gross proceeds of $31,000.
|
|
|
|
|
|
In April 2014, 110,000 common
share purchase warrants with an exercise price of CDN$0.40 were exercised for
cash proceeds of (CDN$44,000)
|
F-74
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Natcore Technology Inc.
We have audited the accompanying consolidated
financial statements of Natcore Technology Inc., which comprise of the
consolidated statements of financial position as at December 31, 2012, 2011 and
2010, and the consolidated statements of comprehensive loss, changes in
shareholders’ equity and cash flows for the years ended December 31, 2012 and
2011 and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Consolidated Financial
Statements
Management is responsible for the preparation and
fair presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on
these consolidated financial statements based on our audits. We conducted our
audits in accordance with Canadian generally accepted auditing standards and
the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence that we have
obtained in our audits is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, these consolidated financial
statements present fairly, in all material respects, the financial position of
Natcore Technology Inc. as at December 31, 2012, 2011 and 2010 and its
financial performance and its cash flows for the years ended December 31, 2012
and 2011, in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
Emphasis of Matter
Without modifying our opinion, we draw attention
to Note 1 to the consolidated financial statements, which describes certain
conditions that indicate the existence of a material uncertainty that give rise
to significant doubt about the entity’s ability to continue as a going concern.
Other Matter
As discussed in Note 17 to the consolidated
financial statements, the consolidated financial statements as at December 31,
2011 and 2010 and for the year ended December 31, 2011 have been restated to
correct a misstatement.
|
|
|
|
|
DALE MATHESON CARR-HILTON LABONTE LLP
|
|
|
CHARTERED ACCOUNTANTS
|
Vancouver,
BC
April 29, 2013
Natcore Technology Inc.
Consolidated statements of financial position
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
December
31,
2012
|
|
December
31,
2011 (Note 17)
|
|
December
31,
2010 (Note 17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
4
|
|
$
|
2,205,709
|
|
$
|
2,360,852
|
|
$
|
2,450,611
|
|
|
Receivables
|
|
|
5
|
|
|
33,211
|
|
|
36,826
|
|
|
41,799
|
|
|
Prepaid expenses
|
|
|
|
|
|
44,718
|
|
|
41,657
|
|
|
67,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,283,638
|
|
|
2,439,335
|
|
|
2,559,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
6
|
|
|
809,309
|
|
|
712,281
|
|
|
8,935
|
|
|
Intangible assets
|
|
|
7
|
|
|
308,104
|
|
|
464,585
|
|
|
582,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,117,413
|
|
|
1,176,866
|
|
|
591,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
|
$
|
3,401,051
|
|
$
|
3,616,201
|
|
$
|
3,151,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables and accrued liabilities
|
|
|
8
|
|
$
|
82,682
|
|
$
|
167,842
|
|
$
|
405,016
|
|
|
Due to related parties
|
|
|
|
|
|
—
|
|
|
—
|
|
|
140,000
|
|
|
Derivative financial liability
|
|
|
9
|
|
|
2,027,568
|
|
|
465,553
|
|
|
1,850,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
|
|
2,110,250
|
|
|
633,395
|
|
|
2,395,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
10
|
|
|
8,970,743
|
|
|
9,629,882
|
|
|
4,663,058
|
|
|
Subscriptions received
|
|
|
|
|
|
—
|
|
|
—
|
|
|
386,666
|
|
|
Share-based payment reserve
|
|
|
11
|
|
|
2,616,511
|
|
|
1,811,022
|
|
|
470,587
|
|
|
Deficit
|
|
|
|
|
|
(10,296,453
|
)
|
|
(8,458,098
|
)
|
|
(4,763,466
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
1,290,801
|
|
|
2,982,806
|
|
|
756,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
$
|
3,401,051
|
|
$
|
3,616,201
|
|
$
|
3,151,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nature and continuance of operations
|
1
|
|
Commitments
|
14
|
|
Subsequent event
|
18
|
Approved on behalf of the Board:
|
|
|
|
|
“John Calhoun”
|
|
“Brien Lundin”
|
|
|
|
|
|
|
|
|
|
– Director
|
|
– Director
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-76
Natcore Technology Inc.
Consolidated statements of comprehensive loss
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
years ended
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
December
31,
2012
|
|
December
31,
2011 (Note 17)
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
15
|
|
$
|
70,410
|
|
$
|
46,607
|
|
|
Depreciation and amortization
|
|
|
6, 7
|
|
|
325,648
|
|
|
143,848
|
|
|
Filing fees
|
|
|
|
|
|
26,743
|
|
|
10,920
|
|
|
Foreign exchange (gain)/loss
|
|
|
|
|
|
(62,086
|
)
|
|
151,504
|
|
|
Interest and bank charges
|
|
|
|
|
|
2,056
|
|
|
4,102
|
|
|
Marketing
|
|
|
|
|
|
56,553
|
|
|
216,267
|
|
|
Office and miscellaneous
|
|
|
15
|
|
|
500,322
|
|
|
286,998
|
|
|
Professional fees
|
|
|
|
|
|
204,442
|
|
|
247,946
|
|
|
Research and development
|
|
|
|
|
|
781,042
|
|
|
452,959
|
|
|
Stock-based compensation
|
|
|
10, 15
|
|
|
609,400
|
|
|
1,287,021
|
|
|
Travel
|
|
|
|
|
|
216,725
|
|
|
275,822
|
|
|
Wages and salaries
|
|
|
10, 15
|
|
|
821,365
|
|
|
947,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,552,620
|
)
|
|
(4,071,105
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on warrants
|
|
|
9, 17
|
|
|
1,690,715
|
|
|
349,711
|
|
|
Interest income
|
|
|
|
|
|
23,550
|
|
|
26,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net and comprehensive loss for the year
|
|
|
|
|
$
|
(1,838,355
|
)
|
$
|
(3,694,632
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share – basic and diluted
|
|
|
10
|
|
$
|
(0.05
|
)
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding– basic and diluted
|
|
|
10
|
|
|
36,014,144
|
|
|
32,756,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-77
Natcore Technology Inc.
Consolidated statement of changes in shareholders’ equity
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
Number of shares
|
|
Amount
|
|
Subscriptions
received
|
|
Share-based payment
reserve
|
|
Deficit
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2010
|
|
|
|
|
28,517,000
|
|
$
|
4,663,058
|
|
$
|
386,666
|
|
$
|
470,587
|
|
$
|
(4,763,466
|
)
|
$
|
756,845
|
|
|
Comprehensive loss for the year
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,694,632
|
)
|
|
(3,694,632
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash –
private placement
|
|
10
|
|
|
1,563,233
|
|
|
1,215,866
|
|
|
(386,666
|
)
|
|
—
|
|
|
—
|
|
|
829,200
|
|
|
Derivative liability –
warrants granted
|
|
9,
10
|
|
|
—
|
|
|
(366,113
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(366,113
|
)
|
|
Derivative liability –
warrants exercised
|
|
9,
10
|
|
|
—
|
|
|
1,400,861
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,400,861
|
|
|
Issuance costs – cash
|
|
10
|
|
|
—
|
|
|
(78,834
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78,834
|
)
|
|
Issuance costs – warrants
|
|
10
|
|
|
—
|
|
|
(53,413
|
)
|
|
—
|
|
|
53,413
|
|
|
—
|
|
|
—
|
|
|
Shares issued for cash –
warrants exercised
|
|
|
|
|
3,855,543
|
|
|
2,848,458
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,848,458
|
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,287,021
|
|
|
—
|
|
|
1,287,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2011
|
|
|
|
|
33,935,776
|
|
|
9,629,883
|
|
|
—
|
|
|
1,811,021
|
|
|
(8,458,098
|
)
|
|
2,982,806
|
|
|
Comprehensive loss for the year
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,838,355
|
)
|
|
(1,838,355
|
)
|
|
Transactions with owners, in their capacity as owners, and other
transfers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash – private placement
|
|
10
|
|
|
4,166,700
|
|
|
2,478,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,478,020
|
|
|
Derivative liability –
warrants granted
|
|
9,
10
|
|
|
—
|
|
|
(3,341,782
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,341,782
|
)
|
|
Derivative liability –
warrants exercised
|
|
9,
10
|
|
|
—
|
|
|
89,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,052
|
|
|
Issuance costs – cash
|
|
10
|
|
|
—
|
|
|
(102,815
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102,815
|
)
|
|
Issuance costs – warrants
|
|
10
|
|
|
—
|
|
|
(273,617
|
)
|
|
—
|
|
|
273,617
|
|
|
—
|
|
|
—
|
|
|
Shares issued for cash – options exercise
|
|
|
|
|
110,000
|
|
|
136,138
|
|
|
—
|
|
|
(55,911
|
)
|
|
—
|
|
|
80,227
|
|
|
Shares issued for cash – warrants exercise
|
|
|
|
|
368,373
|
|
|
355,865
|
|
|
—
|
|
|
(21,617
|
)
|
|
—
|
|
|
334,248
|
|
|
Stock-based compensation
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
609,400
|
|
|
—
|
|
|
609,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2012
|
|
|
|
|
38,580,849
|
|
$
|
8,970,743
|
|
$
|
—
|
|
$
|
2,616,511
|
|
$
|
(10,296,453
|
)
|
$
|
1,290,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-78
Natcore Technology Inc.
Consolidated statements of cash flows
(Expressed in United States dollars)
|
|
|
|
|
|
|
|
|
|
|
|
For the
years ended
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
30,
2011
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,838,355
|
)
|
$
|
(3,694,632
|
)
|
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
325,648
|
|
|
143,848
|
|
|
Fair value adjustment on warrants
|
|
|
(1,690,715
|
)
|
|
(349,711
|
)
|
|
Stock-based compensation
|
|
|
609,400
|
|
|
1,287,021
|
|
|
Changes in non-cash working capital items:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
3,615
|
|
|
4,974
|
|
|
Prepaid expenses
|
|
|
(3,061
|
)
|
|
25,924
|
|
|
Trade payables and accrued liabilities
|
|
|
(85,160
|
)
|
|
(237,173
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in operating activities
|
|
|
(2,678,628
|
)
|
|
(2,819,749
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Expenditures on equipment
|
|
|
(266,195
|
)
|
|
(708,832
|
)
|
|
Expenditures on intangible assets
|
|
|
—
|
|
|
(20,000
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in investing activities
|
|
|
(266,195
|
)
|
|
(728,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Proceeds on issuance of common shares - net
of share issue costs
|
|
|
2,789,680
|
|
|
3,598,822
|
|
|
Repayment of amounts due to related parties
|
|
|
—
|
|
|
(140,000
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flows provided by financing activities
|
|
|
2,789,680
|
|
|
3,458,822
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(155,143
|
)
|
|
(89,759
|
)
|
|
Cash and cash equivalents, beginning
|
|
|
2,360,852
|
|
|
2,450,611
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, ending
|
|
$
|
2,205,709
|
|
$
|
2,360,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary cash flow information:
|
|
|
|
|
|
|
|
|
Cash received for interest
|
|
$
|
33,343
|
|
$
|
5,604
|
|
|
Cash paid for interest
|
|
$
|
6
|
|
$
|
1,679
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
F-79
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
1.
|
Nature and
continuance of operations
|
|
|
|
|
|
Natcore Technology Inc. (the “Company”) was incorporated under the
British Columbia Business Corporations Act on August 9, 2007. The Company’s
common shares are listed on the TSX Venture Exchange (the “Exchange”) under
the symbol NXT.
|
|
|
|
|
|
The Company’s head office
address is 189 N. Water Street, Rochester, NY 14604-1163. The Company’s
registered office is 2080 - 777 Hornby Street, Vancouver British Columbia V6Z
1S4.
|
|
|
|
|
|
On May 8, 2009, the Company acquired all of the issued and
outstanding share capital of a private Delaware company (the “Acquisition”),
also called Natcore Technology, Inc. (“Natcore US”). Natcore US was
incorporated in Delaware in 2002, to exploit the patent pending technology
over which it owns the exclusive license from Rice University. The licensed
intellectual property (the “Technology”) controls the growth of thin and
thick film of silicon dioxide and mixed silicon oxides on silicon and other
substrates from aqueous bath at room temperature and pressure.
|
|
|
|
|
|
These consolidated financial statements have been prepared on the
assumption that the Company will continue as a going concern, meaning it will
continue in operation for the foreseeable future and will be able to realize
assets and discharge liabilities in the ordinary course of operations. Different
bases of measurement may be appropriate if the Company is not expected to
continue operations for the foreseeable future. As at December 31, 2012 the
Company has had recurring losses from operations and a cumulative deficit of
$10,296,453. The Company’s continuation as a going concern is dependent upon
its ability to attain profitable operations and generate funds there from
and/or raise equity capital or borrowings sufficient to meet current and
future obligations. These conditions indicate the existence of a material
uncertainty that may cast significant doubt about the Company’s ability to
continue as a going concern. Management intends to finance operating costs
over the next twelve months with existing cash resources and the private
placement of common shares.
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
|
|
|
|
|
|
Statement
of compliance with International Financial Reporting Standards
|
|
|
|
|
|
These consolidated financial statements of the Company have been
prepared in accordance with International Financial Reporting Standards
(“IFRS”) issued by the International Accounting Standards Board (“IASB”) and
interpretations of the International Financial Reporting Interpretations
Committee (“IFRIC”).
|
|
|
|
|
|
The consolidated financial
statements were authorized for issue by the Board of Directors on April 29,
2013.
|
|
|
|
|
|
Basis
of preparation
|
|
|
|
|
|
The consolidated financial statements of the Company have been
prepared on an accrual basis and are based on historical costs, modified
where applicable. The consolidated financial statements are presented in
United States dollars unless otherwise noted.
|
F-80
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Consolidation
|
|
|
|
|
|
The consolidated financial statements include the accounts of the
Company and its controlled entities. Details of controlled entities are as
follows:
|
|
|
|
|
|
|
|
|
Percentage
owned*
|
|
|
|
|
|
|
Jurisdiction
of
incorporation
|
December
31,
2012
|
December
31,
2011
|
|
|
|
|
|
|
Natcore
Technology, Inc.
|
United States
|
100%
|
100%
|
|
Newcyte,
Incorporated
|
United States
|
100%
|
100%
|
|
Vanguard
Solar, Inc.
|
United States
|
100%
|
100%
|
|
Natcore Asia
Technology, Limited
|
Hong Kong
|
100%
|
100%
|
|
|
|
|
|
*Percentage
of voting power is in proportion to ownership.
Inter-company balances are eliminated on consolidation.
|
|
|
|
|
Significant accounting judgments, estimates
and assumptions
|
|
|
|
|
|
The preparation of
consolidated financial statements in accordance with IFRS requires the
Company to make estimates and assumptions concerning the future. The
Company’s management reviews these estimates and underlying assumptions on an
ongoing basis, based on experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
Revisions to estimates are adjusted for prospectively in the period in which
the estimates are revised.
|
|
|
|
|
|
Estimates and assumptions
where there is significant risk of material adjustments to assets and
liabilities in future accounting periods include the useful lives of
equipment, impairment considerations for equipment and intangible assets,
determination of fair value for stock-based compensation and other
share-based payments, valuations and assumptions used to determine deferred
income taxes and the fair value of financial instruments.
|
|
|
|
|
|
Foreign currency translation
|
|
|
|
|
|
The functional currency of
each of the Company’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated
financial statements are presented in United States dollars which is the
functional currency of the Company and its subsidiaries.
|
|
|
|
|
|
Transactions and balances:
|
|
|
|
|
|
Foreign currency transactions
are translated into functional currency using the exchange rates prevailing
at the date of the transaction. Foreign currency monetary items are
translated at the period-end exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of
the transaction. Non-monetary items measured at fair value are reported at
the exchange rate at the date when fair values were determined.
|
|
|
|
|
|
Exchange differences arising
on the translation of monetary items or on settlement of monetary items are
recognized in profit or loss in the statement of comprehensive loss in the
period in which they arise, except where deferred in equity as a qualifying
cash flow or net investment hedge.
|
F-81
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Foreign currency translation
(cont’d)
|
|
|
|
|
|
Exchange differences arising
on the translation of non-monetary items are recognized in other
comprehensive loss in the statement of comprehensive loss to the extent that
gains and losses arising on those non-monetary items are also recognized in
other comprehensive loss. Where the non-monetary gain or loss is recognized
in profit or loss, the exchange component is also recognized in profit or
loss.
|
|
|
|
|
|
The financial results and
position of foreign operations whose functional currency is different from
the Company’s presentation currency are translated as follows:
|
|
|
|
|
|
•
|
assets and liabilities are
translated at period-end exchange rates prevailing at that reporting date;
and
|
|
|
|
|
|
|
•
|
income and expenses are
translated at average exchange rates for the period.
|
|
|
|
|
|
|
Intangible
assets
|
|
|
|
|
|
Intangible assets acquired separately
|
|
|
|
|
|
Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated amortization and accumulated
impairment losses. Amortization is recognized on a straight-line basis over
their estimated useful lives. The estimated useful life and amortization
method are reviewed at the end of each reporting period, with the effect of
any changes in estimate being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are acquired separately
are carried at cost less accumulated impairment losses.
|
|
|
|
|
|
Internally-generated intangible assets - Research and development
expenditure
|
|
|
|
|
|
Expenditure on research activities is recognized as an expense in the
period in which it is incurred.
|
|
|
|
|
|
An internally-generated intangible asset arising from development (or
from the development phase of an internal project) is recognized if, and only
if, all of the following have been demonstrated:
|
|
|
|
|
|
•
|
The technical feasibility of completing the intangible asset so that
it will be available for use or sale;
|
|
|
|
|
|
|
•
|
The intention to complete the intangible asset and use or sell it;
|
|
|
|
|
|
|
•
|
The ability to use or sell the intangible asset;
|
|
|
|
|
|
|
•
|
How the intangible asset will generate probable future economic
benefits;
|
|
|
|
|
|
|
•
|
The availability of adequate technical, financial and other resources
to complete the development and to use or sell the intangible asset; and
|
|
|
|
|
|
|
•
|
The ability to measure reliably the expenditure attributable to the
intangible asset during its development.
|
|
|
|
|
|
|
The amount initially recognized for internally-generated intangible
assets is the sum of the expenditure incurred from the date when the
intangible asset first meets the recognition criteria listed above. Where no
internally-generated intangible asset can be recognized, development
expenditure is recognized in loss in the period in which it is incurred.
|
|
|
|
|
|
Subsequent to initial recognition, internally-generated intangible
assets are reported at cost less accumulated amortization and accumulated
impairment losses, on the same basis as intangible assets that are acquired
separately.
|
|
|
|
|
|
At December 31, 2012, the Company has not recognized any
internally-generated intangible assets.
|
F-82
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Share-based
payments
|
|
|
|
|
|
The Company operates a stock
option plan. Share-based payments to employees are measured at the fair value
of the instruments issued and amortized over the vesting periods. Share-based
payments to non-employees are measured at the fair value of goods or services
received or the fair value of the equity instruments issued, if it is
determined the fair value of the goods or services cannot be reliably
measured, and are recorded at the date the goods or services are received.
The corresponding amount is recorded to the share-based payment reserve. The
fair value of options is determined using the Black–Scholes Option Pricing
Model. The number of shares and options expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognized
for services received as consideration for the equity instruments granted
shall be based on the number of equity instruments that eventually vest.
|
|
|
|
|
|
Financial
instruments
|
|
|
|
|
|
The Company classifies its financial instruments in the following
categories: at fair value through profit or loss, loans and receivables,
held-to-maturity investments, available-for-sale and financial liabilities.
The classification depends on the purpose for which the financial instruments
were acquired. Management determines the classification of its financial
instruments at initial recognition.
|
|
|
|
|
|
Financial assets are
classified at fair value through profit or loss when they are either held for
trading for the purpose of short-term profit taking, derivatives not held for
hedging purposes, or when they are designated as such to avoid an accounting
mismatch or to enable performance evaluation where a group of financial
assets is managed by key management personnel on a fair value basis in
accordance with a documented risk management or investment strategy. Such
assets are subsequently measured at fair value with changes in carrying value
being included in profit or loss.
|
|
|
|
|
|
Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market and are
subsequently measured at amortized cost. They are included in current assets,
except for maturities greater than 12 months after the end of the reporting
period. These are classified as non-current assets.
|
|
|
|
|
|
Held-to-maturity investments
are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Company’s intention to hold these
investments to maturity. They are subsequently measured at amortized cost.
Held-to-maturity investments are included in non-current assets, except for
those which are expected to mature within 12 months after the end of the
reporting period.
|
|
|
|
|
|
Available-for-sale financial assets are non-derivative financial
assets that are designated as available-for-sale or are not suitable to be
classified as financial assets at fair value through profit or loss, loans
and receivables or held-to-maturity investments and are subsequently measured
at fair value. These are included in current assets. Unrealized gains and
losses are recognized in other comprehensive loss, except for impairment
losses and foreign exchange gains and losses.
|
|
|
|
|
|
Non-derivative financial
liabilities (excluding financial guarantees) are subsequently measured at
amortized cost. Derivative financial liabilities are classified at fair value
through profit and loss and are subsequently measured at fair value with
changes in carrying value being included in profit or loss.
|
|
|
|
|
|
Regular purchases and sales of financial assets are recognized on the
trade-date – the date on which the Company commits to purchase the asset.
|
F-83
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Financial
instruments
(cont’d)
|
|
|
|
|
|
Financial assets are derecognized when the rights to receive cash
flows from the investments have expired or have been transferred and the
Company has transferred substantially all risks and rewards of ownership.
|
|
|
|
|
|
At each reporting date, the
Company assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial
instruments, a significant and prolonged decline in the value of the
instrument is considered to determine whether an impairment has arisen.
|
|
|
|
|
|
Impairment
of long-lived assets
|
|
|
|
|
|
The carrying amount of the Company’s long-lived assets (which include
equipment andintangible assets) is reviewed at each reporting date to
determine whether there is any indication of impairment. If such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss. An impairment loss is recognized
whenever the carrying amount of an asset or its cash generating unit exceeds
its recoverable amount. Impairment losses are recognized in the statement of
comprehensive loss.
|
|
|
|
|
|
The recoverable amount of assets is the greater of an asset’s fair
value less cost to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects the current market assessments of the
time value of money and the risks specific to the asset. For an asset that
does not generate cash inflows largely independent of those from other
assets, the recoverable amount is determined for the cash-generating unit to
which the asset belongs.
|
|
|
|
|
|
An impairment loss is only reversed if there is an indication that
the impairment loss may no longer exist and there has been a change in the
estimates used to determine the recoverable amount, however, not to an amount
higher than the carrying amount that would have been determined had no
impairment loss been recognized in previous years.
|
|
|
|
|
|
Assets that have an indefinite useful life are not subject to
amortization and are tested annually for impairment.
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
|
|
|
Cash
and cash equivalents include cash on hand, deposits held at call with banks
and other short-term highly liquid investments, such as guaranteed investment
certificates with original maturities of three months or less. Guaranteed
investment certificates are investments with Canadian banks that are the
equivalent of a certificate of deposit.
|
|
|
|
|
|
Income taxes
|
|
|
|
|
|
Current income tax:
|
|
|
|
|
|
Current income tax
assets and liabilities for the current period are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date, in the countries where the
Company operates and generates taxable income.
|
F-84
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
2.
|
Significant
accounting policies and basis of preparation
(cont’d)
|
|
|
|
|
|
Income taxes(cont’d)
|
|
|
|
|
|
Current income tax (cont’d)
|
|
|
|
|
|
Current income
tax relating to items recognized directly in other comprehensive loss or
equity is recognized in other comprehensive loss or equity and not in profit
or loss. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
|
|
|
|
|
|
Deferred income tax:
|
|
|
|
|
|
Deferred income
tax is provided using the asset and liability method on temporary differences
at the reporting date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.
|
|
|
|
|
|
The carrying
amount of deferred income tax assets is reviewed at the end of each reporting
period and recognized only to the extent that it is probable that sufficient
taxable profit will be available to allow all or part of the deferred income
tax asset to be utilized.
|
|
|
|
|
|
Deferred income
tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realized or the liability is settled,
based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
|
|
|
|
|
|
Deferred income
tax assets and deferred income tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current income
tax liabilities and the deferred income taxes relate to the same taxable
entity and the same taxation authority.
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
Equipment is stated at historical cost less accumulated depreciation
and accumulated impairment losses.
|
|
|
|
|
|
Subsequent costs are included in the asset’s carrying amount or
recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. The carrying amount of the
replaced part is derecognized. All other repairs and maintenance are charged
to the statement of comprehensive loss during the financial period in which
they are incurred.
|
|
|
|
|
|
Gains and losses on disposals are determined by comparing the proceeds
with the carrying amount and are recognized in profit or loss.
|
|
|
|
|
|
Depreciation and amortization are calculated on a straight-line
method to write off the cost of the assets to their residual values over
their estimated useful lives.
|
|
|
|
|
3.
|
Accounting
standards issued but not yet effective
|
|
|
|
|
|
New standard IFRS 9 “Financial Instruments”
|
|
|
|
|
|
This new standard is a
partial replacement of IAS 39 “Financial
Instruments: Recognition and Measurement”. IFRS 9 uses a single approach to
determine whether a financial asset is measured at amortized cost or fair
value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is
based on how an entity manages its financial instruments in the context of
its business model and the contractual cash flow characteristics of the
financial assets.
|
|
|
|
|
|
The
new standard also requires a single impairment method to be used, replacing
the multiple impairment methods in IAS 39. IFRS 9 is effective for annual
periods beginning on or after January 1, 2015.
|
F-85
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
3.
|
Accounting standards issued but not yet
effective (cont’d)
|
|
|
|
|
|
New standard IFRS 10 “Consolidated
Financial Statements”
|
|
|
|
|
|
This
new standard will replace IAS 27 “Consolidated and Separate Financial
Statements”, and Standing Interpretations Committee abstract (“SIC”) 12
“Consolidation – Special Purpose Entities”. Concurrent with IFRS 10, the IASB
issued IFRS 11 “Joint Ventures”; IFRS 12 “Disclosures of Involvement with
Other Entities”; IAS 27 “Separate Financial Statements”, which has been
amended for the issuance of IFRS 10 but retains the current guidance for
separate financial statements; and IAS 28 “Investments in Associates and
Joint Ventures”, which has been amended for conforming changes based on the
issuance of IFRS 10 and IFRS 11.
|
|
|
|
|
|
IFRS
10 uses control as the single basis for consolidation, irrespective of the
nature of the investee, eliminating the risks and rewards approach included
in SIC-12, and requires continuous assessment of control over an investee.
The above consolidation standards are effective for annual periods beginning
on or after January 1, 2013.
|
|
|
|
|
|
New standard IFRS 11 “Joint Arrangements”
|
|
|
|
|
|
This new standard requires a
venturer to classify its interest in a joint arrangement as a joint venture
or joint operation. Joint ventures will be accounted for using the equity
method of accounting whereas for a joint operation the venture will recognize
its share of the assets, liabilities, revenue and expenses of the joint
operation. Under existing IFRS, entities have the choice to proportionately
consolidate or equity account for interests in joint ventures. IFRS 11 supersedes
lAS 31, Interests in Joint Ventures, and SIC-13, Jointly Controlled
Entities-Non-monetary Contributions by Venturers.
|
|
|
|
|
|
New standard IFRS 12 “Disclosure of
Interests in Other Entities”
|
|
|
|
|
|
This new standard
establishes disclosure requirements for interests in other entities, such as
joint arrangements, associates, special purpose vehicles and off balance
sheet vehicles. The standard carries forward existing disclosures and also
introduces significant additional disclosure requirements that address the
nature of, and risks associated with, an entity’s interests in other
entities.
|
|
|
|
|
|
New standard IFRS 13 “Fair value measurement”
|
|
|
|
|
|
This new standard replaces
the fair value measurement guidance currently included in various other IFRS
standards with a single definition of fair value and extensive application
guidance. IFRS 13 provides guidance on how to measure fair value and does not
introduce new requirements for when fair value is required or permitted. It
also establishes disclosure requirements to provide users of the financial
statements with more information about fair value measurements. IFRS 13 is
effect for annual periods beginning on or after January 1, 2013.
|
|
|
|
|
|
Amendments to IAS 32 “Financial
Instruments: Presentation”
|
|
|
|
|
|
These amendments address
inconsistencies when applying the offsetting requirements, and is effective
for annual periods beginning on or after January 1, 2014.
|
|
|
|
|
|
Financial statement presentation
|
|
|
|
|
|
In June 2011, the IASB and
the Financial Accounting Standards Board (“FASB”) issued amendments to
standards to align the presentation requirements for other comprehensive
income (“OCI”). The IASB issued amendments to IAS 1 “Presentation of
Financial Statements” to require companies preparing financial statements under
IFRS to group items within OCI that may be reclassified to the profit or
loss.
|
F-86
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
3.
|
Accounting standards issued but not yet effective (cont’d)
|
|
|
|
|
|
The amendments also reaffirm
existing requirements that items in OCI and profit or loss should be
presented as either a single statement or two consecutive statements. The
amendments are effective for fiscal years beginning on or after July 1, 2012.
|
|
|
|
|
|
The Company has not early
adopted these new and revised standards and is currently assessing the impact
that these standards will have on its consolidated financial statements.
Other accounting standards or amendments to existing accounting standards
that have been issued but have future effective dates are either not
applicable or are not expected to have a significant impact on the Company’s
financial statements.
|
|
|
|
|
4.
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Cash at bank
|
|
$
|
371,401
|
|
$
|
260,852
|
|
|
Guaranteed
investment certificates
|
|
|
1,834,308
|
|
|
2,100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,205,709
|
|
$
|
2,360,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
HST
receivable*
|
|
$
|
16,957
|
|
$
|
12,970
|
|
|
Due from
related party (Note 15)
|
|
|
5,097
|
|
|
2,862
|
|
|
Interest
receivable
|
|
|
11,157
|
|
|
20,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
33,211
|
|
$
|
36,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
*The Harmonized Sales Tax (“HST”) receivable is comprised of input
taxes the Company has been charged by vendors on purchases of goods and
services obtained in Canada. The Company is entitled to a refund of these
input taxes from the Canada Revenue Agency, which it receives on a quarterly
basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture
and
office equipment
|
|
Production
equipment
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2010
|
|
$
|
18,010
|
|
$
|
—
|
|
$
|
18,010
|
|
|
Additions
|
|
|
105,379
|
|
|
603,453
|
|
|
708,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
|
123,389
|
|
|
603,453
|
|
|
726,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2010
|
|
|
9,075
|
|
|
—
|
|
|
9,075
|
|
|
Charge for the period
|
|
|
5,486
|
|
|
—
|
|
|
5,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
|
14,561
|
|
|
—
|
|
|
14,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
$
|
108,828
|
|
$
|
603,453
|
|
$
|
712,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
$
|
123,389
|
|
$
|
603,453
|
|
$
|
726,842
|
|
|
Additions
|
|
|
161,661
|
|
|
104,534
|
|
|
266,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
285,050
|
|
|
707,987
|
|
|
993,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
|
14,561
|
|
|
—
|
|
|
14,561
|
|
|
Charge for the period
|
|
|
38,023
|
|
|
131,144
|
|
|
169,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
52,584
|
|
|
131,144
|
|
|
183,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
$
|
232,466
|
|
$
|
576,843
|
|
$
|
809,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-87
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
Issued and
pending patents
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
At December 31, 2010
|
|
$
|
691,814
|
|
|
Additions
|
|
|
20,000
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
|
711,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization:
|
|
|
|
|
|
At December 31, 2010
|
|
|
108,867
|
|
|
Charge for the period
|
|
|
138,362
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
|
247,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
$
|
464,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
At December 31, 2011
|
|
$
|
711,814
|
|
|
Additions
|
|
|
—
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
711,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization:
|
|
|
|
|
|
At December 31, 2011
|
|
|
247,229
|
|
|
Charge for the period
|
|
|
156,481
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
403,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
$
|
308,104
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
Trade payables and accrued liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
$
|
82,682
|
|
$
|
102,087
|
|
|
Accrued
liabilities
|
|
|
—
|
|
|
65,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
82,682
|
|
$
|
167,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.
|
Derivative financial liability
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31,
2012
|
|
Year ended
December 31,
2011
|
|
|
|
|
|
|
|
|
|
Balance,
beginning
|
|
$
|
465,553
|
|
$
|
1,850,012
|
|
|
Fair value
of warrants issued during the year
|
|
|
3,341,782
|
|
|
366,113
|
|
|
Fair value
of warrants exercised during year
|
|
|
(89,052
|
)
|
|
(1,400,861
|
)
|
|
Change in
fair value of warrants outstanding
|
|
|
(1,690,715
|
)
|
|
(349,711
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance,
ending
|
|
$
|
2,027,568
|
|
$
|
465,553
|
|
|
|
|
|
|
|
|
|
|
F-88
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
9.
|
Derivative
financial liability (cont’d)
|
|
|
|
|
|
The derivative financial liability consists of the fair value of
share purchase warrants that have exercise prices that differ from the
functional currency of the Company and are within the scope of IAS 32
“Financial Instruments: Presentation”. Details of these warrants and their
fair values are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiry
Date
|
|
Exercise
Price
|
|
Number of
warrants
outstanding at
December 31, 2012
|
|
Fair value
at
December 31,
2012
|
|
Number of
warrants
outstanding at
December 31,
2011
|
|
Fair value
at
December 31,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDN $
|
|
|
|
US $
|
|
|
|
US $
|
|
|
December 22, 2013
|
|
|
1.00
|
|
|
1,234,667
|
|
|
355,987
|
|
|
1,234,667
|
|
|
285,080
|
|
|
January 4, 2014
|
|
|
1.00
|
|
|
499,867
|
|
|
144,124
|
|
|
781,617
|
|
|
180,473
|
|
|
July 20, 2014
|
|
|
0.90
|
|
|
4,166,700
|
|
|
1,527,457
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,901,234
|
|
|
2,027,568
|
|
|
2,016,284
|
|
|
465,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair values of these
warrants were estimated using the Black-Scholes Option Pricing Model using
the following assumptions.
|
|
|
|
|
|
•
|
The stock price was based upon
the publicly traded price at the time of issuance
|
|
|
|
|
|
|
•
|
The risk-free interest rate
assumption is based on the U.S. Treasury yield for a period consistent with
the expected term of the option in effect at the time of the grant.
|
|
|
|
|
|
|
•
|
The Company does not pay
dividends on common stock and does not anticipate paying dividends on its
common stock in the foreseeable future. Therefore, the expected dividend rate
was 0%.
|
|
|
|
|
|
|
•
|
The warrant term is the life
of the warrant.
|
|
|
|
|
|
|
•
|
The expected volatility was
based off of the historical trading prices of the Company’s common stock
price over the expected life of the warrant.
|
|
|
|
|
|
|
•
|
The forfeiture rate is based
on the historical forfeiture rate for the Company’s unvested warrants, which
was 0%.
|
|
|
|
|
|
|
The fair values of these warrants as at December 31, 2012 were
estimated using the Black-Scholes Option Pricing Model using the following
inputs.
|
|
|
|
|
|
|
Expiry
Date
|
December 22, 2013
|
January 4, 2014
|
July 20, 2014
|
|
|
|
|
|
|
Exercise
price
|
CDN $1.00
|
CDN $1.00
|
CDN $0.90
|
|
Share price
|
CDN $0.79
|
CDN $0.79
|
CDN $0.79
|
|
Expected
volatility
|
113%
|
113%
|
106%
|
|
Expected
life
|
1.0 year
|
1.0 years
|
1.55 years
|
|
Dividends
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
1.07%
|
1.07%
|
1.12%
|
|
|
|
|
|
F-89
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
9.
|
Derivative
financial liability (cont’d)
|
|
|
|
|
|
The fair values of these warrants as at December 31, 2011 were
estimated using the Black-Scholes Option Pricing Model using the following
inputs.
|
|
|
|
|
|
Expiry
Date
|
December 22, 2013
|
January 4, 2014
|
|
|
|
|
|
Exercise
price
|
CDN $1.00
|
CDN $1.00
|
|
Share price
|
CDN $0.79
|
CDN $0.79
|
|
Expected
volatility
|
106%
|
106%
|
|
Expected
life
|
2.0 years
|
2.0 years
|
|
Dividends
|
0.00%
|
0.00%
|
|
Risk-free
interest rate
|
0.97%
|
0.97%
|
|
|
|
|
|
|
|
|
10.
|
Share capital
|
|
|
|
|
|
Authorized
share capital
|
|
|
|
|
|
Unlimited number of common shares without par value.
|
|
|
|
|
|
Issued
share capital
|
|
|
|
|
|
At December 31, 2012 there were 38,580,849 issued and fully paid
common shares (December 31, 2011 – 33,935,776).
|
|
|
|
|
|
Private
placements
|
|
|
|
|
|
On January 4, 2011, the
Company completed the second tranche of a non-brokered private placement and
issued 1,563,233 units at CDN$0.75 per unit for aggregate gross proceeds of
$1,215,866 (CDN$1,172,425).Each unit was comprised of one common share and
one half share purchase warrant exercisable at CDN$1.00 expiring in three
years. On issue the fair value of the warrants was determined to be $366,113
using the Black-Scholes Option Pricing Model with the following assumptions:
Risk free rate of 1.78%; Expected life of 3 years; Volatility of 118%; and a
Dividend yield of 0%.Finder’s fees were paid on portions of the private
placement in the amount of 10% of the gross proceeds placed by such finders,
payable in cash ($78,834) and 10% of the total units placed by such finders,
payable through the issuance of finder’s warrants, exercisable into one
common share of the Company on the same terms as the warrants issued as part
of the aforementioned units. A total of 113,988 finder’s warrants were issued
with a fair value of $53,413 determined using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of 1.78%;
Expected life of 3 years; Volatility of 118%; and a Dividend yield of 0%.
|
|
|
|
|
|
On July 20, 2012, The Company completed a private placement of
4,166,700 units at a price of CDN $0.60 per unit generating aggregate gross
proceeds of $2,478,020(CDN$2,500,000). Each unit comprised one common share
and one share purchase warrant, with each whole warrant exercisable at a
price of CDN$0.90 per share until July 20, 2014. On issue the fair value of
the warrants was determined to be $3,341,782 using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of 0.97%;
Expected life of 2 years; Volatility of 93%; and a Dividend yield of 0%. In
the event that the Company’s common shares close at over CDN$1.60 for 20
consecutive trading days, the warrants will be subject to accelerated
conversion within 30 days notice of the Company disseminating a press release
providing notice of that circumstance. Finder’s fees were paid on a portion
of the financing, such that an aggregate of $102,815 was paid in cash and
22,516 finder’s warrants were issued, having the same terms as the warrants
forming part of the units and 152,000 finder’s unit warrants were issued exercisable
to acquire units on the same terms as the units issued in the financing at an
exercise price of CDN$0.60 per unit for until July 20, 2014. An additional
152,000 finder’s warrants were issued with an exercise price of CDN$0.90
until July 20, 2014. The fair value of the finder’s warrants was $273,617
determined using the Black-Scholes Option Pricing Model with the following
assumptions: Risk free rate of 0.97%; Expected life of 2 years; Volatility of
93%; and a Dividend yield of 0%.
|
F-90
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
|
10.
|
Share capital
(cont’d)
|
|
|
|
|
|
Basic
and diluted loss per share
|
|
|
|
|
|
The calculation of basic and diluted loss per share for the years
ended December 31, 2012and 2011 was based on the loss attributable to common
shareholders of $1,838,355 and $3,694,632 and the weighted average number of
common shares outstanding of 36,014,144and 32,756,376, respectively.
|
|
|
|
|
|
Diluted loss per share did not include the effect of stock options
and warrants as the effect would be anti-dilutive.
|
|
|
|
|
|
Stock
options
|
|
|
|
|
|
The Company has adopted an incentive stock option plan, which
provides that the Board of Directors of the Company may from time to time, at
its discretion, and in accordance with the Exchange requirements, grant to
directors, officers, employees and technical consultants to the Company,
non-transferable options to purchase common shares, provided that the number
of common shares reserved for issuance will not exceed 6,779,255 common
shares. Such options will be exercisable for a period of up to 10 years from
the date of grant. In connection with the foregoing, the number of common
shares reserved for issuance to any one optionee will not exceed five percent
(5%) of the issued and outstanding common shares and the number of common
shares reserved for issuance to all technical consultants will not exceed two
percent (2%) of the issued and outstanding common shares. Options may be
exercised no later than 90 days following cessation of the optionee’s
position with the Company or 30 days following cessation of an optionee
conducting investor relations activities’ position.
|
|
|
|
|
|
Stock-based compensation expense has been calculated using the
Black-Scholes option pricing model. The measurement date fair values of the
stock options were estimated using the Black-Scholes Option Pricing Model
using the following assumptions.
|
|
|
|
|
|
•
|
The stock price was based upon
the publicly traded price at the time of issuance
|
|
|
|
|
|
|
•
|
The risk-free interest rate
assumption is based on the U.S. Treasury yield for a period consistent with
the expected term of the option in effect at the time of the grant.
|
|
|
|
|
|
|
•
|
The Company does not pay dividends
on common stock and does not anticipate paying dividends on its common stock
in the foreseeable future. Therefore, the expected dividend rate was 0%.
|
|
|
|
|
|
|
•
|
The expected life of the
warrants was estimated at 75% of the remaining term until expiry, which is
based on the length of time similar warrants have remained outstanding in the
past.
|
|
|
|
|
|
|
•
|
The expected volatility was
based off on the historical trading prices of the Company’s common stock
price over the expected life of the warrant.
|
|
|
|
|
|
|
•
|
The forfeiture rate is based
on the historical forfeiture rate for the Company’s unvested warrants, which
was 0%.
|
|
|
|
|
|
|
On February 8, 2011, the Company granted 2,190,000 stock options to
directors, employees and consultants. The options vest over a three year
period, and are exercisable at CDN$0.97 expiring in five years. The options
had a grant date fair value of $1,666,332 (CDN$1,650,651) determined using
the Black-Scholes Option Pricing Model with the following assumptions: Risk free rate of 2.44%; Expected
life of 5 years; Volatility of 118%; and a Dividend yield of 0%. During the
year ended December 31, 2012, the Company recorded stock-based compensation
expense of $340,825 (2011 - $1,287,021) relating to the vesting of these
options. During the year ended December 31, 2012, 117,000 of the options were
forfeited. The related share based payment relating to these cancelled
options of $40,655 was reversed in the statement of comprehensive loss.
|
F-91
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
10.
|
Share capital
(cont’d)
|
|
|
|
|
|
Stock
options (cont’d)
|
|
|
|
|
|
On April17, 2012, the Company granted 120,000 stock options to
employees. 50% of the options vested on October 17, 2012 and the remaining
vest on October 17, 2013. The options are exercisable at CDN$0.51and expire
on April 17, 2017. The options had a grant date fair value of $43,545
(CDN$43,359) determined using the Black-Scholes Option Pricing Model with the
following assumptions: Risk free rate of 1.63%; Expected life of 5
years; Volatility of 92%; and a Dividend yield of 0%. During the year ended
December 31, 2012 the Company recorded stock-based compensation expense of
$32,022 relating to the vesting of these options.
|
|
|
|
|
|
On August 16, 2012, the Company granted 200,000 stock options to an
employee. 50% of the options vest six months following the grant date and the
remaining in twelve months from the grant date. The options are exercisable
at CDN$1.11and expire September 4, 2017. The options had a grant date fair
value of $170,047 (CDN$168,112) determined using the Black-Scholes Option
Pricing Model with the following assumptions: Risk free rate of 1.51%; Expected
life of 5 years; Volatility of 97%; and a Dividend yield of 0%. During the
year ended December 31, 2012, the Company recorded stock-based compensation
expense of $116,936 relating to the vesting of these options.
|
|
|
|
|
|
On December 20, 2012 the
Company granted 80,000 stock options to employees. 50% of the options vest
six months following the grant date and the remaining 18 months from the
grant date. The options are exercisable at CDN$0.80 and expire December 20,
2017. The options had a grant date fair value of $46,306 (CDN$45,780)
determined using the Black-Scholes Option Pricing Model with the following
assumptions: Risk free rate of 1.39%; Expected life of 5 years; Volatility of
97%; and a Dividend yield of 0%. During the year ended December 31, 2012, the
Company recorded stock-based compensation expense of $1,980 relating to the
vesting of these options.
|
|
|
|
|
|
On December 20, 2012 the
Company granted 272,000 stock options to employees and consultants of the
Company which vested immediately. The options are exercisable at CDN$0.80 and
expire December 20, 2017. During the year ended December 31, 2012 the Company
recorded stock-based compensation of $158,292 (CDN$156,497) determined using
the Black-Scholes Option Pricing Model with the assumptions: Risk free rate
of 1.39%; Expected life of 5 years; Volatility of 97%; and a Dividend yield
of 0%.
|
|
|
|
|
|
The changes in options during the years ended December 31, 2012 and
2011 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2012
|
|
December
31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
outstanding, beginning
|
|
|
3,065,000
|
|
|
CDN$0.87
|
|
|
875,000
|
|
|
CDN$0.72
|
|
|
Options
granted
|
|
|
672,000
|
|
|
CDN$0.84
|
|
|
2,190,000
|
|
|
CDN$0.93
|
|
|
Options exercised
|
|
|
(110,000
|
)
|
|
CDN$0.72
|
|
|
—
|
|
|
—
|
|
|
Options
forfeited
|
|
|
(120,000
|
)
|
|
CDN$0.97
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
outstanding, ending
|
|
|
3,507,000
|
|
|
CDN$0.93
|
|
|
3,065,000
|
|
|
CDN$0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
exercisable, ending
|
|
|
2,497,000
|
|
|
CDN$0.91
|
|
|
1,605,000
|
|
|
CDN$0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average measurement date fair value of the options
granted during the year ended December 31, 2012 was $0.62 (2012 - $0.76).
|
|
|
|
|
|
The weighted average remaining life of the options outstanding as at
December 31, 2012 is 2.76 years.
|
F-92
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
10.
|
Share capital
(cont’d)
|
|
|
|
|
|
Stock
options (cont’d)
|
|
|
|
|
|
Details of options outstanding as at December 31, 2012 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise price
|
|
|
Expiry date
|
|
|
Number of options
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.40
|
|
|
May 7, 2014
|
|
|
325,000
|
|
|
CDN$ 1.00
|
|
|
May 7, 2014
|
|
|
300,000
|
|
|
CDN$ 1.50
|
|
|
May 7, 2014
|
|
|
200,000
|
|
|
CDN$ 0.97
|
|
|
February 8, 2016
|
|
|
2,010,000
|
|
|
CDN$ 0.51
|
|
|
April 17, 2017
|
|
|
120,000
|
|
|
CDN$ 1.11
|
|
|
September4, 2017
|
|
|
200,000
|
|
|
CDN$ 0.80
|
|
|
December20, 2017
|
|
|
352,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,507,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
purchase warrants
|
|
|
|
|
|
Each warrant entitles the holder to purchase one common share of the
Company. The changes in warrants during the year ended December 31, 2012 and
2011 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2012
|
|
December
31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
Number of
warrants
|
|
Weighted
average
exercise price
|
|
Number of
warrants
|
|
Weighted
average
exercise price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, beginning
|
|
|
4,427,869
|
|
|
CDN$0.76
|
|
|
10,542,369
|
|
|
CDN$0.86
|
|
|
Warrants
issued
|
|
|
4,493,216
|
|
|
CDN$0.89
|
|
|
895,605
|
|
|
CDN$0.93
|
|
|
Warrants
expired
|
|
|
(190,605
|
)
|
|
CDN$1.34
|
|
|
(3,154,562
|
)
|
|
CDN$0.75
|
|
|
Warrants
exercised
|
|
|
(368,373
|
)
|
|
CDN$0.95
|
|
|
(3,855,543
|
)
|
|
CDN$0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
outstanding, ending
|
|
|
8,362,107
|
|
|
CDN$0.80
|
|
|
4,427,869
|
|
|
CDN$0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Details of
warrants outstanding as at December 31, 2012 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Exercise price
|
|
|
Expiry date
|
|
|
Number of warrants
outstanding and
exercisable
|
|
|
|
|
|
|
|
|
|
|
|
CDN$ 0.40
|
|
|
May 7, 2014
|
|
|
1,845,500
|
|
|
CDN$ 1.00
|
|
|
December 22, 2013
|
|
|
1,431,767
|
|
|
CDN$ 1.00
|
|
|
January 4, 2014
|
|
|
591,624
|
|
|
CDN$ 0.90
|
|
|
July 20, 2014
|
|
|
4,341,216
|
|
|
CDN$ 0.60
|
|
|
July 20, 2014
|
|
|
152,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,362,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.
|
Reserves
|
|
|
|
|
|
Share-based
payment reserve
|
|
|
|
|
|
The share-based payment reserve records the fair value of options and
warrants recorded in accordance with IFRS 2 “Share-based payments” until such
time that the stock options or warrants are exercised, at which time the
corresponding amount will be transferred to share capital.
|
F-93
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
12.
|
Financial risk and
capital management
|
|
|
|
|
|
The Company is exposed in
varying degrees to a variety of financial instrument related risks. The Board
of Directors approves and monitors the risk management processes, inclusive
of documented investment policies, counterparty limits, and controlling and
reporting structures. The type of risk exposure and the way in which such
exposure is managed is provided as follows:
|
|
|
|
|
|
Credit risk
|
|
|
|
|
|
Credit risk is the risk that
one party to a financial instrument will fail to discharge an obligation and
cause the other party to incur a financial loss. The Company’s primary
exposure to credit risk is on its cash, and cash equivalents. The majority of
cash is deposited in bank accounts held with major banks in Canada and the
United States. As most of the Company’s cash is held by two banks there is a
concentration of credit risk. This risk is managed by using major banks that
are high credit quality financial institutions as determined by rating
agencies. The Company’s secondary exposure to risk is on its receivables. The
risk is considered to be minimal.
|
|
|
|
|
|
Liquidity risk
|
|
|
|
|
|
Liquidity risk is the risk
that the Company will not be able to meet its financial obligations as they
fall due. The Company has a planning and budgeting process in place to help
determine the funds required to support the Company’s normal operating
requirements on an ongoing basis. The Company ensures that there are
sufficient funds to meet its short-term business requirements, taking into
account its anticipated cash flows from operations and its holdings of cash
and cash equivalents.
|
|
|
|
|
|
Historically, the Company’s
sole source of funding has been the issuance of equity securities for cash,
primarily through private placements. The Company’s access to financing is
always uncertain. There can be no assurance of continued access to
significant equity funding.
|
|
|
|
|
|
The following is an analysis
of the contractual maturities of the Company’s non-derivative financial
liabilities as at December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within one
year
|
|
Between
one
and five years
|
|
More than
five years
|
|
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
$
|
82,682
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange risk
|
|
|
|
|
|
Foreign exchange risk is the
risk that the fair values of future cash flows of a financial instrument will
fluctuate because they are denominated in currencies that differ from the
respective functional currency. The Company does not hedge its exposure to
fluctuations in foreign exchange rates.
|
|
|
|
|
|
The following is an analysis
of the United States dollar equivalent of financial assets and liabilities
that are denominated in Canadian dollars:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
1,869,056
|
|
$
|
2,124,582
|
|
|
Trade
payables
|
|
|
—
|
|
|
(43,178
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,869,026
|
|
$
|
2,081,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on the above net exposures, as at December 31, 2012, a 1%
change in the Canadian dollar to United States dollar exchange rate would
impact the Company’s net loss by $18,691 (2011 - $20,814).
|
F-94
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
12.
|
Financial risk and
capital management (cont’d)
|
|
|
|
|
|
Interest rate risk
|
|
|
|
|
|
Interest rate risk is the risk
that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company is exposed
to interest rate risk on its cash equivalents as these instruments have
original maturities of three months or less and are therefore exposed to
interest rate fluctuations on renewal. A 1% change in market interest rates
would have an impact on the Company’s net loss of approximately $18,000.
|
|
|
|
|
|
Capital Management
|
|
|
|
|
|
The Company’s policy is to
maintain a strong capital base so as to maintain investor and creditor
confidence and to sustain future development of the business. The capital
structure of the Company consists of equity, comprising share capital, net of
accumulated deficit. There were no changes in the Company’s approach to
capital management during the period.
|
|
|
|
|
|
The Company is not subject
to any externally imposed capital requirements.
|
|
|
|
|
|
Classification of financial instruments
|
|
|
|
|
|
Financial assets included in the statement of financial position are
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Loans and
receivables:
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
2,205,709
|
|
$
|
2,360,852
|
|
|
Loans and
receivables:
|
|
|
|
|
|
|
|
|
Due
from related party
|
|
|
5,097
|
|
|
2,862
|
|
|
Interest receivable
|
|
|
11,157
|
|
|
20,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,221,963
|
|
$
|
2,384,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
included in the statement of financial position are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Non-derivative
financial liabilities:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
$
|
82,682
|
|
$
|
102,087
|
|
|
Derivative
liabilities
|
|
|
|
|
|
|
|
|
Derivative financial liability - warrants
|
|
|
2,027,568
|
|
|
465,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,110,250
|
|
$
|
567,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
|
|
|
|
|
|
The fair value of the
Company’s financial assets and liabilities approximates the carrying amount.
|
|
|
|
|
|
Financial instruments
measured at fair value are classified into one of three levels in the fair
value hierarchy according to the relative reliability of the inputs used to
estimate the fair values. The three levels of the fair value hierarchy are:
|
|
|
|
|
|
•
|
Level 1 – Unadjusted quoted
prices in active markets for identical assets or liabilities;
|
|
|
|
|
|
|
•
|
Level 2 – Inputs other than
quoted prices that are observable for the asset or liability either directly
or indirectly; and
|
|
|
|
|
|
|
•
|
Level 3 – Inputs that are
not based on observable market data.
|
|
|
|
|
|
|
Financial liabilities
measured at fair value at December 31, 2012 and 2011 consist of the
derivative financial liability. These are classified as Level 3.
|
F-95
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
12.
|
Financial risk and capital
management (cont’d)
|
|
|
|
|
|
Fair value (cont’d)
|
|
|
|
|
|
The fair value of the
derivative liability is determined by the Black-Scholes option pricing model
using the historical volatility as an estimate of future volatility. At
December 31, 2012, if the volatility used was increased by 10% the impact
would be an increase to the derivative liability of $201,413 with a
corresponding increase to comprehensive loss.
|
|
|
|
|
13.
|
Segmented
information
|
|
|
|
|
|
Operating
segments
|
|
|
|
|
|
The Company operates in a
single reportable operating segment being the production and sale of thin and
thick film of silicon dioxide and mixed silicon oxides on silicon and other
substrates from aqueous bath at room temperature and pressure. Substantially
all assets of the business support these operations.
|
|
|
|
|
|
Geographic
segments
|
|
|
|
|
|
At December 31, 2012 and 2011, all of the Company’s equipment and
intangible assets are located in the United States.
|
|
|
|
|
14.
|
Commitments
|
|
|
|
|
|
Employment
Agreement
|
|
|
|
|
|
The Company has an agreement (the “Employment Agreement”) dated
October 1, 2007, and amended July 31, 2008, with an officer of the Company
under which the Company pays a fee for employee services at a base salary of
$220,000 per annum. On April 30, 2010, the Board of Directors passed a
resolution to increase this to $250,000 per annum and on May 13, 2011 passed
a resolution to increase this to $275,000 per annum. The employee is entitled
to receive options under the terms and conditions of the Company’s stock
option plan. The employee will serve as the President and Chief Executive
Officer of the Company. On April 5, 2012, the employment agreement was
extended for an additional two years under the same terms.
|
|
|
|
|
|
The employee has the right, upon 30 days notice, to terminate the
Employment Agreement. The Company may terminate the Employment Agreement on
10 days notice if for cause or on 60 days notice if without cause. Should the
Company terminate the contract without cause, it is obligated to pay the
employee an amount equal to three month’s base salary.
|
|
|
|
|
|
License
Agreement
|
|
|
|
|
|
In 2004 the Company entered into a License Agreement with a
university under which the university is entitled to receive: (i) 2% of the
Company’s adjusted gross sales as defined in the License Agreement, and (ii)
2% of the adjusted gross sales of any sublicensee as defined in the License
Agreement. The License Agreement gives the Company an exclusive license to a
certain United States patent and the related technology for low temperature
growth of inorganic materials from solution using catalyzed growth and
re-growth.
|
|
|
|
|
|
Sponsored
Research Agreement
|
|
|
|
|
|
On September 1, 2009, the Company has entered into a sponsored research
agreement with the same university to develop thin films incorporating
silicon quantum dots. The initial term of the agreement is one year and the
proposed budget is $100,000. Both the term and the funding can be extended
under mutual agreement.
|
F-96
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
14.
|
Commitments
(cont’d)
|
|
|
|
|
|
China
Joint Venture
|
|
|
|
|
|
On June 22, 2010 the Company formed a joint venture (“Natcore
Technology (Zhuzhou) Co., Ltd.”) with a consortium in China to develop and
manufacture film-growth equipment and materials using the Company’s
proprietary Liquid Phase Deposition (LPD) technology licensed from Rice
University. Natcore Technology (Zhuzhou) Co., Ltd. will be 55% owned by the
Company, with the Zhuzhou Hi-Tech Industrial Development Zone and a Chinese
firm that is currently a producer of polysilicon and a manufacturer of
industrial equipment used in the solar industry (together, the “Chinese
Partnership”) holding the remaining 45% ownership position. Natcore
Technology (Zhuzhou) Co., Ltd. will be funded by an initial $3 million
investment consisting of $500,000 contributed by the Company and $2,500,000
contributed by the Chinese Partnership. Natcore Technology (Zhuzhou) Co.,
Ltd. will have the exclusive right to develop, manufacture and sell AR
film-growth equipment in China, and a five-year exclusive right to
manufacture such equipment for sale outside of China. Our Board of Directors
has not approved funding for the joint venture and consequently no funding
has been made and the joint venture has not taken place as of this filing.
|
|
|
|
|
|
Research
and Development Facility Lease
|
|
|
|
|
|
On July 18, 2011, the Company entered into a lease agreement for a
research and development facility. The lease is for two years expiring June
30, 2013. The Company will pay a base rent of $36,477 during the six months
ended June 30, 2013.
|
|
|
|
|
|
Patent
License Agreement
|
|
|
|
|
|
On December 9, 2011 the Company entered into a Patent License
Agreement to use certain licensed patents. The Company is required to pay an
annual fee of $25,000 for as long as the Company uses the patents.
|
|
|
|
|
15.
|
Related party
transactions and balances
|
|
|
|
|
|
Related
party balances
|
|
|
|
|
|
As at December 31, 2012, there was $5,097 (2011 - $2,862) owing from
an officer of the Company and has been included in receivables.
|
|
|
|
|
|
Key
management personnel compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Administrative
fees
|
|
$
|
60,000
|
|
$
|
60,000
|
|
|
Consulting
|
|
|
30,200
|
|
|
44,500
|
|
|
Stock-based
compensation
|
|
|
28,768
|
|
|
282,086
|
|
|
Wages and
benefits
|
|
|
446,750
|
|
|
509,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
565,718
|
|
$
|
896,253
|
|
|
|
|
|
|
|
|
|
|
F-97
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial
Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
16.
|
Income taxes
|
|
|
|
|
|
A reconciliation of the expected income tax recovery to the actual
income tax recovery is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,838,355
|
)
|
$
|
(3,694,632
|
)
|
|
Tax rate
|
|
|
34
|
%
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
Expected
income tax recovery
|
|
|
(625,040
|
)
|
|
(1,256,175
|
)
|
|
Derivative
liability
|
|
|
(574,843
|
)
|
|
(118,902
|
)
|
|
Non-deductive
items and other
|
|
|
58,361
|
|
|
533,801
|
|
|
Effect of
share issuance costs not recognized
|
|
|
(35,246
|
)
|
|
(27,047
|
)
|
|
Effect of
different foreign tax rates
|
|
|
24,897
|
|
|
23,029
|
|
|
Temporary
differences not recognized
|
|
|
1,151,871
|
|
|
845,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has the following deductible temporary differences for
which no deferred tax asset has been recognized:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2012
|
|
December
31,
2011
|
|
|
|
|
|
|
|
|
|
Non-capital
losses – Canada
|
|
$
|
1,173,191
|
|
$
|
868,277
|
|
|
Tax losses –
United States
|
|
|
8,860,293
|
|
|
6,140,600
|
|
|
Equipment
tax pools
|
|
|
123,977
|
|
|
71,945
|
|
|
Share
issuance costs
|
|
|
257,205
|
|
|
280,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,414,666
|
|
$
|
7,361,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tax
pools relating to these deductible temporary differences expire as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-capital
losses – Canada
|
|
Tax losses
–
United States
|
|
Equipment
tax
pools
|
|
Share
issue costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
$
|
—
|
|
$
|
60
|
|
$
|
—
|
|
$
|
—
|
|
|
2023
|
|
|
—
|
|
|
534
|
|
|
—
|
|
|
—
|
|
|
2024
|
|
|
—
|
|
|
36,334
|
|
|
—
|
|
|
—
|
|
|
2025
|
|
|
—
|
|
|
105,744
|
|
|
—
|
|
|
—
|
|
|
2026
|
|
|
—
|
|
|
112,823
|
|
|
—
|
|
|
—
|
|
|
2027
|
|
|
3,735
|
|
|
176,830
|
|
|
—
|
|
|
—
|
|
|
2028
|
|
|
96,687
|
|
|
557,073
|
|
|
—
|
|
|
—
|
|
|
2029
|
|
|
200,883
|
|
|
861,988
|
|
|
—
|
|
|
—
|
|
|
2030
|
|
|
282,584
|
|
|
1,976,987
|
|
|
—
|
|
|
—
|
|
|
2031
|
|
|
284,388
|
|
|
2,312,227
|
|
|
—
|
|
|
—
|
|
|
2032
|
|
|
304,914
|
|
|
2,719,693
|
|
|
—
|
|
|
—
|
|
|
No expiry
|
|
|
—
|
|
|
—
|
|
|
123,977
|
|
|
257,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,173,191
|
|
$
|
8,860,293
|
|
$
|
123,977
|
|
$
|
257,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-98
|
|
|
Natcore Technology Inc.
|
|
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended December 31, 2012 and 2011
|
|
|
|
|
|
|
17.
|
Restatement
|
|
|
|
|
|
The Company determined the number of warrants outstanding used in the
valuation of the derivative liability in the prior years was incorrect. In
consideration of the effect of the difference in the number of warrants, the
consolidated statements of financial position as at December 31, 2011 and
2010 and the consolidated statement of comprehensive loss and cash flows for
the years ended December 31, 2011 and 2010 have been restated. As required by
International Accounting Standard 8, the Company included the re-stated
statement of financial position as at December 31, 2010 as the error occurred
during the year ended December 31, 2010.
|
|
|
|
|
|
The following adjustments were made to the consolidated statement of
financial position as at December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously stated
|
|
Adjustment
|
|
As
restated
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
financial liability
|
|
$
|
232,777
|
|
$
|
232,776
|
|
$
|
465,553
|
|
|
Share
capital
|
|
|
10,096,966
|
|
|
(467,084
|
)
|
|
9,629,882
|
|
|
Share-based
payment reserve
|
|
|
1,784,315
|
|
|
26,707
|
|
|
1,811,022
|
|
|
Deficit
|
|
$
|
(8,665,699
|
)
|
$
|
207,601
|
|
$
|
(8,458,098
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following adjustments were made to the consolidated statement of
financial position as at December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously stated
|
|
Adjustment
|
|
As
restated
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
financial liability
|
|
$
|
1,579,621
|
|
$
|
270,391
|
|
$
|
1,850,012
|
|
|
Share
capital
|
|
|
4,920,379
|
|
|
(257,321
|
)
|
|
4,663,058
|
|
|
Deficit
|
|
$
|
(4,750,397
|
)
|
$
|
(13,069
|
)
|
$
|
(4,763,466
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following adjustments were made to the consolidated statement of
comprehensive loss for the year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously stated
|
|
Adjustment
|
|
As
restated
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
adjustment on warrants
|
|
$
|
129,041
|
|
$
|
220,670
|
|
$
|
349,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The comprehensive loss decreased by $220,670. Loss per share changed
from $0.12 to $0.11 as at December 31, 2011 due to the restatement.
|
|
|
|
|
|
The following adjustments were made to the consolidated statement of
cash flow for the year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously stated
|
|
Adjustment
|
|
As
restated
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
3,915,302
|
|
$
|
(220,670
|
)
|
$
|
3,694,632
|
|
|
Fair value
adjustment on warrants
|
|
$
|
(129,041
|
)
|
$
|
(220,670
|
)
|
$
|
(349,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18.
|
Subsequent event
|
|
|
|
|
|
On April 5, 2013, the Company granted 40,000 stock options to
consultants. The options have an exercise price of CDN$0.71. 50% of the
options vest within six months of hire and the balance vest 18 months
following the hire date.
|
F-99
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The
Company’s articles provide, to the fullest extent permitted by the laws of
British Columbia, that the officers and directors of the Company who was or is
a party to or is threatened to be made a party to, any threatened, or pending
or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative, by reason of fact that he/she is or was
acting as the incorporator, officer, director or nominee officer/director or
was serving in any capacity at any time. Furthermore, it is the responsibility
of the Company to pay for all legal expenses that may occur on behalf of the
party who may come under any such type of action.
Management
of the Company has entered into indemnity agreements consistent with the
foregoing to all officers and directors of the Company. In this regard,
investors should be aware of the position of the United States Securities and
Exchange Commission respecting such indemnification, which position is as
follows: “Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the “Act”) may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.”
ITEM
7. RECENT SALES OF UNREGISTERED SECURITIES
The
following information is furnished with regard to all securities issued by the
registrant within the last four years that were not registered under the
Securities Act. The issuance of such shares was deemed exempt from registration
requirements of the Securities Act as such securities were offered and sold
pursuant to Regulation D, Rule 506 of the Securities Act and outside of the
United States to persons who were neither citizens nor residents of the United
States or such sales were exempt from registration under Section 4(2) of
Securities Act. No underwriting discounts or commissions were paid with respect
to any of the issuances listed below.
|
|
|
|
|
From August 1, 2009, through July 31, 2012, we have issued the
following securities, none of which involved a change in voting rights
attached to the securities at issue:
|
|
|
|
|
|
On August 31, 2009 we issued 3,201,750 common shares at a price of
CDN$0.40 per share and 2,932,500 warrants eligible to purchase 2,912,500
common shares at a price of CDN$0.75 per share for a period of 24 months. 41
non-US, accredited investors and one (1) consultant received shares at $0.40
per share. Issuer relied upon Canadian private placement law, specifically
Section 2.3 of National Instrument 45-106 and upon U.S. law Rule 506 of
Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
On September 15, 2009 we issued 20,000 common shares at a price of
CDN$0.40 per share and 2,932,500 warrants eligible to purchase 20,000 common
shares at a price of CDN$0.75 per share for a period of 24 months. One (1)
US, accredited investor bought shares at $0.40 per share. Issuer relied upon
Rule 506 of Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
On December 11, 2009, there were 200,000 warrants issued by the
company as consideration for all of the issued and outstanding shares of New
Cyte, Inc. There were eight (8) New Cyte, Inc. shareholders that received
these warrants. Issuer relied upon Canadian private placement law,
specifically exemptions in BC Instrument 72-503 and Sections 2.3 and 2.5 of
National Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and
Regulation S of the Securities Act of 1933.
|
II-1
|
|
|
|
|
From August 1, 2009 to December 31, 2009, the Company received net
proceeds of CDN$17,025.00 from the exercise of 110,650 agent’s warrants.
|
|
|
|
|
|
From January 1 to June 30, 2010, the Company received net proceeds of
CDN$493,410 from the exercise of 657,880 warrants.
|
|
|
|
|
|
On April 9, 2010, we granted 50,000 stock options eligible to
purchase 50,000 common shares at a price of CDN$0.50 per share for a period
of five years. One (1) consultant was granted stock, pursuant to shareholder
approval of a Stock Option Plan on July 3, 2009. Issuer relied upon Canadian
private placement law, specifically Section 2.24 of National Instrument
45-106 and upon U.S. law Rule 506 of Regulation D and Regulation S of the
Securities Act of 1933.
|
|
|
|
|
|
On May 19, 2010, we issued 375,236 common shares at a deemed price of
CDN$0.62 per share for the acquisition of all of the issued and outstanding
securities of Vanguard Solar Inc. May 19, 2010, there were 515,311 warrants
issued to thirteen (13) Vanguard Solar Inc. shareholders. Issuer relied upon
Canadian private placement law, specifically BC Instrument 72-503 and upon
U.S. law Rule 506 of Regulation D and Regulation S of the Securities Act of
1933.
|
|
|
|
|
|
On May 19, 2010, we issued 120,075 common shares at a deemed price of
CDN$0.62 per share in settlement of an arrangement of legal services incurred
by Vanguard Solar Inc. The 120,075 shares were issued to Vanguard Solar
Inc.’s intellectual property legal counsel. Issuer relied upon Canadian
private placement law, specifically BC Instrument 72-503 and upon U.S. law
Rule 506 of Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
On May 19, 2010, we issued 20,000 common shares at a deemed price of
CDN$1.00 per share in settlement of services provided to the Company. The
20,000 shares were issued to United States securities counsel. Issuer relied
upon Rule 506 of Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
From July 1, 2010 to December 31, 2010, the Company received net
proceeds of CDN$169,654.75 from the exercise of 242,873 warrants and stock
options.
|
|
|
|
|
|
Pursuant to a private placement, on December 22, 2010, we issued
2,469,333 common shares at a price of CDN$0.75 per share and 1,234,667
warrants eligible to purchase 1,431,667 common shares at a price of CDN$1.00
per share for a period of 36 months. There were 2,469,333 shares purchased by
twenty (20) investors in the private placement. For Canadian investors,
Issuer relied upon Canadian private placement law, specifically Section 2.3
of National Instrument 45-106 and for United States investors, Issuer relied
upon Rule 506 of Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
Pursuant to a private placement, on January 4, 2011 we issued
1,563,233 common shares at a price of $0.75 per share and 895,602 warrants
eligible to purchase 895,602common shares at a price of $1.00 per share for a
period of 36 months. There were 1,563,233 shares purchased by thirty-one (31)
investors in the private placement. For Canadian investors, Issuer relied
upon Canadian private placement law, specifically Section 2.3 of National
Instrument 45-106 and for United States investors, Issuer relied upon Rule
506 of Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
On February 8, 2011, we granted 2,190,000 stock options eligible to
purchase 2,190,000 common shares at a price of CDN$0.97 per share. The grants
were made to fourteen (14) employees and consultants. Grants were made
pursuant to shareholder approval of a Stock Option Plan in May 2009. Issuer
relied upon Canadian private placement law, specifically Section 2.24 of
National Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and
Regulation S of the Securities Act of 1933.
|
II-2
|
|
|
|
|
From January 1, 2011 to June 30, 2011, the Company received net
proceeds of CDN$2,807,915 from the exercise of 3,845,543 warrants.
|
|
|
|
|
|
From July 1, 2011 to December 31, 2011, the Company received net
proceeds of CDN$7,500.00 from the exercise of 10,000 warrants.
|
|
|
|
|
|
On April 17, 2012, we granted 120,000 stock options eligible to
purchase 120,000 common shares at a price of CDN$0.51 per share for a period
of five years. The two (2) recipients were an employee and a consultant.
Grants were made pursuant to shareholder approval of a Stock Option Plan on
June 6, 2011. Issuer relied upon Canadian private placement law, specifically
Section 2.24 of National Instrument 45-106 and upon U.S. law Rule 506 of
Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
Pursuant to a private placement, on July 20, 2012 we issued 4,166,700
common shares at a price of CDN$0.60 per share and 4,189,216 warrants
eligible to purchase 4,189,216 common shares at a price of CDN$0.90 per share
for a period of 24 months. We also issued 152,000 finder’s options entitling
the holder to acquire one common share and one share purchase warrant of the
Company at a price of CDN$0.60 per unit for a period of 24 months. Each
warrant underlying the unit entitles the holder to acquire one common share
at a price of CDN$0.90 per share for a period of 24 months from the issuance
of the finder’s options. There were 4,166,700 shares purchased by twenty-six
(26) investors in the private placement. For Canadian investors, Issuer
relied upon Canadian private placement law, specifically Section 2.3 and 2.5
of National Instrument 45-106 and for United States investors, Issuer relied
upon Rule 506 of Regulation D and Regulation S.
|
|
|
|
|
|
On September 4, 2012, we granted 200,000 stock options eligible to
purchase 200,000 common shares at a price of CDN$1.11 per share for a period
of five years. One (1) employee received 200,000 shares, pursuant to
shareholder approval of Stock Option Plan on June 6, 2011. Issuer relied upon
Canadian private placement law, specifically Section 2.24 of National
Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and Regulation S
of the Securities Act of 1933.
|
|
|
|
|
|
On December 20, 2012, we granted 352,000 stock options eligible to purchase
352,000 common shares at a price of CDN$0.80 per share for a period of five
years. This grant was made to twelve (12) employees and consultants. The
grants were made pursuant to shareholder approval of Stock Option Plan on
June 6, 2011. Issuer relied upon Canadian private placement law, specifically
Section 2.24 of National Instrument 45-106 and upon U.S. law Rule 506 of
Regulation D and Regulation S of the Securities Act of 1933.
|
|
|
|
|
|
From July 1, 2012 to December 31, 2012, the Company received net
proceeds of CDN$411,134 from the exercise of 478,373 options and warrants.
|
|
|
|
|
|
On January 4, 2013, we granted 20,000 stock options eligible to
purchase 20,000 common shares at a price of CDN$0.80 per share for a period
of five years. One (1) consultant was granted options pursuant to shareholder
approval of Stock Option Plan on June 6, 2011. Issuer relied upon Canadian
private placement law, specifically Section 2.24 of National Instrument
45-106 and upon U.S. law Rule 506 of Regulation D and Regulation S of the
Securities Act of 1933.
|
|
|
|
|
|
On April 5, 2013, we granted 40,000 stock options eligible to
purchase 40,000 common shares at a price of CDN$0.71 per share for a period
of five years. Two (2) consultants were granted options pursuant to
shareholder approval on June 6, 2011. Issuer relied upon Canadian private
placement law, specifically Section 2.24 of National Instrument 45-106 and
upon U.S. law Rule 506 of Regulation D and Regulation S of the Securities Act
of 1933.
|
|
|
|
|
|
On June 1, 2013, we granted 100,000 stock options eligible to
purchase 100,000 common shares at a price of CDN$0.79 per share for a period
of five years. One (1) consultant was granted options pursuant to shareholder
approval on June 6, 2011. Issuer relied upon Canadian private placement law,
specifically Section 2.24 of National Instrument 45-106 and upon U.S. law
Rule 506 of Regulation D and Regulation S of the Securities Act of 1933.
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II-3
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On June 3, 2013, we granted 25,000 stock options eligible to purchase
25,000 common shares at a price of CDN$0.83 per share for a period of five
years. One (1) employee of the Issuer was granted options pursuant to
shareholder approval on June 6, 2011. Issuer relied upon Canadian private
placement law, specifically Section 2.24 of National Instrument 45-106 and
upon U.S. law Rule 506 of Regulation D and Regulation S of the Securities Act
of 1933.
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On July 31, 2013, we granted 100,000 stock options eligible to
purchase 100,000 common shares at a price of CDN$0.58 per share for a period
of five years. Two (2) consultants were granted options pursuant to
shareholder approval on June 6, 2011. Issuer relied upon Canadian private
placement law, specifically Section 2.24 of National Instrument 45-106 and
upon U.S. law Rule 506 of Regulation D and Regulation S of the Securities Act
of 1933.
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On August 16, 2013, we granted 400,000 stock options eligible to
purchase 400,000 common shares at a price of US$0.59 per share for a period
of three years. One (1) consultant was granted options pursuant to
shareholder approval of Stock Option Plan on June 17, 2013. Issuer relied
upon Canadian private placement law, specifically Section 2.24 of National
Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and Regulation S
of the Securities Act of 1933.
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In connection with the August 2013 private placement:
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On August 20, 2013, we issued 4,705,240 common shares at a price of
US$0.50 per share and 4,705,240 warrants eligible to purchase 4,705,240
common shares at a price of US$0.62 per share for a period of 36 months.
Twenty-one (21) investors purchased 4,705,240 shares in the private
placement. For Canadian investors Issuer, relied upon Canadian private
placement law, specifically Section 2.3 of National Instrument 45-106 and for
United States investors, Issuer relied upon Rule 506 of Regulation D and
Regulation S.
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On August 23, 2013, we issued 465,000 common shares at a price of
US$0.50 per share and 465,000 warrants eligible to purchase 465,000 common
shares at a price of US$0.62 per share for a period of 36 months. Four (4)
investors purchased 465,000 shares in the private placement. Issuer relied
upon Canadian private placement law, specifically Section 2.3 of National
Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and Regulation S
of the Securities Act of 1933.
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On August 27, 2013, we issued 1,077,850 common shares at a price of
US$0.50 per share and 1,077,850 warrants eligible to purchase 1,077,850
common shares at a price of US$0.62 per share for a period of 36 months.
Sixteen (16) investors purchased 1,077,850 shares in the private placement.
For Canadian investors, Issuer relied upon Canadian private placement law,
specifically Section 2.3 of National Instrument 45-106 and for United States
investors, Issuer relied upon Rule 506 of Regulation D and Regulation S.
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On August 28, 2013, we issued 100,000 common shares at a price of
US$0.50 per share and 100,000 warrants eligible to purchase 100,000 common
shares at a price of US$0.62 per share for a period of 36 months. One (1)
investor purchased 100,000 shares in the private placement. Issuer relied
upon Canadian private placement law, specifically Section 2.3 of National
Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and Regulation S
of the Securities Act of 1933.
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From January 1, 2013 to December 31, 2013, the Company received net
proceeds of CDN$707,177 from the exercise of 998,530 warrants.
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From January 1, 2013 to December 31, 2013, the Company received net
proceeds of CDN$225,000 from the exercise of 225,000 options.
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II-4
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On January 10, 2014, we granted 345,000 stock options eligible for
purchase 345,000 common shares at a price of US$1.08 per share for a period
of five years. Eleven (11) employees and consultants were granted 345,000
shares. The grants were approved in the Stock Option Plan by shareholders on
June 17, 2013. Issuer relied upon Canadian private placement law,
specifically Section 2.24 of National Instrument 45-106 and upon U.S. law
Rule 506 of Regulation D and Regulation S of the Securities Act of 1933.
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On February 3, 2014, we granted 60,000 stock options eligible for
purchase 60,000 common shares at a price of US$0.99 per share for a period of
five years. One (1) consultant was granted 60,000 shares. The grants were
approved in the Stock Option Plan by shareholders on June 17, 2013. Issuer
relied upon Canadian private placement law, specifically Section 2.24 of
National Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and
Regulation S of the Securities Act of 1933.
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From January 1, 2014 to July 31, 2014, the Company received net
proceeds of US$708,428 from the exercise of 1,666,383 warrants.
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From January 1, 2014 to July 31, 2014, the Company received net
proceeds of US$36,726 from the exercise of 100,000 options.
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On January 21, 2015 we issued 1,256,784 common shares at a price of
US$0.43 per share and 1,256,784warrants eligible to purchase 1,256,784 common
shares at a price of US$0.70 per share for a period of 36 months. Fifteen
(15) investors purchased 1,256,784 shares in the private placement. Issuer
relied upon Canadian private placement law, specifically Sections 2.3 and 2.9
of National Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and
Regulation S of the Securities Act of 1933.
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On January 23, 2015 we issued95,278 common shares at a price of
US$0.43 per share and 95,278 warrants eligible to purchase 95,278 common
shares at a price of US$0.70 per share for a period of 36 months. Two (2)
investors purchased 95,278 shares in the private placement. Issuer relied
upon Canadian private placement law, specifically Sections 2.3 and 2.9 of
National Instrument 45-106 and upon U.S. law Rule 506 of Regulation D and
Regulation S of the Securities Act of 1933.
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On April 27, 2015 we issued 1,597,050 common shares at a price of
CDN$0.70 per share and 1,597,050 warrants eligible to purchase 1,597,050
common shares at a price of $0.70 for gross proceeds of $891,686
(CDN$1,117,935). Twenty (22) investors purchased 1,597,050 shares in the
private placement.Issuer relied upon Canadian private placement law,
specifically Sections 2.3 and 2.9 of National Instrument 45-106 and upon U.S.
law Rule 506 of Regulation D and Regulation S of the Securities Act of 1933.
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On July 28, 2015, the Company completed a non-brokered private
placement exclusively in Canada pursuant to Sections 2.3 and 2.10 of National
Market Instrument 45-106. The Company issued 1,822,000 units at a price of
CDN$0.54 per unit for gross proceeds of $754,104.39 (CDN$983,880). Each unit
is comprised of one common share and one share purchase warrant,with each
warrant exercisable at a price of $0.74 per share for a period of 36 months
from the date of closing.
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II-5
ITEM
8. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following is a list of exhibits filed as part of this registration
statement:
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#
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Description
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2.1
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Acquisition
Agreement between Syracuse Capital Corp. and Natcore Technology, Inc.
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3.1
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Articles of
Syracuse Capital Corp.
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4.1-4.12
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Warrant Agreements
issued in Private Placements
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5.1
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Opinion of
LoPresti Law Group, P.C
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10.1
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Employment
Agreement Between Charles Provini and Natcore
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10.2
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March 31,
2004 License Agreement Between Natcore and William Marsh Rice University
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10.3
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July 29,
2008 Amendment to License Agreement Between Natcore and William Marsh Rice
University
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10.4
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September 1,
2009 Sponsored Research Agreement Between Natcore and William Marsh Rice
University
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10.5
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May 10, 2012
Amendment to License Agreement Between Natcore and William Marsh Rice
University
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10.6
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March 1,
2013 Amendment to Lease Agreement Between Natcore and Eastman Kodak Company
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10.7
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July 18,
2011 Lease Agreement Between Natcore and Eastman Kodak Company
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10.8
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January 5,
2012 License Agreement Between Alliance for Sustainable Energy, LLC and
Natcore
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10.9
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July 27,
2012 Amendment to License Agreement Between Alliance for Sustainable Energy,
LLC and Natcore
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10.10
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January 22,
2014 Amendment to License Agreement Between Alliance for Sustainable Energy,
LLC and Natcore
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10.11
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February 21,
2012 Cooperative Research and Development Agreement Between Alliance for
Sustainable Energy, LLC and Natcore
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10.12
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September
21, 2010 Cooperative Joint Venture Contract Between Zhuzhou Hexing Industrial
Company and Natcore Asia Technology, Limited (Chinese Version)
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10.13
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September
21, 2010 Cooperative Joint Venture Contract Between Zhuzhou Hexing Industrial
Company and Natcore Asia Technology, Limited (American Version)
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10.14
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September
19, 2013 Australian Joint Venture Memorandum of Understanding between Denzo
Pty Limited and Natcore Technology, Inc.
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10.15
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June 20,
2013 Lease Agreement between North Water Street Realty and Natcore
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10.16
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Investment
Agreement dated August 21, 2015 between Natcore Technology, Inc. and Dutchess
Opportunity Fund, II, LP
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10.17
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Registration
Rights Agreement dated August21, 2015 between Natcore Technology, Inc. and
Dutchess Opportunity Fund, II, LP
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10.18
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Second
Amendment to Lease Agreement dated June 26, 2015 Between Eastman Kodak
Company and Natcore Technology, Inc.
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23.1
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Consent of
Dale Matheson Carr-Hilton LaBonte LLP (DMCL) Chartered Accountants
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23.2
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Consent of
LoPresti Law Group, P.C. (included in Exhibit 5.1)
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24.1
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Powers of
Attorney (included hereinafter)
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II-6
ITEM
9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales of securities are being made,
a post-effective amendment to this registration statement to:
(i)
Include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii)
Reflect in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration
statement; and notwithstanding the forgoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of
prospectuses filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement.
(iii)
Include any additional or changed material information on the plan of
distribution;
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) If the
registrant is a foreign private issuer, to file a post-effective amendment to
the registration statement to include any financial statements required by
“Item 8.A. of Form 20-F (17 CFR 249.220f)” at the start of any delayed offering
or throughout a continuous offering. Financial statements and information
otherwise required by Section 10(a)(3) of the Act need not be furnished,
provided that the registrant includes in the prospectus, by means of a
post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3 (§ 239.33 of this chapter), a post-effective
amendment need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or § 210.3-19 of this chapter if such
financial statements and information are contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Form F-3.
(5)For
determining liability of the undersigned small business issuer under the Securities
Act to any purchaser in the initial distribution of the securities, the
undersigned small business issuer undertakes that in a primary offering of
securities of the undersigned small business issuer pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
small business issuer will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned small business
issuer relating to the offering required to be filed pursuant to Rule 424
(§230.424 of this chapter);
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf
of the undersigned small business issuer or used or referred to by the
undersigned small business issuer;
II-7
(iii)
The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned small business issuer or
its securities provided by or on behalf of the undersigned small business
issuer; and
(iv)
Any other communication that is an offer in the offering made by the
undersigned small business issuer to the purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described herein, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(c) that, for the purpose of determining liability under the Securities
Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of
this registration statement relating to the offering, shall be deemed to be
part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however, that no statement made in the
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form F-1 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Rochester, New York on September 24, 2015.
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NATCORE TECHNOLOGY, INC.
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By:/S/
CHARLES R. PROVINI
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Name:
Charles R. Provini
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Title:
President & CEO
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Authorized
Representative in the United States
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II-8
POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each director and officer of Natcore Technology,
Inc. whose signature appears below hereby appoints
Charles R. Provini
, and each
of them severally, acting alone and without the other, his/her true and lawful
attorney-in-fact with full power of substitution or re-substitution, for such
person and in such person’s name, place and stead, in any and all capacities,
to sign on such person’s behalf, individually and in each capacity stated
below, any and all amendments, including post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as such person
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to
the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the described capacities and
on September 24, 2015.
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Name
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Title
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/S/ CHARLES
R. PROVINI
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Authorized
Representative in the United States,
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Charles R.
Provini
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Director,
President & Chief Executive Officer,
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Natcore
Technology, Inc.
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/S/ JOHN
MEEKISON
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Director,
Chief Financial Officer& Controller
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John
Meekison
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Natcore
Technology, Inc.
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BRIEN F.
LUNDIN
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Director
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Brien F.
Lundin
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Natcore
Technology, Inc.
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JOHN C.
CALHOUN
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Director
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John C.
Calhoun
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Natcore
Technology, Inc.
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II-9
45 Broadway, Suite 610
New York, New York 10006
T
ELEPHONE
212.732.4029
F
ACSIMILE
646.607.1998
September 24, 2015
Securities and Exchange
Commission
100 F. Street N.E.
Washington, D.C. 20549
Re:
Natcore Technology, Inc.
To
Whom It May Concern:
I
have acted as counsel for Natcore Technology, Inc., a corporation organized
under the laws of British Columbia,
Canada organized on August 9, 2007 (the “Company”), in connection with the
preparation of a registration statement on Form F-1 (the “Registration
Statement”) pursuant to the United
States Securities Act of 1933, as amended (the “Act”) as filed with the
Securities and Exchange Commission
(the “SEC”) in connection with a proposed public offering by certain
shareholders of 10,325,000 common shares,
no par value per share, of the Company’s common stock (the “Shares”) at an
offering price of that may be fixed or negotiated in the future.
You
have asked me to render my opinion as to the matters hereinafter set forth
herein.
I
have examined originals and copies, certified or otherwise identified to my
satisfaction, of all such agreements,
certificates, and other statements of corporate officers and other
representatives of the company, and
other documents as I have deemed necessary as a basis for this opinion. In my examination I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals, and the conformity with the originals of
all documents submitted to me as copies.
I have, when relevant facts material to my opinion were not independently
established by my, relied to the
extent I deemed such reliance proper upon written or oral statements of
officers and other representatives of the Company.
Based
upon and subject to the foregoing, I am of the opinion that insofar as the laws
of British Columbia, Canada are concerned:
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1.
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The Company is a corporation
duly organized and validly existing under the laws of British
Columbia, Canada.
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LoPresti
Law Group, P.C.
Securities and
Exchange Commission
100 F. Street N.E.
Washington, D.C. 20549
September 24, 2015
Page 2 of 2
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2.
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The Shares that are to
be issued and sold as described in the Registration Statement have been duly authorized and will be legally issued as
fully paid and non-assessable shares.
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3.
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The
Shares to be issued upon exercise of the Puts to Dutchess Opportunity Fund, II,
LP as described in the Registration Statement will be duly authorized and
legally issued as fully paid and non-assessable shares.
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I
hereby consent to the filing of this opinion with the Securities and Exchange
Commission as Exhibit 5.1 to the Registration Statement, and to the use of my
firm name wherever appearing in the Registration Statement.
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Very truly yours,
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L
O
P
RESTI
L
AW
G
ROUP
, P.C.
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By:
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Marc X. LoPresti, Esq.
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OFFICE LEASE
AGREEMENT
DATED
June 20, 2013
BETWEEN
NORTH WATER STREET
REALTY I LLC, LANDLORD
AND
NATCORE
TECHNOLOGY, INC,, TENANT
FOR SPACE AT
189 N. WATER
STREET
ROCHESTER, NEW YORK
LEASE AGREEMENT
THIS
AGREEMENT OF LEASE is made this 20
th
day of June, 2013 by and
between North Water Street Realty I LLC, a New York limited liability company
with an office at 259 Alexander Street, Rochester, New York 14607 (the “
Landlord”
)and Natcore Technology Inc., with an office at 87 Maple Avenue, Red
Bank, New Jersey 07701. (the
“Tenant”
).
WITNESSETH:
SECTION 1
REMISES
1.1 Landlord
currently owns property at 165-217 North Water Street, City of Rochester,
County of Monroe, State of New York, consisting of three buildings and other
improvements (the
“Facility”).
For
and in consideration of the rent and additional rent herein reserved and of the
covenants, conditions, and agreements of the Tenant hereinafter expressed the
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
following described premises in the Facility (the
“Premises”
)as
shown on Schedule A attached hereto:
For purposes of this
Lease, the rentable square footage area of the Premises shall be deemed to be
1,600 square feet on the first floor together with the right of access, ingress
and egress to and from the same.
The Premises shall
include 3 parking spaces in the adjacent ramp or sutface lot or another
designated lot within one city block.
Tenant shall have the
right to access the adjacent office space for use of the existing kitchenette.
Subject to Section 35 below, in the event the adjacent office space is leased
to another tenant, Tenant’s rights to use the kitchenette will terminate.
This Lease shall continue
unaffected should Landlord transfer all or a part of its interest in the
Premises and any transferee shall take its interest in the Premises subject to
this Lease.
1.2
Landlord grants to Tenant and Tenant’s invitees the right to use the
“Common Areas” of the Facility in common with the other tenants in the
Facility. The term “Common Areas” means areas, structures and/or services used
in common by all tenants in the Facility, including but not limited to foyers,
lobbies, bathrooms, elevators, walks, access driveways, and landscaped areas,
dumpsters and all signage. Tenants, its agents, employess and contractors are
not allowed access to any roof area, at any time, without prior written
approval of the Landlord. Violation will require the Tenant to be responsible
for all future roof leaks.
SECTION 2
TERM
2.1
The term of this Lease shall be for a period of 3 years commencing on
the later of: August 1,2013 or
ii) day on which Tenant enters into possession of the Premises and, unless
sooner terminated, ending on July 31, 2016. If Tenant should enter into
possession of the Premises on a day prior to the commencement of the term, the
rent, additional rent, and all other charges due from Tenant to Landlord
hereunder shall be prorated to the day on which Tenant entered into possession.
All
terms and conditions of this Lease shall be in effect upon possession.
2.2
The term “Lease Year” shall mean each twelve (12) month period beginning
on the first day of August and expiring on the last day of July thereafter. Any
period between the commencement of the term of this Lease and the commencement
of the first Lease Year or any period subsequent to the expiration or
termination of the term of this Lease, as it may be extended, but prior to the
expiration of the then current Lease Year, shall be prorated and adjusted with
respect to rent, additional rent, or any other matters or charges provided in
this Lease in which the Lease Year is a factor.
SECTION
3
RENT
3.1
Tenant shall pay to Landlord, during the term of this Lease, and any
renewal thereof, in lawful money of the United States, without any prior demand
and without any setoff or deduction whatever, rent as follows:
a)
Commencing on the later of: August 1,2013
or ii) day on which Tenant enters into possession of the Premises (or on such
earlier date that Tenant enters into possession of the Premises for the purpose
of conducting its business therein), Tenant shall pay rent to Landlord the
amount of $22,000.00 per year in monthly installments of $1,833.34. Commencing
on each succeeding August 1, the annual rental shall be increased to an amount
equal to one hundred three (103%) per cent of the annual rental payable in the
preceding Lease Year and the annual rental shall continue to be payable in
monthly installments.
3.2
On the first day of each and every month during the term of this Lease,
Tenant covenants and agrees to pay to Landlord an amount equal to the sum of
the monthly installments of rent set forth herein plus the monthly installments
of additional rent set forth in this Lease.
3.3
enant covenants and agrees to pay the rent set forth herein to the
Landlord at its offices described above or at such other place as the Landlord
may from time to time designate by written notice to Tenant.
3.4
Tenant agrees to pay a “late charge” equal to five (5%) per cent of the payment
due, for any payment of rent or additional rent not received by Landlord by the
fifth (5
th
) day of the month due.
ECTION 4
USE
4.1
The Tenant may use the Premises only for the purpose of offices for business.
Tenant at its sole expense shall comply with all laws, orders, and regulations
of federal, state, and municipal authorities, and with any direction of any
public officer, pursuant to law, which will impose any duty upon the Landlord
or the Tenant with respect to the Premises. The Tenant at its sole expense
shall obtain all licenses or permits which may be required for the conduct of
its business within the terms of this Lease or for the making of repairs,
alterations, improvements or additions. The Tenant shall not use the Premises
or permit their use for any dangerous, noxious, or offensive trade or business,
nor cause or maintain any nuisance upon the Premises.
SECTION 5
COMMON AREAS
5.1
The driveways, landscaped areas, entrances and exits, elevators, and all
other areas within the Facility of which the Premises are a part designated by
Landlord for the common use and benefit of its tenants are referred to as the
“Common Areas”. Landlord hereby gives and grants unto Tenant a license over, on
and through the area adjacent to the Premises, for ingress and egress to and
from the Premises the same to be used and enjoyed by Tenant, its invitees,
customers and the general public, together with and subject to the rights
granted from time to time by Landlord to other tenants and occupants of the
Facility. It is understood and agreed that the Tenant’s use of the Common Areas
shall be in common with the tenants of the other leases on the Facility.
5.2
Landlord agrees to operate, manage, equip, repair and maintain the Common Areas
in good repair and to be reasonably free
of refuse, ice and snow (Snow removal shall be done when there is three
inches or more of accumulation). Landlord may deposit accumulated ice and snow
on portions of the Facility as may be necessary under the circumstances.
SECTION 6
REAL PROPERTY
TAXES
6.1
Landlord agrees to pay all real property taxes and assessments attributable to
the Building of which the Premises form a part. Tenant shall pay, as Additional
Rent, its Pro Rata Share of increases in any property taxes paid by the
Landlord over those paid by the Landlord in the tax year in effect July 1, 2013 through June 30,
2014. Pro Rata Share is calculated by taking the number of rentable square feet of the Premises
divided by the total number of rentable square feet in the building.
SECTION 7
ALTERATIONS
7.1
Any changes, alterations, additions or improvements in, or to the
Premises, of any kind or nature whatever, or in the amount or nature of
equipment, or the location thereof or in additions thereto, or whatever may be
the nature thereof including but not limited to carpets painting, lighting,
interior partitions, window coverings, window treatments, window hangings,
blinds, shades, and draperies, desired by the Tenant may be done by the Tenant
at its own cost and expense only upon the following terms and conditions:
a)
The Tenant shall notify the Landlord in advance in writing, specifying
in detail the alterations or additions contemplated.
b)
Such notice shall be accompanied by a plan, blue print, or diagram
showing such proposed alterations or additions, and a bid or contract signed by
a reputable builder or contractor, undertaking to perform the work as shown in
the plan, blue print or diagram for a specified cost stated therein.
c)
The Landlord shall, within a reasonable time, indicate In writing its
approval or disapproval of the contemplated alterations or additions.
d)
If the Landlord approves thereof and the specified cost as above stated
is less than $2,500.00, such approval shall constitute the necessary consent to
such alterations or additions. If, however, the aforesaid specified cost is in
excess of $2,500.00, then no consent of the Landlord shall be valid or binding
upon it until the Tenant furnishes the Landlord a liability policy with limits
in the amounts set forth in Section 18.1 hereof protecting Landlord from any
liability for injury to persons or property arising, directly or indirectly,
from the making of such alterations or additions by Tenant, its agents,
servants, employees and/or independent contractors.
7.2
Prior to occupancy of the Premises by Tenant, Landlord shall at Landlord’s cost
and expense remodel the premises in accordance with outline plans and
specifications therefor separately agreed upon between Landlord and Tenant.
SECTION 8
IMPROVEMENTS AND
FIXTURES
8.1
All permanent construction, additions and improvements, made and maintained in
or on the Premises, either by the Tenant or Landlord, shall be the sole
property of the Landlord, and shall not be removed or injured by the Tenant,
nor shall be the Tenant claim at any time compensation therefore. It is
understood and agreed that any trade and lighting fixtures and any wall
treatments and interior signage placed upon the Premises by Tenant are to
remain the property of the Tenant and may be removed by Tenant from the
Premises promptly at the expiration of the demised term. Alternatively, Tenant
may abandon such improvements and fixtures, in whole or in part.
SECTION 9
EPAIRS, DAMAGE,
ETC.
9.1
Landlord covenants to keep or cause to be kept the roof, foundations,
and major mechanicals of the Premises and the structural soundness of the
exterior, non-party walls, except as affected by Tenant’s work or Tenant’s
negligence or omission, in good order, repair and condition. Tenant shall take
good care of and make all other repairs to the Premises, and to the fixtures
and equipment, which repairs shall be in quality and class equal to the
original work. Tenant, at Tenant’s sole cost and expense, shall maintain all
doors in and to the Premises (including all overhead or other types of doors)
and all mechanical devices, electrical equipment, frames and other components
of such doors, in good repair and condition throughout the term of this Lease
and shall make all necessary repairs thereto and replacements thereof.
Upon the expiration or
other termination of the term of this Lease, Tenant shall remove all property
of the Tenant as provided in Section 8 and shall quit and surrender to the
Landlord the Premises, broom clean, in good order and condition, ordinary wear excepted.
9.2
If at any time during the last six months of the term of this Lease there is
substantial damage, whether or not an insured loss, Landlord may at Landlord’s
option cancel and terminate this Lease as of the date of occurrence of such damage
by giving written notice to Tenant of Landlord’s election to do so within 30
days after the date of occurrence of such damage.
SECTION 10
HOLDOVER
10.1
In the event that the Tenant shall remain in possession of the Premises beyond
the termination
of the term as provided herein, and Landlord has not as yet removed the Tenant
from the
Premises, the Tenant shall pay for each month of continued possession, or any
part thereof, 150% of the monthly rental for the month immediately prior to the termination
of the term hereof,
together with all additional rent which become due during the period of
possession.
SECTION 11
SIGNS
11.1
Tenant shall not place, erect or install any signs on any portion of the
Premises, nor allow to be erected or installed any signs, printed displays or
show window lettering visible from outside the Premises without the prior
written approval of the Landlord. Any permitted sign shall comply with sign
regulations which shall be established by Landlord and with all applicable
ordinances of municipalities having jurisdiction. All such signs shall be
maintained in a good and safe condition and appearance by the Tenant at its own
expense. Tenant shall repair any damage to the Premises, either inside or
outside, resulting from the erection, maintenance or removal of the signs.
SECTION 12
GLASS REPLACEMENT
AND INSURANCE
12.1
The Tenant shall replace all damaged or broken plate glass and other structural
glass promptly with glass of equal quality with that broken, if caused by
Tenant’s negligence.
SECTION 13
PAYMENT OF
ELECTRICITY, WATER, HEAT, ETC.
13.1
Tenant shall pay for all its electric and for the gas used for heat and air
conditioning. Water for sanitary purposes shall be paid for by Landlord. In addition,
in the event of non-payment after ten (10) days written notice, Landlord shall
have the absolute right, without further notice to Tenant, to have electricity
or other utilities serving the Premises turned off and shall have no liability
whatsoever to Tenant for any damages Tenant may incur on account thereof.
Tenant hereby waives the benefit of any law which might restrict Landlord in
its right to turn off the utilities.
Landlord shall not be
liable for any failure to furnish heat and air conditioning or for any
interruption of deficiency thereof, due to any reason beyond the Landlord’s
control. Landlord shall be diligent in remedying any of the aforementioned
interruptions.
SECTION 14
CLEANING AND
RUBBISH REMOVAL
14.1
Landlord shall be responsible for the cleaning of the hallways and common
areas, removal of rubbish, removal of snow from the sidewalks and parking
areas, landscape maintenance and general repairs and maintenance of the
Building, all to be done in a first class workmanlike manner. Tenant shall be
responsible for janitorial service in connection with the Premises.
SECTION 15
DELIVERIES,
LOADING AND UNLOADING AND PARKING
15.1
Tenant covenants and agrees that none of the agents, invitees, or contractors
of the Tenant shall so use the Premises for deliveries, loading, and unloading
of merchandise and other materials of Tenant so that the designated parking,
docking, and loading and unloading areas of other tenants of the Premises will
be obstructed in any way by such activities.
SECTION 16
MECHANIC’S LIENS
16.1
Tenant shall indemnify, defend and save harmless Landlord against all loss,
liability, cost attorneys’ fees, damages or interest charges as a result of any
mechanic’s lien or other lien filed against the Premises or the Facility as a
result of any act or omission or as a result of any repairs improvements,
alterations or additions made by Tenant or its agents or employees. Tenant
shall within ten (10) days of the filing of any such lien, remove, payor cancel
the lien or secure the payment of any such lien or liens by bond or other
acceptable security. Tenant shall have the right at all times and at its own
expense, to contest and defend on behalf of tenant or Landlord any action
involving the cancellation, validity or removal of such lien or liens, upon
giving adequate security to the Landlord for payment of such lien. Nothing
herein contained shall be construed as consent to anyone on the part of
Landlord, either express or implied, to subject the fee or any other estate of
the Landlord to any mechanic’s lien or liability.
Landlord,
at its option, after the ten (10) day period may pay the Hen or bond in its
discretion, without inquiring into the validity thereof and Tenant shall
forthwith reimburse Landlord for the total expense incurred by Landlord as
additional rent hereunder.
SECTION 17
INSURANCE
17.1
Tenant shall, at its sale expense and for the mutual benefit of the Landlord,
The Property Manager (Buckingham Properties LLC) and the Tenant, allof which shall be named insured on all
applicable policies, carry and maintain comprehensive public liability
insurance, including property damage, insuring the Landlord, Buckingham
Properties LLC and the Tenant against liability for injury to persons or
property occurring in or about the Premises and the Common Areas or arising out
of the ownership, maintenance, use or occupancy of the Premises and the Common
Areas, in at least the amount of $1,000,000.00 combined single limit for bodily
injury or property damage. At the execution of this Lease, the Tenant shall
deliver to the Landlord certificates of insurance indicating that this coverage
is in effect as per attached Certificate of Insurance form. Tenant’s policy
shall contain a clause providing that the insurer will not cancel the insurance
without giving Landlord thirty (30) days prior written notice.
SECTION 18
LIABILITY
18.1
Landlord, its agents, or Buckingham Properties LLC shall not be liable for any
damage to either the person or the property of the Tenant nor for the loss of
or damage to any property of the Tenant by theft or from any other cause
whatsoever, whether similar or dissimilar to the foregoing. The Landlord, its
agents or Buckingham Properties LLC shall not be liable for any injury or
damage to persons or property or loss of or interruption to the business
resulting from fire, explosion, falling plaster, stem, gas, electricity, water,
rain or snow or leaks from any part of the building or from the pipes,
appliances or plumbing works or from the roof, street or subsurface or from any
other place or by dampness or by any other cause of whatsoever nature unless
caused by or due to the negligence of the Landlord, its agents, servants and
employees; nor shall the Landlord or Buckingham Properties LLC be liable for
any damages resulting from the use by any injured party of the sidewalk
adjoining the Premises, nor shall the Landlord, Buckingham Properties LLC or
its agents be liable for any damage caused by other tenants or persons in the
building or caused by operations in construction of any private, public or
quasi public work; nor shall the Landlord or Buckingham Properties LLC be
liable for any latent defects in the Premises or in the building of which they
form a part.
18.2
Tenant shall be liable for any damage to the building or property therein which
may be caused by its act or negligence or the acts of its agents, employees or
customers; and the Landlord may, at its option, repair such damage and the
Tenant shall thereupon reimburse and compensate the Landlord as additional rent
within five (5) days after rendition of a statement by the Landlord for the
total cost of such repair and damage. The Tenant hereby agrees to indemnify,
defend and hold harmless the Landlord and Buckingham Properties LLC from
damages sustained by persons or property and against all claims of third
persons for damages arising out of the use by such third party and out of the
Tenant’s use of the Premises and for all damages and monies paid out to the
Landlord in settlement of all claims or judgments as well as for all expenses
and attorneys’ fees incurred in connection therewith.
SECTION 19
DEFAULT
19.1
Each of the following events shall constitute a default (sometimes and “Event
of Default”):
a)
default by Tenant in the due and punctual payment of any rent and
additional rent, or additional or other charges payable under this Lease or any
part thereof when and as the same shall become due and payable; or
b)
default by Tenant in the performance of or compliance with any of the
covenants, agreements, terms or provisions contained in this Lease, and such
default shall continue for a period of ten (10) days after written notice
thereof from the Landlord to Tenant; or
c)
Tenant or the guarantor of Tenant’s obligations hereunder (if any) shall
file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or
insolvent, or shall file any petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the present or any future federal bankruptcy act or any other
present or future applicable federal, state or other statute of law, or shall
seek consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant or of all or any substantial part of its properties or of
the Premises; or
d)
if within sixty (60) days after the commencement of any proceeding against
Tenant or any guarantor of Tenant’s obligations hereunder seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal
bankruptcy act or any other present or future applicable federal, state or
other statute or law, such proceeding shall not have been dismissed, or if,
within sixty (60) days after the appointment, without the consent or
acquiescence of Tenant or any guarantor, of any trustee, receiver or liquidatot
of Tenant of any guarantor or of all or any substantial part of its properties
or of the Premises, such appointment shall not have been vacated or stayed on
appeal or otherwise, or if,within
sixty (60) days after the expiration of any such stay, such appointment shall
not have vacated.
19.2
In the event any such default as set forth in paragraphs (a) through (d)
of Section 19.1 above shall occur, the Landlord, at any time thereafter during
the continuance of such default, may give written notice to Tenant, specifying
such default or event of default and stating that this Lease and the term
hereby demised shall expire and terminate on the date specified in such notice,
which shall be at least three (3) days after giving such notice, and upon the date
specified in such notice, this Lease and the term hereby demised and all rights
of tenant under this Lease shall terminate.
19.3
In the event any such default as set forth in paragraphs (c) and (d) of
Section 19.1 above shall occur with respect to Tenant, Tenant agrees that it
will either assume or reject this Lease within sixty (60) days after the filing
of the petition or the commencement of this proceeding described in such
paragraphs. In the event this Lease is not assumed within sixty (60) day
period, then Tenant deems this Lease rejected.
19.4
If this Lease shall terminate as provided in this Section or if an event of
default referenced in Section 19.1, Landlord may immediately or any time after
termination of this Lease or expiration of the applicable grace period,
re-enter into or upon the Premises, or any part thereof, by summary proceedings
or by any suitable action or proceeding at law or in equity, or by force or
otherwise, without being liable to indictment, prosecution or damages therefor,
and may repossess the same and may remove any persons therefrom, to the end
that Landlord may have, hold and enjoy the Premises. The words, “re-enter”,
“re-entry” and “re-entered” as used in this Lease are not restricted to their
technical legal meanings.
19.5
Upon the termination of this Lease either at the option of the Landlord as
aforesaid, or at the expiration by lapse of time of the term hereof, the Tenant
will at once surrender possession of the Premises to the Landlord and remove
all effects therefrom and if such possession be not immediately surrendered,
the Landlord may forthwith re-enter the Premises and repossess itself therefor
as in its former estate and remove all persons and effects therefrom, using
such force as may be necessary, without being deemed guilty of any trespass or
forcible entry.
19.6
If the Tenant shall not remove all of its effects from the Premises as
above provided, Landlord may, at its option, remove any or all of the effects
in any manner that Landlord shall choose and store the same without liability
for loss thereof, and Tenant will pay the Landlord, on demand, any and all
expense incurred in such removal and also storage of the effects for any length
of time during which the same shall be in Landlord’s possession or in storage,
or Landlord may at its option, without notice, sell any or all of the effects
in such manner and for such price as the Landlord may deem best and apply the
proceeds of such sale upon any amounts due under this Lease from the Tenant to
the Landlord, including the expenses of removal and sale.
19.7
In the event of any termination in the event of default of this Lease or
of any re-entry of the Premises by Landlord, Landlord may relet the Premises or
any part or parts thereof either in the name of Landlord or Tenant for a term
or terms which may at Landlord’s option extend beyond the balance of the term
of this Lease and Tenant shall pay Landlord any deficiency between the rent and
additional rent hereby reserved and covenanted to be paid and the net amount of
the rents collected on such reletting, as well as any expenses incurred by
Landlord in such reletting, including, but not limited to, attorneys’ fees,
brokers’ fees, and expenses of remodeling and putting the Premises in good
order and preparing the same for re-rental.
19.8
Landlord may collect from Tenant any other loss or damage Landlord may
sustain by reason of any default in any diminished value of the Premises
resulting from the default by Tenanthereunder
.
19.9
In the event of a default or threatened default by Tenant of any of the
covenants or provisions of this Lease, Landlord shall have the right to enjoin
any such default or threatened default.
19.10
In the event of a default in the payment of rent or additional rent, Landlord
shall have the right to declare the entire rent and additional for the balance
of the term immediately due and payable.
19.11
Except as expressly provided herein, Tenant expressly waives the service
of any notice of intention to terminate this Lease or re-enter the Premises,
and waives the service of any demand for payment of rent and additional rent or
for possession, and waives the service of any and every other notice or demand
prescribed by any statute or other law, and agrees that the simple breach of
any of the covenants hereof shall, of itself, without the service of any notice
or demand whatever, constitute a forcible detainer by the Tenant of the
Premises. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws, in the event of eviction of
dispossession of Tenant by Landlord under any provisions of this Lease. No
receipt of monies by the Landlord from the Tenant, after the termination in any
way of this Lease or after the giving of any notice, shall reinstate, continue
or extend the term of this Lease, or affect any notice given to the Tenant
prior to the receipt of such money, it being agreed that after the service of
notice or the commencement of a suit, or after final judgment for possession of
the Premises, the Landlord may receive and collect any rent and additional rent
due, and the payment of the rent and additional rent shall not waive or affect
the notice, the suit or the judgment. Tenant waives the right of trial by jury.
19.12
Any and all rights and remedies which Landlord may have under this Lease and at
law or in equity shall be cumulative and shall not be deemed inconsistent with
each other, and any two or more or all of such rights and remedies may be
exercised at the same time.
SECTION 20
VACATION OF
PREMISES
20.1
In the event that the Tenant shall vacate or abandon the Premises during the
term hereof, the whole sum to be paid as rental throughout the entire term of
this Lease including the monthly rent and additional rental herein provided
for, shall immediately become due and payable. The Landlord may also at its
option reenter upon the Premises and relet the same, and it is expressly agreed
that the Tenant shall not be entitled to credit for the rents so received until
the whole sum due from the Tenant to the Landlord, including damages, expenses,
attorneys’ fees, cost of alterations and repairs as herein provided shall have
been fully paid, and nothing in this Section shall be deemed to have waived any
other right or remedy of the Landlord.
SECTION 21
WAIVER
21.1
No waiver of any condition or legal right or remedy shall be implied by the
failure of the Landlord to declare a forfeiture, or for any other reason, and
no waiver of any condition or covenant shall be valid unless it be in writing
signed by the Landlord, and no waiver by the Landlord in respect to one tenant
shall constitute a waiver in favor of any other tenant, not shall the waiver of
a breach of any condition be claimed or pleaded to excuse a future breach of
the same condition or covenant or any other condition or covenant.
SECTION 22
PREMISES
UNTENANTABLE
22.1
If the Premises shall be damaged by fire or other causes without default or
neglect by Tenant, its employees, agents, visitors, or licensees, but are not
wholly untenantable, the damage shall be promptly repaired by Landlord at its
own expense. In such event the Lease shall not terminate, but shall remain in
full force and effect, and the rent and additional rent shall not abate but
shall be prorated for the portion of un-inhabitability while the Premises are
being repaired. Due allowance shall be made for delays caused by force majeure.
If the damage is caused by the default or neglect of Tenant, its employees,
agents, visitors, or licensees, Landlord shall nevertheless repair such damage
and Tenant shall reimburse Landlord therefor promptly upon demand.
22.2
If the Premises is rendered wholly untenantable or a substantial portion of the
building in which the Premises is located shall be damaged or destroyed by fire
or other causes, either party may cancel this Lease upon written notice to the
other, in which case all rent and additional rent shall be adjusted to the date
of such change. In the event that the Lease is not terminated by either party
as above provided, then this Lease shall not terminate but shall remain in full
force and effect, and the rent and additional rent shall abate while the
Premises are being repaired.
SECTION 23
EMINENT DOMAIN
23.1
If the whole or part of the Premises shall be taken or condemned by a competent
authority for any public or quasi public use or purpose, then, in that event,
the term of this Lease, at the option of the Landlord, shall cease and
terminate. Any award for the land and buildings, of which the Premises are a
part, and for damages to the residue, shall belong to Landlord, and Tenant
shall not be entitled to any part thereof. Any award for Tenant’s trade
fixtures installed by the Tenant in the Premises, as well as moving expenses,
shall belong to the Tenant. The current rental, additional rent and other
charges payable hereunder shall be apportioned as of the date of delivery of
possession of the Premises to the condemning authority in the event of any
termination of this Lease hereunder.
SECITON 24
FORCE MAJEURE
24.1
In the event that either Landlord or Tenant shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reason of Act
of God strikes lockouts, labor troubles, inability to procure materials
(including energy), power casualty inclement weather, restrictive governmental
laws, orders or regulation,, riots, insurrection, war or other reason of a like
nature not the fault of the party delayed in performing work or doing acts
required under the terms of this Lease, then performance of any such act shall
be extended for a period equivalent to the period of such delay. The provisions
of this Section shall not operate to excuse Tenant from prompt payment of rent
and additional rent, or any other payments required by the terms of this Lease
subject to the terms of Section 22 above.
SECTION 25
SUBORDINATION
25.1
The Tenant herein agrees that this Lease and any optional renewal thereof is
automatically subordinate to any and all mortgages or consolidated mortgage,
deeds of trust or renewals, modifications, and extensions thereof, or to any
other forms or methods of financing or refinancing of the Premises of which the
within Premises is a part or of any part of the total Premises, whether such
mortgage,, deeds of trust, or other forms or methods of financing or
refinancing are now or are hereafter executed, delivered, and recorded, and the
Tenant does herein covenant that it will, upon demand at any time, execute,
acknowledge and deliver any and all instruments that may be necessary or proper
to further evidence this subordination.
SECTION 26
ASSIGNMENT, ETC.
26.1
The Tenant shall not assign nor encumber this Lease. The Tenant shall not
sublet or permit the Premises or any part thereof to be used by others, without
the written consent of the Landlord.
SECTION 27
ACCESS TO PREMISES
27.1
The Landlord shall have the right to install and maintain in the Premises all
water drain, gas, heating pipes and fixtures and electrical wiring and all
other appliances necessary for the operation of the balance of the building of
which these Premises are a part and shall have access to the Premises at all
reasonable times and in case of emergency at any time for the purpose of
examining the same or making such repairs or changes thereto or to the pipes,
wires, fixtures and appliances referred to above as Landlord may deem
necessary. The Tenant agrees that it will not install any equipment which will
exceed the capacity of the utility lines leading into the Premises or the
building and that if any equipment so installed shall require additional
utility facilities to be brought into the Premises that they shall be installed
at Tenant’s expense. Landlord shall have access during the last six months of
the term of this Lease for the purpose of exhibiting the Premises and putting
up the usual notice “To Rent” which notice shall not be removed, obliterated or
hidden by Tenant. The rights of access granted to Landlord hereunder shall,
except in the event of an emergency, be exercised so as not to unreasonably
interfere with the conduct of Tenant’s business.
SECTION 28
PUBLIC
INTERFERENCE
28.1
If the Landlord shall be required by any lawful authority to alter,
remove, reconstruct or improve any part of the building, compliance with such
lawful authority shall not in any way affect the obligation or covenants of the
Tenant, and the Tenant hereby expressly waives any and all claims for damages
or for abatement of rent. Notwithstanding the foregoing, if such required
activities shall render the Premises wholly untenantable, Tenant shall have the
right to terminate this Lease upon written notice to Landlord.
SECTION 29
LAWS, ORDERS
29.1
The Landlord and the Tenant shall comply with all laws, orders and regulations
of federal, state, county and municipal authorities, and with any direction or
recommendation of any public officer and officers, pursuant to law, or any
insurance company carrying any insurance on the Premises, and any insurance
inspection or rating bureau, which shall impose any duty upon Landlord or
Tenant with respect to the Premises, or the use or occupation thereof.
SECTION 30
MISCELLANEOUS
PROVISIONS
30.1
Interpretation.
The words “Tenant” and “Landlord” shall include their
respective successors assigns, and the necessary grammatical changes required
to make the provisions hereof apply to corporations, individuals, men or women,
partnerships, limited liability companies or other associations may be made.
This clause shall not be construed to permit any assignment or subletting,
except as otherwise permitted in this Lease, without Landlord’s consent.
30.2
Entire Agreement.
It is understood and agreed by the parties hereto that
this Lease shall constitute the only agreement between them relative to the
Premises and that no oral statements or no prior written matter extrinsic to
this instrument shall have any force or effect. The Tenant agrees that it has
signed this Lease fully aware of the condition of the Premises and all other
matters relative thereto and is not relying on any representations or
agreements other than those contained in this Lease. This agreement shall not
be modified except by writing, subscribed by both parties. In the event of any
conflict between the terms of this Lease and any lease summary agreement or
other written or oral agreements, the terms of this Lease shall control. The taking
possession of the Premises by the Tenant shall be conclusive evidence as
against the Tenant that the Premises and the buildings of which the same form a
part were in good and satisfactory condition and fully completed in accordance
with the terms of this Lease at the time such possession was so taken.
30.3
Quiet Enjoyment.
The Landlord covenants and agrees with the Tenant that
upon the Tenant paying the rent and additional rent, and performing all the
covenants and conditions aforesaid on the Tenant’s part to be observed and
performed, the Tenant shall and may peaceably and quietly have, hold and enjoy
the Premises hereby demised for the term aforesaid, subject, however, to the
terms of this Lease.
30.4
Bills and Notices.
Unless otherwise in this Lease provided, any bill,statement, notice or communication, which
Landlord may desire or be required to give to Tenant, including any notice of
expiration, shall be deemed sufficiently given or rendered if in writing,
delivered to Tenant by Certified or Registered Mail addressed to Tenant at the
address first stated above or sent by Certified or Registered Mail to any other
address the Tenant may from time to time designate in writing, Any notice by
Tenant to Landlord must be served by Certified or Registered Mail addressed to
Landlord at the address where the last previous rental hereunder was paid or at
any other address the Landlord may from time to time designate in writing. The
time of the rendition of such
bill
or
statement or of the giving of such notice or communication shall be deemed to
be the time when the same is received by Landlord or Tenant, as the case may
be.
30.5
Marginal Heading.
The marginal headings are inserted only as a matter of
convenience and for reference and in no way define, limit, or describe the
scope of intent of this Lease nor in any affect this Lease.
30.6
Authority.
Landlord and Tenant hereby warrant and represent that they
have the necessary power and authority to enter into this Lease and that they
have taken all necessary action in order to enter into this Lease,
30.7
Governing Law.
This Lease shall be construed and in force in accordance
with the laws of the State of New York.
30.8
Attorneys’ Fees.
If any Base Rent or additional rent is collected
by or through an attorney or if Landlord requires the services of an attorney
to cause Tenant to cure any default, to evict Tenant or to pursue any other
remedies to which Landlord is entitled hereunder, Tenant shall pay the
reasonable fees of such attorney together with all reasonable costs and
expenses incurred by Landlord in connection with such matters, whether or not
any legal proceedings have been commenced.
30.9
Financial Statements.
This Lease is contingent upon Tenant having
previously provided Landlord with Tenant’s financial statements (“Financial
Statements”) certified by an independent Certified Public Accountant (CPA) or
if not customarily prepared by a CPA, then internally provided reports to be
certified by Tenant to be a true, complete and accurate presentation as of the
date hereof of all of the assets, liabilities and net worth of Tenant, and it
shall be in the sole discretion of Landlord as to proceed with this Lease or
terminate within ten (10) days of receipt of same. In addition Tenant shall
provide Landlord annual Financial Statements within sixty (60) days after the
end of each fiscal year of Tenant and Tenant agrees to reasonably cooperate
with Landlord in its evaluation of the Financial Statements and in answering
questions from Landlord’s current or future lenders, or in the event of
potential sale of the Property of which the Premises forms a part, the
prospective purchasers.
SECTION 31
RULES AND
REGULATIONS
31
1 Landlord reserves the right to provide Rules and Regulations relative to the
conduct of building, including common areas in order to promote a uniform
appearance and harmonious relationships. Any rules and regulations will not
result in additional expense to Tenant, if such rules and regulations are
enacted after the Lease date.
ECTION 32
LANDLORD WORK
32.1
Landlord shall do the following work at its cost and expense:
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1.
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Demise space.
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2.
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Replace missing or damaged ceiling tiles.
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3
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Paint existing office with color to be selected by
tenant from Landlord Standard Finishes.
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4
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Replace existing carpets, and install
laminate/bamboo flooring in entry and hallway between offices.
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5.
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Divide large open workspace with half wall.
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6.
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Install crown molding in large office, corner office
and garage side office.
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7.
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Remove sound proof room from garage side office.
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Except as above, Tenant
accepts Premises in “as is” condition. Tenant is responsible for repair
maintenance to all operations aspects of the space including but not limited to
plumbing, all mechanical devises, electrical equipment, doors, walls, floors,
and lights.
32.2
Tenant agrees to notify the Landlord within ten (10) business days of occupancy
of any mechanical faults in the Premises, and if no notification occurs, then
Tenant accepts responsibility for space condition and those mechanical aspects
as defined in this Lease.
SECTION 33
SECURITY DEPOSIT
33.1
Tenant hereby deposits $1,766.67 as and for a Security Deposit, which shall be
returned after the Lease has expired and Tenant has vacated the premises and
provided Tenant has fulfilled all of the terms of said Lease. No interest shall
accrue on the Security Deposit.
SECTION 34
REAL ESTATE BROKER
34.1
Landlord and Tenant each warrant and represent that no broker was in any
way involved in the negotiation or conclusion of this Lease.
SECTION 35
RIGHT OF FIRST
OPTION
35.1
In the event that any space in the building adjacent to the Premises
becomes available during the Term of this Lease, Tenant shall have the right to
negotiate with Landlord to lease the Additional Space upon and subject to the
following terms and conditions:
1.
Tenant may at any time provide Landlord with written notice of its
interest to lease any adjacent Additional Space that becomes available
(“Expansion Notice”). The Expansion Notice shall specify the space Tenant
desires to lease. Upon receipt of the Expansion Notice by Landlord, Landlord
and Tenant shall have five (5) business days to negotiate satisfactory terms
for the Additional Space and to execute an amendment to this Lease
incorporating such terms.
2.
If Landlord and Tenant do not agree upon the terms to lease the Additional
Space within the five (5) day period for any reason, the Tenant’s rights to
lease the Additional Space pursuant to this Section will lapse and be of no
further force and effect.
3.
This Section does not provide Tenant with an exclusive or priority right
to lease the Additional Space, and, Landlord reserves the right at any time to
lease the Adjacent Space to any other prospect. Tenant’s rights under this
Section are expressly subordinate to any agreement Landlord may enter into with
any prospect, whether before or after any Expansion Notice is delivered by
Tenant.
4.
If Tenant defaults under this Lease at any time, then Tenant’s rights
under this Section shall automatically lapse and be of no further force or
effect.
This
Lease shall be null and void if not fully executed on or before 5 p.m. June 28,
2013.
SIGNATURE PAGE TO
FOLLOW
IN
W1TNESS WHEREOF, the parties have signed and acknowledged this Lease on the day
and year first above written.
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LANDLORD: North Water Street Realty I LLC
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By:
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Laurence
C. Glazer
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Title:
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Member
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By:
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Charles
R. Provini
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Title:
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President and Chief Executive Officer
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EXHIBIT A
PREMISES
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT (this “AGREEMENT”), dated as of August 21, 2015 by
and between NATCORE, INC., a British Columbia corporation (the “Company”)
located in the British Columbia, Canada,
and Dutchess Opportunity Fund, II, LP, a Delaware Limited Partnership (the “Investor”).
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Investor shall invest up to five million
dollars ($5,000,000) to purchase the Company’s Common Stock with no par value
per share (the “Common Stock”);
WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(a)(2) and/or 4(a)(5) under the Securities Act of 1933, as amended
(the “1933 Act”), Rule 506 of Regulation D, and the rules and regulations
promulgated thereunder, and/or upon such other exemption from the registration
requirements of the 1933 Act as may be available with respect to any or all of
the investments in Common Stock to be made hereunder;
WHEREAS, such investments will also be made in reliance upon an
exemption from the prospectus requirements of applicable securities laws in
Canada;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement substantially in the form attached hereto (the “Registration
Rights Agreement”) pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act, and the rules and regulations
promulgated thereunder, and applicable state securities laws; and
WHEREAS, this Agreement shall supersede all previous agreements and
understandings between the Parties with respect to the subject matter addressed
herein.
NOW THEREFORE, in consideration of the foregoing recitals, which shall
be considered an integral part of this Agreement, the covenants and agreements
set forth hereafter, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Investor
hereby agree as follows:
SECTION 1. DEFINITIONS.
As used in
this Agreement, the following terms shall have the following meanings specified
or indicated below, and such meanings shall be equally applicable to the
singular and plural forms of such defined terms.
“
1933
Act
” shall have the meaning set forth in the recitals of this Agreement.
“
1934
Act
” shall mean the Securities Exchange Act of 1934, as it may be amended.
“
AAA
”
shall have the meaning specified in Section 11.
“
Affiliate
”
shall have the meaning specified in Section 5(G).
“
Agreement
”
shall mean this Investment Agreement.
“
Articles
of Incorporation
” shall have the meaning specified in Section 4(C).
NTCXF.INVESTMENT AGREEMENT.AUGUST.2015
“
By-laws
”
shall have the meaning specified in Section 4(C).
“Clear”
shall mean the Shares are available for the Investor to trade on the Principal
Market.
“Clearing
Date”
shall mean the date on which the Shares Clear.
“
Closing
”
shall have the meaning specified in Section 2(E).
“
Closing
Date
” shall have the meaning specified in Section 2(E).
“
Common
Stock
” shall have the meaning set forth in the recitals of this Agreement.
“
Company
”
shall have the meaning set forth in the preamble of this Agreement.
“
Control
”
or “
Controls
” shall have the meaning specified in Section 5(G).
“
DTC
”
shall have the meaning specified in Section 2(E).
“
DWAC
”
shall have the meaning specified in Section 2(E).
“
Effective
Date
” shall mean the date the SEC declares effective under the 1933 Act the
Registration Statement covering the Securities.
“
Equity
Line Transaction Documents
” shall mean this Agreement and the Registration
Rights Agreement.
“
FAST
”
shall have the meaning specified in Section 2(E).
“
Fee
Shares
” shall have the meaning specified in Section 11.
“
Indemnities
”
shall have the meaning specified in Section 10.
“
Indemnified
Liabilities
” shall have the meaning specified in Section 10.
“
Indemnitor
”
shall have the meaning specified in Section 10.
“
Investor
”
shall have the meaning indicated in the preamble of this Agreement.
“
Material
Adverse Effect
” shall have the meaning specified in Section 4(A).
“
Maximum
Common Stock Issuance
” shall have the meaning specified in Section 2(F).
“
Minimum
Purchase Price
” with respect to any Put Notice shall be USD $0.30.
“
Open
Market Adjustment Amount
” shall have the meaning specified in Section 2(G).
“
Open
Market Share Purchase
” shall have the meaning specified in Section 2(G).
“
Open
Period
” shall mean the period beginning on and including the Trading Day
immediately following the Effective Date and ending on the earlier to occur of
(i) the date which is thirty-six (36) months from the Effective Date; or (ii)
termination of the Agreement in accordance with Section 9, below.
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
“
Pricing
Period
” shall mean the five (5) consecutive Trading Days beginning on the
Put Notice and ending on and including the
date that is four (4) Trading Days after such Put Notice.
“
Principal
Market
” shall mean the Canadian Securities Exchange, Toronto Stock
Exchange, TSX Venture Exchange, Nasdaq Capital Market, the NYSE Amex, the New
York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market
or the OTCQB, whichever is the principal market on which the Common Stock is
listed.
“
Prospectus
”
shall mean the prospectus, preliminary prospectus and supplemental prospectus
used in connection with the Registration Statement.
“
Purchase
Amount
” shall mean the total amount being paid by the Investor on a
particular Closing Date to purchase the Securities.
“
Purchase
Price
” shall mean ninety-five percent (95%) of the lowest daily VWAP (as
defined herein) of the Common Stock during the Pricing Period.
“
Put
”
shall have the meaning set forth in Section 2(B) hereof.
“
Put
Amount
” shall have the meaning set forth in Section 2(B) hereof.
“
Put
Notice
” shall mean a written notice in the form attached hereto as Exhibit
C, sent to the Investor by the Company stating the Put Amount in U.S. dollars
the Company intends to sell to the Investor
pursuant to the terms of the Agreement and stating the current number of Shares
issued and outstanding on such date.
“
Put
Notice Date
” shall mean the Trading Day, as set forth below, immediately
following the day on which the Investor receives a Put Notice, however a Put
Notice shall be deemed delivered on (a) the
Trading Day it is received by facsimile or email by the Investor if such notice
is received prior to noon Eastern Time, or (b) the immediately succeeding
Trading Day if it is received by facsimile or otherwise after noon Eastern Time
on a Trading Day. No Put Notice may be deemed delivered on a day that is not a
Trading Day or if the Shares do not Clear.
“
Put
Restriction
” shall mean the days during the Pricing Period. During this
time, the Company shall not be entitled to deliver another Put Notice.
“
Put
Shares Due
” shall have the meaning specified in Section 2(G).
“
Registration
Rights Agreement
” shall have the meaning set forth in the recitals of this
Agreement.
“
Registration
Statement
” means the registration statement of the Company filed under the
1933 Act covering the resale by the Investor of the Common Stock issuable
hereunder.
“
Related
Party
” shall have the meaning specified in Section 5(G).
“
Resolutions
”
shall have the meaning specified in Section 7(E).
“
SEC
”
shall mean the U.S. Securities & Exchange Commission.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
3
“
Securities
”
shall mean the shares of Common Stock issued pursuant to the terms of the
Agreement.
“SEDAR”
shall mean the System for Electronic Document Analysis and Retrieval, a filing system
developed for the Canadian Securities Administrators (“CSA”) to facilitate the
electronic filing of securities information as required by the CSA; allow for
public dissemination of Canadian securities information collected in the
securities filing process; and provide electronic communication between
electronic filers, agents and the CSA.
“
SEDAR
Documents
” shall mean, as of a particular date, all reports and other
documents filed by the Company pursuant to applicable Canadian securities laws
since the end of the Company’s then most recently completed and reported fiscal
year as of the time in question (provided that if the date in question is
within ninety days of the beginning of the Company’s fiscal year, the term
shall include all documents filed since the beginning of the preceding fiscal
year).
“
Shares
”
shall mean the shares of the Company’s Common Stock.
“
Subsequent
Purchasers
” shall have the meaning specified in Section 2(G).
“
Subsidiaries
”
shall have the meaning specified in Section 4(A).
“
Trading
Day
” shall mean any day on which the Principal Market for the Common Stock
is open for trading, from the hours of 9:30 am until 4:00 pm Eastern Time.
“
VWAP
”
shall mean the volume weighted average price during a Trading Day.
SECTION 2. PURCHASE AND SALE OF COMMON STOCK.
(A)
PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and
conditions set forth herein, the Company may issue and sell to the Investor,
and the Investor shall purchase from the Company, up to that number of Shares
having an aggregate Purchase Price of five million dollars ($5,000,000).
(B)
DELIVERY OF PUT NOTICES. Subject to the terms and conditions of
the Equity Line Transaction Documents, and from time to time during the Open
Period, the Company may, in its sole discretion, deliver a Put Notice to the
Investor which states the dollar amount (designated in U.S. Dollars) (the “Put
Amount”) of Shares which the Company intends to sell to the Investor on a
Closing Date (the “Put”). The Put Amount shall be equal to the lesser of 1) two
hundred percent (200%) of the average daily volume (U.S. market only) of the
Common Stock for the three (3) Trading Days prior to the applicable Put Notice
Date, multiplied by the average of the three (3) daily closing prices
immediately preceding the Put Date or 2) two hundred thousand dollars
($200,000). During the Open Period, the Company shall not be entitled to submit
a Put Notice until the Pricing Period for the prior Put has been completed. The
Common Stock identified in the Put Notice shall be purchased for a price equal
to the Purchase Price. The Company shall deliver to the Investor pursuant to
this Agreement, certificates representing the Shares to be issued to the
Investor on such date and registered in the name of the Investor (“Deposit Shares”).
The number of Deposit Shares shall be calculated by dividing the current price
of the Common Stock by the Put Amount (minus any prior Deposit Shares held, if
any, by the Investor). In lieu of delivering physical certificates representing
the Securities and provided that the Company’s transfer agent then is
participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer (“FAST”) program, upon request of the
Investor, the Company shall use all commercially reasonable efforts to
cause its transfer agent to electronically transmit the Securities by crediting
the account of the Investor’s prime broker (as specified by the Investor within
a reasonable period in advance of the Investor’s notice) with DTC through its
Deposit Withdrawal Agent Commission (“DWAC”) system.
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
(C)
MINIMUM PURCHASE PRICE. Notwithstanding any other provision of
this Agreement, the Purchase Price shall be greater than or equal to the
Minimum Purchase Price.
(D)
CONDITIONS TO INVESTOR’S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the contrary in this
Agreement, the Company shall not be entitled to deliver a Put Notice and
the Investor shall not be obligated to purchase any Shares at a Closing unless
each of the following conditions are satisfied:
(1)
a Registration Statement shall have been declared effective and
shall remain effective and available for the resale of all the Registrable
Securities (as defined in the Registration Rights Agreement) at all times until
the Closing with respect to the subject Put Notice;
(2)
at all times during the period beginning on the related Put
Notice Date and ending on and including the
related Closing Date, the Common Stock shall have been listed on the
Principal Market and unless otherwise required by the securities laws and
regulations of Canada and the provinces and the rules and regulations of the
Principal Market or principal securities exchange or trading market on which
the Common Stock is traded or listed, shall not have been suspended from
trading thereon for a period of two (2) consecutive Trading Days during the
Open Period and the Company shall not have been notified of any pending or
threatened proceeding or other action to suspend the trading of the Common
Stock;
(3)
the Company has complied with its obligations and is otherwise
not in breach of or in default under this Agreement, the Registration Rights
Agreement or any other agreement executed in connection herewith which has not
been cured prior to delivery of the Put Notice;
(4)
no injunction shall have been issued and remain in force, or
action commenced by a governmental authority which has not been stayed or abandoned,
prohibiting the purchase or the issuance of the Securities; and
(5)
the issuance of the Securities pursuant to this Agreement will
not violate any shareholder approval requirements of the Principal Market.
If any of the events described in clauses (1) through (5) above occurs
during a Pricing Period, then the Investor shall have no obligation to purchase
the Common Stock subject to the applicable Put Notice.
(E)
MECHANICS OF PURCHASE OF SHARES BY INVESTOR. The closing of the
purchase by the Investor of Shares (a “Closing”) shall occur on the date which
is no later than three (3) Trading Days following the last day of the Pricing
Period (each a “Closing Date”). On each Closing Date the Investor shall deliver
to the Company the Purchase Price to be paid for such Shares, based on the Put
Amount set forth in Section 2(B). In the event the Investor has not sold all
the Deposit Shares, the Company may elect to either: 1) request the remaining
Deposit Shares to be returned; or, 2) have the Investor hold the Deposit Shares
toward a future Put.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
5
(F)
OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything
contained herein to the contrary, if during the Open Period the Company becomes
listed on an exchange that limits the number of shares of Common Stock that may
be issued without shareholder approval,
then the number of Shares issuable by the Company and purchasable by the
Investor, shall not exceed that number of the shares of Common Stock that may
be issuable without shareholder approval (the “Maximum Common Stock
Issuance”). If such issuance of shares of Common Stock could cause a delisting
on the Principal Market, then the Maximum Common Stock Issuance shall first be
approved by the Company’s shareholders in accordance with applicable law and
the By-laws and Articles of Incorporation of the Company, as amended. The
parties understand and agree that the Company’s failure to seek or obtain such
shareholder approval shall in no way adversely affect the validity and due
authorization of the issuance and sale of Securities or the Investor’s
obligation in accordance with the terms and conditions hereof to purchase a
number of Shares in the aggregate up to the Maximum Common Stock Issuance
limitation, and that such approval pertains only to the applicability of the
Maximum Common Stock Issuance limitation provided in this Section 2(F).
(G)
INTENTIONALLY OMITTED.
(H)
LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary in
this Agreement, in no event shall the Investor be entitled to purchase that
number of Shares, which when added to the sum of the number of shares of Common
Stock beneficially owned (as such term is defined under Section 13(d) and Rule
13d-3 of the 1934 Act), by the Investor, would exceed 9.99% of the number of
shares of Common Stock outstanding on the Closing Date, as determined in
accordance with Rule 13d-1(j) of the 1934 Act.
SECTION 3. INVESTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Investor represents and warrants to the Company, and covenants, that:
(A)
SOPHISTICATED INVESTOR. The Investor has, by reason of its
business and financial experience, such knowledge, sophistication and
experience in financial and business matters and in making investment decisions
of this type that it is capable of (1) evaluating the merits and risks of an investment in the Securities and making an
informed investment decision; (2) protecting its own interest; and (3) bearing
the economic risk of such investment for an indefinite period of time.
(B)
AUTHORIZATION; ENFORCEMENT. The Investor has the requisite power
and authority to enter into and perform this Agreement and the Registration
Rights Agreement. The execution and delivery of the Equity Line Transaction
Documents by the Investor and the consummation by it of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
Investor’s general partners and no further consent or authorization is required
by its partners. This Agreement has been duly and validly authorized, executed
and delivered on behalf of the Investor and is a valid and binding agreement of
the Investor enforceable against the Investor in accordance with its terms,
subject as to enforceability to general principles of equity and to applicable
bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
(C)
SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the
Investor will comply with the provisions of Section 9 of the 1934 Act, and the
rules promulgated thereunder, with respect to transactions involving the Common
Stock. The Investor agrees not to sell the Company’s stock short, either
directly or indirectly through its affiliates, principals or advisors, the
Company’s common stock during the term of this Agreement.
(D)
ACCREDITED INVESTOR. Investor is an “Accredited Investor” as that
term is defined in Rule 501(a) of Regulation D of the 1933 Act and has
completed the U.S. Accredited Investor Certificate as set forth on Exhibit B to
this Agreement. Investor is not a “disqualified investor” by virtue of the
investor being subject to a “disqualifying event” as defined under Rule 506(b)
through (e) of Regulation D of the 1933 Act as amended.
(E)
UNDERWRITER STATUS. The
Investor is deemed an “underwriter” (as that term is defined in Section
2(a)(11) of the Securities Act) in connection with the registration of the
Registrable Securities and will be identified as such in the Registration
Statement. As an underwriter, the Investor will not have Rule 144 of the Securities
Act available as a resale exemption from registration under the U.S. securities
laws.
(F)
NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Investor and the consummation by the Investor of
the transactions contemplated hereby and thereby will not (1) result in a
violation of the partnership agreement or other organizational documents of the
Investor, (2) conflict with, or constitute a material default (or an event
which with notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, contract, indenture mortgage,
indebtedness or instrument to which the Investor
is a party, or to the Investor’s knowledge result in a violation of any law,
rule, regulation, order, judgment or decree (including United States
federal and state securities laws and regulations) applicable to the Investor
or by which any property or asset of the Investor is bound or affected.
(G)
NO VIOLATIONS. Except as disclosed in Schedule 3(f), the Investor
is not in violation of any term of, or in default under, the partnership
agreement of other organizational documents of the Investor or any material
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable to the Investor,
except for conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations that would not, individually or in the aggregate,
constitute or reasonably be expected to constitute a material adverse effect on
the Investor. The business of the Investor is not being conducted, and shall
not be conducted, in violation of any law, statute, ordinance, rule, order or
regulation of any governmental authority or agency, regulatory or self-
regulatory agency, or court, except for violations the sanctions for which
either, individually or in the aggregate, would not have or reasonably be
expected to have a material adverse effect on the Investor. Except as
specifically contemplated by this Agreement and as required under the 1933 Act
or any securities laws of any states, to the Investor’s knowledge, the Investor
is not required to obtain any consent, authorization, permit or order of, or
make any filing or registration (except the filing of a registration statement
as outlined in the Registration Rights Agreement) with, any court, governmental
authority or agency, regulatory or self-regulatory agency or other third party
in order for it to execute, deliver or perform any of its obligations under, or
contemplated by, the Equity Line Transaction Documents in accordance with the
terms hereof or thereof except for those consents, authorizations, permits,
orders or filings as have been obtained or effected on or prior to the date
hereof and are in full force and effect as of the date hereof. Except as
disclosed in Schedule 3(f), the Investor is unaware of any facts or
circumstances which might give rise to any violation or default set forth in
this Section 3(G).
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
7
(H)
OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to the
Company’s business, finance and operations which it has requested. The Investor
has had an opportunity to discuss the business, management and financial
affairs of the Company with the Company’s management.
(I)
INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own account for investment purposes and not with a
view towards distribution and agrees to resell or otherwise dispose of
the Securities solely in accordance with the registration provisions of the
1933 Act (or pursuant to an exemption from such registration provisions).
(J) NO
REGISTRATION AS A DEALER. The Investor is not and will not be required to be
registered as a “dealer” under the 1934 Act, either as a result of its
execution and performance of its obligations under this Agreement or otherwise.
(K) GOOD STANDING.
The Investor is a Limited Partnership, duly organized, validly existing and in
good standing in the state of Delaware.
(L) TAX
LIABILITIES. The Investor understands that it is liable for its own tax
liabilities.
(M)
ACKNOWLEDGEMENTS OF THE INVESTOR: The Investor acknowledges the following:
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(i)
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no securities commission or similar regulatory authority in Canada
has reviewed or passed on the merits of the securities of the Company;
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(ii)
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there is no government or other issuance
covering the securities of the Company;
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(iii)
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there is risk associated with the purchase
of the securities of the Company;
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(iv)
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there are restrictions on a Investor’s ability to resell the
Securities in Canada and it is the responsibility of the Investor to find out
what those restriction are and to comply with them before selling the
Securities; and
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(v)
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the Company is relying on an exemption from the requirements to
provide the purchaser with a prospectus and to sell securities through a
person registered to sell Securities under the applicable securities laws of
Canada and, as a consequence of acquiring Securities pursuant to this
exemption, certain protections, rights and remedies provided by applicable
securities laws in Canada including statutory rights of rescission or
damages, will not be available to the Investor.
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(vi)
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Canadian securities laws restrict the trading of the Securities for a
period of four months and one day from their date of issue and as such the
Securities may not be traded on the TSX Venture Exchange and otherwise in
Canada until the date which is four months and one day from the date of
issuance of the Securities.
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NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
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The Company and its transfer agent will take any necessary action to
enforce these restrictions and all Securities issuable hereunder may not be
offered and sold in Canada, through the facilities of the TSX Venture
Exchange or any other Principal Market in Canada, or otherwise, directly or
indirectly before such date, failing which the Investor will be in violation
of Canadian securities legislation. The certificates representing the Common
Stock issued pursuant to this Agreement will bear the following legends:
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“Unless permitted
under securities legislation, the holder of the securities shall not trade the securities before [insert
date that is four months and one day following the distribution
date].”
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“Without prior
written approval of the TSX Venture Exchange and compliance with all
applicable securities legislation, the securities represented by this
certificate may not be sold, transferred, hypothecated or otherwise traded on
or through the facilities of the TSX Venture Exchange or otherwise in Canada
or to or for the benefit of a Canadian resident before [insert date that is
four months and one day following the distribution date].”
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(vii)
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Except as otherwise set forth in this Agreement, no persons has made
written or oral representation: (a) that any person will resell or repurchase
the Securities, (b) that any person will refund the purchase price of the
Securities, (c) as to the future price or value of the Securities; and (iv)
that the Securities will be listed and posted for trading on any stock
exchange or that application has been made to list the Securities on any
stock exchange other than the TSX Venture Exchange.
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SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set
forth in the Schedules attached hereto, or as disclosed in the Company’s SEDAR
Documents, the Company represents and warrants to the Investor that:
(A)
ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized and
validly existing in good standing under the Canadian laws and has the requisite
corporate power and authorization to own its properties and to carry on its
business as now being conducted. Both the Company and the companies it owns or
controls (“Subsidiaries”) are duly qualified to do business and are in good
standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in
this Agreement, “Material Adverse Effect” means any material adverse
effect on (1) the properties, assets, operations, results of operations, or
financial condition of the Company and its Subsidiaries, if any, taken as a
whole, (2) the transactions contemplated hereby or by the agreements and
instruments to be entered into in connection herewith, or (3) the authority or
ability of the Company to perform its obligations under the Equity Line
Transaction Documents other than as a result of (a) changes adversely affecting
the United States economy (so long as the Company is not disproportionately
affected thereby), (b) changes adversely affecting the industry in which the
Company operates (so long as the Company is not disproportionately affected
thereby), (c) the announcement or consummation of the transactions contemplated
by this Agreement, and (d) changes in the market price of the Common Stock.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
9
(B)
AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.
(1)
The Company has the requisite corporate power and authority to
enter into and perform the Equity Line Transaction Documents, and to perform
its obligations contemplated hereby and thereby.
(2)
The execution and delivery of the Equity Line Transaction
Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby, including
without limitation the reservation for issuance and the issuance of the
Securities pursuant to this Agreement, have been duly and validly authorized by
the Company’s Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors, or its shareholders.
(3)
The Equity Line Transaction Documents have been duly and validly
executed and delivered by the Company.
(4)
The Equity Line Transaction Documents constitute the valid and
binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies.
(C)
CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of an unlimited number of shares of Common Stock
with no par value per share, with 52,632,614 shares issued and outstanding as
of August 21, 2015. Except as disclosed in the Company’s publicly available
filings with SEDAR or elsewhere in this Agreement:
(1) no shares of the Company’s capital stock are subject to preemptive rights
or any other similar rights or any liens or encumbrances suffered or
permitted by the Company; (2) there are no outstanding debt securities; (3)
there are no outstanding shares of capital stock, options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the Company or any of
its Subsidiaries; (4) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except the Registration Rights Agreement);
(5) there are no outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (6) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities as described in this Agreement; (7) the Company does
not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement; and (8) there is no dispute as to the
classification of any shares of the Company’s capital stock.
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
The Company
has furnished to the Investor, or the Investor has had access through the SEDAR website to, true and correct copies of the
Company’s notice of articles, as amended and in effect on the date
hereof (the “Articles of Incorporation”), and the Company’s articles, as in
effect on the date hereof (the “By-laws”), and the terms of all securities
convertible into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto.
(D)
ISSUANCE OF SHARES. The Company is authorized to issue an
unlimited numbers of common shares voting and participating, without par value
per share. Upon issuance in accordance with this Agreement, the Securities will
be validly issued, fully paid for and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof.
(E)
NO CONFLICTS. The execution, delivery and performance of the
Equity Line Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby will not (I) result
in a violation of the Articles of Incorporation,
any Certificate of Designations, Preferences and Rights of any outstanding
series of preferred stock of the Company or the By-laws; or (II)
conflict with, or constitute a material default (or an event which with notice
or lapse of time or both would become a material default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, contract, indenture mortgage, indebtedness or
instrument to which the Company or any of its Subsidiaries is a party, or to
the Company’s knowledge result in a violation of any law, rule, regulation,
order, judgment or decree (including United States federal and state securities
laws and regulations and the rules and regulations of the Principal Market or
principal securities exchange or trading market on which the Common Stock is
traded or listed) applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected. Except as disclosed in Schedule 4(e), neither the Company nor its
Subsidiaries is in violation of any term of, or in default under, the Articles
of Incorporation, any Certificate of Designations, Preferences and Rights of
any outstanding series of preferred stock of the Company or the By-laws or
their organizational charter or by-laws, respectively, or any contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
Subsidiaries, except for possible conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations that would not
individually or in the aggregate have or constitute a Material Adverse Effect.
The business of the Company and its Subsidiaries is not being conducted, and
shall not be conducted, in violation of any law, statute, ordinance, rule,
order or regulation of any governmental authority or agency, regulatory or
self- regulatory agency, or court, except for possible violations the sanctions
for which either individually or in the aggregate would not have a Material
Adverse Effect. Except as specifically contemplated by this Agreement and as
required under the 1933 Act or any securities laws of any states, or any other
jurisdiction to which the Company is subject, to the Company’s knowledge, the Company is not required to obtain
any consent, authorization, permit or order of, or make any filing or
registration (except the filing of a registration statement as outlined in the
Registration Rights Agreement between the Parties) with, any court,
governmental authority or agency, regulatory or self-regulatory agency or other
third party in order for it to execute, deliver or perform any of its
obligations under, or contemplated by, the Equity Line Transaction Documents in
accordance with the terms hereof or thereof. All consents, authorizations, permits, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence
have been obtained or effected on or prior to the date hereof and are in full
force and effect as of the date hereof. Except as disclosed in Schedule 4(e),
the Company and its Subsidiaries are
unaware of any facts or circumstances which might give rise to any violation or
default of any of the foregoing. The Company is not, and will not be, in
violation of the listing requirements of the Principal Market as in effect on
the date hereof and on each of the Closing Dates and is not aware of any facts
which would reasonably lead to delisting of the Common Stock by the Principal
Market in the foreseeable future.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
11
(F)
SEDAR DOCUMENTS; FINANCIAL STATEMENTS. The Company may make
available to Investor true and complete copies of the SEDAR Documents
(including, without limitation, proxy information and solicitation materials).
As of their respective dates, the SEDAR Documents complied in all material
respects with the requirements of Canadian securities laws, rules and
regulations applicable to such SEDAR Documents, and none of the SEDAR Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEDAR Documents comply as to form and substance in all
material respects with applicable accounting requirements and the published
rules and regulations of applicable Canadian securities regulators or other
applicable rules and regulations with respect thereto.
Such financial statements have been prepared in accordance with international
financial reporting standards applied on a consistent basis during the periods
involved (except (a) as may be otherwise indicated in such financial
statements or the notes thereto or (b) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
(G)
ABSENCE OF CERTAIN CHANGES. Except as otherwise set forth in the
SEDAR Documents, the Company does not intend to change the business operations
of the Company in any material way. The Company has not taken any steps, and
does not currently expect to take any steps, to seek protection pursuant to any
bankruptcy law nor does the Company or its Subsidiaries have any knowledge or
reason to believe that its creditors intend to initiate involuntary bankruptcy
proceedings.
(H) ABSENCE
OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in the SEDAR
Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of
Company or any of its Subsidiaries, threatened against or affecting the
Company, the Common Stock or any of the Company’s Subsidiaries or any of the
Company’s or the Company’s Subsidiaries’ officers or directors in their
capacities as such, in which an adverse decision could have a Material Adverse
Effect.
(I)
ACKNOWLEDGMENT REGARDING INVESTOR’S PURCHASE OF SHARES. The Company acknowledges
and agrees that the Investor is acting solely in the capacity of an arm’s
length purchaser with respect to the Equity Line Transaction Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges
that the Investor is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Equity Line
Transaction Documents and the transactions contemplated hereby and thereby and
any advice given by the Investor or any of its respective representatives or
agents in connection with the Equity Line Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to the
Investor’s purchase of the Securities, and is not being relied on by the Company.
The Company further represents to the Investor that the Company’s decision to enter into the Equity Line Transaction Documents
has been based solely on the independent evaluation by the Company and
its representatives.
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
(J) NO
UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set
forth in the SEDAR Documents, as of the date hereof, no event, liability,
development or circumstance has occurred or exists, or to the Company’s
knowledge is contemplated to occur, with respect to the Company or its
Subsidiaries or their respective business, properties, assets, prospects,
operations or financial condition, that would be required to be disclosed by
the Company under applicable securities laws on a registration statement filed
with the SEC relating to an issuance and sale by the Company of its Common
Stock and which has not been publicly announced.
(K)
EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is involved
in any union labor dispute nor, to the knowledge of the Company or any of its
Subsidiaries, is any such dispute threatened. Neither the Company nor any of
its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that relations with their employees are
good. At the time of signing this Agreement, no executive officer (as defined
in Rule 501(f) of the 1933 Act) has notified the Company that such officer
intends to leave the Company’s employ or otherwise terminate such officer’s
employment with the Company.
(L)
INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own or possess
adequate rights or licenses to use all trademarks, trade names, service marks,
service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now conducted.
Except as set forth in the SEDAR Documents, none of the Company’s trademarks,
trade names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, government
authorizations, trade secrets or other intellectual property rights necessary
to conduct its business as now or as
proposed to be conducted have expired or terminated, or are expected to expire
or terminate within two (2) years from the date of this Agreement. The Company
and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of
trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade
secret or other similar rights of others, or of any such development of similar
or identical trade secrets or technical information by others and, except as
set forth in the SEDAR Documents, there is no claim, action or proceeding being
made or brought against, or to the Company’s knowledge, being threatened
against, the Company or its Subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service
marks, service mark registrations, trade secret or other infringement; and the
Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company and its Subsidiaries have
taken commercially reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.
(M)
ENVIRONMENTAL LAWS. The Company and its Subsidiaries (I) are, to the knowledge
of the Company and its Subsidiaries, in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”); (II)
have, to the knowledge of the Company, received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (III) are in compliance, to the knowledge of the
Company, with all terms and conditions of any such permit, license or approval
where, in each of the three (3) foregoing cases, the failure to so comply would
have, individually or in the aggregate, a Material Adverse Effect.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
13
(N) TITLE.
The Company and its Subsidiaries have good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in the SEDAR Documents or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any of its
Subsidiaries. Any real property and facilities held under lease by the Company
or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.
(O)
INSURANCE. Each of the Company’s Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of the Company reasonably believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are engaged.
Neither the Company nor any of its Subsidiaries has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(P)
REGULATORY PERMITS. The Company and its Subsidiaries have in full force and
effect all certificates, approvals, authorizations and permits from the
appropriate federal, state, local or foreign regulatory authorities and
comparable foreign regulatory agencies, necessary to own, lease or operate
their respective properties and assets and conduct their respective businesses,
and neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
approval, authorization or permit, except
for such certificates, approvals, authorizations or permits which if not
obtained, or such revocations or modifications which, would not have a Material
Adverse Effect.
(Q)
INTERNAL ACCOUNTING CONTROLS. The Company and each of its Subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable
assurance that (I) transactions are executed in accordance with management’s
general or specific authorizations; (II) transactions are recorded as necessary
to permit preparation of financial statements in conformity with international
financial reporting standards by a firm with membership to the PCAOB and CPAB
and to maintain asset accountability; (III) reasonable controls to safeguard
assets are in place; and (IV) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(R) NO
MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction,
or any judgment, decree or order which in the judgment of the Company’s
officers has or is expected in the future to have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries is a party to any contract or
agreement which in the judgment of the Company’s officers has or is expected to
have a Material Adverse Effect.
(S) TAX
STATUS. The Company and each of its Subsidiaries has made or filed all income
and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim.
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
(T) CERTAIN
TRANSACTIONS. Except as set forth in the SEDAR Documents filed at least ten
(10) days prior to the date hereof and except for arm’s length transactions
pursuant to which the Company makes payments in the ordinary course of business
upon terms no less favorable than the Company could obtain from disinterested
third parties and other than the grant of stock options disclosed in the SEDAR
Documents or stock options granted in the future as contemplated by current
compensation agreements or plans disclosed in the SEDAR Documents, none of the
officers, directors, or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
(U)
DILUTIVE EFFECT. The Company understands and acknowledges that the number of
shares of Common Stock issuable upon purchases pursuant to this Agreement will
increase in certain circumstances including, but not necessarily limited to,
the circumstance wherein the trading price of the Common Stock declines during
the period between the Effective Date and the end of the Open Period. The
Company’s executive officers and directors have studied and fully understand
the nature of the transactions contemplated by this Agreement and recognize
that they have a potential dilutive effect on the shareholders of the Company.
The Board of Directors of the Company has concluded, in its good faith business
judgment, and with full understanding of the implications, that such issuance is
in the best interests of the Company. The Company specifically acknowledges
that, subject to such limitations as are expressly set forth in the Equity Line
Transaction Documents, its obligation to issue shares of Common Stock upon
purchases pursuant to this Agreement is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership interests
of other shareholders of the Company.
(W) NO
GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor any
person acting on its behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Common Stock to be offered as set forth in this Agreement.
(X) NO
BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No brokers, finders
or financial advisory fees or commissions will be payable by the Company, its
agents or Subsidiaries, with respect to the transactions contemplated by this
Agreement, except as otherwise disclosed in this Agreement.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
15
SECTION 5. COVENANTS OF THE COMPANY
(A)
EFFORTS. The Company shall use all commercially reasonable
efforts to timely satisfy each of the conditions set forth in Section 8 of this
Agreement.
(B)
BLUE SKY. The Company shall, at its sole cost and expense, on or
before each of the Closing Dates, take such
action as the Company shall reasonably determine is necessary to qualify
the Securities for, or obtain exemption for the Securities for, sale to the
Investor at each of the Closings pursuant to this Agreement under applicable
securities or “Blue Sky” laws and shall provide evidence of any such action so
taken to the Investor on or prior to the Closing Date. The Investor agrees
listing and maintaining the Company’s stock in a nationally recognized
securities manual pursuant to the Blue Sky standard manual exemption is
sufficient for this purpose.
(C)
REPORTING STATUS. The Company will seek reporting issuer status
under the 1934 Act. Once a reporting issuer and until one of the following
occurs, the Company shall file all reports required to be filed with the SEC
pursuant to the 1934 Act, and the Company shall not terminate its status, or take
an action or fail to take any action, which would terminate its status as a
reporting company under the 1934 Act: (1) this Agreement terminates pursuant to
Section 8, or (2) the date on which the Investor has sold all the Securities;
provided that the Investor shall promptly notify the Company after the Investor
has sold all the Securities.
(D)
USE OF PROCEEDS. The Company will use the proceeds from the sale
of the Securities (excluding amounts paid by the Company for fees as set forth
in the Equity Line Transaction Documents)
for general corporate and working capital purposes and acquisitions or assets,
businesses or operations or for other purposes that the Board of Directors, in
its good faith, deems to be in the best interest of the Company.
(E)
FINANCIAL INFORMATION. During the Open Period, the Company agrees
to make available to the Investor via the SEC’s EDGAR website or other
electronic means the following documents
and information on the forms set forth: (1) within five (5) Trading Days after the
filing thereof with the SEC, a copy of its audited financial statements,
unaudited financial statements for the most recently completed quarter, any
current reports filed on Form 6-K and any Registration Statements or amendments
filed pursuant to the 1933 Act; and (2) copies of any notices and other
information made available or given to the shareholders of the Company
generally, contemporaneously with the making available or giving thereof to the
shareholders.
(F)
LISTING. The Company shall promptly secure and maintain the
listing of all of the Registrable Securities (as defined in the Registration
Rights Agreement) on the Principal Market and each other national securities
exchange and automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and shall
maintain, such listing of all Registrable Securities from time to time issuable
under the terms of the Equity Line Transaction Documents. Neither the Company
nor any of its Subsidiaries shall take any action which would be reasonably
expected to result in the delisting or suspension of the Common Stock on the
Principal Market unless otherwise required by the securities laws and
regulations of Canada and the provinces and the rules and regulations of the
Principal Market or principal securities exchange or trading market. The
Company shall promptly provide to the Investor copies of any notices it
receives from the Principal Market regarding the continued eligibility of the
Common Stock for listing on such automated quotation system or securities
exchange. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 5(F).
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
(G)
TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of
its Subsidiaries not to, enter into, amend, modify or supplement, or permit any
Subsidiary to enter into, amend, modify or supplement, any agreement,
transaction, commitment or arrangement with any of its or any Subsidiary’s
officers, directors, persons who were officers or directors at any time during
the previous two (2) years, shareholders who beneficially own 5% or more of the
Common Stock, or Affiliates or with any individual related by blood, marriage
or adoption to any such individual or with any entity in which any such entity
or individual owns a 5% or more beneficial interest (each a “Related Party”),
except for (1) customary employment arrangements and benefit programs on
reasonable terms, (2) any agreement, transaction, commitment or arrangement on
an arms-length basis on terms no less favorable than terms which would have
been obtainable from a disinterested third party other than such Related
Party,(3) any agreement, transaction, commitment or arrangement which is
approved by a majority of the disinterested directors of the Company, or (4)
extensions or amendments of any existing employment agreement. For purposes
hereof, any director who is also an officer of the Company or any Subsidiary of
the Company shall not be a disinterested director
with respect to any such agreement, transaction, commitment or arrangement.
“Affiliate” for purposes hereof means, with respect to any person or
entity, another person or entity that, directly or indirectly, (1) has a 5% or
more equity interest in that person or entity, (2) has 5% or more common
ownership with that person or entity, (3) controls that person or entity, or
(4) is under common control with that person or entity. “Control” or “Controls”
for purposes hereof means that a person or entity has the power, directly or
indirectly, to conduct or govern the policies of another person or entity.
(H)
CORPORATE EXISTENCE. The Company shall use all commercially reasonable efforts
to preserve and continue the corporate existence of the Company.
(I) NOTICE
OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT.
The Company shall promptly notify the Investor upon the occurrence of any of
the following events in respect of a Registration Statement or related
prospectus in respect of an offering of the Securities: (1) receipt of any
request for additional information by the SEC or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or
related prospectus; (2) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any
Registration Statement or the initiation of
any proceedings for that purpose; (3) receipt of any notification with respect
to the suspension of the qualification or exemption from qualification of any
of the Securities for sale in any jurisdiction or the initiation or notice of
any proceeding for such purpose; (4) the happening of any event that makes any
statement made in such Registration Statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in the
Registration Statement, related prospectus or documents so that, in the case of
a Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (5) the Company’s reasonable determination that a
post-effective amendment to the Registration Statement would be appropriate,
and the Company shall promptly make available to Investor any such supplement
or amendment to the related prospectus. The Company shall not deliver to the
Investor any Put Notice during the continuation of any of the foregoing events
in this Section 5(I).
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
17
(J)
REIMBURSEMENT. If (I) the Investor becomes involved in any capacity in any
action, proceeding or investigation brought by any shareholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Equity Line Transaction Documents, or if the Investor is
impleaded in any such action, proceeding or investigation by any person (other
than as a result of a breach of the Investor’s representations and warranties set forth in this Agreement); or
(II) the Investor becomes involved in any capacity in any action,
proceeding or investigation brought by the SEC against or involving the Company
(unless the Company is involved in the action, proceeding or investigation as a
witness only) or in connection with or as a result of the consummation of the
transactions contemplated by the Equity Line Transaction Documents (other than
as a result of a breach of the Investor’s representations and warranties set
forth in this Agreement), or if this Investor is impleaded in any such action,
proceeding or investigation by any person, then in any such case, the Company
will reimburse the Investor for its actual, reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in
connection therewith, as such expenses are incurred. In addition, other than
with respect to any matter in which the Investor is a named party, the Company
will pay to the Investor the charges, as reasonably determined by the Investor,
for the time of any officers or employees of the Investor devoted to appearing
and preparing to appear as witnesses, assisting in preparation for hearings,
trials or pretrial matters, or otherwise with respect to inquiries, hearing,
trials, and other proceedings relating to
the subject matter of this Agreement. The reimbursement obligations of the
Company under this section shall be in addition to any liability which
the Company may otherwise have, shall extend upon the same terms and conditions
to any affiliates of the Investor that are actually named in such action,
proceeding or investigation, and partners, directors, agents, employees,
attorneys, accountants, auditors and controlling persons (if any), as the case
may be, of Investor and any such affiliate, and shall be binding upon and inure
to the benefit of any successors of the Company, the Investor and any such
affiliate and any such person. However, in all events, if the Investor is found
to be guilty of violations of the federal or state securities laws (or pleads “no contest” or other similar
plea or settles an investigation or pleading without a specific finding of
liability but is still subject to civil or criminal liability), the Company
will have no responsibility to pay any of the Investor’s fees and
expenses regardless of whether or not the Company is or is also found to have
liability.
(K)
TRANSFER AGENT. Upon effectiveness of the Registration Statement, and for so
long as the Registration Statement is effective, the Company shall deliver
instructions to its transfer agent to issue Shares to the Investor that are
covered for resale by the Registration Statement free of restrictive legends,
other than as required pursuant to Canadian securities laws and the policies of
the TSX Venture Exchange as set forth in subsection 3(M)(vi).
(L)
ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the
Investor that: (1) it is voluntarily entering into this Agreement of its own
freewill, (2) it is not entering this Agreement under economic duress, (3) the
terms of this Agreement are reasonable and fair to the Company, and (4) the
Company has had independent legal counsel of
its own choosing review this Agreement, advise the Company with respect to this
Agreement, and represent the Company in connection with this Agreement.
SECTION 6. CONDITIONS OF THE COMPANY’S OBLIGATION TO SELL. The
obligation hereunder of the Company to issue and sell the Securities to the
Investor is further subject to the satisfaction, at or before each Closing
Date, of each of the following conditions set forth below. These conditions are
for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion.
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
(A)
The Investor shall have executed this Agreement and the
Registration Rights Agreement and delivered the same to the Company.
(B)
The Investor shall have delivered to the Company the Purchase
Price for the Securities being purchased by the Investor between the end of the
Pricing Period and the Closing Date via a Put Settlement Sheet (hereto attached
as Exhibit D). Immediately after receipt of confirmation of delivery of such
Securities to the Investor, the Investor, by wire transfer of immediately
available funds pursuant to the wire instructions provided by the Company, will
disburse the funds constituting the Purchase Amount.
(C)
The representations and warranties of the Investor shall be true
and correct in all material respects as of the date when made and as of the
applicable Closing Date as though made at that time and the Investor shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Equity Line Transaction Documents to
be performed, satisfied or complied with by the Investor on or before such
Closing Date.
(D)
No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
SECTION 7. FURTHER CONDITIONS OF THE INVESTOR’S OBLIGATION TO PURCHASE.
The obligation of the Investor hereunder to purchase Shares is subject to the
satisfaction, on or before each Closing Date, of each of the following
conditions set forth below.
(A)
The Company shall have executed the Equity Line Transaction
Documents and delivered the same to the Investor.
(B)
The Common Stock shall be
authorized for quotation on the Principal Market and trading in the
Common Stock shall not have been suspended by the Principal Market or the SEC,
unless otherwise required by the securities laws and regulations of Canada and
the provinces and the rules and regulations of the Principal Market or
principal securities exchange or trading market on which the Common Stock is
traded or listed, at any time beginning on the date hereof and through and
including the respective Closing Date.
(C)
The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
applicable Closing Date as though made at that time and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Equity Line Transaction Documents to
be performed, satisfied or complied with by the Company on or before such
Closing Date. The Investor may request an update as of such Closing Date
regarding the representation contained in Section 4(C) above.
(D)
The Company shall have executed and delivered to the Investor the
certificates representing, or have executed electronic book-entry transfer of,
the Securities (in such denominations as the Investor shall request) being
purchased by the Investor before the Pricing Period.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
19
(E)
The Board of Directors of the
Company shall have adopted resolutions consistent with Section 4(B)(2)
above (the “Resolutions”) and such Resolutions shall not have been amended or
rescinded prior to such Closing Date.
(F)
No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
(G)
The Registration Statement shall be effective on each Closing
Date and no stop order suspending the effectiveness of the Registration
statement shall be in effect or to the Company’s knowledge shall be pending or
threatened. Furthermore, on each Closing Date (1) neither the Company nor the
Investor shall have received notice that the SEC has issued or intends to issue
a stop order with respect to such Registration Statement or that the SEC
otherwise has suspended or withdrawn the effectiveness of such Registration
Statement, either temporarily or permanently, or intends or has threatened to
do so (unless the SEC’s concerns have been
addressed and Investor is reasonably satisfied that the SEC no longer is
considering or intends to take such action), and (2) no other suspension
of the use or withdrawal of the effectiveness of such Registration Statement or
related prospectus shall exist.
(H) At the
time of each Closing, the Registration Statement (including information or
documents incorporated by reference therein) and any amendments or supplements
thereto shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or which would require public disclosure or
an update supplement to the prospectus.
(I) The
conditions to such Closing set forth in Section 2(E) shall have been satisfied
on or before such Closing Date.
(J) The
Company shall have certified to the Investor the number of Shares of Common
Stock outstanding when a Put Notice is given to the Investor. The Company’s
delivery of a Put Notice to the Investor constitutes the Company’s
certification of the reservation for issuance of the necessary number of shares
of Common Stock subject to a Put Notice.
SECTION 8. TERMINATION. This Agreement shall terminate upon any of the
following events:
(A)
when the Investor has purchased an aggregate of five million
dollars $5,000,000 in the Common Stock of the Company pursuant to this
Agreement; or,
(B)
on the date which is thirty-six (36) months after the Effective
Date; or,
(C)
upon written notice of the Company to the Investor. Any and all
shares, or penalties, if any, due under this Agreement shall be immediately
payable and due upon termination of this Agreement.
SECTION 9. SUSPENSION. The Company’s right to cause the Investor to
purchase Shares pursuant to a Put Notice,
and the Investor’s obligation to purchase Shares under this Agreement shall
be suspended upon any of the following events, and shall remain suspended until
such event is rectified:
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
(A) The
Common Stock ceases to be registered under the 1934 Act or listed or traded on
the Principal Market, not including a change from one exchange to another
exchange as defined by the term Principal Market. Immediately upon the
occurrence of one of the above-described events, the Company shall send written
notice of such event to the Investor.
SECTION 10. INDEMNIFICATION. In consideration of the parties’ mutual
obligations set forth in the Transaction Documents, each of the parties (in
such capacity, an “Indemnitor”) shall defend, protect, indemnify and hold
harmless the other and all of the other party’s shareholders, officers,
directors, employees, counsel, and direct or indirect investors and any of the
foregoing person’s agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable
expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising
out of, or relating to (A) any material misrepresentation or breach of any
representation or warranty made by the Indemnitor in the Equity Line
Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; (B) any
material breach of any covenant, agreement or obligation of the
Indemnitor contained in the Equity Line Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby; or (C) any
cause of action, suit or claim brought or made against such Indemnitee by a
third party and arising out of or resulting from the execution, delivery,
performance or enforcement of the Equity Line Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby,
except insofar as (Y) any such misrepresentation, breach or any untrue
statement, alleged untrue statement, omission or alleged omission is made in
reliance upon and in conformity with information furnished to Indemnitor which
is specifically intended for use in the preparation of any such Registration
Statement, preliminary prospectus, prospectus or amendments to the prospectus,
(Z) any such Indemnified Liabilities resulted or arose from the breach by the
Indemnitee party hereto of any representation, warranty, covenant or agreement
of such Indemnitee contained in the Equity Line Transaction Documents or the
negligence, recklessness, willful misconduct or bad faith of such Indemnitee.
To the extent that the foregoing undertaking by the Indemnitor may be
unenforceable for any reason, the Indemnitor shall
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. The
indemnity provisions contained herein shall be in addition to any cause of
action or similar rights Indemnitor may have, and any liabilities the
Indemnitor or the Indemnitees may be subject to.
SECTION 11. GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION. All
disputes arising under this agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts, without regard
to principles of conflict of laws. The parties to this agreement will submit
all disputes arising under this agreement to arbitration in Boston, MA before a
single arbitrator of the American Arbitration Association (“AAA”). The arbitrator shall be selected by application of
the rules of the AAA, or by mutual agreement of the parties, except that
such arbitrator shall be an attorney admitted to practice law in Commonwealth
of Massachusetts. No party to this Agreement will challenge the jurisdiction or
venue provisions as provided in this section. No party to this agreement will
challenge the jurisdiction or venue provisions as provided in this section. Nothing
contained herein shall prevent the party from obtaining an injunction.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
21
SECTION 12. LEGAL EXPENSES; FEE SHARES AND MISCELLANEOUS EXPENSES.
Except as otherwise set forth in the Equity Line Transaction Documents, each
party shall pay the fees and expenses of its advisers, counsel, the accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance
of this Agreement. Any attorneys’ fees and expenses incurred by either the
Company or the Investor in connection with the preparation, negotiation,
execution and delivery of any amendments to
this Agreement or relating to the enforcement of the rights of any
party, after the occurrence of any breach of the terms of this Agreement by
another party or any default by another party in respect of the transactions
contemplated hereunder, shall be paid on demand by the party which breached the
Agreement and/or defaulted, as the case may be. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of any
Securities. The Company has paid fifteen thousand dollars ($15,000) for the
preparation of the Equity Line Transaction Documents. If the Company is not
DWAC eligible at the time of a Put Closing, there will be a $2,000 charge on
each Closing Date to cover costs associated with, but not limited to: deposit
costs, legal review fees and wire fees. If the Company is DWAC eligible at the
time of a Put Closing, there will be a $500 charge on each Closing Date.
SECTION 13. COUNTERPARTS. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original
signature.
SECTION 14. HEADINGS; SINGULAR/PLURAL. The headings of this Agreement
are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Whenever required by the context of this
Agreement, the singular shall include the plural and masculine shall include
the feminine.
SECTION 15. SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
SECTION 16. ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL
AGREEMENT between the Company and the Investor with respect to the terms and
conditions set forth herein, and, the terms of this Agreement may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the Parties. No provision of this Agreement may be amended other
than by an instrument in writing signed by the Company and the Investor, and no
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought. The execution and delivery of the
Equity Line Transaction Documents shall not alter the force and effect of any
other agreements between the Parties, and the obligations under those
agreements.
SECTION 17. NOTICES. Any notices or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered (A) upon receipt, when delivered
personally; (B) upon receipt, when sent by facsimile or email with the signed
document attached in PDF format (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party); or (C) one (1) day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
If to the Company:
NATCORE TECHNOLOGY, INC.
189 N. Water Street, Suite 700
Rochester, NY 14604
Telephone: (585) 286-9180
If to the Investor:
Dutchess
Opportunity Fund, II, LP
50 Commonwealth Avenue, Suite 2
Boston, MA 02116
Telephone: (617) 301-4700
Each party shall provide five (5) days prior written notice to the
other party of any change in address or facsimile number.
SECTION 18. NO ASSIGNMENT. This Agreement and any rights, agreements or
obligations hereunder may not be assigned, by operation of law, merger or
otherwise, and any purported assignment by a party without prior written
consent of the other party will be null and void and not binding on such other
party. Subject to the preceding sentence, all of the terms, agreements,
covenants, representations, warranties and conditions of this Agreement are binding upon, and inure to the benefit of and are
enforceable by, the parties and their respective successors and assigns.
SECTION 19. NO THIRD PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the parties hereto and is not for the benefit of, nor may
any provision hereof be enforced by, any other person, except that the Company
acknowledges that the rights of the Investor may be enforced by its general
partner.
SECTION 20. SURVIVAL. The indemnification provisions set forth in
Section 11, shall survive each of the Closings and the termination of this
Agreement.
SECTION 21. PUBLICITY. The Company and the Investor shall consult with
each other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and no party shall issue
any such press release or otherwise make
any such public statement without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed, except that no
prior consent shall be required if such disclosure is required by law, in which
such case the disclosing party shall provide the other party with prior notice
of such public statement. The Investor acknowledges that this Agreement and all
or part of the Equity Line Transaction Documents may be deemed to be “material
contracts” as that term is defined by Item 601(b)(10) of Regulation S-K, and
that the Company may therefore be required to file such documents as exhibits
to reports or registration statements filed under the 1933 Act or the 1934 Act.
The Investor acknowledges that this Agreement and all or part of the Equity
Line Transaction Documents may be deemed to be “material contracts” as that
term is defined by Subsection 1(1) of National Instrument 51-102 Continuous Disclosure, and that the Company may
therefore be required to file such documents as exhibits to reports or
registration statements filed under the National Instrument 51-102 Continuous
Disclosure. The Investor further agrees that the status of such documents and
materials as material contracts shall be determined solely by the Company, in
consultation with its counsel.
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
23
SECTION 22. FURTHER ASSURANCES. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
SECTION 23. NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party,
as the parties mutually agree that each has had a full and fair opportunity to
review this Agreement and seek the advice of counsel on it.
SECTION 24. REMEDIES. The Investor shall have all rights and remedies
set forth in this Agreement and the Registration Rights Agreement and all
rights and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which the Investor has by
law. Any person having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or
other security), to recover damages by reason of any default or breach of any
provision of this Agreement, including the recovery of reasonable attorneys
fees and costs, and to exercise all other rights granted by law.
SECTION 25. PAYMENT SET ASIDE. To the extent that the Company makes a
payment or payments to the Investor hereunder or under the Registration Rights
Agreement or the Investor enforces or exercises its rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by or are required to be refunded,
repaid or otherwise restored to the Company, a trustee, receiver or any other
person under any law (including, without limitation, any bankruptcy law, state
or federal law, common law or equitable cause of action), then to the extent of
any such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
SECTION 26. NON-DISCLOSURE OF NON-PUBLIC INFORMATION AFTER REGISTRATION
STATEMENT IS EFFECTIVE.
(A)
The Company shall not disclose non-public information concerning
the Company to the Investor, its advisors, or its representatives.
(B)
Nothing herein shall require the Company to disclose non-public
information to the Investor or its advisors or representatives, provided,
however, that notwithstanding anything herein to the contrary, the Company
will, as hereinabove provided, immediately notify the advisors and
representatives of the Investor and, if any, underwriters, of any event or the
existence of any circumstance (without any obligation to disclose the specific
event or circumstance) of which it becomes aware, constituting non-public
information (whether or not requested of the Company specifically or generally
during the course of due diligence by such persons or entities), which, if not
disclosed in the prospectus included in the Registration Statement would cause such prospectus to include
a material misstatement or to omit a material
NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
fact required to be stated therein in order to make the statements,
therein, in light of the circumstances in which they were made, not misleading.
Nothing contained in this Section 29 shall be construed to mean that such
persons or entities other than the Investor (without the written consent of the
Investor prior to disclosure of such information) may not obtain non-public
information in the course of conducting due diligence in accordance with the
terms of this Agreement and nothing herein shall prevent any such persons or
entities from notifying the Company of their opinion that based on such due
diligence by such persons or entities, that the Registration Statement contains
an untrue statement of material fact or omits a material fact required to be stated
in the Registration Statement or necessary to make the statements contained
therein, in light of the circumstances in which they were made, not misleading.
SECTION 27. PRICING OF COMMON STOCK. For purposes of this Agreement,
the VWAP of the Common Stock shall be as reported on a direct feed service.
SECTION 28. ACKNOWLEDGEMENTS OF THE PARTIES. Notwithstanding anything
in this Agreement to the contrary, the parties hereto hereby acknowledge and
agree to the following: (A) the Investor makes no representations or covenants
that it will not engage in trading in the securities of the Company, other than
the Investor will not sell short any of the Company’s common stock at any time
during a Pricing Period; (B) the Company shall, by 8:30 a.m. Eastern Time on the
fourth Trading Day following the date hereof, file a current report on Form 6-K
disclosing the material terms of the transactions contemplated hereby and in
the other Equity Line Transaction Documents; (C) the Company has not and shall
not provide material non-public information to the Investor unless prior
thereto the Investor shall have executed a written agreement regarding the
confidentiality and use of such information; and (D) the Company understands
and confirms that the Investor will be relying on the acknowledgements set
forth in clauses (A) through (C) above if the Investor effects any transactions
in the securities of the Company.
[Signature Page Follows]
NTCXF.INVESTMENT
AGREEMENT.AUGUST.2015
25
SIGNATURE PAGE OF INVESTMENT AGREEMENT
Your
signature on this Signature Page evidences your agreement to be bound by the
terms and conditions of the Investment Agreement as of the date first written
above.
The
undersigned signatory hereby certifies that he has read and understands the
Investment Agreement, and the representations made by the undersigned in this
Investment Agreement are true and accurate, and agrees to be bound by its
terms.
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DUTCHESS OPPORTUNITY FUND, II, L.P.
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By:
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Douglas H. Leighton
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Managing Member of:
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Dutchess Capital Management, II, LLC
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General Partner to:
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Dutchess Opportunity Fund, II, LP
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NATCORE TECHNOLOGY, INC.
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By:
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Charles R. Provini
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President
& CEO
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NTCXF.INVESTMENT
AGREEMENT.AUGUST 2015
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LIST OF EXHIBITS
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EXHIBIT A
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Registration
Rights Agreement
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EXHIBIT B
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U.S. Accredited Investor Certificate
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EXHIBIT C
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Put Notice
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EXHIBIT D
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Put
Settlement Sheet
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
(Attached)
A-1
EXHIBIT B
U.S. ACCREDITED INVESTOR
CERTIFICATE
B-1
EXHIBIT C
FORM OF PUT NOTICE
Date: ________________
RE: Put Notice Number ______
Dear Mr. Leighton:
This is to inform you that as of today, NATCORE TECHNOLOGY, INC. a British
Columbia corporation (the “
Company
”),
hereby elects to exercise its right pursuant to the Investment Agreement
entered into with Dutchess Opportunity Fund II, LP (“
Dutchess
”) to require
Dutchess to purchase shares of its common stock. The Company hereby certifies
that:
1. The undersigned is the duly elected _______________ of the Company.
2. There are no fundamental
changes to the information set forth in the Registration Statement which would
require the Company to file a post-effective amendment to the Registration
Statement.
3. The Company has performed in all material respects all covenants and
agreements to be performed by the Company and has complied in all
material respects with all obligations and conditions contained in this Agreement on or prior to the Put Notice
Date, and shall continue to perform in all material respects all covenants
and agreements to be performed by the Company through the applicable Put Date.
All conditions to the delivery of this Put Notice are satisfied as of the date
hereof.
4. The undersigned hereby
represents, warrants and covenants that it has made all filings required to be
made by it pursuant to applicable securities laws. All filings and other public
disclosures made by the Company, including, without limitation, all press
releases, analysts meetings and calls, etc. (collectively, the “
Public
Disclosures
”), have been reviewed and approved for release by the Company’s
attorneys and, if containing financial information, the Company’s independent
certified public accountants. None of the Company’s Public Disclosures contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
5. The amount of this put is up to $ __________________.
6. The Pricing Period runs from _______________ until _______________.
7. The current number of shares
issued and outstanding as of the Company are: _______________
8. The number of shares
currently available for resale pursuant to the Registration Statement on Form
F-1 for the Equity Line are: _______________.
9. The Company shall transfer to the Investor
_______________ Deposit Shares.
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NATCORE
TECHNOLOGY, INC.
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By:
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Name:
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Title:
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EXHIBIT D
FORM OF PUT SETTLEMENT SHEET
Date: _______________
RE: NATCORE, INC.
Dear _______________:
Pursuant to the Put given by NATCORE
TECHNOLOGY, INC. to Dutchess Opportunity Fund, II, LP on ____________
20__, we are now submitting the amount of common shares sold.
XXXXXX
The Remaining Deposit shares are ______________
.
Please sign below and we will have the funds wired to the Company.
Regards,
Douglas H. Leighton
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DATE
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PRICE
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Date of Day 1
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VWAP of Day 1
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Date of Day 2
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VWAP of Day 2
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Date of Day 3
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VWAP of Day 3
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Date of Day 4
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VWAP of Day 4
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Date of Day 5
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VWAP of Day 5
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LOWEST VWAP
IN PRICING PERIOD ______________________
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PUT AMOUNT __________________
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PURCHASE PRICE (NINETY-FIVE PERCENT
(95%)) _________________________
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AMOUNT OF
SHARES SOLD ________________________
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DEPOSIT
SHARES BALANCE FORWARD
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DEPOSIT
SHARES BALANCE
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The undersigned has completed this Put as of this ___ th day of ____________,
20__.
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NATCORE
TECHNOLOGY, INC.
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By:
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Name:
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Title:
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NTCXF.INVESTMENT AGREEMENT.AUGUST 2015
REGISTRATION RIGHTS AGREEMENT
Registration
Rights Agreement (the “
Agreement
”), dated as of August 21, 2015, by and
between Natcore Technology, Inc., a corporation organized under the laws of
British Columbia (the “
Company
”) and Dutchess Opportunity Fund, II, LP,
a Delaware Limited Partnership (the “
Investor
”).
Whereas
,
in connection with the Investment Agreement by and between the Company and the
Investor of this date (the “
Investment Agreement
”), the Company has
agreed to issue and sell to the Investor up to $5,000,000 in value payable in
shares of the Company’s Common Stock, no par value per share (the “
Common
Stock
”), to be purchased pursuant to the terms and subject to the
conditions set forth in the Investment Agreement; and
Whereas
,
to induce the Investor to execute and deliver the Investment Agreement, the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the “
1933 Act
”), and applicable
state securities laws, with respect to the shares of Common Stock issuable
pursuant to the Investment Agreement.
Whereas
,
this Agreement shall supersede all previous agreements and understandings
between the Parties with respect to the subject matter addressed herein.
Now
therefore, in consideration of the foregoing promises and the mutual covenants
contained hereinafter and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
Section 1.
DEFINITIONS
.
As used in
this Agreement, the following terms shall have the following meanings:
“
Execution
Date
” means the date of this Agreement set forth above.
“
Person
”
means a corporation, a limited liability company, an association, a
partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.
“
Principal
Market
” shall mean Canadian Securities Exchange, Toronto Stock Exchange,
TSX Venture Exchange, Nasdaq Capital Market, the NYSE Amex, the New York Stock
Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market or the
OTCQB, whichever is the principal market on which the Common Stock of the
Company is listed.
“
Register
,”
“
Registered
,” and “
Registration
” refer to the Registration
effected by preparing and filing one (1) or
more Registration Statements in compliance with the 1933 Act, or pursuant
to Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous basis (“
Rule 415
”), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United
States Securities and Exchange Commission (the “
SEC
”).
“
Registrable
Securities
” means (i) the shares of Common Stock issued or issuable
pursuant to the Investment Agreement, (ii) any shares of capital stock issued
or issuable with respect to such shares of Common Stock, if any, as a result of
any stock split, stock dividend, recapitalization, exchange or similar event or
otherwise, which have not been (x) included in the Registration Statement that
has been declared effective by the SEC, or (y) sold under circumstances meeting
all of the applicable conditions of Rule 144 (or any similar provision then in
force) under the 1933 Act.
RSSFF.REGISTRATION.RIGHTS.AUGUST.2015
“
Registration
Statement
” means the registration statement or statements of the Company
filed under the 1933 Act covering the Registrable Securities.
All
capitalized terms used in this Agreement and not otherwise defined herein shall
have the same meaning ascribed to them as in the Investment Agreement.
Section 2.
REGISTRATION
.
(a)
Subject to
Section 3(g)
, the
Company shall, within twenty-one (21) days after the date of this Agreement,
file with the SEC the Registration Statement or Registration Statements (as is
necessary) on Form F-1 (or, if such form is unavailable for such a
registration, on such other form as is available for such registration),
covering the resale of all of the Registrable Securities, which Registration
Statement(s) shall state that, in accordance with Rule 416 promulgated under
the 1933 Act, such Registration Statement also covers such indeterminate number of additional shares of Common Stock as
may become issuable upon stock splits, stock dividends or similar
transactions. The Company shall initially register for resale 10,000,000 shares
of Common Stock, except to the extent that the SEC requires the share amount to
be reduced as a condition of effectiveness.
Section 3.
RELATED OBLIGATIONS
.
At such
time as the Company is obligated to prepare and file the Registration Statement
with the SEC pursuant to
Section 2(a)
, the Company shall have the
following obligations with respect to the Registration Statement:
(a)
The Company shall use all
commercially reasonable efforts to cause such Registration Statement relating
to the Registrable Securities to become effective within ninety (90) days after
the date that the Registration Statement is filed and shall keep such
Registration Statement effective until the
earlier to occur of the date on which (A) the Investor shall have sold all
the Registrable Securities; or (B) the Company has no right to sell any
additional shares of Common Stock under the Investment Agreement (the “
Registration
Period
”). The Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading. The Company shall
use all commercially reasonable efforts to respond to all SEC comments within
ten (10) business days from receipt of such comments by the Company. The
Company shall use all commercially reasonable efforts to cause the Registration
Statement relating to the Registrable Securities to become effective no later
than five (5) business days after notice from the SEC that the Registration
Statement may be declared effective. The Investor agrees to provide all information which it is required by law to
provide to the Company, including the intended method of disposition of
the Registrable Securities, and the Company’s obligations set forth above shall
be conditioned on the receipt of such information.
(b)
The Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
2
used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by such Registration
Statement until such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition by the
Investor thereof as set forth in such Registration Statement. In the event the
number of shares of Common Stock covered by the Registration Statement filed
pursuant to this Agreement is at any time insufficient to cover all of the
Registrable Securities, the Company shall amend such Registration Statement, or
file a new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover all of the Registrable Securities, in each
case, as soon as practicable, but in any event within fifty (50) calendar days
after the necessity therefor arises (based on the then Purchase Price of the
Common Stock and other relevant factors on which the Company reasonably elects
to rely), assuming the Company has sufficient authorized shares at that time,
and if it does not, within fifty (50) calendar days after such shares are
authorized. The Company shall use commercially reasonable efforts to cause such amendment and/or new Registration Statement
to become effective as soon as practicable following the filing thereof.
(c)
The Company shall make
available to the Investor whose Registrable Securities are included in any
Registration Statement and its legal counsel without charge (i) if requested by the Investor, promptly after the same is
prepared and filed with the SEC at least one (1) copy of such
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits, the prospectus included in such Registration Statement (including
each preliminary prospectus) and, with regards
to such Registration Statement(s), any correspondence by or on behalf of the
Company to the SEC or the staff of the SEC and any correspondence from
the SEC or the staff of the SEC to the Company or its representatives; and (ii)
upon the effectiveness of any Registration Statement,
the Company shall make available copies of the prospectus, via EDGAR, included
in such Registration Statement and all amendments and supplements
thereto.
(d)
The Company shall use commercially reasonable efforts to (i) register
and qualify the Registrable Securities covered by the Registration
Statement under such other securities or “blue sky” laws of such states in the
United States as the Investor reasonably requests ; (ii) prepare and file in
those jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period; (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this
Section 3(d)
, or (y)
subject itself to general taxation in any such jurisdiction. The Company shall
promptly notify the Investor who holds Registrable Securities of the receipt by
the Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the
securities or “blue sky” laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for
such purpose.
(e)
As promptly as
practicable after becoming aware of such event, the Company shall notify the
Investor in writing of the happening of any event as a result of which the
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
3
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(“Registration Default”) and use all diligent efforts to promptly prepare a
supplement or amendment to such Registration Statement and take any other
necessary steps to cure the Registration Default (which, if such Registration
Statement is on Form S-3, may consist of a document to be filed by the Company
with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as
defined below) and to be incorporated by reference in the prospectus) to
correct such untrue statement or omission, and make available copies of such
supplement or amendment to the Investor. The Company shall also promptly notify
the Investor (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when the Registration Statement or
any post-effective amendment has become effective; (ii) of any request by the
SEC for amendments or supplements to the Registration Statement or related
prospectus or related information, (iii) of the Company’s reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate, (iv) in the event the Registration Statement is no longer
effective, or (v) if the Registration Statement is stale as a result of the
Company’s failure to timely file its financials or otherwise. If a Registration
Default occurs during the period commencing on the Put Notice Date and ending
on the Closing Date, the Company acknowledges that its failure to cure such a
Registration Default within ten (10) business days will cause the Investor to
suffer damages in an amount that will be difficult to ascertain.
(f)
The Company shall use all
commercially reasonable efforts to prevent the issuance of any stop order or
other suspension of effectiveness of the Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale
in any jurisdiction and, if such an order or suspension is issued, to obtain
the withdrawal of such order or suspension at the earliest possible moment and
to notify the Investor holding Registrable Securities being sold of the
issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding concerning the
effectiveness of the Registration Statement.
(g)
The Company shall permit
the Investor and one (1) legal counsel, designated by the Investor, to review
and comment upon the Registration Statement and all amendments and supplements
thereto at least one (1) calendar day prior to their filing with the SEC.
However, any postponement of a filing of a Registration Statement or any
postponement of a request for acceleration or any postponement of the effective
date or effectiveness of a Registration Statement by written request of the
Investor (collectively, the “Investor’s Delay”) shall not act to trigger any
penalty of any kind, or any cash amount due or any in-kind amount due the
Investor from the Company under any and all agreements of any nature or kind
between the Company and the Investor. The event(s) of an Investor’s Delay shall
act to suspend all obligations of any kind or nature of the Company under any
and all agreements of any nature or kind between the Company and the Investor.
(h)
The Company shall hold in confidence
and not make any disclosure of information concerning the Investor unless (i)
disclosure of such information is necessary to comply with securities laws in
any jurisdiction to which the Company is subject, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court or
governmental body of competent jurisdiction, (iv) such information has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement, or (v) the Investor has
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
4
consented to such disclosure. The Company agrees that it shall, upon
learning that disclosure of such information concerning the Investor is sought
in or by a court or governmental body of competent jurisdiction or through
other means, give prompt written notice to the Investor and allow the Investor,
at the Investor’s expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order covering such information.
(i)
The Company shall use all commercially
reasonable efforts to maintain designation and quotation of all the Registrable
Securities covered by any Registration Statement on the Principal Market. The
Company shall pay all fees and expenses in connection with satisfying its
obligation under this
Section 3(i)
.
(j)
The Company shall provide a transfer
agent for all the Registrable Securities not later than the effective date of
the first Registration Statement filed pursuant hereto.
(k)
If requested by the Investor, the
Company shall (i) as soon as reasonably practical incorporate in a prospectus
supplement or post-effective amendment such information as the Investor
reasonably determines should be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the offering
of the Registrable Securities to be sold in such offering; (ii) make all
required filings of such prospectus supplement or post-effective amendment as
soon as reasonably possible after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) supplement or make amendments to any Registration Statement if reasonably
requested by the Investor.
(l)
The Company shall use all commercially
reasonable efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to facilitate
the disposition of such Registrable Securities.
(m)
The Company shall otherwise use all
commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.
(n)
Within one (1) business day after the
Registration Statement which includes Registrable Securities is declared
effective by the SEC, the Company shall deliver to the transfer agent for such
Registrable Securities, with copies to the Investor, a written notification
that such Registration Statement has been declared effective by the SEC.
Section 4.
OBLIGATIONS OF THE INVESTOR
.
(a)
At least five (5) calendar days prior to the first anticipated filing date of
the Registration Statement the Company shall notify the Investor in writing of
the information the Company requires from the Investor for the Registration
Statement. It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities and the Investor agrees to furnish to the Company that
information regarding itself, the Registrable Securities and the intended
method of disposition of the Registrable Securities as shall reasonably be
required to effect the registration of the resale of such Registrable
Securities and the Investor shall execute such documents in connection with
such registration as the Company may reasonably request. The Investor covenants
and agrees that, in connection with any sale of Registrable Securities by it
pursuant to the Registration Statement, it shall comply with the “Plan of
Distribution” section of the then current prospectus relating to such
Registration Statement.
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
5
(b)
The Investor, by its acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder.
(c)
The Investor agrees that, upon receipt of written
notice from the Company of the happening of
any event of the kind described in
Section
3(f)
or the first sentence of
Section
3(e)
, the Investor will immediately discontinue disposition
of Registrable Securities pursuant to any Registration
Statement(s)
covering the resale of such
Registrable Securities until the Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or the first
sentence of
Section 3(e)
.
Section 5.
EXPENSES OF REGISTRATION
.
Each party shall pay the fees and expenses of its advisers, counsel,
the accountants and other experts, if any, and all other expenses incurred by
such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. All reasonable expenses, other than underwriting
discounts and commissions and other than as set forth in the Investment
Agreement or herein, incurred in connection with registrations including
comments, filings or qualifications pursuant to Section 2 and Section 3,
including, without limitation, all registration, listing and qualifications
fees, printing and accounting fees, and fees and disbursements of counsel for
the Company shall be paid by the Company.
Section 6.
INDEMNIFICATION
.
In the
event any Registrable Securities are included in the Registration Statement
under this Agreement:
(a)
To the fullest extent permitted by law, the Company, under this Agreement,
will, and hereby does, indemnify, hold harmless and defend the Investor, the
directors, officers, partners, employees, counsel, agents, representatives of, and
each Person, if any, who controls, the Investor within the meaning of the 1933
Act or the Securities Exchange Act of 1934, as amended (the “
1934 Act
”)
(each, an “
Indemnified Person
”), against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, attorneys’ fees, amounts paid in settlement or expenses,
joint or several (collectively, “
Claims
”), incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC,
whether or not an indemnified party is or may be a party thereto (“
Indemnified
Damages
”), to which any of them may become subject insofar as such Claims
(or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in the Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which the Investor has requested in writing that the
Company register or qualify the Shares (“
Blue Sky Filing
”), or the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which the statements therein were made, not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the final prospectus for the offer of the Registrable Securities
(as amended or supplemented, if the Company files any
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
6
amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to the Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “
Violations
”). Subject to
the restrictions set forth in
Section 6(c)
the Company shall reimburse
each Indemnified Person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this
Section 6(a)
:
(i) shall not apply to a Claim arising out of or based upon a Violation which
is due to the inclusion in the Registration Statement of the information
furnished to the Company by any Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (ii) shall not be available to the
extent such Claim is based on (A) a failure of the Investor to deliver or to
cause to be delivered the prospectus made available by the Company; (B) the
Indemnified Person’s use of an incorrect prospectus despite being promptly
advised in advance by the Company in
writing not to use such incorrect prospectus; (C) the manner of sale of
the Registrable Securities by the Investor or of the Investor’s failure to
register as a dealer under applicable securities laws; (D) any omission of the
Investor to notify the Company of any material fact that should be stated in
the Registration Statement or prospectus relating to the Investor or the manner
of sale; (E) any act or omission of the Investor constituting a “disqualifying
event” as defined under Rule 506(b) through (e) of Regulation D of the 1933 Act
as amended and (F) any amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the resale of the Registrable Securities
by the Investor pursuant to the Registration Statement and shall not be
available to the extent the Claim arises out of the gross negligence or willful
misconduct of the Indemnified Person.
(b)
In connection with any Registration Statement in which the Investor is
participating, the Investor agrees to severally and jointly indemnify, hold
harmless and defend, to the same extent and in the same manner as is set forth
in
Section 6(a)
, the Company, each of its directors, officers,
employees, counsel, agents and representatives and each Person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act (each,
an “
Indemnified Party
”), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent, that such Violation is due to (i) the inclusion
in the Registration Statement of the written information furnished to
the Company by the Investor expressly for use in connection with such Registration Statement; (ii) a failure of the
Investor to deliver or to cause to be delivered the prospectus made
available by the Company or the Investor’s use of an incorrect prospectus
despite being timely advised by the Company in writing not to use such
incorrect prospectus; (iii) the Investor’s failure to register as a dealer under
applicable securities laws; (iv) the Investor’s gross negligence or willful
misconduct; or (v) any omission of the Investor to notify the Company of any
material fact that should be stated in the Registration Statement or prospectus
relating to the Investor or the manner of sale; and, subject to
Section 6(c)
,
the Investor will reimburse any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Claim; provided,
however, that the
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
7
indemnity agreement contained in this
Section 6(b)
and the
agreement with respect to contribution contained in
Section 7
shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Investor, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the resale of the Registrable Securities by the Investor
pursuant to the Registration Statement.
(c)
Promptly after receipt by an Indemnified Person or
Indemnified Party under this
Section 6
of notice of the commencement of
any action or proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under
this
Section 6
, deliver to the indemnifying party a written notice of
the commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party
and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party, as the case
may be, shall have the right to retain its own counsel with the fees and
expenses to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the Indemnified Person or Indemnified Party, the
representation by counsel of the Indemnified Person or Indemnified Party and
the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and
any other party represented by such counsel in such proceeding. The
indemnifying party shall pay for only one (1) separate legal counsel for the
Indemnified Persons or the Indemnified Parties, as applicable, and such counsel
shall be selected by the Investor, if the Investor is entitled to
indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action
or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of
any action, claim or proceeding affected without its written consent; provided,
however, that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party
or Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall not relieve such indemnifying party
of any liability to the Indemnified Person or Indemnified Party under this
Section
6
, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action.
(d)
The indemnity agreements contained herein
shall be in addition to (i) any cause of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
8
Section 7.
CONTRIBUTION
.
To
the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under
Section 6
to the fullest extent permitted by law; provided, however, that: (i) no contribution
shall be made under circumstances where the maker would not have been
liable for indemnification under the fault standards set forth in
Section 6
;
(ii) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (iii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
Section 8.
NO ASSIGNMENT OF REGISTRATION
RIGHTS
.
This
Agreement and the rights, agreements or obligations hereunder may not be
assigned, by operation of law, merger or otherwise, and without the prior
written consent of the other party hereto, and any purported assignment by a
party without prior written consent of the other party will be null and void
and not binding on such other party. Subject to the preceding sentence, all of
the terms, agreements, covenants, representations, warranties and conditions of
this Agreement are binding upon, and inure to the benefit of and are
enforceable by, the parties and their respective successors and assigns.
Section 9.
AMENDMENT OF REGISTRATION
RIGHTS
.
The
provisions of this Agreement may be amended only with the written consent of
the Company and the Investor.
Section 10.
MISCELLANEOUS
.
(a)
Any notices or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile or email with
the signed document attached in PDF format (provided a confirmation of
transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
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If to the Company:
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NATCORE TECHNOLOGY, INC.
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189 N. Water
Street,
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Rochester, NY 14604-1163
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(585)
286-9180
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If to the Investor:
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Dutchess Opportunity Fund, II, LP
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50 Commonwealth Ave, Suite 2
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Boston, MA
02116
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Telephone: (617) 301-4700
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NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
9
Each party
shall provide five (5) business days prior notice to the other party of any
change in address, phone number, facsimile number ore-mail address.
(b)
Failure of any party to exercise any right
or remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
(c)
This Agreement and the Investment Agreement constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
(d)
This Agreement and the Investment Agreement supersede
all prior agreements and understandings among the parties hereto with respect
to the subject matter hereof and thereof.
(e)
The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
Whenever required by the context of this Agreement, the singular shall include
the plural and masculine shall include the feminine. This Agreement shall not
be construed as if it had been prepared by one of the parties, but rather as if
all the parties had prepared the same.
(f)
This Agreement may be executed in two or more
identical counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile
transmission or by e-mail delivery of a PDF format of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
(g)
Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(h)
In case any provision of this Agreement is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Agreement will not in any way be affected
or impaired thereby.
Section 11.
GOVERNING LAW; DISPUTES
SUBMITTED TO ARBITRATION
.
All
disputes arising under this agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts, without regard
to principles of conflict of laws. The parties to this agreement will submit
all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
(“
AAA
”). The arbitrator shall be selected by application of the rules of
the AAA, or by mutual agreement of the parties, except that such arbitrator
shall be an attorney admitted to practice law in the Commonwealth of
Massachusetts. No party to this agreement will challenge the jurisdiction or
venue provisions as provided in this section. Nothing contained herein shall
prevent the party from obtaining an injunction.
NTCXF.REGISTRATION.RIGHTS.AUGUST.2015
10
SIGNATURE PAGE OF REGISTRATION RIGHTS AGREEMENT
Your
signature on this Signature Page evidences your agreement to be bound by the terms and conditions of the Investment Agreement
and the Registration Rights Agreement as of the date first written
above.
The
undersigned signatory hereby certifies that he has read and understands the
Registration Rights Agreement, and the representations made by the undersigned
in this Registration Rights Agreement are true and accurate, and agrees to be
bound by its terms.
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DUTCHESS OPPORTUNITY FUND, II, L.P.
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By:
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Douglas H. Leighton
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Managing Member of:
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Dutchess Capital Management, II, LLC
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General Partner to:
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Dutchess Opportunity Fund, II, LP
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NATCORE TECHNOLOGY, INC.
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By:
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Charles R. Provini
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President
& CEO
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Signature Page
to Registration Rights Agreement
SECOND
AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT
(this “Second Amendment”), dated as of June 26, 2015 (the “Effective Date”), is
entered into as by and between
EASTMAN KODAK
COMPANY
, a New Jersey Corporation (“Landlord”) and
NATCORE TECHNOLOGY, INC.,
a Delaware
corporation (“Tenant”).
WITNESSETH:
WHEREAS,
pursuant to that certain Lease
Agreement between Landlord and Tenant dated as of July 18, 2011 (the “Original
Lease”) and amended by that certain First Amendment to Lease Agreement dated as
of March 1, 2013 (the “First Amendment”) (collectively, the “Lease”), whereby
Landlord leased to Tenant approximately 19,376 usable SF of space located in
that certain building known as Building 308 (the “Building”), located at the
manufacturing plant known as Eastman Business Park (“EBP”), in the City of
Rochester, County of Monroe, and the State of New York; and
WHEREAS,
Landlord and Tenant now desire to
modify and amend the Lease in accordance with the terms hereinafter provided:
and
NOW,
THEREFORE,
in consideration of the foregoing and for other
good and valuable consideration and of the mutual agreements hereinafter set
forth, the receipt and sufficiency of which are hereby acknowledged, Landlord
and Tenant stipulate, covenant and agree as follows:
1.
TERM.
The Lease Term is hereby extended
until the earlier of (i) midnight on June 30, 2017 or (ii) the earlier
termination or cancellation of the Lease. All references to the Expiration Date
in the Original Lease and First Amendment shall mean the Expiration Date as
extended pursuant to this Paragraph 1.
2.
ADDRESS FOR PAYMENT OF RENT.
Tenant shall
send all payments of Rent to Landlord at the following address:
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Eastman Kodak Company
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343 State Street, Rochester, New York 14650-0207
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Attention: Lease Administration & Field
Operations
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3.
NOTICES AND CONSENTS.
Section 21 of the Original Lease is
hereby amended by deleting Lessor’s notification addresses and adding, in its stead,
the following:
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If to Landlord:
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Eastman Kodak Company
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343 State Street
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Rochester, New York 14650-0207
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Attn: Lease Management Office
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With a copy to:
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Eastman Kodak Company
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343 State Street
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Rochester, New York 14650-0224
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Attn: General Counsel
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1
4.
SERVICES.
Landlord shall have no
obligation to provide pressure vessel safety services to the Premises.
5.
RENT.
Beginning on July 1,
2015, the Base Rent set forth in Section 4 of the First Amendment to Lease
shall increase to
ONE HUNDRED FIVE THOUSAND
TWO HUNDRED ELEVEN DOLLARS AND 68/100 ($105,211.68)
per year,
payable in equal monthly installments of
EIGHT
THOUSAND SEVEN HUNDRED SIXTY SEVEN DOLLARS AND 64/100 ($8,767.64)
.
6.
RATIFICATION.
Except as
modified herein, all other terms and conditions of the Lease shall remain
unchanged and in full force and effect and are hereby ratified and confirmed by
the parties hereto.
7.
CAPITALIZATION.
Except as
expressly provided herein, all capitalized terms used herein shall have the
meanings ascribed to them in the Lease. Any inconsistencies or conflicts
between the terms and provisions of the Lease and the terms and provisions of
this Second Amendment shall be resolved in favor of the terms and provisions of
this Second Amendment.
8.
MODIFICATION.
This Second
Amendment shall not be modified except in writing signed by both parties.
9.
COUNTERPARTS.
This Second
Amendment may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Second Amendment and all of which, when
taken together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF,
the undersigned have
executed this Second Amendment effective as of the Effective Date.
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LANDLORD:
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EASTMAN KODAK COMPANY
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By:
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Name:
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CBALLS
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Title:
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DIRECTOR REAL ESTATE
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TENANT:
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NATCORE
TECHNOLOGY, INC.
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By:
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Name:
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THEODORE JUBIL
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Title:
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DIRECTOR of OPERATION
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2
CONSENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration
Statement on Form F-1 of our reports dated April 20, 2015, April 30, 2014 and
April 29, 2013 relating to the consolidated financial statements of Natcore
Technology Inc. and to the reference to our firm under the caption “Experts”.
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DALE MATHESON
CARR-HILTON LABONTE LLP
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Chartered Professional
Accountants
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Vancouver,
Canada
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September 24, 2015
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45 Broadway, Suite 610
New
York, New York 10006
T
ELEPHONE
212.732.4029
F
ACSIMILE
646.607.1998
September 24, 2015
I HEREBY CONSENT to the
inclusion of my name in connection with the Form F-1 Registration Statement
filed with the Securities and Exchange Commission as attorney for the
registrant, Natcore Technologies, Inc.
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Very truly yours,
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L
O
P
RESTI
L
AW
G
ROUP
,
P.C.
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By:
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Marc X. LoPresti, Esq.
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UNANIMOUS
WRITTEN CONSENT OF DIRECTORS
OF
NATCORE TECHNOLOGY, INC.
The
undersigned persons, being ail the members of the Board of Directors of Natcore
Technology, Inc., a corporation
organized and existing under the laws of the Province of British Columbia (the
“Corporation”), sign this instrument
in lieu of holding a special meeting of the Board of Directors (the “‘Board’’)
to evidence their consent to the
resolutions set forth below, with the same force and effect as if such
resolutions were adopted at a duly called meeting of the Board.
WHEREAS,
that the employment contract for the Corporation’s current President and Chief
Executive Officer, Charles R. Provini (“Employee”) expires on May 8,
2012; and
WHEREAS,
the Board of Directors has determined to continue Employee’s employment by the
Company pursuant to the terms and
conditions of the Employment Agreement attached hereto as Exhibit A (the
“Employment Agreement”); and
WHEREAS,
the Compensation Committee of the Board has approved the attached Employment Agreement, and Employee has informed that Board
that the terms and conditions set forth therein are acceptable to Employee;
NOW,
THEREFORE, BE IT:
RESOLVED,
that the Employment Agreement, as attached hereto as Exhibit A, is hereby
approved and adopted in the form reviewed by the Board; and be it
further
RESOLVED,
that the proper officers of the Corporation be, and hereby are, authorized,
empowered, and directed to prepare, enter into, execute, and deliver the
Employment Agreement to Charles R. Provini for his execution thereof; and be it
further
GENERAL
AUTHORIZATION AND RATIFICATION
RESOLVED,
that the execution by any of said officers, of any document authorized by the
foregoing resolutions or any documents executed in the accomplishment of any
action or actions so authorized, is (or shall become upon delivery) the enforceable and binding act and obligation of
the Corporation, without the necessity of the signature or attestation of
the corporate seal; and be it further
RESOLVED,
that all acts, transactions, or agreements undertaken prior to the adoption of
these resolutions by any of the
officers or representatives of the Corporation in its name in connection with
the foregoing matters are hereby ratified, confirmed and adopted by the
Corporation; and be it further
RESOLVED,
that this Written Consent is ordered added to the Minute Book of the
Corporation.
EXECUTED
this 4th day of April 2012.
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Brien F. Lundin, Director
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John Meekison, Director
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Jhon Calhoun, Director
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EMPLOYMENT AGREEMENT
This
Employment Agreement (this “
Agreement
”) is entered into on April 5, 2012
(the “
Effective Date
”) by and between
NATCORE
TECHNOLOGY INC.,
(hereinafter the “Company”), a company incorporated
pursuant to the laws of the Province of British Columbia and having an office located at located at 87
Maple Avenue, Red Bank, New Jersey, USA, 07701 (the “
Company
”),
and
Charles R. Provini
, a resident
of the State of New Jersey residing at 47 Club Way, Red Bank, New Jersey 07701
(“
Executive
”).
WHEREAS,
the Company desires to employ Executive and Executive wishes to provide his
services to the Company, subject to the terms and conditions set forth in this
Agreement.
In
consideration of the foregoing premises and the respective agreements of the
Company and Executive set
forth below, the Company and Executive, intending to be legally bound, agree as
follows:
1.
Employment
. Subject to all the terms and conditions of
this Agreement, Executive’s period of employment under this Agreement shall be
the period commencing on the Effective Date and ending on the second
anniversary of the Effective Date (the “
Term
”), unless the Executive’s
employment terminates earlier in accordance with Section 11 hereof.
2.
Position
and Duties
.
(a)
Position with the
Company
. While Executive is
employed by the Company during the Term, Executive will serve as President and
Chief Executive Officer, and shall perform such duties and responsibilities as
the Board of Directors of the Company (the “Board”)
will assign to him from time to time. In the capacity of President and Chief
Executive Officer, Executive shall have the functions, duties and
responsibilities customarily associated with the positions Executive holds,
subject to instructions and restrictions imposed by the Bylaws of the Company,
the Board of Directors, or applicable law or regulation.
(b)
Performance of Duties
and Responsibilities
.
Executive will serve the Company faithfully and to the best of his ability and
will devote his full time, attention and efforts to the business of the Company
during his employment. Executive will report to the Board of Directors of the Company or to such other party that may be
designated by the Board. During his employment hereunder, Executive will
not accept other employment or engage in other material business activity,
except as approved in writing by the Board. Executive hereby represents and confirms that he is under no
contractual or legal commitments that would prevent him from fulfilling
his duties and responsibilities as set forth in this Agreement.
3.
Compensation
.
(a)
Base Salary
. While Executive is employed by the Company during the Term, the Company will pay to Executive an annual
base salary of $275,000, less deductions and withholdings, which base
salary will be paid in accordance with the Company’s normal payroll policies
and procedures. During each year after the first year of Executive’s employment
hereunder, the Board will review and may
increase (but not reduce) Executive’s base salary in its sole discretion;
provided, however, that the Company may reduce Executive’s base salary if such reduction
is part of a general, pro-rata reduction in the base salaries of all executives
of the Company implemented as a result of
financial problems experienced by the Company.
(b)
Bonus
. While Executive is employed by the Company
during the Term, Executive will be entitled
to receive bonuses pursuant to any bonus plan approved by the Board.
(c)
Employee
Benefits
.
While Executive is employed by the Company during the Term, Executive will be entitled to
participate in all employee benefit plans and programs of the Company to the
extent that Executive meets the eligibility requirements for each individual
plan or program. The Company provides no assurance as to the adoption or continuance
of any particular employee benefit plan or program, and Executive’s
participation in any such plan or program will be subject to the provisions,
rules and regulations applicable thereto.
(d)
Expenses
. While Executive is employed by the Company
during the Term, the Company will reimburse Executive for all reasonable and
necessary out-of-pocket business, travel and entertainment expenses incurred by
Executive in the performance of the duties and responsibilities hereunder,
subject to the Company’s normal policies and procedures for expense
verification and documentation.
(e)
Vacation
. While Executive is employed by the Company
during the Term, Executive will receive 15
business days paid vacation time off, such time to be taken with the
approval of the Board, at such times so as not to disrupt the operations of the
Company.
(f)
Options
. Executive shall also be entitled to receive
options to purchase up to Five Hundred Thousand (500,000) shares of the Company’s
common stock (the “Stock Options”) as follows: Executive shall receive Stock
Options to purchase One Hundred Thousand (100,000) shares of the Company’s
common stock upon the Company’s receipt of One Million Dollars ($1,000,000) of
net revenue during the Term of Executive’s employment, and Executive shall
receive Stock Options to purchase One Hundred Thousand (100,000) shares of the
Company’s common stock for each additional One Million Dollars ($1,000,000) of
net revenue received by the Company during the Term of Executive’s employment
(up to a maximum of Five Hundred Thousand (500,000) shares of the Company’s
common stock). Options granted under this incentive plan will be priced at the
lowest possible strike price approved by the Toronto Venture Exchange at the
time of the grant.
4.
Affiliated
Entities
.
As used in this Agreement, “
Affiliates
”
includes the Company and each
corporation, partnership, or other entity which controls the Company, is
controlled by the Company, or is under common control with the Company (in each
case “
control
” meaning the direct
or indirect ownership of 50% or more of all outstanding equity interests).
2
5.
Confidential
Information
. Except as
permitted by the Company, Executive will not at any time divulge, furnish or
make accessible to anyone or use in any way other than in the ordinary course
of the business of the Company or its Affiliates, any confidential, proprietary or secret knowledge or information of the
Company or its Affiliates that Executive has acquired or will acquire
about the Company or its Affiliates, whether developed by himself or by others,
concerning (i) any trade secrets, (ii) any confidential, proprietary or secret
designs, programs, processes, formulae, plans, devices or material (whether or
not patented or patentable) directly or
indirectly useful in any aspect of the business of the Company or of its
Affiliates, (iii) any customer or supplier lists, (iv) any confidential,
proprietary or secret development or research work, (v) any strategic or other
business, marketing or sales plans, (vi) any financial data or plans, or (viii)
any other confidential or proprietary information or secret aspects of the
business of the Company or of its Affiliates. Executive acknowledges that the
above-described knowledge and information constitutes a unique and valuable
asset of the Company and represents a
substantial investment of time and expense by the Company, and that any
disclosure or other use of such knowledge or information other than for the
sole benefit of the Company or its Affiliates would be wrongful and would cause
irreparable harm to the Company. Executive
will refrain from intentionally committing any acts that would materially reduce
the value of such knowledge or information to the Company or its Affiliates.
The foregoing obligations of confidentiality shall not apply to any knowledge
or information that (i) is now or subsequently becomes generally publicly
known, other than as a direct or indirect result
of the breach of this Agreement, (ii) is independently made available to
Executive in good faith by a third party who has not violated a
confidential relationship with the Company or its Affiliates, or (iii) is
required to be disclosed by law or legal process. Executive understands and
agrees that his obligations under this Agreement to maintain the
confidentiality of the Company’s confidential information are in addition to
any obligations of Executive under applicable statutory or common law.
6.
Ventures
. If, during Executive’s employment with the
Company, Executive is engaged in or provides input into the planning or
implementing of any project, program or
venture involving the Company, all rights in such project, program or venture
belong to the Company. Except as approved in writing by the Board of
Directors of the Company, Executive will
not be entitled to any interest in any such project, program or venture or to
any commission, finder’s fee or other compensation in connection
therewith. Executive will have no interest,
direct or indirect, in any customer or supplier that conducts business with the
Company.
7.
Noncompetition
and Nonsolicitation Covenants
.
(a)
Agreement Not to Compete
. During Executive’s employment with the Company
or any Affiliates and for a period of 12 consecutive months from and after the
termination of Executive’s employment, whether such termination is with or
without cause, or whether such termination is at the instance of Executive or
the Company, Executive will not, directly or indirectly, engage in any
business, in the State of New Jersey or in any other location in which the
Company is then doing business, for the development, sale, service, or
distribution of process or equipment for the manufacture of solar panels (or
any component thereof) or other alternative energy technology products or any
similar business that is competitive with the businesses of the Company or its
Affiliates, including without limitation as a proprietor, principal, agent, partner,
officer, director, stockholder, employee, member of any association, consultant
or otherwise. Ownership by Executive, as a passive investment, of less than
2.5% of the outstanding shares of capital
stock of any corporation listed on a national securities exchange or
publicly traded in the over-the-counter market shall not constitute a breach of
this Section 7(a).
3
(b)
Agreement Not to Hire
. During Executive’s employment with the
Company or any Affiliates and for a period of 12 consecutive months from and
after the termination of Executive’s employment, whether such termination is
with or without cause, or whether such termination is at the instance of
Executive or the Company, Executive will not, directly
or indirectly, hire, engage or solicit any person who is then an employee or
contractor of the Company or who was an employee of the Company at any
time during the six-month period immediately preceding Executive’s termination
of employment, in any manner or capacity, including without limitation as a
proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association,
consultant or otherwise.
(c)
Agreement Not to
Solicit
. During Executive’s
employment with the Company or any Affiliates and for a period of 12
consecutive months from and after the termination of executive’s employment,
whether such termination is with or without cause, or whether such termination
is at the instance of Executive or the Company, Executive will not, directly or indirectly, solicit, request, advise
or induce any current or potential customer, supplier or other business
contact of the Company to cancel, curtail or otherwise adversely change its
relationship with the Company, in any manner or capacity, including without
limitation as a proprietor, principal, agent, partner, officer, director,
stockholder, employee, member of any association, consultant or otherwise.
(d)
Acknowledgment
. Executive hereby acknowledges that the
provisions of this Section 7 are reasonable and necessary to protect the
legitimate interests of the Company and that any violation of this Section 7 by
Executive will cause substantial and irreparable harm to the Company to such an
extent that monetary damages alone would be an inadequate remedy therefor.
(e)
Blue Pencil Doctrine
. If the duration of, the scope of or any
business activity covered by any provision of this Section 7 is in excess of
what is determined to be valid and enforceable under applicable law, such
provision will be construed to cover only that duration, scope or activity that
is determined to be valid and enforceable. Executive hereby acknowledges that this Section 7 will be given
the construction which renders its provisions valid and enforceable to
the maximum extent, not exceeding its express terms, possible under applicable
law.
4
8.
Patents, Copyrights and Related Matters
.
(a)
Disclosure and Assignment
. Executive must immediately disclose to the
Company any and all improvements and inventions that Executive may conceive
and/or reduce to practice individually or jointly or commonly with others while
he is employed with the Company or any of its Affiliates with respect to (i)
any methods, processes or apparatus concerned with the development, use or
production of any type of products, goods or services sold or used by the
Company or its Affiliates, and (ii) any type of products, goods or services
sold or used by the Company or its Affiliates. Any such improvements and
inventions will be the sole and exclusive
property of the Company and Executive shall immediately assign, transfer and
set over to the Company his entire right, title and interest in and to any and
all of such improvement and inventions as are specified in this Section 8(a),
and in and to any and all applications for letters patent that may be filed on
such inventions, and in and to any and all letters patent that may issue, or be
issued, upon such applications. In connection therewith and for no additional compensation therefor, but at
no expense to Executive, Executive will sign any and all instruments
deemed necessary by the Company for:
(i)
the filing and prosecution of any applications for letters patent of the United
States or of any foreign country that the Company may desire to file upon such
inventions as are specified in this Section 8(a);
(ii)
the filing and prosecution of any divisional, continuation, continuation-in-part or reissue applications that the Company
may desire to file upon such applications for letters patent; and
(iii)
the reviving, re-examining or renewing of any of such applications for letters
patent.
This
Section 8(a) will not apply to any invention for which no equipment, supplies,
facilities, confidential, proprietary or
secret knowledge or information, or other trade secret information of the
Company was used and that was developed entirely on Executive’s own time, and
(i) that does not relate (A) directly to the business of the Company, or (B) to
the Company’s actual or demonstrably
anticipated research or development, or (ii) that does not result from any work
performed by Executive for the Company.
(b)
Copyrightable Material
. All right, title and interest in all
copyrightable material that Executive shall conceive or originate individually
or jointly or commonly with others, and that arise in connection with
Executive’s services hereunder or knowledge of confidential and proprietary
information of the Company, will be the property of the Company and are hereby
assigned by Executive to the Company of its Affiliates, along with ownership of
any and all copyrights in the copyrightable material. Where applicable, works
of authorship created by Executive relating to the Company or its Affiliates
and arising out of Executive’s knowledge of confidential and proprietary
information of the Company shall be considered “works made for hire,” as
defined in the U.S. Copyright Act, as amended.
9.
Return of Records and Property
. Upon termination of Executive’s
employment or at any time upon the Company’s request, Executive will promptly
deliver to the Company any and all Company and Affiliate records and any and
all Company and Affiliate property in his possession or under his control,
including without limitation manuals, books, blank forms, documents, letters,
memoranda, notes, notebooks, reports, printouts, computer disks, computer
tapes, source codes, data, tables or calculations and all copies thereof,
documents that in whole or in part contain any trade secrets or confidential,
proprietary or other secret information of
the Company or its Affiliates and all copies thereof, and keys, access cards, access
codes, passwords, credit cards, personal computers, telephones and other
electronic equipment belonging to the Company or its Affiliates.
5
10.
Remedies
. Executive acknowledges that it would be
difficult to fully compensate the Company for monetary damages resulting from
any breach by him of the provisions hereof. Accordingly, in the event of any
actual or threatened breach of any such provisions, the Company will, in
addition to any other remedies it may have, be entitled to injunctive and other
equitable relief to enforce such provisions, and such relief may be granted
without the necessity of proving actual monetary damages.
11.
Termination
of Employment
.
(a)
The Executive’s employment with the Company will terminate immediately upon:
(i)
Executive’s receipt of written notice from the Company of the termination of
his employment, effective as of the date indicated in such notice, with such
notice provided to Executive no less than thirty (30) days before the effective
date, except in the event that Executive is being terminated for Cause, in
which case no prior notice shall be required;
(ii)
The Company’s receipt of Executive’s written resignation from the Company, effective as of the date indicated in
such resignation, with such notice provided to the Company no less than thirty
(30) days before the effective date;
(iii)
Executive’s Disability (as defined below); or
(iv)
Executive’s death.
(b)
The date upon which Executive’s termination of employment with the Company
occurs is the “
Termination Date
.”
12.
Payments
upon Termination of Employment
.
(a)
If Executive’s employment
with the Company is terminated by the Company by any reason other than for
Cause (as defined below), the Company will pay to Executive an amount equal to Executive’s current base salary, less
applicable withholdings, for a period of three (3) months following the
Termination Date.
(b)
The
Company will pay to Executive or his beneficiary or his estate, as the case may be, his base salary through the
Termination Date if Executive’s employment with the Company is terminated by
reason of:
(i)
Executive’s abandonment of his employment or Executive’s resignation for any
reason;
6
(ii)
termination of Executive’s employment by the Company for Cause (as defined
below); or
(iii)
Executive’s Disability or death,
(c)
“
Cause
” hereunder
means:
(i)
an act or acts of dishonesty undertaken by Executive and intended to result in personal gain or enrichment of Executive or
others at the expense of the Company;
(ii)
unlawful conduct or gross misconduct that is willful and deliberate on
Executive’s part and that, in either event, is injurious to the Company;
(iii)
the conviction of Executive of a felony;
(iv)
failure of Executive to perform his duties and responsibilities hereunder or to
satisfy his obligations as an officer or employee of the Company; or
(v)
breach of any terms and conditions of this Agreement by Executive.
(d)
“
Disability
”
hereunder means the inability of Executive to perform on a full-time basis the
duties and responsibilities of his employment with the Company by reason of his
illness or other physical or mental impairment or condition, if such inability
continues for an uninterrupted period of 90
days or more during any 180-day period. A period of inability is
“uninterrupted” unless and until Executive returns to full-time work for a
continuous period of at least 30 days.
(e)
In the event of
termination of Executive’s employment, the sole obligation of the Company under this Agreement will be its
obligation to make the payments called for by Sections 12(a) or 12(b)
hereof, as the case may be, and the Company will have no other obligation to
Executive or to his beneficiary or his estate, except as otherwise provided by
law, under the terms of any other
applicable agreement between Executive and the Company or under the terms of
any employee benefit plans or programs then maintained by the Company in which Executive
participates.
(f)
Notwithstanding
the foregoing provisions of this Section 12, the Company will not be obligated to make any payments to
Executive under Section 12(a) hereof unless Executive has signed a release of
claims in favor of the Company and its Affiliates in a form to be prescribed by
the Board, all applicable consideration and rescission periods provided by law shall have expired, and is in strict compliance
with the terms of this Agreement as of the dates of such payments.
7
(g)
Following Executive’s termination
from the Company for whatever reason Executive shall not directly or
indirectly, disparage, defame or discredit the Company (including, but not
limited to any officer, director, employee, consultant, or affiliate thereof)
or engage in any activity that would have the effect of disparaging, defaming
or discrediting the Company (or any officer, director, employee, consultant, or
affiliate thereof).
13.
Miscellaneous
.
(a)
Governing Law
. All matters relating to the interpretation,
construction, application, validity and
enforcement of this Agreement will be governed by the laws of the State of
Delaware without giving effect to any choice or conflict of law provision or
rule, whether of the State of Delaware or any other jurisdiction, that would
cause the application of laws of any jurisdiction other than the State of
Delaware.
(b)
Jurisdiction and Venue
. Executive and the Company consent to
jurisdiction of the courts of the State of New Jersey and/or the federal
district courts, District of New Jersey, for the purpose of resolving all
issues of law, equity, or fact, arising out of or in connection with this
Agreement. Any action involving claims of a breach of this Agreement must be
brought in such courts. Each party consents to personal jurisdiction over such
party in the state and/or federal courts of New Jersey and hereby waives any
defense of lack of personal jurisdiction. Venue, for the purpose of all such
suits, will be in Essex County, State of New Jersey.
(c)
Entire Agreement
. This Agreement contains the entire
agreement of the parties relating to Executive’s employment with the Company
and supersedes all prior agreements and understandings with respect to such
subject matter, and the parties hereto have made no agreements, representations
or warranties relating to the subject matter of this Agreement that are not set
forth herein.
(d)
No Violation of Other
Agreements
. Executive hereby
represents and agrees that neither (i) Executive’s entering into this Agreement
nor (ii) Executive’s carrying out the provisions of this Agreement, will
violate any other agreement (oral, written or other) to which Executive is a
party or by which Executive is bound.
(e)
Amendments
. No amendment or modification of this
Agreement will be deemed effective unless
made in writing and signed by the parties hereto.
(f)
No Waiver
. No term or condition of this Agreement will
be deemed to have been waived, except by a statement in writing signed by the
party against whom enforcement of the
waiver is sought. Any written waiver will not be deemed a continuing waiver unless
specifically stated, will operate only as to the specific term or condition
waived and will not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.
(g)
Assignment
. This Agreement will not be assignable, in
whole or in part, by either party without the prior written consent of the other
party, except that the Company may, without
the consent of Executive, assign its rights and obligations under this
Agreement (1) to an Affiliate or (2) to any corporation or other person
or business entity to which the Company may sell or transfer all or
substantially all of its assets. After any such assignment by the Company, the Company will be discharged from all
further liability hereunder and such assignee will thereafter be deemed to be “the Company” for purposes of all terms
and conditions of this Agreement, including this Section 13.
8
(h)
Counterparts
. This Agreement may be executed in any number of
counterparts, and such counterparts executed and delivered, each as an
original, will constitute but one and the same instrument.
(i)
Severability
. Subject to Section 7(e) hereof, to the extent that any
portion of any provision of this Agreement
is held invalid or unenforceable, it will be considered deleted herefrom and
the remainder of such provision and of this Agreement will be unaffected and
will continue in full force and effect.
(j)
Captions and Headings
. The captions and paragraph headings used in this
Agreement are for convenience of reference only and will not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
Executive
and the Company have executed this Agreement as of the date set forth in the first paragraph.
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COMPANY:
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NATCORE
TECHNOLOGY, INC.
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By:
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Brien
Lundin, Director
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EXECUTIVE:
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Charles
R. Provini
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9
NATCORE TECHNOLOGY INC.
DIRECTORS’ CONSENT RESOLUTIONS
Pursuant to the powers vested in the Board of Directors
by the Articles of the Company, the following resolutions are hereby
passed as evidenced by the signatures hereto of all the directors of the
Company and may be consented to in one or more counterparts (each signed by one
or more directors) of which, together, such counterparts shall be deemed to constitute one instrument.
We,
the undersigned, being all of the Directors of NATCORE TECHNOLOGY INC. (the
“Company”) hereby consent to and adopt in writing the following resolutions:
AMENDMENT TO EMPLOYMENT AGREEMENT
WHEREAS
the Company’s subsidiary, Natcore Technology, Inc. has entered into an
employment agreement (the “Employment
Agreement”) dated April 5, 2012 with Charles Provini for his services as the Company’s
Chief Executive Officer;
AND WHEREAS
the term of the
Employment Agreement ended on April 5, 2014, but the Company and Mr. Provini continued to operate under the
Employment Agreement as though it were in full force and effect;
AND WHEREAS
Company proposes to
amend the Employment Agreement to extend the term of the Employment Agreement to April 5, 2017 (the
“Amendment”);
AND WHEREAS
the Board has been advised, as set out in the Disclosure of
Disclosable Interest attached as Schedule “A” to this resolution, that Charles
Provini has a disclosable interest in the Amendment.
BE IT RESOLVED THAT:
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1.
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The execution and delivery
of the Amendment, and all other
agreements, documents, deeds and instruments that are necessary to give
effect to the Amendment is hereby ratified, confirmed and approved;
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2.
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Any
one director or officer as an authorized signatory of the Company or its
subsidiary, be and is hereby authorized to execute on behalf of the Company
and its subsidiary any and all documents, instruments and writings , and do such other things, in
the name and on behalf of the Company, as he in his discretion may determine necessary, desirable and useful for the
purposes of giving effect to the above resolutions.
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AS WITNESS
our signatures hereto
dated for reference as at the 15 day of August, 2014.
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Abstaining from voting on the resolutions
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CHARLES
PROVINI
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BRIEN
LUNDIN
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JOHN
CALHOUN
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JOHN
MEEKISON
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AS WITNESS
our signatures hereto
dated for reference as at the 15 day of August, 2014.
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Abstaining from voting on the resolutions
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CHARLES PROVINI
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BRIEN LUNDIN
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JOHN
CALHOUN
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JOHN
MEEKISON
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Schedule “A”
DISCLOSURE OF DISCLOSABLE INTEREST
Charles Provini discloses that the Amendment will give
rise to an extension in the term of direct compensation due to Mr. Provini.
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Dated:
August 15, 2014
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CHARLES
PROVINI
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License Agreement
between
Natcore Technology, Inc.
and
WilliamMarsh Rice University
Effective Date: March 31, 2004
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Agreement
# _______________
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THIS
LICENSE AGREEMENT (“Agreement”), with an Effective Date of March 31,2004, is
entered into by William Marsh Rice University, hereinafter referred to as
“Rice”, a Texas non-profit corporation with its principal address at 6100 Main Street, Houston, TX 77005, and
Natcore Technology, Inc., hereinafter referred
to as “Licensee”, a Delaware corporation, with its principal address at 47 Club
Way, Red Bank, New Jersey, 07701..
RECITALS:
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A.
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WHEREAS,
Rice is the owner of certain inventions, know-how and rights pertaining to the controlled deposition of silicon oxide on
silicon from an aqueous solution at ambient temperature and pressure,
including, without limitation, all rights pursuant to the patent applications
listed in Exhibit A; and,
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B.
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WHEREAS, Licensee desires to secure the right and
license to use, develop, manufacture, market and exploit the Rice Intellectual Property (as
defined below); and,
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C.
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WHEREAS, Rice has determined that such use, development
and exploitation of the Rice Intellectual Property is in the
public’s best interest and is consistent with Rice’s educational and research
missions and goals.
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NOW,
THEREFORE, in consideration of the foregoing, the provisions set forth herein
and the mutual benefits to be derived herefrom, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Rice and Licensee, hereby agree as
follows:
SECTION 1 Definitions
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1.1
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“
Adjusted
Gross Sales
” means the cash consideration or Fair Market Value of any
in-kind consideration attributable to the
Sale of any Rice Licensed Product(s), less qualifying costs directly attributable to such Sale and actually
identified on the invoice and borne by the seller. Such qualifying costs
shall be limited to the following:
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a)
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Discounts,
in amounts customary in the trade for quantity purchases;
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b)
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Credits or refunds, not
exceeding the original invoice amount, for claims or returns;
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c)
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Transportation insurance
premiums;
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d)
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Outbound transportation
expenses; and/or
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e)
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Sales, or use taxes, or
duties imposed by a governmental agency paid by or on behalf of Licensee.
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1.2
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“
Affiliate(s)
” means, with respect to each
Party, any Entity that controls, is controlled by, or is under common control with said Party. An Entity
shall be deemed to have control of another Entity if it owns directly or
indirectly a majority of the voting shares of or is entitled directly or
indirectly to appoint a majority of the directors of the other Entity.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
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Page
1 of 15
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1.3
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“
Confidential
Information
” means all information that is of a confidential and
proprietary nature to Rice, including
without imitation Rice Intellectual Property and related technology.
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1.4
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“
Effective
Date
” means the date first written above on which this Agreement is
deemed to take effect and both Parties
become subject to the rights and obligations set forth herein.
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1.5
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“
Entity
”
means a corporation, an association, a joint venture, a partnership, a trust,
a business, an institution, an individual,
a government or political subdivision thereof, including an agency, or any other
organization that can exercise independent legal standing.
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1.6
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“
Exclusive License
” means the license granted by
Rice to Licensee to engage in the activities defined and limited in
Section 2.1, such rights granted only to Licensee and to no other Entity;
provided that Licensee acknowledges that Rice has a continuing right to utilize the
Rice Intellectual Property for educational
and research purposes as described in Section 2.3.
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1.7
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“
Fair Market Value
” means the cash consideration
which Licensee or its sublicensee would realize from an unaffiliated,
unrelated buyer in an arm’s length Sale of an identical item sold in the same
quantity, under the same
terms, and at the same time and place.
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1.8
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“
Federal Government Interest
” means the rights
of the United States Government in inventions made with federal
assistance as codified at 35 U.S.C. 200-212, and any regulations issued
thereunder, and as such
statute or regulations may be amended from time to time hereafter.
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1.9
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“
Field of Use
” means the deposition of silicon
oxide (i) for microelectronic, optoelectronic and micromechanical
applications on silicon in any crystallographic form, as well as on metals,
glasses, ceramics and plastics, and (ii) for thermomechanical and decorative
uses on metals, glasses,
ceramics and plastics.
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1.10
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“
Insolvent
”
means being unable to meet one’s debt obligations to another Entity as such
debt obligations become due and not being
able to provide reasonable financial assurances of becoming able to
meet such obligations.
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1.11
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“
Licensee
” means Licensee and its Affiliates.
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1.12
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“
Party
”
shall mean Rice or Licensee individually, and “
Parties
” shall mean
Rice and Licensee collectively.
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1.13
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“
Rice Intellectual Property
” means the Rice
Patents and Rice Technical Information.
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1.14
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“
Rice Licensed Product(s)
” means product(s)
whose manufacture, use or sale is covered by any claim of the Rice Patents;
product(s) which are made using a process or machine covered by a claim of
the Rice Patents; or
product(s) made, at least in part, using Rice Intellectual Property. Rice
Licensed Product(s) shall also include
any service rendered through the use of a product, process or machine covered
by any claim of any of the Rice Patents or enabled by Rice Intellectual
Property.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
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Page
2 of 15
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1.15
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“
Rice Patent(s)
” are those United States patent
applications and patents listed in Exhibit A hereto and any corresponding
foreign patent applications and patents, and any divisional, continuations,
reissues and reexaminations to the extent that the claims are directed to
subject matter within the Field of Use.
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1.16
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“
Rice Technical Information
” means research and
development information, unpatented inventions, know-how, show-how,
trade secrets, and technical data, which Rice has a right to disclose, and is
not otherwise
exclusively licensed, which was developed under the direct supervision of
Prof. Andrew Barron in laboratories at Rice prior to the Effective Date, and which
is used or useful in the production or use of Rice Licensed Product(s) in the Field
of Use. The transfer of Rice Technical Information to Licensee will continue
after the Effective Date through discussions and meetings between Licensee and Prof. Andrew Barron, as necessary.
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1.17
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“Sale”
means any bona fide transaction for which consideration is received or
expected for the sale, use, lease, transfer or other disposition of Rice
Licensed Product(s). A Sale of Rice Licensed Product(s) shall be deemed
completed at the time Licensee or its sublicensee invoices, ships, or
receives payment for such Rice Licensed Product(s), whichever occurs first.
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1.18
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“
Term of Agreement
” shall commence on the
Effective Date and continue until the date of expiration of the last to expire of Rice’s rights in
Rice Intellectual Property.
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1.19
|
“
Territory”
is worldwide.
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SECTION 2 License Grant
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2.1
|
Grant.
Rice grants to Licensee an Exclusive License,
under Rice Intellectual Property to make, have made, use, offer for sale, sell, lease or
otherwise transfer Rice Licensed Product(s) in the Field of Use in the Territory
during the Term of Agreement subject to Rice’s rights set forth in Section
2.3 and to any Federal Government Interest reserved or granted to the
Government of the United States or to a foreign state pursuant to an existing or future
treaty with the United States as a matter of law or statute. No other rights or licenses are granted
hereunder.
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Notwithstanding the foregoing exclusive right and
license granted to Licensee with respect to the use of Rice Technical Information, Rice, Prof.
Andrew Barron, and the other members of his research teams expressly reserve
the right and shall be permitted to publish and/or publicly disclose Rice Technical Information in academic or scholarly
publications or presentations, pursuant to the terms and conditions of this License. Prior to any
such public disclosure of the Rice Technical Information, Rice or
Prof. Barron will provide sixty (60) days advance written notice (unless such
time is not feasible, in which case the
advance notice will be as prompt as possible). In the event that any such
publication or public disclosure thereby causes any such Rice Technical
Information to be publicly available and commercially exploitable by others
without accounting to Rice as the owner thereof, then Licensee shall no longer be required to
pay to Rice any royalties related solely to the use of such Rice
Technical Information.
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2.2
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Sublicensing.
Licensee shall have the right to grant
sublicenses under Section 2.1 to third parties, subject to the following
conditions:
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
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Page
3 of 15
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a)
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Licensee shall confidentially disclose to Rice the
identity of potential third party sublicensees at the time
negotiations with said potential sublicensees commence.
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b)
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Where sublicense is to grant rights to Rice Patents and
other patents, Licensee shall, for the purpose of calculating the payment defined in
Section 3.1.c, confidentially disclose to Rice the relative fair market
values being ascribed to Rice Patents and other patents.
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c)
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Licensee
shall forward to Rice, within thirty (30) days after execution, a complete
and accurate copy written in the English
language of each sublicense granted hereunder. Rice’s receipt of such
sublicense shall not constitute an approval of such sublicense or a waiver of
any of Rice’s rights or Licensee’s obligations hereunder. Each
sublicense shall include the following
provisions, substantially similar to those of the same title in this
Agreement.
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Section
3.4, Maintenance of Records
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Section
6, Confidentiality
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Section
7, Infringement and Litigation
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Section
8, Disclaimer of Warranty; Limitation of Liability; Indemnification
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Section
9, Insurance
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Licensee’s right to grant sublicenses is contingent
upon the sublicense agreement meeting the requirements set forth in this Section
2.2.c.
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d)
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Each sublicense that grants further rights to
sublicense shall include a provision substantially similar to Section 2.2 of this Agreement.
Licensee’s or sublicensee’s right to grant sublicenses granting the right to
further sublicense is contingent upon the sublicense agreement meeting the
requirements set forth in this Section 2.2.d.
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e)
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If Licensee becomes Insolvent, Rice’s proportionate
share of all payments then or thereafter due and owing to Licensee from its
sublicensees for the sublicense of the Rice Intellectual Property Rights shall upon notice from Rice to
any such sublicensee become payable directly to Rice for the account of Licensee; provided however, that Rice shall
remit to Licensee the amount by which such payments exceed the amounts
owed by Licensee to Rice.
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f)
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Notwithstanding any such sublicense, Licensee shall
remain primarily liable to Rice for all of the Licensee’s duties
and obligations contained in this Agreement, and any act or omission of a sublicensee that would be a breach of
this Agreement if performed by Licensee shall be deemed to be a breach by Licensee of this Agreement. Each sublicense
shall contain a right of
termination by Licensee in the event that the sublicensee materially breaches
the payment obligations affecting
Rice or any other material terms and conditions of the sublicense that would constitute a material breach of the terms
and conditions of this Agreement if such acts were performed by Licensee
(a “Material Breach”). In the event of a Material Breach by a sublicensee, and if after a reasonable
opportunity to cure as provided in any such sublicensee, such
sublicensee fails to cure such Material Breach, then the Licensee shall
terminate the sublicensee unless Rice
agrees that such sublicensee need not be terminated. Such Material Breach by
the sublicensee and termination of a sublicensee’s sublicense shall not
affect the term of Licensee’s license hereunder or the sublicense of
any non-breaching sublicensee.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
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Page
4 of 15
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g)
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Upon termination of this Agreement pursuant to Article
5, Rice agrees to enter into a direct license with each sublicensee on substantially
similar terms as its sublicense agreement with Licensee, provided each such sublicensee is not
in breach of or default under any of the provisions of its sublicense and further
providing that such sublicense agreement may require amendment before acceptance
by Rice in order to respect Rice’s non-profit status and ability to deliver on Licensee’s obligations to
sublicensee.
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2.3
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Rice’s
Continuing Educational and Research Rights.
Notwithstanding the grant of rights to
Licensee in Section 2.1, Licensee
acknowledges that Rice shall retain a continuing irrevocable worldwide right to use Rice Intellectual Property on a
non-exclusive royalty-free basis, including, but not limited to, the right to
make, have made, use or transfer Rice Licensed Product(s), in each case, for
educational and research purposes only, including, but not limited to,
third party sponsored research and collaborations with investigators from
other not-for-profit institutions or government agencies. Licensee further acknowledges that the scope of
Rice’s continuing rights includes the right to publish and disclose
any research results related to any of the foregoing.
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SECTION 3 Fees, Royalties and Commercial Obligations
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3.1
|
License Initiation Fee and
Royalties
.
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a)
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In partial consideration of the Exclusive License
granted herein, Licensee shall issue to Rice shares of common stock of Licensee; the
number of shares will correspond to 10% (post-issuance) of the outstanding shares of capital stock of Licensee upon
the Effective Date. Rice shall enter into a Stock Purchase Agreement
and Shareholders’ Agreement with the same effective date of this License
Agreement, and this License Agreement is Exhibit A of the Stock Purchase
Agreement and the Shareholders’ Agreement is Exhibit B of the Stock Purchase Agreement. Such Shareholders’
Agreement shall set forth certain shareholder rights including, but
not limited to, preemptive rights, tag along registration rights,
anti-dilution purchase rights,
shareholders’ information rights and the right to appoint one member of the Board
of Directors of Licensee until such time as the number of Rice owned shares
in Licensee represents less than 5% of
the total number of outstanding shares of common stock of Licensee.
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b)
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In further consideration of the Exclusive License
granted herein, Licensee shall pay to Rice a royalty of 2% (“Royalty”) of Adjusted Gross
Sales attributable to Licensee.
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c)
|
In
further consideration of the exclusive license granted herein and in lieu of
a 2% royalty assessment on sublicensees’
adjusted gross sales, Licensee shall pay to Rice a percentage of any (a) royalties, (b) fees, (c) other cash
consideration, or (d) the fair market value of non-cash consideration received from any sublicensee and
attributable to Rice Licensed Products. The applicable percentage shall be determined when such consideration is
received by Licensee as measured from the Effective Date, as follows:
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
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Page
5 of 15
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Before
the 1
st
anniversary:
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5%
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thereafter,
but before the 2
nd
anniversary
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10%
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thereafter,
but before the 3
rd
anniversary
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15%
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thereafter,
but before the 4
th
anniversary
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20%
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thereafter,
but before the 5
th
anniversary
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25%
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thereafter:
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30%
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The
foregoing payment obligation of Licensee shall not apply to sublicensees
under joint research and development
agreements, provided that the consideration (cash and non-cash) received by Licensee is for the express purpose
of directed research and development related to Rice Licensed Products and, provided further, that the rights
granted to the sublicensee are limited to research and development and do not
permit the commercialization or Sale of Rice Licensed Products.
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d)
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Royalties
and other amounts payable by Licensee to Rice under this Section 3.1 shall accompany reports as set forth in Section 3.3
below.
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3.2
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Milestones
and Maintenance Fees
.
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a)
|
Licensee
shall not be required to pay an annual license maintenance fee.
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b)
|
Licensee shall use its best efforts to develop for
commercial use and to market Rice Licensed Product(s) as soon as
practicable, consistent with sound and reasonable business practices. Licensee shall also meet the milestones set
forth in Exhibit B.
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c)
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Licensee
shall provide Rice on each June 1 and December 1 during the Term of this Agreement with written reports, setting forth in
such detail as Rice may reasonably request, the progress of the
development, evaluation, testing and commercialization of any Rice Licensed Product(s). Licensee shall also notify
Rice within thirty (30) days of the first commercial sale of any Rice
Licensed Product(s).
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3.3
|
Reports and Royalty Payments.
Licensee shall
deliver to Rice within forty-five (45) days after the end of each calendar
quarter, any part of which is within the Term of this Agreement, a written
report, certified
by the chief financial officer of Licensee and setting forth in reasonable
detail the calculation of the
royalties due to Rice for such calendar quarter, including, without
limitation:
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a)
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Number of Rice Licensed Product(s) sold, listed by
country in which the Sale occurred; and
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b)
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Adjusted
Gross Sales listed by country in which the Sale occurred; and
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c)
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Amount
of cash and non-cash consideration received from all sublicensees; and
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d)
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Payments owed to Rice, listed by category, including
without limitation, royalties on Sales, and sublicensee-derived consideration,
including the relative Fair Market Values attributable to Rice Licensed Product(s).
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Licensee shall accompany each report of this Section
3.3 with the payment of amounts due to Rice; provided however, if
Licensee has not received the consideration due for a Sale, or has not
received the consideration owed to Licensee by a sublicensee, then amounts
due to Rice with respect to such unreceived consideration will be payable by Licensee
to Rice upon receipt thereof by Licensee.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
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Page
6 of 15
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3.4
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Records.
Licensee will maintain, and cause its
sublicensees to maintain, complete and accurate books and records that
enable the royalties payable hereunder to be verified. The records for each
calendar quarter shall be
maintained for three years after the submission of each report under Section
3.3 hereof.
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3.5
|
Auditing.
Upon reasonable prior notice to Licensee,
Rice, or its appointed accountants, shall have access to such books and records relating to Adjusted Gross Sales as
necessary to conduct a review or audit of Adjusted Gross Sales. Such
access shall be available to Rice not more than once each calendar year of
the Term, during normal business hours, and once a year for three years after
the expiration or termination of this
Agreement. Whenever Licensee has its books and records audited by an independent certified public accountant,
Licensee shall, within 30 days of the conclusion of such audit, provide Rice
with a written statement, certified by said auditor, setting forth the
calculation of royalties due to
Rice over the time period audited as determined from the books and records of
the Licensee. If an audit of Licensee’s records indicates that Licensee has
underpaid royalties by 5% or more, Licensee will pay the costs and
expenses incurred by Rice and its accountants, if any, in connection with the
review or audit.
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3.6
|
Country, Place of Payment, Interest
.
|
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a)
|
All dollar amounts referred to in this Agreement are
expressed in United States dollars and all payments to Rice
shall be made in United States dollars by check payable to “William Marsh Rice University.”
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b)
|
If Licensee receives revenues from Adjusted Gross
Sales or consideration from sublicensees in currency other than
United States dollars, revenues shall be converted into United States dollars at the
conversion rate for the foreign currency used by Licensee’s bank on the day
the bank credits such funds to
Licensee’s account.
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c)
|
Amounts that are not paid when due shall accrue
interest from the due date until paid, at a rate equal to one percent
(1.0%) per month (or the maximum allowed by law, if less).
|
SECTION 4 Patent Expenses and Reimbursement
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|
4.1
|
Rice
has the right and obligation, pursuant to the express terms of this License,
to prosecute the Rice Patents and the Rice Intellectual Property that may be
patentable to the extent that it is patentable, and shall work closely with Licensee to develop a suitable strategy
for the prosecution, development and maintenance of Rice Patents;
provided that Rice shall maintain final authority in all decisions regarding the prosecution and maintenance of
Rice Patents. Licensee shall promptly reimburse Rice for all documented attorneys’ fees, expenses,
official fees and other charges incident to the preparation, prosecution
and maintenance of Rice Patents pursuant to the strategy developed by Rice in
consultation with Licensee. Licensee shall not be liable for fees and
expenses associated with the preparation,
prosecution and maintenance of Rice Patents, which Licensee has specifically
advised Rice in writing that it
does not desire to pursue. Rice shall provide Licensee with itemized
statements reflecting the expenses owed to Rice for the preparation,
prosecution and maintenance of Rice Patents and Licensee shall
reimburse Rice for such expenses within thirty (30) days after receipt of
such statement.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
7 of 15
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4.2
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Rice shall confer with Licensee regarding choice of
patent counsel. Although Rice shall maintain final authority in all
decisions regarding counsel selection, it is intended that both Rice and
Licensee will interact directly with the selected patent counsel in all phases of
patent prosecution: preparation, office action responses, filing strategies
for continuation or divisional applications, etc. Rice will request that copies of all documents prepared by the
counsel be provided to Licensee for review and comment prior to filing to the
extent practicable under the circumstances.
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4.3
|
Rice shall confer with Licensee as to the countries in
which Licensee desires to seek patent protection. Should Rice elect not
to apply for patent protection in a country desired by Licensee, Rice shall
use reasonable
efforts to give Licensee written notice of its decision at least thirty (30)
days prior to the applicable deadline for such foreign filing. Rice shall, upon request
by Licensee, provide Licensee or its authorized representative with any
information needed to file or prosecute such patent application and will execute and deliver to Licensee
all documents required to file and prosecute such patent application.
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4.4
|
If
Rice, at any time during the Term of Agreement, elects to discontinue
prosecuting a patent application or
maintaining an issued patent that is included in Rice Patents, Rice shall
notify Licensee and shall, if so
requested, assign all rights that Rice may have in the patent application or
patent to Licensee; provided that
Licensee shall grant Rice a royalty-free, non-exclusive, irrevocable license
in any assigned patent rights, such license shall grant Rice
equivalent rights to Rice’s continuing educational
and research rights set forth in Section 2.3, but remaining subject to the
confidentiality obligations of this Agreement.
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4.5
|
Licensee
and its sublicensees shall comply with all United States and foreign laws
with respect to patent and copyright marking of Rice Licensed Product(s).
|
SECTION 5 Term and Termination
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5.1
|
This
Agreement, unless sooner terminated as provided herein, shall terminate at
the end of the Term of Agreement
as defined in Section 1.18.
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|
5.2
|
Licensee,
at its option, may terminate this Agreement at any time by doing all of the
following:
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|
|
a)
|
By ceasing to make (once
production has commenced), have made, use and sell any Rice Licensed
Product(s), and;
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|
b)
|
By giving sixty (60) days
prior written notice to Rice of such cessation and of Licensee’s intent to
terminate; and
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c)
|
By transferring all of its
sublicenses to Rice as per Section 2.2.g., and;
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|
|
d)
|
By tendering payment of
all accrued royalties and other payments due to Rice.
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|
5.3
|
Licensee,
at its option, may terminate this Agreement upon written notice to Rice if
Rice breaches this
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
8 of 15
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Agreement and does not cure such breach within sixty
(60) days after receiving written notice thereof from Licensee. Notwithstanding the above,
the Licensee is not required to terminate this License upon any such breach, and may pursue all of its
rights at law and in equity in the event of a breach by Rice.
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|
5.4
|
Rice, at its option, may terminate this Agreement, upon
written notice to Licensee of Rice’s intent to terminate, if any of the following occur:
|
|
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|
|
|
a)
|
Licensee has not met a milestone set forth in Exhibit B
after receiving sixty (60) days notice from Rice of Rice’s intent to terminate if such
milestones are not met or renegotiated to Rice’s satisfaction; or
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|
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|
b)
|
Licensee
becomes more than ninety (90) days in arrears in any payments, fees or other
expenses due pursuant to this Agreement; or
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c)
|
Licensee
breaches this Agreement, other than being in arrears in payments, fees or
other expenses, and does not cure such
breach within ninety (90) days after receiving written notice thereof
from Rice.
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|
5.5
|
If Licensee becomes Insolvent, all duties of Rice and
all rights (but not duties) of Licensee under this Agreement shall
immediately terminate without the necessity of any action being taken by Rice
or by Licensee.
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5.6
|
Upon termination of this Agreement, except under
Section 5.1, Licensee shall have ninety (90) days to complete the manufacture
of work in progress and one hundred eighty (180) days to complete the sale of any Rice Licensed
Product(s) in stock or in the course of manufacture at the time of
termination; provided, however, that all such Sales are subject to the royalty and
accounting obligations set forth in this Agreement, even if such royalty
obligations arise from transactions subsequent to the effective date of termination.
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5.7
|
Upon termination of this Agreement, except under
Section 5.1, Licensee shall, at Rice’s request, return to Rice all
Confidential Information and Rice Technical Information fixed in any tangible
medium of expression,
as well as any data generated by Licensee during the term of this Agreement
which will facilitate the
development of any technology licensed hereunder.
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5.8
|
Licensee’s obligation to pay royalties accrued during
the Term of Agreement under Section 3 hereof shall survive
termination of this Agreement. In addition, the provisions of Sections 5, 6,
7, 8, 9, 10 and 12 shall
survive any termination or expiration of this Agreement.
|
SECTION 6 Confidentiality
|
|
|
|
6.1
|
Licensee
agrees to maintain in confidence and not to disclose to any third party any
Confidential Information received
pursuant to this Agreement; provided however, that Confidential Information may be disclosed to legal counsel or, upon
execution of an appropriate confidentiality agreement, to sublicensees or
potential sublicensees, corporate partners or potential corporate partners,
investment bankers or consultants. Licensee agrees to ensure that its
employees have access to Confidential
Information only on a need-to-know basis and that they are obligated in
writing to abide by Licensee’s obligations hereunder. The foregoing
obligation shall not apply to:
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|
License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
9 of 15
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a)
|
Information
that is known to Licensee prior to the time of disclosure, in each case, to
the extent evidenced by written records promptly disclosed to Rice upon
receipt of the Confidential Information;
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b)
|
Information disclosed to Licensee by a third party
that has a right to make such disclosure;
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|
c)
|
Information that is independently developed by Licensee
by employees not having access to or knowledge of Confidential Information, in
each case, to the extent evidenced by written records disclosed to Rice;
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d)
|
Information
that becomes patented, published or otherwise part of the public domain as a
result of acts by Rice, or a third person obtaining such information as a
matter of right;
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|
e)
|
Information that is required to be disclosed by order
of United States governmental authority or a court of competent jurisdiction;
provided that Licensee shall use its best efforts to obtain confidential treatment of such information
by the agency or court.
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6.2
|
Rice shall not be obligated to accept or protect any
confidential information from Licensee, except as may be contemplated by
a separate agreement entered into priorto the exchange of any Confidential Information.
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6.3
|
The placement of a copyright notice on any Confidential
Information shall not be construed to mean that such information has been published
and will not release Licensee from its obligation of confidentiality
hereunder.
|
SECTION 7 Infringement and Litigation
|
|
|
|
7.1
|
Rice
and Licensee are responsible for notifying each other promptly of any
infringement of Rice Intellectual Property or any misappropriation of Rice
Confidential Information or Rice Technical Information
that may come to their attention. Rice and Licensee shall consult one another
in a timely manner concerning any appropriate response thereto.
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|
7.2
|
Licensee
shall have the right, but not the obligation to prosecute such infringement
or misappropriation at its own expense. Licensee shall not settle or
compromise any such suit in a manner that
imposes any obligations or restrictions on Rice or grants any rights to Rice
Intellectual Property, without
Rice’s advance written permission. Financial recoveries from any such
litigation will first be applied
to reimburse Licensee for its litigation expenditures with additional
recoveries being paid to Licensee,
subject to any royalties or other payments that would have been due Rice
based upon Section 3 as if the litigation recovery had been revenue
received from a sublicensee.
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|
7.3
|
Licensee’s
prosecution rights under Section 7.2 shall be subject to the continuing right
of Rice to intervene at Rice’s own expense and join Licensee in any claim or
suit for infringement or misappropriation
of Rice Intellectual Property. Any consideration received in settlement of
any claim or suit shall be shared between Rice and Licensee in
proportion with their share of the litigation expenses in such infringement
action.
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|
License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
10 of 15
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7.4
|
If Licensee fails to prosecute such infringement or
misappropriation, Rice shall have the right, but not the obligation, to
prosecute such infringement or misappropriation at its own expense. In such
event, financial recoveries
will be entirely retained by Rice.
|
|
|
|
|
7.5
|
In any action to enforce any of the Rice Intellectual
Property, either Party, at the request and expense of the other Party, shall
cooperate to the fullest extent reasonably possible. This provision shall not
be construed
to require either Party to undertake any activities, including legal
discovery, at the request of any third party except as may be required by lawful
process of a court of competent jurisdiction.
|
SECTION 8 Disclaimer of Warranty; Limitation of Liability;
Indemnification
|
|
|
|
|
8.1
|
The Rice Intellectual Property, and any other
information or technology provided by Rice and used in the manufacture, use or
sale of Rice Licensed Product(s) are provided on an “as is” basis and Rice
makes no representations
or warranties, express or implied, with respect thereto. By way of example
but not of limitation,
Rice makes no representations or warranties (i) of commercial utility, (ii)
of merchantability or fitness for a particular purpose, or (iii) that the
use of the Rice Intellectual Property, or Rice Licensed Product(s) will not
infringe any patent, copyright, trademark, or other proprietary or property
rights of others.
|
|
|
|
|
8.2
|
In no event shall Rice be liable to Licensee or
Licensee’s sublicensees, Licensee’s or Licensee’s sublicensee’s successors
or assigns or any third party with respect to any claim (w) arising from the
use of the
Rice Intellectual Property, (x) arising from the manufacture, use or sale of
Rice Licensed Product(s), (y) for loss of profits, loss or interruption of
business, or (z) for indirect, incidental, special or consequential damages of any kind.
|
|
|
|
|
8.3
|
Licensee shall defend, indemnify and hold harmless
Rice, its trustees, officers, agents, subcontractors, students and
employees (individually, an “Indemnified Party”, and collectively, the
“Indemnified Parties”), from and against any and all liability, loss, damage,
action, claim or expense suffered or incurred by the Indemnified Parties
(including, but not limited to, attorney’s fees) (individually, a
“Liability”, and collectively, the “Liabilities”) that results from or arises
out of: (i) the development, use, manufacture, promotion, sale or other
disposition, of any Rice Intellectual Property or Rice Licensed Product(s) by
Licensee, its assignees, sublicensees, vendors or other third parties; (ii)
breach by Licensee of any covenant or agreement contained in this Agreement; and
(iii) the enforcement by an Indemnified Party of its rights under this
Section. Without limiting the foregoing, Licensee shall defend, indemnify and
hold harmless the Indemnified Parties from and against any Liabilities
resulting from:
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|
|
|
|
a)
|
any product liability or other claim of any kind
related to the use by a third party of a Rice Licensed Product(s)
that was manufactured, sold or otherwise disposed of by Licensee, its assignees, sublicensees, vendors or other
third parties; or
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b)
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a claim by a third party that the Rice Intellectual
Property or the design, composition, manufacture, use, sale or other disposition of
any Rice Licensed Product(s) infringes or violates any patent, copyright,
trademark or other intellectual property rights of such third party.
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8.4
|
The Indemnified Party shall promptly notify Licensee
of any claim or action giving rise to Liabilities. Licensee shall have the right
to defend any such claim or action, at its cost and expense with attorneys
reasonably satisfactory to Rice. Licensee shall not settle or compromise any
such claim or action in a manner that imposes any restrictions or obligations on
Rice or grants any rights to the Rice Intellectual Property or Rice
Licensed Product(s) without Rice’s prior written consent. If Licensee fails
or declines to assume the defense of any such claim or action within thirty (30) days
after notice thereof, Rice may assume the defense of such claim or action for the
account and at the risk of Licensee, and any liabilities related thereto shall
be conclusively deemed a liability of Licensee. Licensee shall pay promptly
to the Indemnified
Party any Liabilities to which the foregoing indemnity relates, as incurred.
The indemnification
rights of Rice or any other Indemnified Party contained herein are in
addition to all other rights which Rice or such other Indemnified Party may
have at law or in equity or otherwise.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
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Page
11 of 15
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SECTION 9 Insurance
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9.1
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Licensee and each of its sublicensees shall procure and
maintain in full force and effect, throughout the Term of
Agreement, commercial general liability insurance for a minimum amount of
$5,000,000 per occurrence and
$5,000,000 in the aggregate.
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9.2
|
Rice reserves the right to request additional policies
of insurance where appropriate and reasonable in light of Licensee’s business operations and
availability of coverage.
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9.3
|
The policy or policies of insurance specified herein
shall be issued by an insurance carrier with an A.M. Best rating of “A” or better and shall
name Rice as an additional insured with respect to Licensee’s performance of this Agreement. All rights of subrogation
shall be waived against Rice and its insurers. Licensee shall, upon
request by Rice, provide Rice with certificates evidencing the insurance
coverage required herein and all subsequent renewals thereof. Such certificates
shall provide that Licensee’s insurance carrier(s) notify Rice in writing at
least 30 days prior to a cancellation or material change in coverage.
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9.4
|
The specified minimum insurance amounts shall not
constitute a limitation on Licensee’s obligation to indemnify Rice under this Agreement.
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SECTION 10 Use of Names; Independent Contractor
|
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10.1
|
Licensee and its employees and agents shall not use and
Licensee shall not permit its sublicensees to use Rice’s name, any
adaptation thereof, any Rice logotype, trademark, service mark or slogan or
the name
mark or logotype of any Rice representative or organization in any way
without the prior, written consent
of Rice.
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10.2
|
Rice
shall permit Licensee to acknowledge that Licensee has entered into an
exclusive license for rights to certain technology developed at Rice.
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10.3
|
Licensee
and Rice intend that their relationship under this Agreement shall be as
independent contractors, and neither Licensee nor Rice shall conduct
themselves in a manner inconsistent with such independent contractor status.
Nothing in this Agreement nor any performance hereunder is intended, or shall
be construed, to create a partnership, joint venture or other form of
business enterprise, or relationship of
agency or employment, between Licensee and Rice (including, its faculty, students and employees). Moreover, neither
Party shall have the authority to enter into contracts on behalf of
the other Party.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
12 of 15
|
SECTION 11 Notices
Any notice or other communication of the Parties
required or permitted to be given or made under this Agreement shall be in
writing and be deemed effective upon receipt if delivered personally, by reputable
courier, by facsimile
with confirmation or electronic transmission with confirmation, or by certified
or registered mail, postage prepaid, return receipt requested, addressed to the
other Party as follows (or as changed by written notice pursuant to this
Section 11):
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If
for Rice:
|
If
for Licensee:
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Office
of Technology Transfer - MS 705
|
Natcore
Technology, Inc.
|
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317 Lovett Hall (Entrance
D)
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47
Club Way
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Rice
University
|
Red Bank, NJ 07701
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6100
Main Street
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P.O.
Box 1892
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Houston, TX 77005-1892
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Attn:
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Dr.
Daryl S. Boudreaux, Director
|
Attn:
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Charles
R. Provini
|
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Phone:
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(713)348-6173
|
Phone:
|
212-391-2709
|
|
Fax:
|
(713)348-6289
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Email:
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techtran@rice.edu
|
Email:
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provini@comcast.net
|
SECTION 12 Additional Provisions
|
|
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12.1
|
Legal Compliance
. Licensee shall
comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture,
marketing, sale, use, import or export of Rice Intellectual Property and Rice
Licensed Product(s). Without limiting the forgoing, it is understood that
Rice Intellectual Property and Rice
Licensed Product(s) may be subject to United States export laws and regulations. The transfer of certain technical
data and commodities may require approval or a license from an agency of the
United States Government and/or written assurances by Licensee that Licensee shall
not export data or commodities to certain foreign countries without prior
approval of such agency. Rice neither
represents that such governmental approval or license is not required nor that,
if required, such approval or license will issue.
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12.2
|
Power
and Authority; Due Authorization; No Conflict; Enforceability; Binding Effect
. Each Party represents and warrants to the other Party that (i) such Party has the
power and authority to execute, deliver
and perform its obligations under this Agreement, (ii) the execution,
delivery and performance of this
Agreement have been duly authorized by such Party and does not and shall not
conflict with any agreement or
instrument to which it is bound, (iii) this Agreement constitutes the legal,
valid and binding obligation of such Party, enforceable against it in
accordance with its terms, and (iv) this Agreement,
and the interests, rights, duties and obligations hereunder, shall be binding
upon, and inure to the benefit of, the Parties and their respective
successors and permitted assigns.
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12.3
|
Entire Agreement; Further Assurances
. This Agreement,
including Exhibits A, B, C, and D attached hereto, constitutes the entire agreement between the Parties, and
supersedes any prior or contemporaneous negotiations, understandings and
agreements, with respect to the subject matter hereof. Each Party shall execute and deliver such further documents
and take such further actions as may be required or reasonably
requested by the other Party to effectuate the purposes of this Agreement.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
13 of 15
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12.4
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No Assignment; No Amendment; No Waiver
. This Agreement (i)
may not be assigned or transferred, in whole or in part, by operation of law
or otherwise, by either Party without the prior written consent of the other Party,
and (ii) may not be amended or modified, by course of conduct or otherwise,
except in a writing duly executed by each of the Parties. Any waiver of any
provision of this Agreement shall be in writing duly executed by the waiving
Party. The failure or delay by either Party to seek redress for any breach or default under this
Agreement, or to insist upon the strict performance of any provision of this
Agreement, shall not constitute a waiver thereof or of any other provision of
this Agreement, and such Party shall have all remedies provided herein and at
law and in equity with respect to such act and any subsequent act
constituting the same.
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12.5
|
Force Majeure; Remedies Cumulative.
In the event either
Party’s performance under this Agreement is in any way prevented or delayed
as a result of causes or conditions (other than financial incapacity to pay) beyond such Party’s reasonable
control, such Party shall be excused temporarily without liability with respect to such performance or
nonperformance; provided, however, that such Party must diligently pursue reasonable and appropriate
actions to remedy such cause or condition. The rights and remedies provided in this Agreement are
cumulative in nature and shall be in addition to any such other rights
and remedies available at law and in equity.
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12.6
|
Resolution
of Disputes
. In the
event of any dispute or disagreement between the Parties either in interpreting any provision of this Agreement or
about the performance of either Party and upon the written request of either Party, each of the
Parties will appoint a designated representative to attemptto resolve
such dispute or disagreement. The designated representatives will discuss the
problem and negotiate in good faith in an
effort to resolve the dispute without any formal proceedings. The specific
format of such discussion shall be left to the discretion of the designated
representatives. No litigation for
the resolution of such dispute may be commenced until the designated
representatives have met and either Party has concluded in good faith that
amicable resolution through continued negotiation does not appear likely (unless either Party
fails or refuses to appoint a designated representative and schedule a meeting of such representatives
within thirty (30) days after a request to do so by the other Party).
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12.7
|
Governing Law; Jurisdiction and Venue; Attorneys’ Fees
. This Agreement shall
be governed by, and construed and enforced in accordance with, the laws of
the United States and the laws of the State of Texas (without regard to the conflicts or choice of law principles
thereof). Licensee and Rice irrevocably consent to the jurisdiction of the
State of Texas, and agree that any court of competent jurisdiction sitting in Harris County, Texas, shall be an appropriate
and convenient place of venue to resolve any dispute with respect to
this Agreement. In the event either Party commences any proceeding against the other Party with respect
to this Agreement, the prevailing Party (as determined by the authority before whom such proceeding is
commenced) shall be entitled to recover reasonable attorneys’ fees and costs as may be incurred in
connection therewith in addition to any such other relief as may be
granted.
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12.8
|
Severability
. In the event any provision of this
Agreement is determined to be invalid or unenforceable,
it is the desire and intention of the Parties that such invalidity or
unenforceability not invalidate or render unenforceable the remainder
of the Agreement and that such provision be
reformed and construed in such a manner that it will, to the maximum extend
practical, be deemed valid and enforceable, and the rights and obligations of
the Parties shall be construed and enforced accordingly.
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
14 of 15
|
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12.9
|
Construction
of Agreement
. The
Parties acknowledge and agree that both Parties substantially participated in negotiating the provisions of
this Agreement; therefore, both Parties agree that this Agreement shall not be construed more favorably
toward one Party than the other Party, regardless of which Party primarily drafted the Agreement. The
Section and other headings in this Agreement are for convenience of reference only and shall not
affect, expressly or by implication, the meaning or interpretation of
any of the provisions hereof.
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12.10
|
Third Party Beneficiaries
. Nothing in this
Agreement, express or implied, is intended to confer any benefits, rights or
remedies on any Entity, other than the Parties and their successors and
permitted assigns.
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12.11
|
Counterparts.
This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
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|
License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
15 of 15
|
IN
WITNESS WHEREOF the Parties, intending to be legally bound, have caused this
Agreement to be executed and delivered by their duly authorized representatives
and effective as of the Effective Date.
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|
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William
Marsh Rice University
|
|
NATCORE
TECHNOLOGY, INC.
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Date:
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Date:
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4-1-04
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Signature:
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Signature:
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|
Scott W. Wise
|
|
|
Charles
Provini
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|
Vice President for
|
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President
and CEO
|
|
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Investments
and Treasurer
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Reviewed and recommended
for signature:
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Signature:
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Daryl S Boudreaux
|
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|
|
Director,
|
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Office
of Technology Transfer
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|
License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
16 of 15
|
IN
WITNESS WHEREOF the Parties, intending to be legally bound, have caused this
Agreement to be executed and delivered by their duly authorized representatives
and effective as of the Effective Date.
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|
William
Marsh Rice University
|
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NATCORE
TECHNOLOGY, INC.
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Date:
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April 6, 2004
|
|
Date:
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Signature:
|
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Signature:
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|
Scott W. Wise
|
|
|
Charles
Provini
|
|
|
Vice President for
|
|
|
President
and CEO
|
|
|
Investments
and Treasurer
|
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Reviewed and recommended
for signature:
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Signature:
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Daryl S Boudreaux
|
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Director,
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Office
of Technology Transfer
|
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License
Agreement between Natcore Technology, Inc. & William Marsh Rice
University
|
Page
17 of 15
|
Exhibit A
Rice Intellectual Property
I.
Rice Patent(s) and patent
applications
U.S.
Provisional Patent Application “Method for Low Temperature Growth of Inorganic
Materials from Solution using Growth and Re-Growth”, Serial No. 60/427,392,
filed November 19, 2002.
Exhibit B
Milestones
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1.
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Secure first round funding six months after the
license agreement is signed.
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2.
|
Award
product development contract within 9 months.
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2.1
|
Complete Phase 1 within 7 months (demonstrate film
growth on large area wafers, improve purity).
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2.2
|
Complete Phase 2 within 2 ½years (develop multiple wafer, high throughput process).
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3.
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Secure second round funding within 2 ½years.
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4.
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Hire Director of Product Development and Manufacturing
(1 person), in-house R&D staff (3 persons) and
business/operations managers (2 persons) within 1 ½years (assumes money is available).
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5.
|
Initiate product qualification program within 2 ½years (Natcore R&D personnel
located on-site at performing
organization). Complete qualification program within 3 years.
|
Exhibit C
Stock Purchase Agreement
To
be provided by Licensee for review by Rice prior to execution of license. This document
should be accompanied by a capitalization table that shows ownership before and
after the execution of deal with Rice.
Exhibit D
Shareholder’s Agreement
To
be provided by Licensee for review by Rice prior to execution of license.
Chuck,
It
is expected that you will provide a copy of all interrelated company founding
documents for our legal review. As you know, there are issues in the
corporation’s by-laws that interrelate with purchase rights and shareholder
rights, etc.
Daryl
ACQUISITION AGREEMENT
|
|
|
|
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THIS AGREEMENT
made as of the 26
th
day of March, 2009.
|
AMONG:
|
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THE PERSONS
listed
in Schedule “A” attached hereto
|
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(hereinafter collectively called the “Vendors”)
|
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OF THE FIRST PART
|
AND:
|
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SYRACUSE CAPITAL CORP
.,
a company incorporated pursuant to the laws of the Province of British
Columbia and having an office located at 918 – 1030 West Georgia Street,
Vancouver, British Columbia V6E 2Y3
|
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(hereinafter called “Syracuse”)
|
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OF THE SECOND PART
|
AND:
|
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|
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NATCORE TECHNOLOGY, INC
.,
a company incorporated pursuant to the laws of the State of Delaware and
having an office located at 47 Club Way, Red Bank, New Jersey, USA, 07701
|
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(hereinafter called “Natcore”)
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OF THE THIRD PART
|
WITNESSES THAT:
|
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A.
|
The Vendors are or are entitled to be the registered, legal and
beneficial owners of all of the issued and outstanding common shares (the
“Natcore Shares”) and all of the issued and outstanding warrants to acquire
common shares of Natcore (the “Natcore Warrants”) as registered to and in the
amounts set forth in Schedule “A” attached hereto;
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B.
|
Natcore holds exclusive licensing rights to certain intellectual
property developed for the purpose of commercializing technology which
enables the controlled growth of silicon dioxide and mixed silicon oxides
from an aqueous solution at ambient temperatures and pressures;
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C.
|
Syracuse proposes to buy from the Vendors, and the Vendors have each
agreed to sell to Syracuse, all legal and beneficial interest in the Natcore
Shares and the Natcore Warrants (collectively, the “Natcore Securities”) in
consideration of the allotment and issuance of fully paid and non-assessable
common shares without par value in the capital of Syracuse and warrants to
acquire common shares without par value in the capital of Syracuse, upon and
subject to the terms and conditions set forth in this Agreement; and
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D.
|
The purchase of the Natcore Securities from the Vendors by Syracuse
will constitute Syracuse’s ‘Qualifying Transaction’, as such term is defined
in Policy 2.4 of the TSX Venture Exchange (the “Exchange”), and upon
completion will result in the listing of Syracuse as a Tier 2 Technology
Issuer on the Exchange.
|
NOW THEREFORE
in consideration of the
mutual covenants and agreements contained herein, it is agreed by and between
the parties hereto as follows:
ARTICLE 1 - INTERPRETATION
1.1 Definitions
|
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|
|
In this Agreement, the following words and phrases shall have the
following meanings:
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(a)
|
“
Advance
“ means the
advance of the sum of $100,000 by Syracuse to Natcore to cover Natcore’s
costs associated with the transactions contemplated by this Agreement until
the Closing Date.
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(b)
|
“
Agent’s Options
“ means
the option to acquire up to 150,000 common shares of Syracuse at an exercise
price of $0.15 per share granted to PI Financial Corp. in consideration for
services performed in respect of the initial public offering of Syracuse.
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(c)
|
“
Applicable Securities Laws
”
means the
Securities Act
(British
Columbia), the
Securities Act
(Alberta), the
Securities Act
(Nova Scotia), the
Securities Act
(Ontario),
the US Securities Act and the applicable rules, regulations, rulings, orders
and forms made or promulgated under such statutes and the published policies
of the Securities Commissions, as well as the rules, regulations, by-laws and
policies of the Exchange.
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(d)
|
“
Business Corporations Act
”
means the
Business Corporations Act
(British Columbia) and regulations pursuant thereto, as amended from time to
time.
|
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(e)
|
“
Business Day
” means a
day other than a Saturday, Sunday or statutory holiday in the Province of
British Columbia .
|
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(f)
|
“
Cancellable Warrants
”
means 300,000 warrants to purchase common shares of Natcore at a price of
US$1.00 per share until January 31, 2011 and 200,000 warrants to purchase
common shares of Natcore at a price of US$1.50 per share until January 31,
2013 to be cancelled by Natcore with the consent of the holders of such
warrants prior to the Closing Date.
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(g)
|
“
Closing
” means the
completion of the sale and purchase of the Natcore Securities pursuant to and
in accordance with all of the terms and conditions of this Agreement.
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(h)
|
“
Closing Date
“ means
the date the Final Exchange Bulletin is issued by the Exchange in respect of
the Qualifying Transaction, or such other date as the parties may agree upon.
|
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|
|
(i)
|
“
Closing Time
“ means
the time on the Closing Date specified in Section 8.1 hereof.
|
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|
|
(j)
|
“
Exchange
” means the TSX
Venture Exchange.
|
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(k)
|
“
Exchange Policies
”
means the Policies of the Exchange and all orders, policies, rules,
regulations and by-laws of the Exchange as amended from time to time
|
- 2 -
|
|
|
|
|
|
(l)
|
“
Final Exchange Bulletin
”
means the Exchange Bulletin which is issued following closing of the
Qualifying Transaction and the submission of all required documentation and
that evidences the final Exchange acceptance of the Qualifying Transaction.
|
|
|
|
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(m)
|
“
GAAP
” means those
generally accepted accounting principles (including the methods of
application of such principles) established by the Canadian Institute of
Chartered Accountants and, in respect of the financial statements of any
person, applied on a basis consistent with the financial statements of prior
periods of such person.
|
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(n)
|
“
Income Tax Act
” means
the
Income Tax Act
of Canada
and Regulations pursuant thereto, as amended from time to time.
|
|
|
|
|
|
|
(o)
|
“
Letter of Intent
” means
the Letter of Intent signed by Natcore and Syracuse dated August 28, 2008 as
amended February 12, 2009.
|
|
|
|
|
|
|
(p)
|
“
License Agreement
”
means the exclusive license agreement dated March 31, 2004 between Natcore
and Rice concerning certain intellectual property as described in Recital B
hereto.
|
|
|
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|
|
(q)
|
“
Minimum Listing Requirements
”
has the meaning set out in Policy 2.1 of the Exchange Policies.
|
|
|
|
|
|
|
(r)
|
“
Natcore
” means Natcore
Technology, Inc., a private company incorporated under the laws of Delaware.
|
|
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|
(s)
|
“
Natcore Shares
” means
all of the issued and outstanding common shares of Natcore.
|
|
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|
|
(t)
|
“
Natcore Securities
”
means the Natcore Shares and the Natcore Warrants.
|
|
|
|
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|
|
(u)
|
“
Natcore Warrants
” means
1,950,000 warrants to purchase common shares of Natcore, representing all of
the issued and outstanding warrants to purchase common shares of Natcore on
the Closing Date, as set out in Schedule “A” hereto. Each Natcore Warrant
entitles the holder to acquire one additional Natcore Share at an exercise
price of US$0.30 until January 31, 2016.
|
|
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(v)
|
“
Parties
” means the
Vendors, Syracuse and Natcore.
|
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|
|
(w)
|
“
Payment Securities
”
means the Payment Shares and the Payment Warrants.
|
|
|
|
|
|
|
(x)
|
“
Payment Shares
” means
an aggregate of 12,960,086 common shares without par value in the capital of
Syracuse, to be issued to the Vendors as the total consideration payable for
the Natcore Shares as provided in Section 3.2.
|
|
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(y)
|
“
Payment Warrants
” means
the 2,145,000 warrants to purchase common shares in the capital of Syracuse
to be issued to certain of the Vendors as the total consideration payable for
the Natcore Warrants as provided in Section 3.2, each warrant entitling the
holder to purchase one additional common share of Syracuse at a price of
$0.40 per share until the date which is five years from the Closing Date,
which shall be in the form attached hereto as Schedule “B”.
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(z)
|
“
Payment Warrant Shares
”
means the common shares without par value in the capital of Syracuse, to be
issued to certain of the Vendors upon the exercise of the Payment Warrants.
|
- 3 -
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(aa)
|
“
Person
” means an
individual, corporation, body corporate, partnership, joint venture,
association, trust or unincorporated organization or any trustee, executor,
administrator or other legal representative.
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(bb)
|
“
Private Placement
”
means the private placement of up to 3,000,000 Units at a price of $0.40 per
Unit to be completed by Syracuse in conjunction with the Qualifying
Transaction. Each Unit is to be comprised of one common share in the capital
of Syracuse and one Private Placement Warrant.
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(cc)
|
“
Private Placement Warrant
”
means a share purchase warrant entitling the holder to acquire one common
share of Syracuse at a price of $0.75 per common share for a period of 24
months following its issuance, subject to certain forced exercise provisions.
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(dd)
|
“
Public Record
” means
the information filed by Syracuse on SEDAR, with the required Securities
Commissions, with the Exchange and with the Registrar of Companies for
British Columbia , as required in accordance with the requirements of the
Applicable Securities Laws, and which record contains all material facts (as
that term is defined by the Applicable Securities Laws) relating to the
corporate structure, business and operations of Syracuse.
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(ee)
|
“
Qualifying Transaction
”
means the acquisition of the Natcore Securities by Syracuse as provided for
in this Agreement, which acquisition shall meet the requirements of a
‘Qualifying Transaction’ as such term is defined in Policy 2.4 of the
Exchange.
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(ff)
|
“
Regulatory Authorities
”
means all regulatory authorities having jurisdiction over the transactions
contemplated by this Agreement including, without limitation, the Exchange
and the Securities Commissions and the United States Securities and Exchange
Commission.
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(gg)
|
“
Rice
“ means William
Marsh Rice University.
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(hh)
|
“
Shareholder’s Agreement
”
means the shareholder’s agreement dated March 31, 2004 between Natcore and
Rice entered into pursuant to the terms of the License Agreement.
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(ii)
|
“Sponsor Units” means 62,500 Sponsor Units to be granted to Haywood
Securities Inc. for acting as Syracuse’s sponsor in connection with the
Qualifying Transaction, each Sponsor Unit consisting of one common share of
Syracuse and one share purchase warrant having the same terms and conditions
as the Private Placement Warrants.
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(jj)
|
“
Sponsorship Engagement
”
means the engagement by Syracuse of Haywood Securities Inc. to act as
Syracuse’s sponsor in connection with the Qualifying Transaction to be
evidenced by the execution of a formal sponsorship agreement between the
parties, containing, among other things, terms relating to the consideration
payable by Syracuse to Haywood Securities Inc., including payment of the
Sponsor Units.
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(kk)
|
“
Syracuse
” means
Syracuse Capital Corp. , a company incorporated under the provisions of the
Business Corporations Act.
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(ll)
|
“
Syracuse Options
“ has
the meaning ascribed to that term in subsection 5.1(b).
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(mm)
|
“
Securities Commissions
”
means the British Columbia Securities Commission, the Alberta Securities
Commission, the Nova Scotia Securities Commission and the Ontario Securities
Commission.
|
- 4 -
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(nn)
|
“
Termination Date
” means May 31, 2009, or
such other date as the parties hereto may agree upon.
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(oo)
|
“
Unit
” means one common share of Syracuse
and one Private Placement Warrant.
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(pp)
|
“
U.S. Securities Act”
means the United
States Securities Act of 1933, as amended.
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(qq)
|
“
Vendors
” means all of the securityholders
of Natcore, as set forth in Schedule “A” hereto.
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1.2 Schedules
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The
following is the Schedule to this Agreement:
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Schedule “A”
|
-
|
Vendors and
Natcore Securities
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Schedule “B”
|
-
|
Form of
Payment Warrant
|
1.3 Interpretation
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For purposes of this Agreement, except as otherwise expressly
provided:
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(a)
|
“this Agreement” means this agreement, including the Schedules
hereto, and any agreement, document or instrument entered into, made or
delivered pursuant to the terms hereof, as any of them may from time to time
be supplemented or amended and in effect.
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(b)
|
All references in this Agreement to a designated “Article”,
“Section”, “subsection” or other subdivision or to a Schedule “A” are to the
designated Article, Section, subsection or other subdivision of, or Schedule
to, this Agreement unless otherwise specified.
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(c)
|
The words “herein”, “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any partic ular
Article, Section, subsection or other subdivision or Schedule.
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(d)
|
The headings in this Agreement are for convenience only and do not
form a part of this Agreement and are not intended to interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.
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(e)
|
All accounting terms not otherwise defined have the meanings assigned
to them in accordance with GAAP.
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(f)
|
All references to currency refer to lawful money of Canada (unless
expressed to be in some other currency) and all amounts to be calculated or
paid pursuant to this Agreement are to be calculated in lawful money of
Canada.
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(g)
|
Any reference to a corporate entity includes and is also a reference
to any corporate entity that is a successor to such entity.
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(h)
|
Words importing the masculine gender include the feminine or neuter
gender and words in the singular include the plural and vice versa.
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(i)
|
Except as otherwise provided in this Agreement, if any
representation, warranty, covenant or agreement herein is made by two or more
persons, or is made by a party hereto that is comprised of two or more
persons, the representation, warranty, covenant or agreement shall be the
several, and not joint, representation, warranty, covenant or agreement of
all such persons.
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(j)
|
Any action to be taken pursuant to this Agreement on a day which is
not a Business Day shall be taken on the next succeeding Business Day.
|
- 5 -
1.4 Governing Law
This
Agreement shall be governed by and construed in accordance with the laws of the
Province of British Columbia which shall be deemed to be the proper law hereof.
The courts of the Province of British Columbia and all appellate courts shall
have jurisdiction to entertain and determine all disputes and claims, whether
for specific performance, injunction, declaration or otherwise both at law and
in equity, arising out of or in any way connected with the construction,
breach, or alleged, threatened or anticipated breach of this Agreement, and
shall have jurisdiction to hear and determine all questions as to the validity,
existence or enforceability thereof.
ARTICLE 2 - ADVANCE TO NATCORE
2.1 Advance
Subject to
the terms and conditions hereof, Syracuse has made the Advance to Natcore.
2.2 Security
The Advance
is secured by a general security agreement dated September 26, 2008 over
Natcore’s assets with the exception of intellectual property or the License
Agreement, and a promissory note dated September 26, 2008 with a one year term
bearing interest at 7% per annum. Natcore acknowledges that it has arranged for
the registration of such general security interest in Natcore with the
applicable authorities in the State of Delaware.
If the
transactions contemplated by this Agreement do not complete or this Agreement
is terminated for whatever reason, the Advance will be immediately due and
payable by Natcore upon demand by Syracuse, along with interest at the rate of
7% per annum calculated daily, both before and after maturity.
ARTICLE 3 – PURCHASE AND SALE OF NATCORE
SECURITIES
3.1 Purchase of Natcore Securities and
Natcore
Based upon
the representations and warrantie s of the Parties set forth herein, and
subject to the conditions herein, Syracuse agrees to purchase from the Vendors,
and the Vendors agree to sell to Syracuse, free and clear of all liens, claims,
charges, options and encumbrances whatsoever, at the Closing Time, the Natcore
Securities together with all rights now or hereafter attached to or accruing in
respect of such Natcore Securities including all dividends and distributions
declared, paid or made in respect of them on or after the Closing Date.
3.2 Consideration
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(a)
|
For the Natcore Shares
: The consideration
payable by Syracuse to the Vendors for the purchase and sale of the Natcore
Shares shall be paid through the allotment and issuance to the Vendors of an
aggregate of 12,960,086 Payment Shares, each Payment Share having a deemed
price of $0.40 per Payment Share, which Payment Shares, the Vendors agree to
accept in complete satisfaction of the purchase price for the Natcore Shares.
The Payment Shares shall be distributed to the Vendors pro rata in accordance
with the number of the Natcore Shares held by them as set out in Schedule “A”
hereto, each Natcore Share held entitling the holder to 1.10 Payment Share.
|
- 6 -
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|
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(b)
|
For the Natcore Warrants
: The consideration
payable by Syracuse to the Vendors for the purchase and sale of the Natcore
Warrants shall be paid through the allotment and issuance to the Vendors of
an aggregate of 2,145,000 Payment Warrants, each Payment Warrant entitling
the holder to acquire one additional common share of Syracuse at a price of
$0.40 per share until the date which is five years from the Closing Date,
which Payment Warrants, the Vendors agree to accept in complete satisfaction
of the purchase price for the Natcore Warrants. The Payment Warrants shall be
distributed to the Vendors pro rata in accordance with the number of the
Natcore Warrants held by them as set out in Schedule “A” hereto, each Natcore
Warrant held entitling the holder to one Payment Warrant.
|
3.3 Fractional Securities
No
fractional Payment Shares, Payment Warrants or rights to acquire fractional
Payment Shares or Payment Warrants will be issued to the Vendors. No cash will
be paid by Syracuse in lieu of fractional securities and any fractions so
resulting will be rounded:
|
|
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|
(a)
|
Up to the
nearest whole Payment Share or Payment Warrant, as the case may be, in the
event of a fractional security of 0.5 or greater; and
|
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(b)
|
Down to the
nearest whole Payment Share or Payment Warrant, as the case may be, in the
event of a fractional security of less than 0.5.
|
3.4 Payment of the Consideration
The
issuance of the Payment Securities shall be effected at Closing pursuant to Article
8 hereof. The Vendors acknowledge that some or all of the Payment Shares, the
Payment Warrants and/or the Payment Warrant Shares, may be subject to escrow in
accordance with the requirements of the Exchange.
3.5 Securities Resale Restrictions
The Vendors
acknowledge that the issuance of the Payment Shares, the Payment Warrants and
the Payment Warrant Shares may be subject to certain trading restrictions in
the jurisdiction in which they are resident, and the Vendors accordingly agree
to abide by and facilitate compliance with any and all trading restrictions and
filing requirements as may be applicable in such jurisdictions.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF
THE VENDORS
4.1 Representations and Warranties of the
Vendors
To induce
Syracuse to enter into and to complete the transactions contemplated by this
Agreement, the Vendors individually and severally represent and warrant to
Syracuse, as warranties and representations that are true at the Closing Time
as if such warranties and representations were made at such time, that:
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|
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(a)
|
Valid and Binding
. This Agreement
constitutes a legal, valid and binding obligation of each of the Vendors
enforceable in accordance with its terms.
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|
(b)
|
Authority to Sell
. Each of the Vendors has
due and sufficient right and authority to enter into this Agreement on the
terms and conditions herein set forth and the Vendors have sufficient right
and authority to transfer all the legal and beneficial title to and ownership
of the Natcore Securities held by them, as set forth on the Schedule “A”
hereto, to Syracuse, free and clear of any liens, charges, encumbrances or
voting agreement, escrow agreement or pooling arrangement, voting trust,
unanimous shareholder agreement, or other agreement, limitation or
restriction of any nature.
|
- 7 -
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|
(c)
|
Corporate Authority
. In the case of any
Vendor who is not an individual, the execution and delivery of and
performance by such Vendor of this Agreement and the consummation of the
transactions contemplated by them have been duly authorized by all necessary
corporate action on the part of such Vendor.
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|
(d)
|
Share Holdings
. At the Closing Time, the
Natcore Shares will be validly issued and outstanding as fully paid and
non-assessable common shares of Natcore and the number of Natcore Shares held
by each of the Vendors and to be sold to Syracuse at the Closing is as set
forth on Schedule “A” hereto.
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|
(e)
|
Warrant Holdings
. The Natcore Warrants are
validly issued and outstanding and the number of Natcore Warrants held by
each of the Vendors and to be sold to Syracuse at the Closing is as set forth
on Schedule “A” hereto.
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|
(f)
|
Title to Securities
. Each of the Vendors is
the registered, legal and beneficial owner of all of the Natcore Securities
as indicated on Schedule “A” hereto with good and marketable title thereto
and such Securities are free and clear of any voting restriction, trade
restriction lien, charge, encumbrance or voting agreement, voting trust or
other agreement, limitation or restriction of any nature, and there are no
agreements, warrants, rights of conversion, rights of pre-emption or similar
rights or other rights pursuant to which any of the Vendors are or may become
obligated to sell, transfer or assign any shares or other securities of
Natcore to any person other than Syracuse, except as disclosed to Syracuse.
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|
(g)
|
No Material Adverse Claims
. There are no
material adverse claims or challenges of any kind whatsoever, including
without limitation claims or challenges by third parties, against or to the
ownership of, or title to, the Natcore Securities, nor is there any basis
therefore, that if determined adversely, would have a material adverse effect
on the ownership or use thereof.
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|
|
|
(h)
|
No Breach
. The execution and delivery of
this Agreement, the performance of the obligations of the Vendors under this
Agreement and the completion of the transactions contemplated under this
Agreement will not:
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|
|
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|
|
(i)
|
materially conflict with, or result in a material breach of or the
acceleration of any material indebtedness under, or constitute a material
default under, any material indenture, mortgage, agreement, lease, license or
other instrument of any kind whatsoever to which any of the Vendors is a
party or by which any of the Vendors is bound, or any judgement or order of
any kind whatsoever of any court or administrative body of any kind
whatsoever by which any of the Vendors is bound, which would have a material
adverse effect on this Agreement and the completion of the transactions
contemplated hereunder; or
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|
(ii)
|
result in a material violation of any material law or regulation of
any kind whatsoever by any of the Vendors, which would have a material
adverse effect on this Agreement and the completion of the transactions
contemplated hereunder,
|
- 8 -
and the Vendors covenant, represent and warrant to and in favour of and
with Syracuse that, except as otherwise provided in this Agreement, all of the
representations and warranties set forth in this Section 4.1 shall be true and
correct at the Closing Time as if made on that date. The parties acknowledge
and agree that each Vendor makes these representations and warranties
individually on behalf of such Vendor alone and not as to the truth and
accuracy of the representations and warranties of other Vendors or the Vendors
as an aggregate group and to the extent each Vendor’s representations and
warranties relate to Natcore Shares and Natcore Warrants, they only relate to
those Natcore Shares and Natcore Warrants owned by such Vendor.
4.2 Representations and Warranties of Natcore
To induce
Syracuse to enter into and to complete the purchase of Natcore as contemplated
by this Agreement, Natcore represents, and warrants, to Syracuse, as warranties
and representations that are true at the Closing Time as if such warranties and
representations were made at such time, that:
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|
|
(a)
|
Corporate Status
. Natcore:
|
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|
|
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|
|
(i)
|
is a company duly incorporated and validly existing under the laws of
the State of Delaware and has all requisite corporate power and authority to
enter into and perform its obligations under this Agreement;
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|
(ii)
|
is in good standing and not in default with respect to the filings
required under the laws of the State of Delaware;
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|
(iii)
|
is not a ‘reporting issuer’ in any jurisdiction of Canada or the
United States and does not carry any similar designation outside of Canada or
the United States; and
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|
(iv)
|
has the corporate power and capacity to carry on the business carried
on by it and to own and lease its property and assets.
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|
|
(b)
|
Capital
. The authorized capital of Natcore
consists of 27,000,000 of common shares with a par value of $0.001 of which
11,781,896 common shares are issued and outstanding, all of which have been
duly and validly issued and are fully paid common shares.
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|
(c)
|
No Options
. Other than the Natcore Warrants
and the Cancellable Warrants, no person has any right, agreement, warrant,
option, right of conversion, right of pre-emption, or commitment, present or
future, contingent or absolute, or anything capable of becoming a right,
agreement or option with the passage of time or the occurrence of any event
or otherwise:
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|
(i)
|
to require Natcore to issue any further or other shares or any other
security or other instrument convertible or exchangeable into shares or to
convert or exchange any security or other instrument into or for shares of
Natcore;
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|
(ii)
|
for the issue or allotment of any of the unissued shares of Natcore; or
|
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|
(iii)
|
to require Natcore to purchase, redeem or otherwise acquire any of
the issued and outstanding shares of Natcore.
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|
(d)
|
No Subsidiaries
. Natcore has no subsidiaries
and does not own any securities issued by, or any equity or ownership
interest in, any other corporate entity.
|
- 9 -
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|
(e)
|
No Escrow/ Pooling
. Except pursuant to the
Shareholders Agreement, a copy of which has been provided by Natcore to
Syracuse, none of the Natcore Shares are subject to escrow restrictions, pooling
arrangements, voting trust or unanimous shareholder agreements, whether
voluntary or otherwise.
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|
(f)
|
No Litigation
. There are no claims, actions,
suits, judgments, litigation or proceedings pending against or affecting
Natcore, and neither is Natcore aware of any existing ground on which any
such claim, action, suit, judgment, litigation or proceeding might be
commenced with any reasonable likelihood of success.
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|
(g)
|
Corporate Action
. The execution, delivery
and performance of this Agreement and the performance of the transactions
contemplated herein are within the corporate power and authority of Natcore
and have been authorized by all necessary corporate action of Natcore.
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|
(h)
|
Financial Statements
. The interim financial
statements of Natcore for the nine months ended September 30, 2008 and the
audited financial statements of Natcore for the year ended December 31, 2007
have been prepared in accordance with U.S. generally accepted accounting
principles consistently applied and present fairly the financial position of
Natcore at the relevant dates and the results of operations cash flows (if
any) for the periods covered thereby.
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|
(i)
|
No Authorization Required
. Other than
certain filings with the United Stated Securities and Exchange Commission, no
authorization, approval, order, license, permit or consent of any court,
tribunal or government authority, and no registration with, declaration or
notice to or filing by with any such court, tribunal or government authority,
is required in order for Natcore to incur the obligations expressed to be
incurred by Natcore in or pursuant to this Agreement, to execute and deliver
all other documents and instruments to be delivered by Natcore pursuant to
this Agreement, to perform and observe the terms and provisions of this
Agreement, and to render this Agreement a legal, valid and binding obligation
of, and enforceable against, Natcore.
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|
(j)
|
No Finder’s Fee
. No person or corporation is
entitled to a finder’s fee or other form of compensation from Natcore with
respect to this Agreement.
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|
(k)
|
No Breach
. Neither of the execution and
delivery of this Agreement, the completion of the transactions contemplated
hereby, nor the observance and performance by Natcore of its covenants and
obligations herein, will:
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|
|
(i)
|
result in a breach or violation of any of the terms or provisions of
the constating documents of Natcore;
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|
(ii)
|
conflict with, result in a breach or cancellation of, constitute a
default under, invalidate or impair rights to properties under, or accelerate
or permit the acceleration of the performance required by, any agreement,
instrument, license, permit or authority to which Natcore is a party or by
which it is bound or to which any property of Natcore is subject or result in
the creation of any lien, charge or encumbrance upon any of the assets of
Natcore under any such agreement or instrument, or give to others any
material interest or rights, including rights of purchase, termination,
cancellation or acceleration, under any such agreement, instrument, license,
permit or authority; or
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|
|
(iii )
|
violate any provision of law or administrative regulation or any
judicial or administrative order, award, judgment or decree applicable to
Natcore.
|
- 10 -
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|
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|
|
(l)
|
Directors
and Officers
. The directors and officers of Natcore
are as follows:
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Name
|
|
Position
|
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Charles
Provini
|
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Chief
Executive Officer
|
|
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Brien Lundin
|
|
Director
|
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Joseph
Konopny
|
|
Director
|
|
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Joseph
Calhoun
|
|
Director
|
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(m)
|
Corporate Records
. The corporate records and
minute books of Natcore, as required to be maintained by it pursuant to the
laws of the State of Delaware, are accurate, complete and up to date in all
material respects, and are maintained at the records office of Natcore.
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|
(n)
|
No Adverse Event
. There has been no material
adverse change in the business or condition, financial or otherwise, of
Natcore from that shown in its most recent financial statements and Natcore
has not experienced, nor is it aware of any occurrence or event which has, or
might reasonably be expected to have, a material adverse effect on the
business or the result of its operations which would materially adversely
affect the value of its business or the Natcore Securities.
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|
|
(o)
|
No Material Adverse Claims
. There are no
material adverse claims or challenges of any kind whatsoever, including
without limitation claims or challenges by third parties, against or to the
ownership of, or title to Natcore or its assets, nor, to the best of
Natcore’s knowledge are any such challenges contemplated, threatened nor is
there any basis therefore, that if determined adversely, would have a
material adverse affect on the ownership or use thereof.
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|
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|
(p)
|
Material Agreements
. Natcore is not a party
to, or bound by, any material agreements, covenants, undertakings or other
commitments other than:
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|
|
|
|
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|
|
(i)
|
the present agreement;
|
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(ii)
|
the Letter of Intent;
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(iii)
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the License Agreement;
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(iv)
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the Shareholder’s Agreement;
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(v)
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the general security Agreement dated July 18, 2008 between Natcore
and Nanotech Sciences Corp.;
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(vi)
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the promissory note dated July 18, 2008 between Natcore and Nanotech
Sciences Corp.;
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(vii)
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the general security agreement dated September 26, 2008 between
Syracuse and Natcore;
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(viii)
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the promissory note dated September 26, 2008 between Syracuse and
Natcore;
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(ix)
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an executive management agreement between Natcore and Charles
Provini;
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(x)
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promissory note dated December 10, 2008 between Natcore and Brien
Lundin; and
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(xi)
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promissory note dated December 16, 2008 between Natcore and John
Calhoun.
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- 11 -
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copies of which have been provided to Syracuse and each material
contract or agreement between Natcore and any other person is in full force
and effect and, to the best of the knowledge and belief of Natcore, is valid,
binding and enforceable against each of the parties thereto in accordance
with its terms and no material breach or default exists in respect thereof on
the part of any party thereto and no event has occurred which, with the
giving of notic e or lapse of time or both, would constitute such a material
breach or default.
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(q)
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No Agreements
. Except as set forth in
subsection 4.2(p), Natcore is not a party to, or bound by, any agreements,
covenants, undertakings or other commitments, on its own or as a result of
any partnership or joint venture in which it is a partner or participant:
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(i)
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under which the transaction contemplated herein would have the effect
of imposing restrictions or obligations on Natcore materially greater than
those imposed upon Natcore or any such partnership or joint venture at the
date hereof;
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(ii)
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which would give a third party, as a result of the consummation of
the transaction contemplated herein, a right to terminate any material
agreement to which Natcore or any such partnership or joint venture is a
party or to purchase any of their respective assets;
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(iii)
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under which the consummation of the transaction contemplated herein
would impose material restrictions on the ability of Natcore to carry on any
business which it might choose to carry on within any geographical area, to
acquire property or dispose of its property and assets in their entirety or
to change its corporate status; or
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(iv)
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under which the consummation of the transaction contemplated herein
would impose material restrictions on the ability of Natcore to pay dividends
or make distributions to its shareholders or to borrow money and to mortgage
and pledge its property as security therefore.
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(r)
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Pension Plans
. There are no pension, profit
sharing, group insurance or similar plans or other deferred compensation
plans of any kind whatsoever with respect to the directors, officers or
employees of Natcore and there are no labour contracts or collective
agreements with respect to any employees of Natcore, nor any labour grievance
procedures, labour disputes or strikes or union organization campaign,
pending or threatened against Natcore.
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(s)
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No Non Arm’s Length Debts owed to Natcore
.
There are no debts or amounts owing to Natcore by any of its officers, former
officers, directors, former directors, shareholders, employees or former
employees or any family member thereof, or any person with whom Natcore does
not deal at arm’s length excerpt for any amounts advanced to such persons for
expenses incurred on behalf of Natcore in the ordinary course.
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(t)
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Tax Returns
. Natcore has paid or adequately
provided for, and undertakes to pay, all taxes, duties and imposts levied
under applicable legislation, including but without limitation, income tax,
capital gains tax, recoupment tax, sales tax, fringe benefits tax,
withholding tax, excise duty, stamp duty, land tax, local authority rates and
other taxes,
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- 12 -
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fees and assessments, including interest and penalties or other
payments whether similar or dissimilar to the foregoing (“
Taxes
”) required to be paid by Natcore
for each tax period ending on, and as of, and prior to the Closing Date, and
Natcore is not in default in payment of any Taxes, and has duly filed all tax
reports and returns required in connection therewith to be filed by them.
Natcore has not received any notice of any tax deficiency outstanding,
proposed or assessed, and there are no statutory charges or liens upon,
pending against or, to the best knowledge of Natcore, following diligent
inquiry, threatened against Natcore or any of their assets arising pursuant
to any applicable legislation.
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(u)
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Insolvency
. Natcore is not insolvent nor has
it committed an act of bankruptcy, proposed a compromise or arrangement to
its creditors generally, had any petition for the granting of a receiving
order in bankruptcy file d against it, made a voluntary assignment into
bankruptcy or taken any proceeding to have itself wound-up or declared
bankrupt or to have a receiver appointed in respect of all or any portion of
its assets or commenced proceedings for any amalgamation, continuation or
other corporate reorganization.
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(v)
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Compliance with Laws
. To the knowledge of
Natcore, Natcore is in compliance, in all material respects with all
applicable laws.
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(w)
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No Untrue Statements
. None of the
representations, warranties or statements of fact made in this Section
contain any untrue statement of a material fact or omit to state any material
fact necessary to make any such warranty or representation not misleading,
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and Natcore covenants, represents and warrants to and in favour of
and with Syracuse that, except as otherwise provided in this Agreement, all
of the representations and warranties set forth in this Section 4.2 shall be
true and correct at the Closing Time as if made on that date.
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4.3 Survival
The
representations and warranties of the Vendors and Natcore contained in this
Agreement shall survive the Closing and, notwithstanding any investigations or
enquiries made by Syracuse prior to the Closing and notwithstanding the waiver
of any condition by Syracuse, the representations, warranties, covenants and
agreements of the Vendors and Natcore, shall (except where otherwise
specifically provided in this Agreement) survive the Closing and shall continue
in full force and effect for a period of 12 months from the Closing Date for
all matters.
4.4 Reliance
The Vendors
and Natcore acknowledge and agree that Syracuse has entered into this Agreement
relying on the warranties and representations and other terms and conditions of
this Agreement notwithstanding any independent searches or investigations that
may be undertaken by or on behalf of Syracuse and that no information that is
now known or should be known or that may hereafter become known to Syracuse or
its directors, officers, employees, representatives or professional advisors
shall limit or extinguish the right to indemnification hereunder.
4.5 Limitation of Liability
If any of
the Vendors are in breach of any representation, warrant, covenant, agreement
or condition made by it and contained in this Agreement the liability of an
individual Vendor shall be limited to the value as at the Closing Date of the
total consideration received by that Vendor.
- 13 -
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF
SYRACUSE
5.1 Representations and Warranties
To induce
each of the Vendors and Natcore to enter into and to complete the transactions
contemplated by this Agreement, Syracuse represents and warrants to each of the
Vendors and Natcore, as warranties and representations that are true at the
Closing Time as if such warranties and representations were made at such time,
that:
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(a)
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Corporate Status
. Syracuse:
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(i)
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is a corporation duly incorporated and validly existing under the
laws of the Province of British Columbia and has all requisite corporate
power and authority to enter into and perform its obligations under this
Agreement;
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(ii)
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is in good standing and not in default with respect to the filings
required under the Applicable Securities Laws and the Business Corporations
Act; and
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(iii)
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has the corporate power and capacity to carry on the business carried
on by it and to own and lease its property and assets.
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(b)
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Capital
. The authorized capital of Syracuse
consists of an unlimited number of common shares without par value of which
4,031,667 common shares are issued and outstanding, all of which have been
duly and validly issued and are fully paid and non-assessable shares and in
compliance with all applicable corporate and securities laws. Syracuse has
outstanding stock options held by directors, officers and a consultant to
purchase 400,000 common shares in the capital of Syracuse at a price of $0.15
per share (herein called “
Syracuse Options
“), of which 200,000 shall be cancelled by Syracuse or exercised by their
holders prior to the Closing Date, and Agent’s Options in consideration of
services performed by PI Financial Corp. in respect of the initial public
offering of Syracuse.
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(c)
|
No Options
. Except for the Syracuse Options
and the Agent’s Options or as contemplated hereunder, no person has any
right, agreement, warrant, option or commitment, present or future,
contingent or absolute, or anything capable of becoming a right, agreement or
option with the passage of time or the occurrence of any event or otherwise:
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(i)
|
to require Syracuse to issue any further or other shares or any other
security or other instrument convertible or exchangeable into shares or to
convert or exchange any security or other instrument into or for shares of
Syracuse;
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(ii)
|
for the issue or allotment of any of the unissued authorized shares
of Syracuse; or
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(iii)
|
to require Syracuse to purchase, redeem or otherwise acquire any of
the issued and outstanding shares of Syracuse.
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(d)
|
Listed Company
. The common shares in the
capital of Syracuse are listed for trading on the Exchange and no other stock
exchange; Syracuse is a reporting issuer under the Applicable Securities
Laws, with the exception of the US Securities Act, and is not in breach of
any Applicable Securities Laws or of any of the rules or policies of the
Exchange or any other applicable Regulatory Authority.
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(e)
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No Litigation
. To the knowledge of its
directors, there are no claims, actions, suits, judgments, litigation or
proceedings pending against or affecting Syracuse, and neither is Syracuse
aware of any existing ground on which any such claim, action, suit, judgment,
litigation or proceeding might be commenced with any reasonable likelihood of
success.
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- 14 -
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(f)
|
Corporate Action
. The execution, delivery
and performance of this Agreement and the performance of the transactions
contemplated herein are within the corporate power and authority of Syracuse
and have been authorized by all necessary corporate action of Syracuse.
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(g)
|
No Authorization Required
. Except for the
consent of the Regulatory Authorities, no authorization, approval, order,
license, permit or consent of any court, tribunal or government authority,
and no registration with, declaration or notice to or filing by with any such
court, tribunal or government authority, is required in order for Syracuse to
incur the obligations expressed to be incurred by Syracuse in or pursuant to
this Agreement, to execute and deliver all other documents and instruments to
be delivered by Syracuse pursuant to this Agreement, to perform and observe
the terms and provisions of this Agreement, and to render this Agreement a
legal, valid and binding obligation of, and enforceable against, Syracuse.
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(h)
|
No Finder’s Fee
. No person or corporation is
entitled to a finder’s fee or other form of compensation from Syracuse with
respect to this Agreement.
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(i)
|
No Breach
. Neither of the execution and
delivery of this Agreement, the completion of the transactions contemplated
hereby, nor the observance and performance by Syracuse of its covenants and
obligations herein, will:
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(i)
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result in a breach or violation any of the terms or provisions of the
constating documents of Syracuse;
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(ii)
|
conflict with, result in a breach or cancellation of, constitute a
default under, invalidate or impair rights to properties under, or accelerate
or permit the acceleration of the performance required by, any agreement,
instrument, license, permit or authority to which Syracuse is a party or by
which it is bound or to which any property of Syracuse is subject or result
in the creation of any lien, charge or encumbrance upon any of the assets of
Syracuse under any such agreement or instrument, or give to others any
material interest or rights, including rights of purchase, termination,
cancellation or acceleration, under any such agreement, instrument, license,
permit or authority; or
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(iii)
|
violate any provision of law or administrative regulation or any
judicial or administrative order, award, judgment or decree applicable to
Syracuse.
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(j)
|
Directors and Officers
. The directors and
officers of Syracuse are as follows:
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Name
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Position
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Steve Bajic
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President
and Chief Executive Officer and Director
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W. John
Meekison
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Director
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Joel
Dumaresq
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Director
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Martin Bajic
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Chief
Financial Officer and Director
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(k)
|
Corporate Records. The corporate records and minute books of
Syracuse, as required to be maintained by it pursuant to the Business Corporations
Act, are accurate, complete and up to date in all material respects, and are
maintained at the records office of Syracuse.
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- 15 -
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(l)
|
Financial Statements
. The financial
statements of Syracuse contained in the Public Record have been prepared in
accordance with GAAP consistently applied, present fairly the financial
position of Syracuse at the relevant dates and the results of operations cash
flows (if any) for the periods covered thereby.
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(m)
|
No Adverse Event
. Except as disclosed in the
Public Record, there has been no material adverse change in the business or
condition, financial or otherwise, of Syracuse from that shown in the
financial statements referred to in subsection 5.1(l) and Syracuse has not
experienced, nor is it aware of any occurrence or event which has, or might
reasonably be expected to have, a material adverse effect on the business or
the result of its operations which would materially adversely affect the
value of its business.
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(n)
|
Material Agreements
. Except as disclosed in
the Public Record, Syracuse does not have any material contracts, and each
material contract or agreement between Syracuse and any other person is in
full force and effect and, to the best of the knowledge and belief of
Syracuse, is valid, binding and enforceable against each of the parties
thereto in accordance with its terms and no material breach or default exists
in respect thereof on the part of any party thereto and no event has occurred
which, with the giving of notice or lapse of time or both, would constitute
such a material breach or default.
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(o)
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No Dissolution
. No proceedings are pending
for and Syracuse is not aware of any basis for the institution of any
proceedings leading to the dissolution or winding-up of Syracuse or its
subjection to bankruptcy or any other laws governing the affairs of insolvent
persons.
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(p)
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No Non Arm’s Length Debts
. There are no
debts or amounts owing to Syracuse by any of its officers, former officers,
directors, former directors, shareholders, employees or former employees or
any family member thereof, or any person with whom Syracuse does not deal at
arm’s length excerpt for any amounts advanced to such persons for expenses
incurred on behalf of Syracuse in the ordinary course.
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(q)
|
Tax Returns and Liabilities
. Syracuse has
duly filed on a timely basis all tax returns required to be filed by it and
has paid all taxes which are due and payable by it, and has paid all
assessments and reassessments, and all other taxes, governmental charges,
penalties, interest and fines due and payable on or before the date hereof;
adequate provision has been made for taxes payable for the current period for
which tax returns are not yet required to be filed; there are no agreements,
waivers or other arrangements providing for an extension of time with respect
to the filing of any tax return by, or payment of any tax, governmental
charge or deficiency against Syracuse; there are no actions, suits,
proceedings, investigations or claims now threatened or pending against
Syracuse in respect of taxes, governmental charges or assessments, or any
matters under discussion with any governmental authority relating to taxes,
governmental charges or assessments asserted by any such authority. Syracuse
has, where required, withheld from each payment made to any of its officers,
directors, former directors and employees the amount of all taxes including,
but not limited to, income tax and other deductions required to be withheld
therefrom and has paid the same to the proper tax and other receiving
officers within the time required under any applicable tax legislation.
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(r)
|
Compliance with Laws
. To the knowledge of
its directors, Syracuse is in compliance, in all material respects with all
applicable laws.
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(s)
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No Knowledge of Adverse Matters
. Syracuse
does not have any specific information relating to Syracuse that is not
generally known or that has not been disclosed to the Vendors and that, if
known, could reasonably be expected to have a materially adverse effect on
the value of Syracuse, or its common shares as at the date of this Agreement.
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- 16 -
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(t)
|
Payment Shares and Payment Warrants
. The
Payment Shares, when issued on Closing, shall be fully paid, validly issued
and free of clear of all liens, charges, security interests and encumbrances
whatsoever, and the Payment Warrants, when issued on Closing, shall be
validly issued and free and clear of all liens, charges, security interests
and encumbrances whatsoever, except for such escrow and resale restrictions
imposed by the Exchange as contemplated by Section 3.5 of this Agreement.
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(u)
|
No Untrue Statements
. None of the
representations, warranties or statements of fact made in this Section
contain any untrue statement of a material fact or omit to state any material
fact necessary to make any such warranty or representation not misleading.
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and Syracuse covenants, represents and warrants to and in favour of and
with all of the Vendors and Natcore that, except as otherwise provided in this
Agreement, all of the representations and warranties set forth in this Section
5.1 shall be true and correct at the Closing Time as if made on that date.
5.2 Survival
The
representations and warranties of Syracuse contained in this Agreement shall
survive the Closing and the purchase of the Securities and, notwithstanding the
Closing and the purchase of the Natcore Securities, the representations and
warranties of Syracuse shall continue in full force and effect for the benefit
of the Vendors for a period of 12 months from the Closing Date.
5.3 Reliance
Syracuse
acknowledges and agrees that the Vendors and Natcore have entered into this
Agreement relying on the warranties and representations and other terms and
conditions of this Agreement notwithstanding any independent searches or
investigations that may be undertaken by or on behalf of the Vendors or Natcore
and that no information that is now known or should be known or that may
hereafter become known to the Vendors or Natcore or their directors, officers,
employees, representatives or professional advisors, as the case may be, shall
limit or extinguish any rights or remedies of the Vendors or Natcore to the
right to indemnification hereunder.
If Syracuse
is in breach of any representation, warranty, covenant, agreement or condition
made by it and contained in this Agreement it shall be liable and shall
indemnify and save harmless the Vendors and Natcore from any and all loss
(including economic loss), costs, damages, actions and suits arising out of or
in connection with any breach of any representation, warranty, covenant,
agreement or condition made by it and contained in this Agreement provided
notice of any such breach is delivered to Syracuse by the Vendors or Natcore
within two years of the date of this Agreement
ARTICLE 6 - COVENANTS
6.1 Covenants of Syracuse:
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Syracuse
hereby covenants and agrees that:
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(a)
|
until the Closing Date, Syracuse will carry on its business in the
ordinary course, except as otherwise contemplated in this Agreement;
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- 17 -
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(b)
|
until the Closing Date, Syracuse will not merge into or with, or
amalgamate or consolidate with, or enter into any other corporate
reorganization with, any other corporation or person or perform any act or
enter into any transaction or negotiation which interferes or is inconsistent
with the completion of the transactions contemplated hereby, other than as
contemplated in this Agreement and, without limiting the generality of the
foregoing, Syracuse will not:
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(i)
|
make any distribution by way of dividend, return of capital or
otherwise to or for the benefit of Syracuse’s shareholders; or
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(ii)
|
issue any of its shares or other securities convertible into shares
or enter into any commitment or agreement therefor, except pursuant to the
exercise of Syracuse Options and the Agent’s Options and the proposed
issuance of securities under the Private Placement and the Sponsorship
Engagement, other than as is contemplated by this Agreement, or as may be
agreed upon in writing by the Vendors and Natcore; or
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(iii)
|
directly or indirectly, buy-back or cancel any of its share capital;
and
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(iv)
|
grant or make any option, calls, rights, commitments or other
agreements of any kind obligating it to issue, transfer, sell or deliver any
security of Syracuse, other than pursuant to this Agreement, the Private
Placement or the Sponsor Units;
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(c)
|
Syracuse shall not alter or amend its constating documents as the
same exist at the date of this Agreement;
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(d)
|
Syracuse shall not, until the Closing Date, engage in any business,
enterprise or other activity different from that carried on by it at the date
of this Agreement or enter into any transaction or incur (except in respect
of obligations or liabilities to which it is already legally subject) any
obligation, expenditure or liability other than obligations, expenditures and
liabilities relating to the maintenance of its corporate existence and this
Agreement;
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(e)
|
Syracuse shall maintain its books, accounts and records in the usual,
regular and ordinary manner, on a basis consistent with prior practices and
will comply with all laws, rules and regulations applicable to it and to the
conduct of its business and will not do any act, or omit to do any act which
will cause a breach of any material commitments of obligations;
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(f)
|
Syracuse shall cancel 200,000 of the Syracuse Options, with the
consents of the holders of such Syracuse Options prior to the Closing Date;
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(g)
|
Syracuse shall furnish to the Vendors such information, in addition
to the information contained in this Agreement, relating to the financial
condition, business, properties and affairs of Syracuse, as may reasonably be
requested by the Vendor, which information shall be true and complete in all
material respects and shall not contain an untrue statement of any material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances in which they are made, not misleading;
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(h)
|
If required by Applicable Securities Laws, Syracuse will forthwith
after the date hereof take steps to convene a general meeting of the
shareholders of Syracuse as soon as reasonably possible, and shall use its
reasonable efforts to obtain thereat, approval by resolution of the
shareholders of Syracuse of the purchase and sale of the Natcore Securities
under this Agreement and the issuance of the Payment Shares, the Payment
Warrants and the Payment Warrant Shares, as full payment for the Natcore
Securities;
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- 18 -
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(i)
|
Syracuse shall promptly apply for and use all reasonable efforts to
obtain all approvals of the Exchange and any Regulatory Authority which are
required in connection with the consummation of the transactions contemplated
hereby, including approval to the listing on the Exchange of the Payment
Shares and the Payment Warrant Shares; and
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(j)
|
Syracuse shall do all such other acts and things as may be necessary
or desirable in order to give effect to the transaction contemplated by this
Agreement, including using its best efforts together with the Vendors and
Natcore, to complete the Private Placement to raise minimum gross proceeds of
$1,200,000, at a price of $0.40 per Unit, and to obtain Exchange acceptance
of the transactions to be undertaken pursuant to this Agreement.
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6.2 Covenants of Natcore :
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Natcore
hereby covenants and agrees that:
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(a)
|
until the Closing Date, Natcore will carry on its business in the
ordinary course, except as otherwise contemplated in this Agreement;
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(b)
|
until the Closing Date, Natcore will not merge into or with, or
amalgamate or consolidate with, or enter into any other corporate
reorganization with, any other corporation or person or perform any act or
enter into any transaction or negotiation which interferes or is inconsistent
with the completion of the transactions contemplated hereby, other than as
contemplated in this Agreement and, without limiting the generality of the
foregoing, Natcore will not:
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(i)
|
make any distribution by way of dividend, return of capital or
otherwise to or for the benefit of Natcore’s shareholders; or
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(ii)
|
issue any of its shares or other securities convertible into shares
or enter into any commitment or agreement therefor, except pursuant to the
exercise of Natcore Warrants, other than as is contemplated by this
agreement, or as may be agreed upon in writing by the Vendors and Syracuse;
or
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(iii)
|
buy-back or cancel any of its share capital; and
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(iv)
|
grant or make any option, calls, rights, commitments or other
agreements of any kind obligating it to issue, transfer, sell or deliver any
security of Natcore other than pursuant to this Agreement;
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(c)
|
Natcore shall not alter or amend its constating documents as the same
exist at the date of this Agreement;
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(d)
|
Natcore shall not, until the Closing Date, engage in any business,
enterprise or other activity different from that carried on by it at the date
of this Agreement or enter into any transaction or incur (except in respect
of obligations or liabilities to which it is already legally subject) any
obligation, expenditure or liability other than obligations, expenditures and
liabilities relating to the maintenance of its corporate existence;
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(e)
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Natcore shall maintain its books, accounts and records in the usual,
regular and ordinary manner, on a basis consistent with prior practices and
will comply with all laws, rules and regulations applicable to it and to the
conduct of its business and will not do any act, or omit to do any act which
will cause a breach of any material commitments of obligations and will
ensure that the License Agreement remains in good standing and will not do
any act or omit to do any act which would cause a breach of the License
Agreement;
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- 19 -
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(f)
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Natcore shall furnish to Syracuse such information, in addition to
the information contained in this Agreement, relating to the financial
condition, business, properties and affairs of Natcore as may reasonably be
requested by Syracuse, including but not limited to, a satisfactory business
plan, financial statements as required by the Exchange including audited
statements for the most recently completed financial year of Natcore and the
two financial years prior and interim statements reviewed by a certified
professional accountant for Natcore’s most recently completed quarter or
other interim period, which information shall be true and complete in all
material respects and shall not contain an untrue statement of any material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances in which they are made, not misleading;
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(g)
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Natcore shall provide to Syracuse prospectus level disclosure
regarding its financial condition, business, assets and affairs for the
purposes of completing a filing statement or information circular as required
by the Exchange and shall certify such disclosure in such filing statement or
information circular as constituting full, true and plain disclosure;
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(h)
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Natcore shall cause the Cancelled Warrants to be cancelled and of no
effect on or prior to the Closing Date, such that upon the completion of the
transactions contemplated by this Agreement, Syracuse shall hold all of the
issued and outstanding securities of Natcore and Natcore shall become a
wholly owned subsidiary of Syracuse;
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(i)
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Natcore, shall together with the written consent of Rice, modify the
Shareholder’s Agreement; and
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(j)
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Natcore shall do all such other acts and things as may be necessary
or desirable in order to give effect to the transaction contemplated by this
Agreement.
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6.3 Covenants of the Vendors
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The Vendors hereby covenant and agree that:
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(a)
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The Vendors shall furnish to Syracuse such information, in addition
to the information contained in this Agreement, relating to the Natcore
Securities as may reasonably be requested by Syracuse, which information
shall be true and complete in all material respects and shall not contain an
untrue statement of any material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading; and
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(b)
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The Vendors shall do all such other acts and things as may be
necessary or desirable in order to give effect to the transaction
contemplated hereby.
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6.4 Mutual Covenants
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Each of the
Parties hereby covenant that:
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(a)
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The Parties covenant that from the date hereof until the Termination
Date not to initiate, propose, assist or participate in any activities in
opposition to or in competition with the transactions contemplated by this
Agreement, and without limiting the generality of the foregoing, not to
undertake any transaction or negotiate any transaction which would be or
potentially could be in conflict with this Agreement and not to take actions
out of the ordinary course of business of any kind which may reduce the
likelihood of success of the transactions contemplated by this Agreement;
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- 20 -
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(b)
|
The Parties acknowledge that the Payment Shares, the Payment
Warrants, the Payment Warrant Shares, to be issued to the Vendors will be
subject to restrictions on resale under applicable policies of the Exchange
and the Applicable Securities Laws and may be subject to escrow restrictions
in whole or in part pursuant to applicable policies of the Exchange;
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(c)
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The Parties agree to bear their own expenses required to be incurred
to complete the transactions described in this Agreement; and
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(d)
|
Each of the Parties shall use their respective commercially
reasonable best efforts to conclude the transactions contemplated by this
Agreement.
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ARTICLE 7 - CONDITIONS PRECEDENT
7.1 Conditions Precedent to the Performance
of Syracuse
The
obligations of Syracuse under this Agreement shall be subject to the
satisfaction at or before the Closing Time of the following conditions :
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(a)
|
Truth and Accuracy of Representations of the Vendors and Natcore at
Closing
. The representations and warranties of the
Vendors made in Section 4.1, and by Natcore in Section 4.2 shall be true and
correct in all material respects as at the Closing and the Vendors and
Natcore shall have complied in all material respects with its obligations and
covenants hereunder;
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(b)
|
No Debts
. There being no debts or amounts
owing to Natcore by any of its officers, former officers, directors, former
directors, shareholders, employees or former employees, or any family member
thereof, or any person with whom Natcore does not deal with at arm’s length,
other than amounts advanced to such person for expenses incurred on Natcore’s
behalf in the ordinary course;
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(c)
|
Performance of Obligations
. The Vendors and
Natcore shall have performed and complied with all the obligations to be
performed and complied with by them in order to complete the intent of this
Agreement and the Letter of Intent;
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(d)
|
Absence of Injunctions , etc
. No injunction
or restraining order of any court or administrative tribunal of competent
jurisdiction shall be in effect prohibiting the transactions contemplated
hereby and no action or proceeding shall have been instituted or be pending
before any court or administrative tribunal to restrain or prohibit the
transactions between the parties contemplated hereby;
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(e)
|
Closing Documents
. At or before the Closing
Time, Syracuse shall have received the documents referred to in Section 8.3
as therein provided;
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(f)
|
Financing
. the Private Placement shall have
been completed to raise proceeds of not less than $1,200,000 to be placed by
Syracuse or the Vendors with or without the assistance of an agent at a price
of $0.40 per Unit;
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(g)
|
No Material Adverse Change
. No material
adverse change shall have occurred in the business, assets, liabilities,
results, financial condition, affairs or prospects of Natcore from the date
hereof to the Closing Date;
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- 21 -
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(h)
|
No Legal Proceeding
. There being no legal
proceeding or regulatory actions, investigations or proceedings against or
threatened against Natcore as at the Closing Date;
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(i)
|
No Prohibition at Law
. There being no
prohibition at law against the consummation of this Agreement or the
acquisition of the Natcore Securities by Syracuse;
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(j)
|
No Investigation
. There shall be no inquiry
or investigation (whether formal or informal) in relation to Natcore or its
directors or officers, commenced or threatened by an officer or official of
any Regulatory Authority, such that the outcome of such inquiry or
investigation could have a material adverse effect on Natcore;
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(k)
|
Natcore Securities
. The Natcore Securities
shall be validly issued and free of clear of all liens, charges, security
interests and encumbrances whatsoever, and the Natcore Shares shall be issued
as non-revocable , fully paid and non-assessable shares, and the Natcore
Warrants shall have been validly issued;
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(l)
|
Cancellable Warrants
. Prior to the Closing
Date, the Cancellable Warrants shall have been cancelled by Natcore, with the
consent of their holders;
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(m)
|
No Unaccounted for Securities
. There shall
be no other issued and outstanding securities in the capital of Natcore other
than as disclosed herein and Natcore shall become a wholly-owned subsidiary
of Syracuse; and
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(n)
|
Approvals
. Any approval or consent of the
Regulatory Authorities required including the Exchange and the Securities
Commissions, as applicable, or the shareholders of Syracuse required with
respect to the transactions contemplated by this Agreement shall have been
obtained.
|
The
conditions set forth in this Section 7.1 are for the exclusive benefit of
Syracuse and may be waived by Syracuse in writing in whole or in part on or
before the Closing Date. Notwithstanding any such waiver, the completion of the
purchase and sale contemplated by this Agreement by Syracuse shall not
prejudice or affect in any way the rights of Syracuse in respect of the
warranties and representations of the Vendors set forth in Section 4.1 of this
Agreement.
7.2 Conditions Precedent to the Performance
of the Vendors and Natcore
The
obligations of the Vendors and Natcore under this Agreement shall be subject to
the satisfaction at or before the Closing Time of the following conditions:
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(a)
|
Truth and Accuracy of Representations of Syracuse at Closing
- The representations and warranties of Syracuse made in Section 5.1 shall be
true and correct in all material respects as at the Closing and Syracuse
shall have complied in all material respects with its obligations and
covenants hereunder;
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(b)
|
No Debts
. There being no debts or amounts
owing to Syracuse by any of its officers, former officers, directors, former
directors, shareholders, employees or former employees, or any family member
thereof, or any person with whom Syracuse does not deal with at arm’s length,
other than amounts advanced to such person for expenses incurred on
Syracuse’s behalf in the ordinary course;
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(c)
|
Performance of Obligations
. Syracuse shall
have performed and complied with all the obligations to be performed and
complied with by it in order to complete the intent of this Agreement and the
Letter of Intent;
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- 22 -
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(d)
|
Absence of Injunctions, etc
. No injunction
or restraining order of any Court or administrative tribunal of competent
jurisdiction shall be in effect prohibiting the transactions contemplated
hereby and no action or proceeding shall have been instituted or be pending
before any Court or administrative tribunal to restrain or prohibit the
transactions between the parties contemplated hereby;
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(e)
|
Closing Documents
. At or before the Closing
Time, the Vendors shall have received the documents referred to in Section
8.4 as therein provided;
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(f)
|
Financing
. the Private Placement shall have
been completed to raise proceeds of not less than $1,200,000 to be placed by
Syracuse or the Vendors with or without the assistance of an agent at a price
of $0.40 per Unit;
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(g)
|
No Material Adverse Change
. No material
adverse change shall have occurred in the business, assets, liabilities,
results, financial condition, affairs or prospects of Syracuse from the date
hereof to the Closing Date;
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|
(h)
|
No Legal Proceeding
. There being no legal
proceeding or regulatory actions, investigations or proceedings against or
threatened against Syracuse as at the Closing Date;
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(i)
|
No Prohibition at Law
. There being no
prohibition at law against the consummation of this Agreement or the
acquisition of the Natcore Securities by Syracuse;
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(j)
|
No Investigation
. There shall be no inquiry
or investigation (whether formal or informal) in relation to Syracuse or its
directors or officers, commenced or threatened by an officer or official of
any Regulatory Authority, such that the outcome of such inquiry or
investigation could have a material adverse effect on Syracuse;
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(k)
|
Payment Shares and Payment Warrants
. The
Payment Shares, when issued on Closing, shall be fully paid, validly issued
and free of clear of all liens, charges, security interests and encumbrances
whatsoever, and the Payment Warrants, when issued on Closing, shall be
validly issued and free and clear of all liens, charges, security interests
and encumbrances whatsoever, except for such escrow restrictions imposed by
the Exchange;
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(l)
|
Approvals
- Any approval or consent of the
Regulatory Authorities required including the Exchange, the Securities
Commissions and the United States Securities and Exchange Commission, as
applicable, or the shareholders of Natcore required with respect to the
transactions contemplated by this Agreement shall have been obtained.
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(m)
|
Advance
. Natcore shall have received the
Advance from Syracuse.
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(n)
|
Syracuse Options
. Prior to the Closing Date,
200,000 of the Syracuse Options shall have been exercised by their holders or
cancelled by Syracuse with the consent of their holders;
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(o)
|
Board of Directors
- On the Closing Date,
all directors and officers of Syracuse shall resign from their offices
effective as of the Closing Date, with the exception of W. John Meekison, who
shall remain on the board as Syracuse’s nominee, in favour of nominees of the
Vendors who shall be entitled to appoint directors of Syracuse and the
following individuals shall be appointed as officers of Syracuse: (i) Charles
Provini shall be appointed Chief Executive Officer, Shauna Hartman shall be
appointed Corporate Secretary and Brian Zucker shall be appointed Chief
Financial Officer; and
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(p)
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Financial Condition
On the Closing Date,
Syracuse will have unencumbered working capital of not less than $250,000,
not including the proceeds of the Private Placement.
|
- 23 -
The conditions
set forth in this Section 7.2 are for the exclusive benefit of the Vendors and
Natcore and may be waived by the Vendors and Natcore in writing in whole or in
part on or before the Closing Date. Notwithstanding any such waiver, completion
of the purchase and sale contemplated by this Agreement by the Vendors and
Natcore shall not prejudice or affect in any way the rights of the Vendors in
respect of the warranties and representations of Syracuse set forth in Section
5.1 of this Agreement.
ARTICLE 8 - CLOSING
8.1 Closing
The
transactions contemplated herein shall be completed at 2:00 p.m. on the Closing
Date, at the offices of Armstrong Simpson, 2080 - 777 Hornby Street, Vancouver,
B.C. V6Z 1S4, or at such other time or at such other location as may be
mutually agreed upon in writing by the parties hereto, but in any event the
Closing Date shall be no later than May 31, 2009.
8.2 Closing Documents
On the
Closing Date, the Vendors and Natcore, as applicable shall deliver, or cause to
be delivered, to Syracuse the documents set forth in Section 8.3 hereof and
such other documents as Syracuse may reasonably require to perfect the purchase
and sale intended hereby and Syracuse shall deliver, or cause to be delivered,
to the Vendors and Natcore the documents set forth in Section 8.4 hereof and
such other documents as the Vendors and Natcore may reasonably require to
perfect the purchase and sale intended hereby.
8.3 Natcore and Vendors’ Closing Documents
At the
Closing Time, the Vendors and Natcore, as applicable, shall deliver or cause to
be delivered to Syracuse at the place of the Closing the following:
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(a)
|
certificates registered in the name of Syracuse representing the
Natcore Shares and Natcore Warrants being acquired hereunder;
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(b)
|
a certificate signed by Natcore, dated as of the Closing Date
confirming the truth and accuracy, in all material respects of Natcore’s
representations and warranties as set out in Section 4.1 hereof, on and as of
the Closing Date, and that the covenants and agreements of Natcore to be
observed and performed at or before the Closing pursuant to this Agreement
have been duly observed and performed in all material respects;
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(c)
|
any escrow agreements in respect of the Payment Shares, the Payment
Warrants and the Payment Warrant Shares that may be required by the Exchange,
duly executed by the Vendors;
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(d)
|
a certified copy of a resolution of the directors of Natcore
approving the transfer of the Natcore Shares and the Natcore Warrants to
Syracuse and authorizing the registration of the Natcore Shares and the
Natcore Warrants in the name of Syracuse and cancelling the Cancellable
Warrants;
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(e)
|
written
consents from the holders of the Cancellable Warrants consenting to the
cancellation of the Cancellable Warrants;
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- 24 -
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(f)
|
written agreement signed by Rice and Natcore for the modification of
the Shareholder’s Agreement;
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(g)
|
written confirmation of Rice confirming the good standing of the
License Agreement and of Natcore’s obligations in relation thereto;
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(h)
|
such favourable legal opinions of legal counsel to Natcore, addressed
to Syracuse and their legal counsel and the Exchange and dated as of the
Closing Date, in form and content acceptable to Syracuse, acting reasonably,
wit h respect to all matters which Syracuse may reasonably request including,
without limitation:
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(A)
|
the due incorporation and valid subsistence of Natcore;
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(B)
|
the qualification of Natcore to carry on business under the laws of
each jurisdiction in which it carries on business;
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(C)
|
the authorized and issued capital of Natcore;
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(D)
|
the due creation, authorization and issuance of the Natcore Shares
and the Natcore Warrants; and
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(E)
|
the due authorization, execution, binding effect and enforceability
of this Agreement subject to bankruptcy laws, the availability of all
equitable remedies and other customary exceptions;
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(i)
|
all other necessary consents, waivers, including waivers of rights of
first refusal and preemptive rights, authorizations and instruments of
transfer required to enable the transfer of the Natcore Securities, in
accordance with the terms hereof, free and clear of any encumbrance or any
voting agreement, voting trust or other agreement, limitation or restriction
whatsoever; and
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(j)
|
such further documents and assurances as Syracuse or Syracuse’s legal
counsel may reasonably require in order to give effect to the provisions
hereof.
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8.4 Syracuse’s Closing Documents
At the
Closing Time, Syracuse shall deliver or cause to be delivered to the Vendors at
the place of the Closing the following:
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(a)
|
a certificate signed by Syracuse, dated as of the Closing Date
confirming the truth and accuracy, in all material respects of Syracuse’s
representations and warranties as set out in Section 5.1 hereof, on and as of
the Closing Date, and that the covenants and agreements of Syracuse to be
observed and performed at or before the Closing pursuant to this Agreement
have been duly observed and performed in all material respects;
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(b)
|
share certificates, or such other documents in lieu thereof as may be
mutually acceptable to the Vendors and Syracuse, acting reasonably,
representing the Payment Shares that are not subject to escrow in accordance
with the requirements of the Exchange, duly issued and signed by Syracuse,
issued in the names of the respective Vendors according to Schedule “A”;
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(c)
|
warrant certificates representing the Payment Warrants that are not
subject to escrow in accordance with the requirements of the Exchange, duly
issued and signed by Syracuse, issued in the names of the respective Vendors
according to Schedule “A” in the form set forth in Schedule “B”;
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- 25 -
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(d)
|
any escrow agreements in respect of the Payment Shares, the Payment
Warrants and the Payment Warrant Shares that may be required by the Exchange,
duly executed by Syracuse;
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(e)
|
a certified copy of a resolution of the directors of Syracuse
approving;
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(i)
|
acceptance of the resignation of the existing directors of Syracuse
as at the Closing Date, with the exception of W. John Meekison;
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(ii)
|
the issuance of the Payment Shares, the Payment Warrants and the
Payment Warrant Shares to the Vendors and authorizing the issuance of share
certificates representing the Payment Shares, and warrant certificates
representing the Payment Warrants all in the names of the Vendors according
to Schedule “A”; and
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(iii)
|
the cancella tion of 200,000 of the Syracuse Options (if not
previously exercised by their holders);
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(f)
|
if not previously exercise by their holders, written consents from
the holders of the 200,000 Syracuse Options to be cancelled confirming their
consent to the cancella tion of those Syracuse Options;
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(g)
|
duly signed resignations of all directors and officers of Syracuse,
with the exception of W. John Meekison;
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(h)
|
certified copies of resolutions of the directors of Syracuse;
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(i)
|
appointing the nominees of Natcore to the board of directors of
Syracuse whom it is acknowledged by Syracuse shall be Brien Lundin and
Charles Provini and appointing the nominees of Natcore as officers of
Syracuse, whom it is acknowledged by Syracuse shall be Charles Provini as President
and Chief Executive Officer, Shauna Hartman as Corporate Secretary and Brian
Zucker as Chief Financial Officer; and
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(ii)
|
altering the signatories on all existing bank accounts of Syracuse as
directed by Natcore on or before the Closing Date, and all such other
corporate documentation as may be reasonably requested by Natcore’s legal
counsel;
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(i)
|
such favourable legal opinion of legal counsel to Syracuse, addressed
to Natcore and each of the Vendors and their legal counsel and dated as of
the Closing Date, in form and content acceptable to Natcore, acting
reasonably, with respect to all matters which Natcore may reasonably request
including, without limitation:
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|
|
(A)
|
the due incorporation and valid subsistence of Syracuse;
|
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(B)
|
the qualification of Syracuse to carry on business under the laws of
each jurisdiction in which it carries on business;
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(C)
|
the authorized and issued capital of Syracuse;
|
- 26 -
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(D)
|
the due creation, authorization and issuance of the Payment Shares
and the Payment Warrants;
|
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(E)
|
the due authorization, execution, binding effect and enforceability
of this Agreement subject to bankruptcy laws, the availability of all
equitable remedies and other customary exceptions;
|
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|
(F)
|
that no prospectus is required and, except as have been obtained or
completed, no approval or consent of or filing with any Regulatory Authority
or the Exchange is required in order to permit the issuance and sale by
Syracuse of the Payment Shares and the Payment Warrants, except for filings
required under the Applicable Securities Laws or as may be required by the
Exchange;
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(G)
|
that no prospectus is required and, except as have been obtained or
completed, no approval or consent of or filing with any Regulatory Authority
or the Exchange is required in order to permit the issuance of the Payment
Warrant Shares, provided the conditions set out in the opinion are satisfied;
and
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(H)
|
the hold periods and resale restrictions applicable to the Payment
Shares, the Payment Warrants and the Payment Warrant Shares, under the
Applicable Securities Laws; and
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(j)
|
such further documents and assurances as the Vendors may reasonably
require in order to give effect to the provisions hereof.
|
ARTICLE 9 – EXAMINATIONS AND WAIVERS
9.1 Access to Information - Natcore
Natcore
shall permit Syracuse and its employees, agents, legal counsel, accountants and
other representatives, between the date hereof and the Closing Date, to have
access during normal business hours to the premises and to all the books,
accounts, records and other data of Natcore (including, without limitation, all
corporate, accounting and tax records and any electronic or computer accessed
data) and to the properties and assets of Natcore, and Natcore will furnish,
and require that their principal bankers, appraisers and independent auditors
and other advisors furnish, to Syracuse such financial and operating data and
other information with respect to the business, properties and assets of
Natcore as Syracuse shall from time to time reasonably request to enable
confirmation of the matters warranted in Article 4 hereof and to seek the
approval of regulatory authoritie s.
9.2 Access to Information - Syracuse
Syracuse
shall permit Natcore and its employees, agents, legal counsel, accountants and
other representatives, between the date hereof and the Closing Date, to have
access during normal business hours to the premises and to all the books,
accounts, records and other data of Syracuse (including, without limitation,
all corporate, accounting and tax records and any electronic or computer
accessed data) and to the properties and assets of Syracuse, and Syracuse will
furnish, and require that their principal bankers, appraisers and independent
auditors and other advisors furnish, to Natcore such financial and operating
data and other information with respect to the business, properties and assets
of Syracuse as Natcore shall from time to time reasonably request to enable
confirmation of the matters warranted in Article 5 hereof and to seek the
approval of regulatory authorities.
- 27 -
9.3 Disclosure of Information
Any information about a Party (in this section a “
Disclosing Party
”) obtained by the other
Party (in this section, a “
Receiving Party
”)
that is not already in the public domain shall be kept confidential by the
Receiving Party, unless otherwise required by applicable Regulatory
Authorities. In the event such disclosure is required by applicable regulatory authorities,
the Disclosing Party, acting reasonably, will be entitled to approve the form
of disclosure prior to its dissemination by the Receiving Party. In the event
Closing does not take place, each Receiving Party shall return to each
Disclosing Party all confidential information and materials about the
Disclosing Party in the Receiving Party’s possession. Any information about
this Agreement and the transactions contemplated herein, to be disseminated by
either party, must be pre-approved by Syracuse and the Vendors, acting
reasonably.
ARTICLE 10 - TERMINATION
10.1 Termination
Unless the
parties otherwise agree, the obligations of the parties hereunder, with the
exception of the obligations of the parties in Article 9 hereto which shall survive
this Agreement, shall terminate on the Termination Date if the Closing has not
occurred for any reason on or prior to such date provided, however, that any
such termination shall not prejudice the rights of a party as a result of a
breach by any other party of its obligations hereunder.
10.2 Further Termination
Notwithstanding
section 10.1 above, the obligations of the parties hereunder, with the
exception of the obligations of the parties in Article 9 hereto which shall
survive this Agreement, shall also terminate on the earliest of the following
events:
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(a)
|
Written agreement of the parties to terminate this Agreement; or
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(b)
|
Any Regulatory Authority having notified in writing any of the
Parties that it will not permit the Qualifying Transaction, the Private
Placement or the transactions contemplated by this Agreement to proceed.
|
ARTICLE 11 - GENERAL
11.1 Public Notices
The parties
hereto agree that all notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and co-ordinated and no party hereto shall act unilaterally in this
regard without the prior approval of the others, such approval not to be
unreasonably withheld.
11.2 Expenses
The Parties
shall bear their own expenses in relation to the matters contemplated herein.
11.3 Time
Time shall
be of the essence hereof.
- 28 -
11.4 Notices
Any notice
or other writing required or permitted to be given hereunder or for the
purposes hereof shall be sufficiently given if delivered or sent by facsimile
to the party to whom it is given or if mailed, by prepaid registered mail,
addressed to such party at:
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(a)
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If to
Syracuse:
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918 – 1030
West Georgia Street
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Vancouver,
British Columbia , V6E 2Y3
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Attention: Steve Bajic
Fax: 604.662.7950
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with a copy
to Syracuse’s legal counsel,
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Boughton Law
Corporation
Suite
700-595 Burrard Street
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Vancouver,
British Columbia, V7X 1S8
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Attention: Rory Godinho
Fax: 604.683.5317
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(b)
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If to the
Vendors or Natcore:
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47 Club Way
Red Bank New
Jersey, USA, 07701
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Attention: Charles Provini
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Email: Provini@verizon.net
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with a copy
to Natcore’s Canadian legal counsel:
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Armstrong
Simpson
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2080 – 777
Hornby Street
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Vancouver,
B.C.
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V6Z 1S4
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Attention: Paul Simpson
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Fax: 604.662.3231
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with a copy
to Natcore’s U.S. legal counsel:
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Tagliaferro
& LoPresti, LLP
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45 Broadway,
Suite 2200
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New York,
New York 10006
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Attention: Marc X. LoPresti, Esq.
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Fax: (212) 232-2398
|
or at such other address as the party to whom such writing is to be
given shall have last notified the party giving the same in the manner provided
in this section. Any notice mailed as aforesaid shall be deemed to have been
given and received on the fifth business day next following the date of its
mailing unless at the time of mailing or within five (5) business days
thereafter there occurs a postal interruption which could
- 29 -
have the effect of delaying the mail in the ordinary course, in which
case any notice shall not be effectively given unless it is actually delivered
or sent by facsimile . Any notic e delivered or sent by facsimile to the party
to whom it is addressed shall be deemed to have been given and received on the
day it was delivered, provided that if such day is not a business day then the
notice shall be deemed to have been given and received on the business day next
following such day.
11.5 Severability
If any one
or more of the provisions contained in this Agreement should be invalid,
illegal or unenforceable in any respect in any jurisdiction, the validity,
legality and enforceability of such provision or provisions shall not in any way
be affected or impaired thereby in any other jurisdiction and the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby, unless in either case as a
result of such determination this Agreement would fail in its essential
purpose.
11.6 Entire Agreement
This
Agreement constitutes the entire agreement between the parties hereto and
supersedes all prior agreements and understandings, oral or written, by and
between any of the parties hereto with respect to the subject matter hereof.
11.7 Further Assurances
The parties
hereto shall with reasonable diligence do all such things and provide all such
reasonable assurances as may be required to consummate the transactions
contemplated hereby, and each party hereto shall provide such further documents
or instruments required by the other party as may be reasonably necessary or
desirable to effect the purpose of this Agreement and carry out its provisions
whether before or after the Closing Date.
11.8 Enurement
This
Agreement and each of the terms and provisions hereof shall enure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and assigns.
11.9 Counterparts
This
Agreement may be executed in as many counterparts as may be necessary or by
facsimile and each such agreement or facsimile so executed shall be deemed to
be an original and such counterparts together shall constitute one and the same
instrument.
- 30 -
IN
WITNESS WHEREOF
the parties have executed this
Agreement as of the day and year first above written, and in the case of the
Vendors which are corporate entities, Natcore and Syracuse, by their respective
proper officers first duly authorized in that behalf.
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SYRACUSE CAPITAL CORP.
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Per:
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Authorized
Signatory
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FORT HILL RESOURCES INC.
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Per:
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Authorized
Signatory
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KADAMON CAPITAL INC.
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Per:
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Authorized
Signatory
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SIGNED, SEALED and DELIVERED by
|
)
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ANDREW R. BARRON
in the presence of:
|
)
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)
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Name of Witness
|
)
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)
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Address
|
)
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ANDREW R. BARRON
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)
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)
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Occupation
|
)
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)
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NORTH COAST INITIATIVES INC.
|
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Per:
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Authorized
Signatory
|
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JEFFERSON DIRECT, LLC.
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Per:
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Authorized
Signatory
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- 31 -
WILLIAM MARSH RICE UNIVERSITY
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Per:
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Authorized
Signatory
|
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HAWK PARTNERSHIP, LP.
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Per:
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Authorized
Signatory
|
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SIGNED, SEALED and DELIVERED by
|
)
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BRIEN LUNDIN
in
the presence of:
|
)
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)
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Name of Witness
|
)
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Address
|
)
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BRIEN LUNDIN
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)
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)
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)
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Occupation
|
)
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)
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SIGNED, SEALED and DELIVERED by
|
)
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GREGG J. SEDUN
in
the presence of:
|
)
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)
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Name of Witness
|
)
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)
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Address
|
)
|
GREGG J. SEDUN
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)
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)
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Occupation
|
)
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)
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|
- 32 -
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SIGNED, SEALED and DELIVERED by
|
)
|
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MICHAEL BAYBAK in the presence of:
|
)
|
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|
)
|
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Name of Witness
|
)
|
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)
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Address
|
)
|
MICHAEL BAYBAK
|
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)
|
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|
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Occupation
|
)
|
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|
)
|
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SIGNED, SEALED and DELIVERED by
|
)
|
|
|
TONY LONSTEIN
in
the presence of:
|
)
|
|
|
|
)
|
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|
|
Name of Witness
|
)
|
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)
|
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Address
|
)
|
TONY LONSTEIN
|
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)
|
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|
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Occupation
|
)
|
|
|
|
)
|
|
BANK SAL. OPPENHEIM JR & CIE. (SWITZERLAND)
LTD.
|
|
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|
|
Per:
|
|
|
|
|
|
|
|
|
Authorized
Signatory
|
|
|
|
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
LAWRENCE ROULSTON
in the presence of:
|
)
|
|
|
|
)
|
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|
)
|
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|
Name of Witness
|
)
|
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)
|
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Address
|
)
|
LAWRENCE ROULSTON
|
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|
)
|
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)
|
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|
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Occupation
|
)
|
|
- 33 -
|
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|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
ERNST PERNET
in
the presence of:
|
)
|
|
|
|
)
|
|
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|
|
|
|
Name of Witness
|
)
|
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|
)
|
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Address
|
)
|
ERNST PERNET
|
|
|
)
|
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|
|
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|
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Occupation
|
)
|
|
|
|
)
|
|
|
|
)
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
SCOTT GIBSON
in
the presence of:
|
)
|
|
|
|
)
|
|
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|
)
|
|
|
Name of Witness
|
)
|
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|
)
|
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Address
|
)
|
SCOTT GIBSON
|
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)
|
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|
)
|
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)
|
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|
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Occupation
|
)
|
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|
)
|
|
CENTRUM BANK
|
|
|
|
|
Per:
|
|
|
|
|
|
|
|
|
Authorized
Signatory
|
|
ZILA CORPORATION
|
|
|
|
|
Per:
|
|
|
|
|
|
|
|
|
Authorized
Signatory
|
|
LOM NOMINEES (ITF LARGO FLIGHT LIMITED)
|
|
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|
|
Per:
|
|
|
|
|
|
|
|
|
Authorized
Signatory
|
|
- 34 -
DCDG, LLC
|
|
|
|
|
Per:
|
|
|
|
|
|
|
|
|
Authorized
Signatory
|
|
LOM NOMINEES (ITF DRAGON GOLD CORP.)
|
|
|
|
|
Per:
|
|
|
|
|
|
|
|
|
Authorized
Signatory
|
|
|
|
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
MARC X. LOPRESTI
in the presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
MARC X. LOPRESTI
|
|
|
)
|
|
|
|
|
|
|
|
)
|
|
|
Occupation
|
)
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
JOSEPH A. TAGLIAFERRO III
in the
|
)
|
|
|
presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
JOSEPH A. TAGLIAFERRO III
|
|
|
)
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
Occupation
|
)
|
|
- 35 -
|
|
|
|
|
SIGNED,
SEALED and DELIVERED by
|
)
|
|
|
DENNIS FLOOD
in the presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of
Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
DENNIS FLOOD
|
|
|
)
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
Occupation
|
)
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED,
SEALED and DELIVERED by
|
)
|
|
|
JOHN C. CALHOUN
in the presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of
Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
JOHN C. CALHOUN
|
|
|
)
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
Occupation
|
)
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED,
SEALED and DELIVERED by
|
)
|
|
|
JOSEPH KONOPNY
in the presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of
Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
JOSEPH KONOPNY
|
|
|
)
|
|
|
|
|
|
|
Occupation
|
)
|
|
- 36 -
|
|
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
CHARLES R. PROVINI
in the presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
CHARLES R. PROVINI
|
|
|
)
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
Occupation
|
)
|
|
|
|
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
ADRIENNE RANDLE BOND
in the
|
)
|
|
|
presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
ADRIENNE RANDLE BOND
|
|
|
)
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
Occupation
|
)
|
|
|
|
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
MARY CAPLINGER
in
the presence of:
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Name of Witness
|
)
|
|
|
|
)
|
|
|
|
|
|
|
Address
|
)
|
MARY CAPLINGER
|
|
|
)
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
Occupation
|
)
|
|
- 37 -
|
|
|
|
|
SIGNED, SEALED and DELIVERED by
|
)
|
|
|
ELIZABETH PROVINI
in the presence of:
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)
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)
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Name of Witness
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)
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)
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Address
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)
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ELIZABETH PROVINI
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)
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)
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Occupation
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)
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)
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- 38 -
SCHEDULE “A”
VENDORS AND NATCORE SECURITIES
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Number of Natcore
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Number of Natcore
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Name and
Address of Vendor
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Shares
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Warrants
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Poydras Street, Suite 2810, New Orleans,
LA, 70163, USA
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1,000,000
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Nil
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Kadamon Capital Inc., 3500 North Causeway
Blvd, Suite 1600, Metairie , LA, 70002, USA
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1,000,000
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Nil
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Andrew R. Barron, 241 Asbury Street,
Houston, TX, 77007, USA
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1,000,000
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250,000
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North Coast Initiatives Ltd., 161 Forest
Street, Oberlin, Ohio, 44074, USA
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1,000,000
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Nil
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Jefferson Direct, LLC, 2400 Jefferson Hwy,
Suite 600, Jefferson, LA, 70121
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1,000,000
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Nil
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William Marsh Rice University, 6100 Main
Street, Houston, TC, 77005, USA
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555,556
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Nil
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Hawk Partnership LP, 47 Club Way, Red Bank,
NJ, 07701, USA
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1,050,000
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Nil
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Brien F. Lundin, 1128 Bonnabel Blvd,
Metairie, LA, 70005, USA
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926,112
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225,000
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Gregg J. Sedun, 6015 Alma Street,
Vancouver, B.C., V6N 1Y3
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275,001
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Nil
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Michael Baybak, 4515 Ocean View Blvd, Suite
305, La Canada, CA, 91011, USA
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308,334
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Nil
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Tony Lonstein, 4825 Gaynore Avenue, Encino,
CA, 91436, USA
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108,334
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Nil
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A - 1
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Number of Natcore
|
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Number of Natcore
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|
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Name and
Address of Vendor
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Shares
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Warrants
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Bank sal. Oppenheim jr. & Cie.
(Switzerland) Ltd., A/C – 960- 2723-1, Rush & Co. Swiss American Sec.
Inc., 12 East 49
th
Street, 41
st
Floor, New York, NY,
10017, USA
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833,334
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Nil
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Lawrence Roulston, 1510-800 West Pender
Street, Vancouver, B.C., V6C 2V6
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111,112
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Nil
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Ernset Pernet, Bachtelstrasse 22, CH-8805,
Richterswil, Switzerland
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416,667
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Nil
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Scott Gibson, 302-2350 Cornwall Street,
Vancouver, B.C., V6K 1B7
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166,668
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Nil
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Centrum Bank, Kirchstrasse 3, 9490 Valduz,
Principality of Liechtenstein
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833,334
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Nil
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Zila Corporation, LeQuesne Chambers, 9
Burrard Street, St. Helier, Jersey, Channel Islands, JE24WS
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527,778
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Nil
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LOM Nominees ITF Largo Flight Limited, 27
Reid Street, Hamilton, HM11, Bermuda
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308,887
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Nil
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DGDC, LLC, 160 S. Main Street #2B, Stowe,
VT, 05672, USA
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123,334
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Nil
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LOM Nominees ITF Dragon Gold Corp., the LOM
Building, 27 Reid Street, Hamilton, HM11, Bermuda
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154,445
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Nil
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Marc X LoPresti, Esq., 45 Broadway, Suite
2200, New York, NY, 10006, USA
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41,500
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125,000
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Joseph A. Tagliaferro III, Esq., 12400
Wilshire Blvd, Suite 820, Los Angeles, California, 90025
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41,500
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125,000
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Dennis Flood, 161 Forest Street, Oberlin,
Ohio, 44074, USA
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Nil
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250,000
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A - 2
|
|
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|
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|
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|
Number of Natcore
|
|
|
Number of Natcore
|
|
|
Name and
Address of Vendor
|
|
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Shares
|
|
|
Warrants
|
|
|
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|
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|
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John C. Calhoun, 1100 Poydras Street, Suite
2810, New Orleans, LA, 70163, USA
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Nil
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225,000
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Joseph Konopny, 3500 North Causeway Blvd,
Suite 1600, Metairie, LA, 70002, USA
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Nil
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225,000
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|
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|
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|
|
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Charles R. Provini, 47 Club Way, Red Bank,
NJ, 07701, USA
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Nil
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225,000
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Adrienne Randle Bond, 5505 Jackson Street,
Houston, TX 77004, USA
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Nil
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100,000
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Mary Caplinger, 1528 Seventh Street, New
Orleans, LA 70115, USA
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Nil
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100,000
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Elizabeth Provini, 47 Club Way, Red Bank,
NJ, 07701, USA
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Nil
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100,000
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|
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|
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|
|
|
|
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Totals:
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11,781,895
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1,950,000
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A - 3
SCHEDULE “B”
FORM OF PAYMENT WARRANT
“Unless permitted
under securities legislation, the holder of the securities shall not trade the
securities before [insert date which is four months and one day from the
Closing Date].”
“Without prior
written approval of the TSX Venture Exchange and compliance with all applicable
securities legislation, the securities represented by this certificate may not
be sold, transferred, hypothecated or otherwise traded on or through the
facilities of the TSX Venture Exchange or otherwise in Canada or to or for the
benefit of a Canadian resident before [insert date which is four months and one
day from the Closing Date].”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE
CITY OF VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON [insert date which is 60 months from the Closing Date]
WARRANTS TO PURCHASE COMMON SHARES OF
SYRACUSE CAPITAL CORP.
(incorporated under the
Business
Corporations Act,
British Columbia)
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No.
WCAQ–00[X]
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*** WARRANTS
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NOTE: One Warrant is Required to purchase one common share.
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THIS IS TO CERTIFY THAT
for value received the holder, _________________ (the “Holder”), of this
certificate (the “
Warrant Certificate
“) is entitled to purchase one fully paid and non-assessable common share
Syracuse Capital Corp. (herein called the “
Corporation
”)
for each Warrant represented hereby, as such shares were constituted on [insert
closing date] at any time up to 4:00 p.m. (local time) in the City of
Vancouver, Province of British Columbia on [insert date which is 60 months from
the Closing Date], (the “
Expiry Date
”)
at and for a price of
$0.40
per
share, of lawful money of Canada, upon and subject to the terms and conditions
referred to in this Warrant Certificate and the Acquisition Agreement dated
March 26, 2009 entered into between the Corporation and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the offices of the Corporation’s transfer
agent, Computershare Trust Company of Canada at 2
nd
Floor, 510
Burrard Street, Vancouver, B.C., V6C 3B8.
IN WITNESS
WHEREOF the Corporation has caused this Warrant Certificate to be executed.
SYRACUSE CAPITAL CORP.
B- 1
TERMS, CONDITIONS AND INSTRUCTIONS
1. The holder of this warrant may subscribe for the number of shares of
the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant on or before the
Expiry Date, payment must be made in the amount of
$0.40
per share. All payments must be made in Canadian Funds,
in cash or by certified cheque, bank draft or money order payable, at par, in
Vancouver, British Columbia. If payment is made by way of an uncertified
cheque, the Corporation reserves the right to deem that the payment has not
been received until the cheque has cleared the account upon which it has been
drawn.
3. To exercise the rights evidenced by this warrant, this warrant with
the following Warrant Exercise Form completed, must be delivered or mailed to
and received by the offic es of the Corporation’s transfer agent, Computershare
Trust Company of Canada at 2
nd
Floor, 510 Burrard Street, Vancouver,
British Columbia, V6C 3B8.
4. The rights evidenced by this warrant expire at 4:00 p.m. local time
in Vancouver, British Columbia, on the Expiry Date.
5. The rights evidenced by this warrant may not be transferred.
6. If this warrant or the purchase price are forwarded by mail it is
suggested that registered mail be used as the Corporation will not be
responsible for any losses which occur through the use of mails.
7. The rights evidenced by this warrant are to purchase common shares
in the capital stock of the Corporation as they were constituted on [insert
Closing .ate] If there shall, prior to the exercise of any of the rights
evidenced hereby, be any reorganization of the authorized capital of the Corporation
by way of consolidation, merger, sub-division, amalgamation or otherwise, or
the payment of any stock dividends, then there shall automatically be an
adjustment in either or both the number of shares of the Corporation which may
be purchased pursuant hereto or the price at which such shares may be
purchased, by corresponding amounts, so that the right evidenced hereby shall
thereafter be as reasonably as possible equivalent to those originally granted
hereby. The Corporation sha ll have the sole and exclusive power to make
adjustments as it considers necessary and desirable.
B- 2
APPENDIX 1
WARRANT EXERCISE FORM
TO:
SYRACUSE CAPITAL CORP.
The undersigned hereby exercises the right to purchase _______ Common
Shares of
SYRACUSE CAPITAL CORP.
(the “
Corporation
”) (or such
number of other securities or property to which such Warrants (the “
Warrants
”) entitle the undersigned in lieu
thereof or in addition thereto under the provisions of the Warrant Certificate
for the time being governing the hold ing of the Warrants in the Corporation)
in accordance with and subject to the provisions of such Warrant Certificate
which may be obtained, free of charge, from the Corporation at Suite 2080-777
Hornby Street, Vancouver, British Columbia, V6Z 1S4.
The Common Shares (or other securities or property) are to be issued as
follows:
Name:
______________________________________________________________________________________
Address in
full:
___________________________________________________________________________________________________
___________________________________________________________________________________________________
Number of Common Shares:
______________________________________________________________________
Note: If further nominees intended, please attach (and initial) a
schedule giving these particulars.
(CHECK ONE)
|
|
|
|
o
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The undersigned hereby represents and warrants to the Corporation
that at the time of exercise the undersigned is not a U.S. person or a person
within the United States (as such terms are defined in Regulation S under the
Securities Act of 1933 (the “U.S. Securities Act”) and the Warrant is not
being exercised on behalf of a U.S. person or any person with the United
States.
|
|
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|
o
|
The undersigned is tendering with this exercise form a written
opinion of counsel or other evidence satisfactory to them to the effect that
the Common Shares to be delivered upon exercise of this Warrant have been
registered under the U.S. Securities Act and the Securities laws of all
applicable States of the United States or are exempt from registration
thereunder; or
|
|
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|
o
|
The undersigned does not make the representation set forth above and
the undersigned hereby represents, warrants and agrees that: (i) the
undersigned will not offer or sell the Common Shares except pursuant to
registration under the U.S. Securities Act or in accordance with an exemption
from registration thereunder or in compliance with Regulation S under the
U.S. Securities Act; and (ii) the certificates representing the Common Shares
subscribed for may have endorsed thereon a legend to such effect.
|
DATED this_______ day of________, 20_____ .
|
|
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Signature
Guaranteed
|
|
(Signature
of Warrant Holder)
|
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Print full
name
|
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Print full
address
|
B- 3
Instructions
.
|
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|
1.
|
The registered holder may exercise his/her right to receive Common
Shares by enclosing payment by way of cash, a certified cheque, bank draft or
money order in lawful money of Canada, payable to the order Syracuse Capital
Corp. and by completing this form and surrendering this form and the original
Warrant Certificate representing the Warrants being exercised to the
Corporation’s transfer agent, Computershare Trust Company of Canada at 2
nd
Floor, 510 Burrard Street, Vancouver, B.C., V6C 3B8. Certificates for Common
Shares will be made available for pick up or mailed by registered mail within
five business days after the exercise of the Warrant.
|
|
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2.
|
If the Exercise Form indicates that Common Shares are to be issued to
a person or persons other than the registered holder of the Warrant
Certificate, the signature of such holder of the Exercise Form must be
guaranteed by an authorized officer of a chartered bank, trust company or
medallion guaranteed by an investment dealer who is a member of a recognized
stock exchange.
|
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3.
|
If the Exercise Form is signed by a trustee, executor, administrator,
curator, attorney, officer of a corporation or any person acting in a
judiciary or representative capacity, the certificate must be accompanied by
evidence of authority to sign satisfactory to the Corporation
|
B- 4
`
|
|
|
|
O
FFICE
O
F
T
ECHNOLOGY
T
RANSFER
|
N
ILA
B
HAKUNI
D
IRECTOR
|
July 29, 2008
Mr.
Charles Provini
President
Natcore
Technology, Inc.
47 Club
Way
Red Bank,
New Jersey 07701
|
|
|
|
|
|
RE:
|
Amendment to the License Agreement between Natcore
Technology, Inc., and
William Marsh Rice University
(Agreement
#
OTT
LA 04-4-001)
|
Dear
Mr. Provini:
Per
our conversation, this tetter confirms our understanding and agreement to amend
that certain license agreement dated March 31, 2004, between Natcore
Technology, Inc., and William
Marsh Rice University (“License Agreement”) as follows:
Article
9.1 is amended in its entirety to read as follows:
|
|
|
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(a)
|
License
shall procure and maintain in full force and effect, from the Effective Date of this Amendment
through September 30, 2008, commercial general liability insurance of not less
than US $3,000,000 (THREE MILLION US DOLLARS) per occurrence and US
$3,000,000 (THREE MILLION US DOLLARS) in the aggregate. Such commercial
general liability insurance shall provide: (i) product liability coverage; and (ii)
broad form contractual liability coverage for Licensee’s indemnification obligations under this
Agreement.
|
|
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|
(b)
|
From
October 1, 2008, throughout the term of this Agreement, Licensee shall procure and maintain
in full force and effect commercial general liability insurance for a
minimum amount of US $5,000,000 (FIVE MILLION US DOLLARS) per occurrence and
US $5,000,000 (FIVE MILLION US DOLLARS) in the aggregate. Such commercial general
liability insurance shall provide: (i) product liability coverage; and (ii)
broad form contractual liability coverage for Licensee’s indemnification obligations under this
Agreement. Licensee shall maintain such commercial general liability
insurance after the expiration or termination of this Agreement during any period in
which Licensee continues to make, use, perform or sell a product that was a
Rice Licensed Product under this Agreement, and thereafter for a period of five (5) years.
|
|
|
|
|
|
|
(c)
|
Licensee’s
sublicensees shall procure and maintain in full force and effect, throughout the Term of
This Agreement, commercial general liability insurance for
|
R
ICE
U
NIVERSITY
• O
FFICE
O
F
T
ECHNOLOGY
T
RANSFER
. • MS 705
6100 M
AIN
S
TREET
, H
OUSTON
, T
EXAS
77005
P
HONE
(713) 348-6231 Fax (713) 348-6289 E-Mail: bhakuni@rice.edu
|
|
|
|
|
|
|
a
minimum amount of US $5,000,000 (FIVE MILLION US DOLLARS) per occurrence and US $5,000,000
(FIVE MILLION US DOLLARS) in the aggregate. Such commercial general liability
insurance shall provide: (i) product liability coverage; and (ii) broad form
contractual liability coverage for sublicensee’s indemniifaction obligations under
this Agreement. Sublicensees shall maintain such commercial general liability
insurance after the expiration or termination of this Agreement during any period in
which sublicensee continues to make, use, perform or sell a product that was
a Rice Licensed Product under this Agreement, and thereafter for a period of five (5) years.
|
All
other provisions of the License Agreement shall remain in full force and
effect..
Please
indicate your agreement to amend the License Agreement as set forth above,
effective July 29, 2008, by signing where indicated below and returning a copy to
my attention.
|
|
|
Sincerely,
|
|
|
|
Nila
D. Bhakuni
|
|
|
|
|
Agreed and accepted:
|
|
|
|
|
|
|
|
|
Charles
Provini
|
|
|
President,
|
|
|
Natcore Technology, Inc.
|
|
SYRACUSE
CAPITAL CORP.
(the “Company”)
The Company has as its articles the following articles.
|
|
|
|
|
Full name and signature of each
incorporator
|
|
Date of signing
|
|
|
|
|
|
|
|
|
|
BOUGHTON
LAW CORPORATION
|
|
|
|
|
|
|
|
|
|
August
9, 2007
|
|
Per:
Kathy H. Tang
|
|
|
|
|
|
|
|
Incorporation Number:
|
|
BCO799358
|
|
|
|
|
SYRACUSE
CAPITAL CORP.
(the “Company”)
ARTICLES
|
|
|
|
|
|
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|
Page
|
|
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|
|
|
|
1.
|
|
Interpretation
|
|
2
|
|
2.
|
|
Shares and Share Certificates
|
|
2
|
|
3.
|
|
Issue of Shares
|
|
3
|
|
4.
|
|
Share Registers
|
|
4
|
|
5.
|
|
Share Transfers
|
|
4
|
|
6.
|
|
Transmission of Shares
|
|
5
|
|
7.
|
|
Purchase of Shares
|
|
6
|
|
8.
|
|
Borrowing Powers
|
|
6
|
|
9.
|
|
Alterations
|
|
7
|
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10.
|
|
Meetings of Shareholders
|
|
8
|
|
11.
|
|
Proceedings at Meetings of Shareholders
|
|
9
|
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12.
|
|
Votes of Shareholders
|
|
12
|
|
13.
|
|
Directors
|
|
15
|
|
14.
|
|
Election and Removal of Directors
|
|
16
|
|
15.
|
|
Alternate Directors
|
|
18
|
|
16.
|
|
Powers and Duties of Directors
|
|
20
|
|
17.
|
|
Disclosure of Interest of Directors
|
|
20
|
|
18.
|
|
Proceedings of Directors
|
|
21
|
|
19.
|
|
Executive and Other Committees
|
|
23
|
|
20.
|
|
Officers
|
|
24
|
|
21.
|
|
Indemnification
|
|
25
|
|
22.
|
|
Dividends
|
|
26
|
|
23.
|
|
Documents, Records and Reports
|
|
27
|
|
24.
|
|
Notices
|
|
27
|
|
25.
|
|
Seal
|
|
29
|
|
26.
|
|
Prohibitions
|
|
29
|
1.
Interpretation
1.1
Definitions
In these Articles, unless the context otherwise requires:
|
|
|
|
(1)
|
“board of directors”, “directors” and “board” mean the
directors or sole director of the Company for the time being;
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(2)
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“Business Corporations Act” means the
Business Corporations Act
(British
Columbia) from time to time in force and all amendments thereto and includes
all regulations and amendments thereto made pursuant to that Act;
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(3)
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“legal personal representative” means the personal or
other legal representative of the shareholder;
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(4)
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“registered address” of a shareholder means the
shareholder’s address as recorded in the central securities register; and
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(5)
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“seal” means the seal of the Company, if any.
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1.2
Business Corporations Act
and
Interpretation Act
Definitions Applicable
The definitions in the
Business
Corporations Act
and the definitions and rules of construction in
the Interpretation Act, with the necessary changes, so far as applicable,
and unless the context requires otherwise, apply to these Articles as if they were
an enactment. If there is a conflict between a definition in the
Business Corporations Act
and a definition or rule
in the
Interpretation Act
relating
to a term used in these Articles, the definition in the
Business
Corporations Act
will prevail in relation to the use of the term in these Articles. If
there is a conflict between these Articles and the
Business
Corporations Act,
the
Business
Corporations Act
will prevail.
2.
Shares and Share Certificates
2.1
Authorized
Share Structure
The authorized share structure of the Company consists
of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.
2.2
Form
of Share Certificate
Each share certificate issued by the Company must comply
with, and be signed as required by, the
Business
Corporations Act.
2.3
Shareholder
Entitled to Certificate or Acknowledgment
Each shareholder is entitled, without charge, to (a) one
share certificate representing the shares of each class or series of shares
registered in the shareholder’s name or (b) a non-transferable written
acknowledgment of the shareholder’s right to obtain such a share certificate, provided that
in respect of a share held jointly by several persons, the Company is not bound to issue more
than one share certificate and delivery of a share certificate for a share to one of several
joint shareholders or to one of the shareholders’ duly authorized agents will
be sufficient delivery to all.
2.4
Delivery
by Mail
Any share certificate or non-transferable written
acknowledgment of a shareholder’s right to obtain a share certificate may be sent
to the shareholder by mail at the shareholder’s registered address and neither
the Company nor
any director, officer or agent of the Company is liable for any loss to the
shareholder because the share certificate
or acknowledgement is lost in the mail or stolen.
-2-
2.5
Replacement
of Worn Out or Defaced Certificate or Acknowledgement
If the directors are satisfied that a share certificate
or a non-transferable written acknowledgment of the shareholder’s right to
obtain a share certificate is worn out or defaced, they must, on production to
them of the share certificate or acknowledgment, as the case may be, and on
such other terms, if any, as they think fit:
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(1)
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order
the share certificate or acknowledgment, as the case may be, to be cancelled;
and
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(2)
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issue
a replacement share certificate or acknowledgment, as the case may be.
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2.6
Replacement
of Lost, Stolen or Destroyed Certificate or Acknowledgment
If a share certificate or a non-transferable written
acknowledgment of a shareholder’s right to obtain a share certificate is lost,
stolen or destroyed, a replacement share certificate or acknowledgment, as the
case may be, must be issued to the person entitled to that share certificate or
acknowledgment, as the case may be, if the directors receive:
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(1)
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proof
satisfactory to them that the share certificate or acknowledgment is lost,
stolen or destroyed; and
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(2)
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any
indemnity the directors consider adequate.
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2.7
Splitting
Share Certificates
If a shareholder surrenders a share certificate to the
Company with a written request that the Company issue in the shareholder’s name two
or more share certificates, each representing a specified number of shares and
in the aggregate
representing the same number of shares as the share certificate so surrendered,
the Company must cancel the surrendered share certificate and issue replacement
share certificates in accordance with that request.
2.8
Certificate
Fee
There must be paid to the Company, in relation to the
issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if
any and which must not exceed the amount prescribed under the
Business Corporations Act,
determined by the directors.
2.9
Recognition
of Trusts
Except as required by law or statute or these Articles,
no person will be recognized by the Company as holding any share upon any trust,
and the Company is not bound by or compelled in any way to recognize (even when
having notice
thereof) any equitable, contingent, future or partial interest in any share or
fraction of a share or (except as by law or statute or these Articles provided or as
ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right
to the entirety thereof in the shareholder.
3. Issue
of Shares
3.1
Directors
Authorized
Subject to the
Business
Corporations Act
and the rights of the holders of issued shares of
the Company, the Company may issue, allot, sell or otherwise dispose of
the unissued shares, and issued shares held by the Company, at the times, to the
persons, including directors, in the manner, on the terms and conditions and
for the issue prices (including any premium at which shares with par value may
be issued) that the directors may determine. The issue price for a share with
par value must be equal to or greater than the par value of the share.
3.2
Commissions
and Discounts
The Company may, at any time, pay a reasonable
commission or allow a reasonable discount to any person in consideration of
that person purchasing or agreeing to purchase shares of the Company from the
Company or any other person or procuring or agreeing to procure purchasers for shares
of the Company.
-3-
3.3 Brokerage
The Company may pay such brokerage fee or other
consideration as may be lawful for or in connection with the sale or placement of its securities.
3.4
Conditions
of Issue
Except as provided for by the
Business Corporations Act,
no share may be issued until it
is fully paid. A share is fully
paid when:
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(1)
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consideration is provided to the Company for the issue
of the share by one or more of the following:
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(a)
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past services performed for the Company;
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(b)
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property;
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(c)
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money; and
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(2)
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the directors in their discretion have determined that
the value of the consideration received by the Company equals or exceeds the issue price
set for the share under Article 3.1.
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3.5
Share
Purchase Warrants and Rights
Subject to the
Business
Corporations Act,
the Company may issue share purchase warrants,
options and rights upon such terms and conditions as the directors determine,
which share purchase warrants, options and rights may be issued alone or in
conjunction with debentures, debenture stock, bonds, shares or any other
securities issued or created by
the Company from time to time.
4.
Share Registers
4.1 Central Securities
Register
As required by and subject to the
Business Corporations Act,
the Company
must maintain in British Columbia a central securities register. The directors may,
subject to the
Business Corporations Act,
appoint
an agent to maintain the central securities register. The directors may also appoint one or
more agents, including the agent which keeps the central securities register,
as transfer agent for its shares or any class or series of its shares, as the
case may be, and the same or another agent as registrar for its shares or such
class or series of its shares, as the case may be. The directors may terminate
such appointment of any agent at any time and may appoint another agent in its
place.
4.2
Closing
Register
The Company must not at any time close its central
securities register.
5.
Share Transfers
5.1 Registering Transfers
A transfer of a share of the Company must not be
registered unless:
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(1)
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a duly signed instrument of transfer in respect of the
share has been received by the Company;
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(2)
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if a share certificate has been issued by the Company
in respect of the share to be transferred, mat share certificate has been surrendered to the
Company; and
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(3)
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if a non-transferable written acknowledgment of the
shareholder’s right to obtain a share certificate has been issued by the
Company in respect of the share to be transferred, that acknowledgment has
been surrendered to the
Company.
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-4-
For the purpose of this Article, delivery or surrender to
the agent that maintains the Company’s central securities register or a branch
securities register, if applicable, will constitute receipt by or surrender to
the Company.
5.2 Form of Instrument of
Transfer
The instrument of transfer in respect of any share of
the Company must be either in the form, if any, on the back of the Company’s
share certificates or in any other form that may be approved by the directors
from time to time.
5.3
Transferor
Remains Shareholder
Except to the extent that the
Business Corporations Act
otherwise provides, the transferor
of shares is deemed to remain the holder of the shares until the name of the
transferee is entered in a securities register of the Company in respect of the transfer.
5.4
Signing
of Instrument of Transfer
If a shareholder, or his or her duly authorized
attorney, signs an instrument of transfer in respect of shares registered in the name of the
shareholder, the signed instrument of transfer constitutes a complete and
sufficient authority to the Company and its directors, officers and agents to
register the number of shares specified in the instrument of transfer or specified in
any other manner, or, if no number is specified, all the shares represented by
the share certificates
or set out in the written acknowledgments deposited with the instrument of
transfer:
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(1)
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in the name of the person named as transferee in that
instrument of transfer; or
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(2)
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if no person is named as transferee in that instrument
of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose
of having the transfer registered.
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5.5
Enquiry
as to Title Not Required
Neither the Company nor any director, officer or agent
of the Company is bound to inquire into the title of the person named in the
instrument of transfer as transferee or, if no person is named as transferee in
the instrument of transfer, of the person on whose behalf the instrument is
deposited for the purpose of having the transfer registered or is liable for any
claim related to registering the transfer by the shareholder or by any
intermediate owner or holder of the shares, of any interest in the shares, of any
share certificate representing such shares or of any written acknowledgment of a right to obtain a share
certificate for such shares.
5.6
Transfer
Fee
There must be paid to the Company, in relation to the
registration of any transfer, the amount, if any, determined by the directors.
6.
Transmission of Shares
6.1
Legal
Personal Representative Recognized on Death
In case of the death of a shareholder, the legal personal
representative, or if the shareholder was a joint holder, the surviving joint holder,
will be the only person recognized by the Company as having any title to the
shareholder’s interest in the shares. Before recognizing a person as a legal
personal representative, the directors may require proof of appointment by a
court of competent jurisdiction, a grant of letters probate, letters of
administration or such other evidence
or documents as the directors consider appropriate.
6.2
Rights
of Legal Personal Representative
The legal personal representative has the same rights,
privileges and obligations that attach to the shares held by the shareholder, including
the right to transfer the shares in accordance with these Articles, provided
the documents required by the
Business Corporations
Act
and the directors have been deposited with the Company.
-5-
7.
Purchase of Shares
7.1
Company
Authorized to Purchase Shares
Subject to Article 7.2, the special rights and
restrictions attached to the shares of any class or series and the
Business
Corporations
Act,
the
Company may, if authorized by the directors, purchase, redeem or otherwise
acquire any of its shares at the
price and upon the terms specified in such resolution.
7.2
Purchase
When Insolvent
The Company must not make a payment or provide any other
consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds
for believing that:
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(1)
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the Company is insolvent; or
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(2)
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making
the payment or providing the consideration would render the Company
insolvent.
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7.3 Sale and Voting of Purchased Shares
If the Company retains a share redeemed, purchased or
otherwise acquired by it, the Company may sell, gift or odierwise dispose of the share, but, while
such share is held by the Company, it:
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(1)
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is
not entitled to vote the share at a meeting of its shareholders;
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(2)
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must
not pay a dividend in respect of the share; and
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(3)
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must
not make any other distribution in respect of the share.
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8. Borrowing
Powers
8.1
Power
to Borrow and Issue Debt Obligations
The Company, if authorized by the directors, may:
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(1)
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borrow money in the manner and amount, on the
security, from the sources and on the terms and conditions that they consider appropriate;
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(2)
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issue bonds, debentures and other debt obligations
either outright or as security for any liability or obligation of the
Company or any other person and at such discounts or premiums and on such
other terms as they consider
appropriate;
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(3)
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guarantee the repayment of money by any other person
or the performance of any obligation of any other person; and
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(4)
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mortgage, charge, whether by way of specific or
floating charge, grant a security interest in, or give other security on, the whole
or any part of the present and future assets and undertaking of the Company.
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8.2
Features
of Debt Obligations
Any bonds, debentures or other debt obligations of the
Company may be issued at a discount, premium or otherwise, or with special
privileges as to redemption, surrender, drawing, allotment of or conversion
into or exchange for shares or other securities, attending and voting at general meetings of
the Company, appointment of directors or otherwise and may, by their terms, be assignable
free from any equities between the Company and the person to whom they were issued or
any subsequent holder thereof, all as the directors may determine.
-6-
9. Alterations
9.1
Alteration
of Authorized Share Structure
Subject to Article 9.2 and the
Business Corporations Act,
the Company
may:
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(1)
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by directors’ resolution or by ordinary resolution, in
each case determined by the directors:
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(a)
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create one or more classes or series of shares or, if
none of the shares of a class or series of shares are allotted or issued, eliminate that
class or series of shares;
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(b)
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increase, reduce or eliminate the maximum number of
shares that the Company is authorized to issue out of any class
or series of shares or establish a maximum number of shares that the Company is authorized
to issue out of any class or series of shares for which no maximum is established;
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(c)
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subdivide or consolidate all or any of its unissued,
or fully paid issued, shares;
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(d)
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if the Company is authorized to issue shares of a class
of shares with par value:
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A.
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decrease the par value of those shares; or
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B.
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if none of the shares of that class of shares are
allotted or issued, increase the par value of those shares;
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(e)
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change all or any of its unissued, or fully paid
issued, shares with par value into shares without par value or any of its
unissued shares without par value into shares with par value;
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(f)
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alter the identifying name of any of its shares; or
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(2)
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by ordinary resolution otherwise alter its shares or
authorized share structure.
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9.2
Special
Rights and Restrictions
Subject to the
Business
Corporations Act,
the Company may:
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(1)
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by directors’ resolution or by ordinary resolution, in
each case as determined by the directors, create special rights or
restrictions for, and attach those special rights or restrictions to, the
shares of any class or series of shares, if none of those shares have been
issued; or vary or delete any special rights or restrictions attached to the
shares of any class or series of shares, if none of those shares have been
issued
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(2)
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by special resolution of the shareholders of the class
or series affected, do any of the acts in (1) above, if any of the shares of the class or series of
shares have been issued.
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9.3
Change
of Name
The Company may by directors’ resolution or by ordinary
resolution, in each case as determined by the directors, authorize an alteration of its Notice of
Articles in order to change its name.
9.4
Other
Alterations
The Company, save as otherwise provided by these Articles
and subject to the
Business Corporations
Act,
may:
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(1)
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by directors’ resolution or by ordinary resolution, in
each case as determined by the directors, authorize alterations to the
Articles that are procedural or administrative in nature or are matters that
pursuant to these Articles are
solely within the directors’ powers, control or authority; and
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(2)
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if the
Business
Corporations Act
does not specify the type of resolution and these
Articles do not specify another type of resolution, the Company may by ordinary
resolution alter these Articles.
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-7-
10. Meetings
of Shareholders
10.1
Annual
General Meetings
Unless an annual general meeting is deferred or waived in
accordance with the
Business Corporations
Act,
the Company must hold its first annual general meeting within
18 months after the date on which it was incorporated or otherwise recognized,
and after that must hold an annual general meeting at least once in each
calendar year and not more than 15 months after the last annual reference date at such time
and place as may be determined by the directors.
10.2
Resolution
Instead of Annual General Meeting
If all the shareholders who are entitled to vote at an
annual general meeting consent by a unanimous resolution under the
Business Corporations Act
to all of the
business that is required to be transacted at that annual general meeting, the
annual general meeting is deemed to have been held on the date of the unanimous
resolution. The shareholders must, in any unanimous resolution passed under
this Article 10.2, select as the Company’s annual reference date a date that would be
appropriate for the holding of the applicable annual general meeting.
10.3 Calling of Meetings of Shareholders
The directors may, whenever they think fit, call a
meeting of shareholders.
10.4
Place
of Meetings of Shareholders
General meetings of shareholders may be held at a
location outside of British Columbia to be determined and approved by a directors’ resolution.
10.5
Meetings
by Telephone or Other Electronic Means
A meeting of the Company’s shareholders may be held entirely
or in part by means of a telephonic, electronic or other communication
facility that permits all participants to communicate adequately with each
other during the meeting, if approved by directors’ resolution prior to the meeting and
subject to the
Business Corporations Act.
Any
person participating in a meeting by such means is deemed to be present at the
meeting.
10.6
Notice
for Meetings of Shareholders
Subject to Article 10.2, the Company must send notice of
the date, time and location of any meeting of shareholders, in the manner provided
in these Articles, or in such other manner, if any, as may be prescribed by
directors’ resolution
(whether previous notice of the resolution has been given or not), to each
shareholder entitled to attend the meeting, to each director and to the auditor of the
Company, unless these Articles otherwise provide, at least the following number of days before the meeting:
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(1)
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if and for so long as the Company is a public company,
21 days;
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(2)
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otherwise, 10 days.
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10.7
Record
Date for Notice
The directors may set a date as the record date for the
purpose of determining shareholders entitled to notice of any meeting of shareholders.
The record date must not precede the date on which the meeting is to be held by
more than two months or, in the case of a general meeting requisitioned by
shareholders under the
Business Corporations
Act,
by more than four months. The record date must not precede the date on
which the meeting is held by fewer than:
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(1)
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if
and for so long as the Company is a public company, 21 days;
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(2)
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otherwise,
10 days.
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-8-
If no record date is set, the record date is 5 p.m. on
the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the
beginning of the meeting.
10.8
Record
Date for Voting
The directors may set a date as the record date for the
purpose of determining shareholders entitled to vote at any meeting of shareholders.
The record date must not precede the date on which the meeting is to be held by
more than two months or, in the case of a general meeting requisitioned by
shareholders under the
Business Corporations
Act,
by more than four months. If no record date is set, the record date is 5
p.m. on the day immediately preceding the first date on which the notice is sent or, if no
notice is sent, the beginning of the meeting.
10.9
Failure
to Give Notice and Waiver of Notice
The accidental omission to send notice of any meeting
to, or the non-receipt of any notice by, any of the persons entitled to notice
does not invalidate any proceedings at that meeting. Any person entitled to
notice of a meeting of shareholders may, in writing or otherwise, waive or
reduce the period of notice of such meeting.
10.10
Notice
of Special Business at Meetings of Shareholders
If a meeting of shareholders is to consider special
business within the meaning of Article 11.1, the notice of meeting must:
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(1)
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state the general nature of the special business; and
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(2)
|
if the special business includes considering, approving,
ratifying, adopting or authorizing any document or the signing of or giving
of effect to any document, have attached to it a copy of the document or
state that a copy of
the document:
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(a)
|
will be available for inspection by shareholders at
the Company’s records office, or at such other reasonably accessible location
in British Columbia as is specified in the notice during statutory business hours on any
one or more specified days before the day set for the holding of the meeting; and
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(b)
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may be available by request from the Company or may be
accessible electronically or on a website, as determined by the directors.
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11. Proceedings
at Meetings of Shareholders
11.1 Special Business
At a meeting of shareholders, the following business is
special business:
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(1)
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at a meeting of shareholders that is not an annual
general meeting, all business is special business except business relating to the conduct of or
voting at the meeting;
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(2)
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at an annual general meeting, all business is special
business except for the following:
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(a)
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business relating to the conduct of or voting at the
meeting;
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(b)
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consideration of any financial statements of the
Company presented to the meeting;
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(c)
|
consideration of any reports of the directors or auditor;
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(d)
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the setting or changing of the number of directors;
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-9-
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(e)
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the
election or appointment of directors;
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(f)
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the
appointment of an auditor;
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(g)
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the
setting of the remuneration of an auditor;
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(h)
|
business
arising out of a report of the directors not requiring the passing of a
special resolution or an
exceptional resolution;
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(i)
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any other business which,
under these Articles or the
Business
Corporations Act,
may be transacted
at a meeting of shareholders without prior notice of the business being given
to the shareholders.
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11.2
Special
Majority
The majority of votes required for the Company to pass a
special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.
11.3 Quorum
Subject to the special rights and restrictions attached
to the shares of any class or series of shares, the quorum for the transaction of business
at a meeting of shareholders is one or more persons present and being, or
representing by proxy, two or
more shareholders entitled to attend and vote at the meeting.
11.4
Other
Persons May Attend
The directors, the president (if any), the secretary (if
any), the assistant secretary (if any), any lawyer for the Company, the auditor of
the Company and any other persons invited by the directors are entitled to
attend any meeting
of shareholders, but if any of those persons does attend a meeting of
shareholders, that person is not to be counted in the quorum and is not
entitled to vote at the meeting unless that person is a shareholder or proxy
holder entitled to vote at the
meeting.
11.5
Requirement
of Quorum
No business, other than the election of a chair of the
meeting and the adjournment of the meeting, may be transacted at any meeting of
shareholders unless a quorum of shareholders entitled to vote is present at the
commencement of the meeting, but
such quorum need not be present throughout the meeting.
11.6
Lack of
Quorum
If, within one-half hour from the time set for the
holding of a meeting of shareholders, a quorum is not present:
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(1)
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in the case of a general meeting requisitioned by
shareholders, the meeting is dissolved, and
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(2)
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in the case of any other meeting of shareholders, the
meeting stands adjourned to the same day in the next week at the same time and place.
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11.7
Lack
of Quorum at Succeeding Meeting
If, at the meeting to which the meeting referred to in
Article 11.6(2) was adjourned, a quorum is not present within one-half hour from the
time set for the holding of the meeting, the person or persons present and
being, or representing
by proxy, one or more shareholders entitled to attend and vote at the meeting
constitute a quorum.
11.8
Chair
The following individual is entitled to preside as chair
at a meeting of shareholders:
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(1)
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the
chair of the board, if any; or
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(2)
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if
the chair of the board is absent or unwilling to act as chair of the meeting,
the president, if any.
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-10-
11.9
Selection
of Alternate Chair
If, at any meeting of shareholders, there is no chair of
the board or president present within 15 minutes after the time set for holding
the meeting, or if the chair of the board and the president are unwilling to
act as chair of the meeting, or if the chair of the board and the president
have advised the secretary, if any, or any director present at the meeting, that they will
not be present at the meeting, the directors present must choose one of their
number to be chair
of the meeting or if all of the directors present decline to take the chair or
fail to so choose or if no director is present, the shareholders entitled to vote at the
meeting who are present in person or by proxy may choose any person present at the meeting to chair the
meeting.
11.10
Adjournments
The chair of a meeting of shareholders may, and if so
directed by the meeting must, adjourn the meeting from time to time and from place
to place, but no business may be transacted at any adjourned meeting other than
the business left unfinished at
the meeting from which the adjournment took place.
11.11
Notice
of Adjourned Meeting
It is not necessary to give any notice of an adjourned
meeting or of the business to be transacted at an adjourned meeting of shareholders
except that, when a meeting is adjourned for 30 days or more, notice of the
adjourned meeting must be given
as in the case of the original meeting.
11.12
Decisions
by Show of Hands or Poll
Subject to the
Business
Corporations Act,
every motion put to a vote at a meeting of
shareholders will be decided on a show of hands unless a poll, before or on the
declaration of the result of the vote by show of hands, is directed by the chair or demanded by
at least one shareholder entitled to vote who is present in person or by proxy.
11.13
Declaration
of Result
The chair of a meeting of shareholders must declare to
the meeting the decision on every question in accordance with the result of the
show of hands or the poll, as the case may be, and that decision must be
entered in the minutes of the meeting. A declaration of the chair that a
resolution is carried by the necessary majority or is defeated is, unless a poll is
directed by the chair or demanded under Article 11.12, conclusive evidence
without proof of the number or
proportion of the votes recorded in favour of or against the resolution.
11.14
Motion
Need Not be Seconded
No motion proposed at a meeting of shareholders need be
seconded unless the chair of the meeting rules otherwise, and the chair of any
meeting of shareholders is entitled to propose or second a motion.
11.15
Casting
Vote
In case of an equality of votes, the chair of a meeting
of shareholders does not, either on a show of hands or on a poll, have a second or
casting vote in addition to the vote or votes to which the chair may be
entitled as a shareholder.
11.16
Manner
of Taking Poll
Subject to Article 11.17, if a poll is duly demanded at a
meeting of shareholders:
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(1)
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the
poll must be taken:
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(a)
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at the meeting, or within seven days after the date of
the meeting, as the chair of the meeting directs; and
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(b)
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in the manner, at the time and at the place that the
chair of the meeting directs;
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(2)
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the result of the poll is deemed to be the decision of
the meeting at which the poll is demanded; and
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(3)
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the demand for the poll may be withdrawn by the person
who demanded it.
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-11-
11.17
Demand
for Poll on Adjournment
A poll demanded at a meeting of shareholders on a
question of adjournment must be taken immediately at the meeting.
11.18
Chair
Must Resolve Dispute
In the case of any dispute as to the admission or
rejection of a vote given on a poll, the chair of the meeting must determine the dispute,
and his or her determination made in good faith is final and conclusive.
11.19
Casting
of Votes
On a poll, a shareholder entitled to more than one vote
need not cast all the votes in the same way.
11.20
Demand
for Poll
No poll may be demanded in respect of the vote by which a
chair of a meeting of shareholders is elected.
11.21
Demand
for Poll Not to Prevent Continuance of Meeting
The demand for a poll at a meeting of shareholders does
not, unless the chair of the meeting so rules, prevent the continuation of a
meeting for the transaction of any business other than the question on which a
poll has been demanded.
11.22
Retention
of Ballots and Proxies
The Company must, for at least three months after a meeting
of shareholders, keep each ballot cast on a poll and each proxy voted at the
meeting, and, during that period, make them available for inspection during
normal business hours by any shareholder or proxyholder entitled to vote at the
meeting. At the end of such three month period, the Company may destroy such ballots and proxies.
12. Votes
of Shareholders
12.1 Number of Votes by Shareholder or
by Shares
Subject to any special rights or restrictions attached
to any shares and to the restrictions imposed on joint shareholders under Article 12.3:
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(1)
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on a vote by show of hands, every person present who is
a shareholder or proxy holder and entitled to vote on the matter has one vote; and
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(2)
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on a poll, every shareholder entitled to vote on the
matter has one vote in respect of each share entitled to be voted on the
matter and held by that shareholder and may exercise that vote either in
person or by proxy.
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-12-
12.2
Votes of Persons in Representative Capacity
A person who is not a shareholder may vote at a meeting
of shareholders, whether on a show of hands or on a poll, and may appoint a proxy
holder to act at the meeting, if, before doing so, the person satisfies the
chair of the meeting,
or the directors, that the person is a legal personal representative or a
trustee in bankruptcy for a shareholder
who is entitled to vote at the meeting.
12
.
3
Votes by Joint Holders
If there are joint shareholders registered in respect of
any share:
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(1)
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any one of the joint shareholders may vote at any
meeting, either personally or by proxy, in respect of the share as if that joint shareholder were
solely entitled to it; or
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(2)
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if more than one of the joint shareholders is present
at any meeting, personally or by proxy, and more than one of them votes in
respect of that share, then only the vote of the joint shareholder present
whose name stands first on the central securities register in respect of the
share will be counted.
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12.4
Legal
Personal Representatives as Joint Shareholders
Two or more legal personal representatives of a
shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint
shareholders.
12.5
Representative
of a Corporate Shareholder
If a corporation, that is not a subsidiary of the
Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of
shareholders of the Company, and:
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(1)
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for that purpose, the instrument appointing a
representative must:
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(a)
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be received at the registered office of the Company or
at any other place specified, in the notice calling the meeting,
for the receipt of proxies, at least the number of business days specified in
the notice for the receipt of proxies, or if no number of days is specified,
two business days before the day
set for the holding of the meeting; or
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(b)
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be provided, at the meeting, to the chair of the
meeting or to a person designated by the chair of the meeting;
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(2)
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if a representative is appointed under this Article
12.5:
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(a)
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the representative is entitled to exercise in respect
of and at that meeting the same rights on behalf of the corporation that the
representative represents as that corporation could exercise if it were a shareholder who is an
individual, including, without limitation, the right to appoint a proxy
holder; and
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(b)
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the representative, if present at the meeting, is to
be counted for the purpose of forming a quorum and is deemed to be a shareholder present
in person at the meeting.
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Evidence of the appointment of any such representative
may be sent to the Company by written instrument, fax or any other method of transmitting legibly
recorded messages.
12.6
Proxy
Provisions Do Not Apply to All Companies
Articles 12.7 to 12.15 do not apply to the Company if and
for so long as it is a public company or a pre-existing reporting company which
has the Statutory Reporting Company Provisions as part of its Articles or to
which the Statutory Reporting
Company Provisions apply.
-13-
12.7
Appointment
of Proxy Holders
Every shareholder of the Company, including a corporation
that is a shareholder but not a subsidiary of the Company, entitled to
vote at a meeting of shareholders of the Company may, by proxy, appoint up to
two proxy holders
to attend and act at the meeting in the manner, to the extent and with the
powers conferred by the proxy.
12.8
Alternate
Proxy Holders
A shareholder may appoint one or more alternate proxy
holders to act in the place of an absent proxy holder.
12.9
Proxy
Holder Need Not Be Shareholder
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(1)
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A
person who is not a shareholder may be appointed as a proxy holder.
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12.10
Deposit
of Proxy
A proxy for a meeting of shareholders must:
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(1)
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be received at the registered office of the Company or
at any other place specified, in the notice calling the meeting, for the
receipt of proxies, at least the number of business days specified in the
notice, or if no number of days is specified, two business days before the day set for
the holding of the meeting; or
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(2)
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unless the notice provides otherwise, be provided, at
the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.
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A proxy may be sent to the Company by written instrument,
fax or any other method of transmitting legibly recorded messages.
12.11
Validity
of Proxy Vote
A vote given in accordance with the terms of a proxy is
valid notwithstanding the death or incapacity of the shareholder giving the
proxy and despite the revocation of the proxy or the revocation of the
authority under which the proxy is given, unless notice in writing of that death, incapacity
or revocation is received:
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(1)
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at the registered office of the Company, at any time up
to and including the last business day before the day set for the holding of the meeting at which
the proxy is to be used; or
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(2)
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by the chair of the meeting, before the vote is taken.
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12.12
Form of Proxy
A proxy, whether for a specified meeting or otherwise,
must be either in the following form or in any other form approved by the directors or the chair of the
meeting:
[Name of Company]
(the
“Company”)
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The undersigned, being a shareholder of the Company,
hereby appoints
[name]
or,
failing that person,
[name],
as proxy
holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the
meeting of shareholders of the Company to be held on
[month, day, year]
and at any adjournment of that meeting.
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Number of shares in respect of which tins proxy is
given (if no number is specified, then this proxy if given in
respect of all shares registered in the name of the shareholder):
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-14-
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Signed
[month, day, year]
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[Signature of shareholder]
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[Name of shareholder - printed]
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12.13
Revocation
of Proxy
Subject to Article 12.14, every proxy may be revoked by
an instrument in writing that is:
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(1)
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received at the registered office of the Company at
any time up to and including the last business day before the day set
for the holding of the meeting at which the proxy is to be used; or
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(2)
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provided, at the meeting, to the chair of the meeting.
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12.14
Revocation
of Proxy Must Be Signed
An instrument referred to in Article 12.13 must be signed
as follows:
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(1)
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if the shareholder for whom the proxy holder is
appointed is an individual, the instrument must be signed by the shareholder or
his or her legal personal representative or trustee in bankruptcy;
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(2)
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if the shareholder for whom the proxy holder is
appointed is a corporation, the instrument must be signed by the corporation or
by a representative appointed for the corporation under Article 12.5.
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12.15
Production
of Evidence of Authority to Vote
The chair of any meeting of shareholders may, but need
not, inquire into the authority of any person to vote at the meeting and may,
but need not, demand from that person production of evidence as to the
existence of the authority to
vote.
13. Directors
13.1 First Directors; Number of
Directors
The first directors are the persons designated as
directors of the Company in the Notice of Articles that applies to the Company
when it is recognized under the
Business
Corporations Act.
The number of directors, excluding additional directors appointed under Article 14.8, is
set at:
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(1)
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subject to paragraphs (2) and (3), the number of
directors that is equal to the number of the Company’s first directors;
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(2)
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if the Company is a public company, the greater of
three and the most recently set of:
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(a)
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the number of directors set by ordinary resolution
(whether or not previous notice of the resolution was given); and
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(b)
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the number of directors set under Article 14.4;
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(3)
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if the Company is not a public company, the most
recently set of:
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(a)
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the number of directors set by ordinary resolution
(whether or not previous notice of the resolution was given); and
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(b)
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the number of directors set under Article 14.4.
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-15-
13.2
Change
in Number of Directors
If the number of directors is set under Articles
13.1(2)(a) or 13.1(3)(a):
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(1)
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the
shareholders may elect or appoint the directors needed to fill any vacancies
in the board of directors up to that number;
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(2)
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if
the shareholders do not elect or appoint the directors needed to fill any
vacancies in the board of directors up to that number contemporaneously with the
setting of that number, then the directors may appoint, or the shareholders may elect or appoint,
directors to fill those vacancies.
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13.3
Directors’
Acts Valid Despite Vacancy
An act or proceeding of the directors is not invalid
merely because fewer than the number of directors set or otherwise required under these Articles is in
office.
13.4
Qualifications
of Directors
A director is not required to hold a share in the capital
of the Company as qualification for his or her office but must be qualified as
required by the
Business Corporations Act
to
become, act or continue to act as a director.
13.5
Remuneration
of Directors
The directors are entitled to the remuneration for
acting as directors, if any, as the directors may from time to time determine. If the
directors so decide, the remuneration of the directors, if any, will be
determined by the shareholders. That remuneration may be in addition to any salary or
other remuneration paid to any officer or employee of the Company as such, who is also a director.
13.6
Reimbursement
of Expenses of Directors
The Company must reimburse each director for the
reasonable expenses that he or she may incur in and about the business of the Company.
13.7
Special
Remuneration for Directors
If any director performs any professional or other
services for the Company that in the opinion of the directors are outside the ordinary
duties of a director, or if any director is otherwise specially occupied in or
about the Company’s business, he or she may be paid remuneration fixed by the directors,
or, at the option of that director, fixed by ordinary resolution, and such remuneration may be
either in addition to, or in substitution for, any other remuneration that he or she may be entitled
to receive.
13.8
Gratuity,
Pension or Allowance on Retirement of Director
Unless otherwise determined by ordinary resolution, the
directors on behalf of the Company may pay a gratuity or pension or allowance on
retirement to any director who has held any salaried office or place of profit
with the Company
or to his or her spouse or dependants and may make contributions to any fund
and pay premiums for the purchase
or provision of any such gratuity, pension or allowance.
14. Election
and Removal of Directors
14.1 Election at Annual General Meeting
At every annual general meeting and in every unanimous
resolution contemplated by Article 10.2:
-16-
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(1)
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the shareholders entitled to vote at the annual
general meeting for the election of directors must elect, or in the unanimous
resolution appoint, a board of directors consisting of the number of
directors for the time being
set under these Articles; and
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(2)
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all the directors cease to hold office immediately
before the election or appointment of directors under paragraph (1), but are eligible for
re-election or re-appointment.
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14.2 Consent to be a Director
No election, appointment or designation of an individual
as a director is valid unless:
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(1)
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that
individual consents to be a director in the manner provided for in the
Business Corporations Act;
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(2)
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that
individual is elected or appointed at a meeting at which the individual is
present and the individual does not refuse, at the meeting, to be a director; or
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(3)
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with
respect to first directors, the designation is otherwise valid under the
Business Corporations Act.
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14.3 Failure to Elect or Appoint Directors
If::
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(1)
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the Company fails to hold an annual general meeting,
and all the shareholders who are entitled to vote at an annual general
meeting fail to pass the unanimous resolution contemplated by Article 10.2,
on or before the date by which the annual general meeting is required to be
held under the
Business Corporations Act;
or
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(2)
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the shareholders fail, at the annual general meeting or
in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;
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then each director then in office continues to hold
office until the earlier of:
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(3)
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the date on which his or her successor is elected or
appointed; and
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(4)
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the date on which he or she otherwise ceases to hold
office under the
Business Corporations Act
or these Articles.
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14.4
Places
of Retiring Directors Not Filled
If, at any meeting of shareholders at which there should
be an election of directors, the places of any of the retiring directors are not
filled by that election, those retiring directors who are not re-elected and
who are asked by the newly elected directors to continue in office will, if willing to do
so, continue in office to complete the number of directors for the time being set pursuant to these
Articles until further new directors are elected at a meeting of shareholders convened
for that purpose. If any such election or continuance of directors does not
result in the election or continuance of the number of directors for the time being
set pursuant to these Articles, the number of directors of the Company is deemed to be set at
the number of directors actually elected or continued in office.
14.5
Directors
May Fill Casual Vacancies
Any casual vacancy occurring in the board of directors
may be filled by the directors.
14.6
Remaining
Directors Power to Act
The directors may act notwithstanding any vacancy in the
board of directors, but if the Company has fewer directors in office than the
number set pursuant to these Articles as the quorum of directors, the directors
may only act for the purpose of appointing directors up to that number or of
summoning a meeting of shareholders for the purpose of filling any vacancies
on the board of directors or, subject to the
Business
Corporations Act,
for any other purpose.
-17-
14.7
Shareholders
May Fill Vacancies
If the Company has no directors or fewer directors in
office than the number set pursuant to these Articles as the quorum of directors, the
shareholders may elect or appoint directors to fill any vacancies on the board
of directors.
14.8
Additional
Directors
Notwithstanding Articles 13.1 and 13.2, between annual
general meetings or unanimous resolutions contemplated by Article 10.2, the
directors may appoint one or more additional directors, but the number of
additional directors appointed
under this Article 14.8 must not at any time exceed:
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(1)
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one-third of the number of first directors, if, at the
time of the appointments, one or more of the first directors have not yet completed their
first term of office; or
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(2)
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in any other case, one-third of the number of the
current directors who were elected or appointed as directors other than under this Article
14.8.
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Any director so appointed ceases to hold office
immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for
re-election or re-appointment.
14.9
Ceasing
to be a Director
A director ceases to be a director when:
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(1)
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the term of office of the director expires;
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(2)
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the director dies;
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(3)
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the
director resigns as a director by notice in writing provided to the Company
or a lawyer for the Company; or
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(4)
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the director is removed from office pursuant to
Articles 14.10 or 14.11.
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14.10
Removal
of Director by Shareholders
The Company may remove any director before the expiration
of his or her term of office by special resolution. In that event, the
shareholders may elect, or appoint by ordinary resolution, a director to fill
the resulting vacancy. If the shareholders do not elect or appoint a director to
fill the resulting vacancy contemporaneously with the removal, then the
directors may appoint or the shareholders may elect, or appoint by ordinary
resolution, a director to fill that vacancy.
14.11
Removal
of Director by Directors
The directors may remove any director before the
expiration of his or her term of office if the director is convicted of an indictable
offence, or if the director ceases to be qualified to act as a director of a
company and does not promptly
resign, and the directors may appoint a director to fill the resulting vacancy.
15. Alternate
Directors
15.1 Appointment of Alternate Director
Any director (an “appointor”) may by notice in writing
received by the Company appoint any person (an “appointee”) who is
qualified to act as a director to be his or her alternate to act in his or her
place at meetings of the directors or committees of the directors at which the
appointor is not present unless (in the case of an appointee who is not a
director) the directors have reasonably disapproved the appointment of such
person as an alternate director and have given notice to that effect to his or her
appointor within a reasonable time after the notice of appointment is received by the Company.
-18-
15.2 Notice of Meetings
Every alternate director so appointed is entitled to
notice of meetings of the directors and of committees of the directors of which his
or her appointor is a member and to attend and vote as a director at any such
meetings at which his or her
appointor is not present.
15.3 Alternate for More Than One
Director Attending Meetings
A person may be appointed as an alternate director by
more than one director, and an alternate director:
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(1)
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will be counted in determining the quorum for a meeting
of directors once for each of his or her appointors and, in the case of an
appointee who is also a director, once more in that capacity;
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(2)
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has a separate vote at a meeting of directors for each
of his or her appointors and, in the case of an appointee who is also a director, an
additional vote in that capacity;
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(3)
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will be counted in determining the quorum for a meeting
of a committee of directors once for each of his or her appointors who is a
member of that committee and, in the case of an appointee who is also a
member of that
committee as a director, once more in that capacity;
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(4)
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has a separate vote at a meeting of a committee of
directors for each of his or her appointors who is a member of that
committee and, in the case of an appointee who is also a member of that
committee as a director, an
additional vote in that capacity.
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15.4
Consent
Resolutions
Every alternate director, if authorized by the notice
appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in
writing.
15.5
Alternate
Director Not an Agent
Every alternate director is deemed not to be the agent of
his or her appointor.
15.6
Revocation
of Appointment of Alternate Director
An appointor may at any time, by notice in writing
received by the Company, revoke the appointment of an alternate director appointed by him or her.
15.7
Ceasing
to be an Alternate Director
The appointment of an alternate director ceases when:
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(1)
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his or her appointor ceases to be a director and is not
promptly re-elected or re-appointed;
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(2)
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the alternate director dies;
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(3)
|
the alternate director resigns as an alternate director
by notice in writing provided to the Company or a lawyer for the Company;
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(4)
|
the alternate director ceases to be qualified to act
as a director; or
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(5)
|
his or her appointor revokes the appointment of the
alternate director.
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-19-
15.8 Remuneration and Expenses of
Alternate Director
The Company may reimburse an alternate director for the
reasonable expenses that would be properly reimbursed if he or she were a director,
and the alternate director is entitled to receive from the Company such
proportion, if any, of the remuneration otherwise payable to the appointor as the appointor
may from time to time direct.
16. Powers and Duties of Directors
16.1
Powers
of Management
The directors must, subject to the
Business Corporations Act
and these
Articles, manage or supervise the management of the business and affairs of the
Company and have the authority to exercise all such powers of the Company as are not, by
the
Business Corporations Act
or
by these Articles, required to be exercised by the shareholders of the Company.
16.2
Appointment
of Attorney of Company
The directors may from time to time, by power of attorney
or other instrument, under seal if so required by law, appoint any person to
be the attorney of the Company for such purposes, and with such powers,
authorities and discretions (not exceeding those vested in or exercisable by the
directors under these Articles and excepting the power to fill vacancies in the board of directors,
to remove a director, to change the membership of, or fill vacancies in, any
committee of the directors, to appoint or remove officers appointed by the
directors and to declare dividends) and for such period, and with such remuneration
and subject to such conditions as the directors may think fit. Any such power of attorney
may contain such provisions for the protection or convenience of persons
dealing with such attorney as the directors think fit. Any such attorney may be
authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for
the time being vested in him or her.
17.
Disclosure of Interest of Directors
17.1
Obligation
to Account for Profits
A director or senior officer who holds a disclosable
interest (as that term is used in the
Business
Corporations Act)
in a contract or transaction into which the
Company has entered or proposes to enter is liable to account to the Company for any profit
that accrues to the director or senior officer under or as a result of the
contract or transaction only if
and to the extent provided in the
Business
Corporations Act.
17.2
Restrictions
on Voting by Reason of Interest
A director who holds a disclosable interest in a
contract or transaction into which the Company has entered or proposes to enter is
not entitled to vote on any directors’ resolution to approve that contract or
transaction, unless all the directors have a disclosable interest in that
contract or transaction, in which case any or all of those directors may vote on such resolution.
17.3
Interested Director
Counted in Quorum
A director who holds a disclosable interest in a
contract or transaction into which the Company has entered or proposes to enter and
who is present at the meeting of directors at which the contract or transaction
is considered for approval may be counted in the quorum at the meeting whether or not the
director votes on any or all of the resolutions considered at the meeting.
17.4 Disclosure of Conflict of Interest
or Property
A director or senior officer who holds any office or
possesses any property, right or interest that could result, directly or indirectly,
in the creation of a duty or interest that materially conflicts with that
individual’s duty or interest as a director or senior officer, must disclose the nature and
extent of the conflict as required by the
Business
Corporations
Act.
-20-
17.5
Director
Holding Other Office in the Company
A director may hold any office or place of profit with
the Company, other than the office of auditor of the Company, in addition to his or
her office of director for the period and on the terms (as to remuneration or
otherwise) that the directors
may determine.
17.6
No
Disqualification
No director or intended director is disqualified by his
or her office from contracting with the Company either with regard to the holding of
any office or place of profit the director holds with the Company or as vendor,
purchaser or otherwise,
and no contract or transaction entered into by or on behalf of the Company in
which a director is in any way
interested is liable to be voided for that reason.
17.7
Professional
Services by Director or Officer
Subject to the
Business
Corporations Act,
a director or officer, or any person in which a
director or officer has an interest, may act in a professional capacity for the
Company, except as auditor of the Company, and the director or officer or such
person is entitled to remuneration for professional services as if that
director or officer were not a director or officer.
17.8
Director
or Officer in Other Corporations
A director or officer may be or become a director,
officer or employee of, or otherwise interested in, any person in which the Company may be
interested as a shareholder or otherwise, and, subject to the
Business Corporations Act,
the director or officer
is not accountable to the Company for any remuneration or other benefits
received by him or her as director, officer or employee of, or from his or her interest in,
such other person.
18. Proceedings
of Directors
18.1
Meetings
of Directors
The directors may meet together for the conduct of
business, adjourn and otherwise regulate their meetings as they think fit, and meetings
of the directors held at regular intervals may be held at the place, at the
time and on the notice, if any,
as the directors may from time to time determine.
18.2
Voting
at Meetings
Questions arising at any meeting of directors are to be
decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not
have a second or casting vote.
18.3
Chair
of Meetings
The following individual is entitled to preside as chair
at a meeting of directors:
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(1)
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the chair of the board, if any;
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(2)
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in the absence of the chair of the board, the
president, if any, if the president is a director; or
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(3)
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any other director chosen by the directors if:
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(a)
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neither the chair of the board nor the president, if a
director, is present at the meeting within 15 minutes after the time set for holding the
meeting;
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(b)
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neither the chair of the board nor the president, if a
director, is willing to chair the meeting; or
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(c)
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the chair of the board and the president, if a
director, have advised the secretary, if any, or any other director, that they will not be
present at the meeting.
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-21-
18.4
Meetings
by Telephone or Other Communications Medium
A director may participate in a meeting of the directors
or of any committee of the directors in person or by telephone if all
directors participating in the meeting, whether in person or by telephone or
other communications medium, are able to communicate with each other. A director may
participate in a meeting of the directors or of any committee of the
directors by a communications medium other than telephone if all directors
participating in the meeting, whether in person or by telephone or other
communications medium, are able to communicate with each other and if all
directors who wish to participate in the meeting agree to such participation. A
director who participates
in a meeting in a manner contemplated by this Article 18.4 is deemed for all
purposes of the
Business
Corporations
Act
and
these Articles to be present at the meeting and to have agreed to participate
in that manner.
18.5
Calling
of Meetings
A director may, and the secretary or an assistant
secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.
18.6
Notice
of Meetings
Other than for meetings held at regular intervals as
determined by the directors pursuant to Article 18.1, reasonable notice of each
meeting of the directors, specifying the place, day and time of that meeting
must be given to each of the directors and the alternate directors by any method
set out in Article 24.1 or orally or by telephone.
18.7
When
Notice Not Required
It is not necessary to give notice of a meeting of the
directors to a director or an alternate director if:
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(1)
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the meeting is to be held immediately following a
meeting of shareholders at which that director was elected or appointed,
or is the meeting of the directors at which that director is appointed; or
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(2)
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the director or alternate director, as the case may be,
has waived notice of the meeting.
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18.8
Meeting
Valid Despite Failure to Give Notice
The accidental omission to give notice of any meeting of
directors to, or the non-receipt of any notice by, any director or alternate director, does not
invalidate any proceedings at that meeting.
18.9
Waiver
of Notice of Meetings
Any director or alternate director may send to the
Company a document signed by him or her waiving notice of any past, present or
future meeting or meetings of the directors and may at any time withdraw that
waiver with respect to meetings held after that withdrawal. After sending a waiver
with respect to all future meetings and until that waiver is withdrawn, no notice
of any meeting of the directors need be given to that director and, unless the
director otherwise
requires by notice in writing to the Company, to his or her alternate director,
and all meetings of the directors so held are deemed not to be improperly called
or constituted by reason of notice not having been given to such director or alternate director.
18.10 Quorum
The quorum necessary for the transaction of the business of
the directors may be set by the directors and, if not so set, is deemed to be
set at a majority of directors then in office or, if the number of directors is
set at one, is deemed to be set
at one director, and that director may constitute a meeting.
18.11 Validity of Acts
Where Appointment Defective
Subject to me
Business
Corporations Act,
an act of a director or officer is not invalid
merely because of an irregularity in the election or appointment or a defect
in the qualification of that director or officer.
-22-
18.12 Consent Resolutions in Writing
A resolution of the directors or of any committee of the
directors consented to in writing by all of the directors entitled to vote on it,
whether by signed document, fax, email or any other method of transmitting
legibly recorded messages, is as valid and effective as if it had been passed
at a meeting of the directors or of the committee of the directors duly called
and held. Such resolution may be in two or more counterparts which together are
deemed to constitute
one resolution in writing. A resolution passed in that manner is effective on
the date stated in the resolution or on the latest date stated on any
counterpart. A resolution of the directors or of any committee of the directors
passed in accordance with this Article 18.12 is deemed to be a proceeding at a
meeting of directors or of the committee of the directors and to be as valid and
effective as if it had been passed at a meeting of the directors or of the committee of the
directors that satisfies all the requirements of the
Business Corporations Act
and all the requirements of these
Articles relating to meetings of the directors or of a committee of the
directors.
19. Executive
and Other Committees
19.1 Appointment and
Powers of Executive Committee
The directors may, by resolution, appoint an executive
committee consisting of the director or directors that they consider
appropriate, and this committee has, during the intervals between meetings of
the board of directors, all of the directors’ powers, except:
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(1)
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the power to fill vacancies in the board of directors;
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(2)
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the power to remove a director;
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(3)
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the power to change the membership of, or fill
vacancies in, any committee of the directors; and
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(4)
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such other powers, if any, as may be set out in the
resolution or any subsequent directors’ resolution.
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19.2
Appointment
and Powers of Other Committees
The
directors may, by resolution:
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(1)
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appoint one or more committees (other than the
executive committee) consisting of the director or directors that they consider appropriate;
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(2)
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delegate to a committee appointed under paragraph (1)
any of the directors’ powers, except:
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(a)
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the power to fill vacancies in the board of directors;
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(b)
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the power to remove a director;
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(c)
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the power to change the membership of, or fill
vacancies in, any committee of the directors; and
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(d)
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the power to appoint or remove officers appointed by
the directors; and
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(3)
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make any delegation referred to in paragraph (2)
subject to the conditions set out in the resolution or any subsequent directors’ resolution.
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19.3 Obligations of Committees
Any committee appointed under Articles 19.1 or 19.2, in
the exercise of the powers delegated to it, must:
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(1)
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conform
to any rules that may from time to time be imposed on it by the directors;
and
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(2)
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report
every act or thing done in exercise of those powers at such times as the
directors may require.
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-23-
19.4
Powers
of Board
The directors may, at any time, with respect to a committee
appointed under Articles 19.1 or 19.2:
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(1)
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revoke or alter the authority given to the committee,
or override a decision made by the committee, except as to acts done before such revocation,
alteration or overriding;
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(2)
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terminate the appointment of, or change the membership
of, the committee; and
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(3)
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fill vacancies in the committee.
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19.5
Committee
Meetings
Subject to Article 19.3(1) and unless the directors
otherwise provide in the resolution appointing the committee or in any
subsequent resolution, with respect to a committee appointed under Articles
19.1 or 19.2:
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(1)
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the committee may meet and adjourn as it thinks proper;
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(2)
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the committee may elect a chair of its meetings but, if
no chair of a meeting is elected, or if at a meeting the chair of the meeting
is not present within 15 minutes after the time set for holding the meeting,
the directors present who are members of the committee may choose one of
their number to chair the meeting;
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(3)
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a majority of the members of the committee constitutes
a quorum of the committee; and
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(4)
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questions arising at any meeting of the committee are
determined by a majority of votes of the members present, and in case
of an equality of votes, the chair of the meeting does not have a second or
casting vote.
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20. Officers
20.1
Directors
May Appoint Officers
The directors may, from time to time, appoint such
officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.
20.2
Functions,
Duties and Powers of Officers
The directors may, for each officer:
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(1)
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determine the functions and duties of the officer;
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(2)
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entrust to and confer on the officer any of the powers
exercisable by the directors on such terms and conditions and with such restrictions as
the directors think fit; and
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(3)
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revoke, withdraw, alter or vary all or any of the
functions, duties and powers of the officer.
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20.3
Qualifications
No officer may be appointed unless that officer is
qualified in accordance with the
Business Corporations
Act.
One person may hold more than one position as an officer of
the Company. Any person appointed as the chair of the board or as the
managing director must be a director. Any other officer need not be a director.
20.4
Remuneration
and Terms of Appointment
All appointments of officers are to be made on the terms
and conditions and at the remuneration (whether by way of salary, fee,
commission, participation in profits or otherwise) that the directors thinks
fit and are subject to termination at the pleasure of the directors, and an officer may in
addition to such remuneration be entitled to receive, after he or she ceases to hold such
office or leaves the employment of the Company, a pension or gratuity.
-24-
21. Indemnification
21.1
Definitions
In this Article 21:
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(1)
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“eligible penalty” means a judgment, penalty or fine
awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
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(2)
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“eligible proceeding” means a legal proceeding or
investigative action, whether current, threatened, pending or completed, in
which a director, former director or alternate director of the Company (an “eligible party”) or
any of the heirs and legal personal representatives of the eligible party, by
reason of the eligible party being or having been a director or alternate director
of the Company:
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(a)
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is or may be joined as a party; or
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(b)
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is or may be liable for or in respect of a judgment,
penalty or fine in, or expenses related to, the proceeding;
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(3)
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“expenses” has the meaning set out in the
Business Corporations Act,
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21.2
Mandatory
Indemnification of Directors and Former Directors
Subject to the
Business
Corporations Act,
the Company must indemnify a director, former
director or alternate director of the Company and his or her heirs and legal
personal representatives against all eligible penalties to which such person is
or may be liable, and the Company must, after the final disposition of an
eligible proceeding, pay the expenses actually and reasonably incurred by such
person in respect of that proceeding. Each director and alternate director is deemed to
have contracted with the Company on the terms of the indemnity contained in
this Article 21.2.
21.3 Indemnification of Other Persons
Subject to any restrictions in the
Business Corporations Act,
the Company may
indemnify any person.
21.4
Non-Compliance
with
Business Corporations Act
The failure of a director, alternate director or officer
of the Company to comply with the
Business
Corporations Act
or these Articles does not invalidate any indemnity to
which he or she is entitled under this Part.
21.5
Company
May Purchase Insurance
The Company may purchase and maintain insurance for the
benefit of any person (or his or her heirs or legal personal representatives) who:
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(1)
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is or was a director, alternate director, officer,
employee or agent of the Company;
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(2)
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is or was a director, alternate director, officer,
employee or agent of a corporation at a time when the corporation is or was an affiliate of the
Company;
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(3)
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at the request of the Company, is or was a director,
alternate director, officer, employee or agent of a corporation or of a
partnership, trust, joint venture or other unincorporated entity;
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(4)
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at the request of the Company, holds or held a position
equivalent to that of a director, alternate director or officer of a partnership, trust, joint
venture or other unincorporated entity;
against any liability incurred by him or her as such director, alternate
director, officer, employee or agent or person who holds or held such
equivalent position.
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-25-
22. Dividends
22.1
Payment
of Dividends Subject to Special Rights
The provisions of this Article 22 are subject to the
rights, if any, of shareholders holding shares with special rights as to dividends.
22.2
Declaration
of Dividends
Subject to the
Business
Corporations Act,
the directors may from time to time declare and
authorize payment of such
dividends as they may deem advisable.
22.3
No
Notice Required
The directors need not give notice to any shareholder of
any declaration under Article 22.2.
22.4
Record
Date
The directors may set a date as the record date for the
purpose of determining shareholders entitled to receive payment of a dividend.
The record date must not precede the date on which the dividend is to be paid
by more than two
months. If no record date is set, the record date is 5 p.m. on the date on
which the directors pass the resolution declaring the dividend.
22.5
Manner
of Paying Dividend
A resolution declaring a dividend may direct payment of
the dividend wholly or partly by the distribution of specific assets or of fully paid
shares or of bonds, debentures or other securities of the Company, or in any
one or more of those ways.
22.6
Settlement
of Difficulties
If any difficulty arises in regard to a distribution
under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:
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(1)
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set the value for distribution of specific assets;
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(2)
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determine that cash payments in substitution for all or
any part of the specific assets to which any shareholders are
entitled may be made to any shareholders on the basis of the value so fixed
in order to adjust the rights
of all parties; and
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(3)
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vest any such specific assets in trustees for the
persons entitled to the dividend.
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22.7
When
Dividend Payable
Any dividend may be made payable on such date as is fixed
by the directors.
22.8
Dividends
to be Paid in Accordance with Number of Shares
All dividends on shares of any class or series of shares
must be declared and paid according to the number of such shares held.
-26-
22.9
Receipt
by Joint Shareholders
If several persons are joint shareholders of any share,
any one of them may give an effective receipt for any dividend, bonus or other money payable in
respect of the share.
22.10
Dividend
Bears No Interest
No dividend bears interest against the Company.
22.11
Fractional
Dividends
If a dividend to which a shareholder is entitled includes
a fraction of the smallest monetary unit of the currency of the dividend, that
fraction may be disregarded in making payment of the dividend and that payment
represents full payment of the
dividend.
22.12
Payment
of Dividends
Any dividend or other distribution payable in cash in
respect of shares may be paid by cheque, made payable to the order of the person to
whom it is sent, and mailed to the address of the shareholder, or in the case
of joint shareholders,
to the address of the joint shareholder who is first named on the central
securities register, or to the person and to the address the shareholder or
joint shareholders may direct in writing. The mailing of such cheque will, to the extent of
the sum represented by the cheque (plus the amount of the tax required by law
to be deducted), discharge all liability for the dividend unless such cheque is not paid
on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.
22.13
Capitalization
of Surplus
Notwithstanding anything contained in these Articles,
the directors may from time to time capitalize any surplus of the Company and
may from time to time issue, as fully paid, shares or any bonds, debentures or
other securities of the
Company as a dividend representing the surplus or any part of the surplus.
23.
Documents, Records and Reports
23.1
Recording
of Financial Affairs
The directors must cause adequate accounting records to
be kept to record properly the financial affairs and condition of the Company and to comply with
the
Business Corporations Act.
23.2
Inspection
of Accounting Records
Unless the directors determine otherwise, or unless
otherwise determined by ordinary resolution, no shareholder of the Company is entitled
to inspect or obtain a copy of any accounting records of the Company.
24.
Notices
24.1 Method of Giving Notice
Unless the
Business
Corporations Act
or these Articles provides otherwise, a notice,
statement, report or other record required or permitted by the
Business Corporations Act
or these
Articles to be sent by or to a person may be sent by any one of the following methods:
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(1)
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mail addressed to the person at the applicable address
for that person as follows:
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(a)
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for a record mailed to a shareholder, the
shareholder’s registered address;
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(b)
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for a record mailed to a director or officer, the prescribed
address for mailing shown for the director or officer in the records kept by the
Company or the mailing address provided by the recipient for the sending of that record or records of that class;
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(c)
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in any other case, the mailing address of the intended
recipient;
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-27-
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(2)
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delivery at the applicable address for that person as
follows, addressed to the person:
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(a)
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for a record delivered to a shareholder, the
shareholder’s registered address;
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(b)
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for a record delivered to a director or officer, the
prescribed address for delivery shown for the director or officer in the
records kept by the Company or the delivery address provided by the recipient for the sending of that record or
records of that class;
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(c)
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in any other case, the delivery address of the intended
recipient;
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(3)
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sending the record by fax to the fax number provided
by the intended recipient for the sending of that record or records of that class;
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(4)
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sending the record by email to the email address provided
by the intended recipient for the sending of that record or records of that class;
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(5)
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physical delivery to the intended recipient.
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24.2 Deemed Receipt of Mailing
A record that is mailed to a person by ordinary mail to
the applicable address for that person referred to in Article 24.1 is deemed to be
received by the person to whom it was mailed on the day, Saturdays, Sundays and
holidays excepted, following the
date of mailing.
24.3 Certificate of Sending
A certificate signed by the secretary, if any, or other
officer of the Company or of any other corporation acting in that behalf for
the Company stating that a notice, statement, report or other record was
addressed as required by Article 24.1, prepaid and mailed or otherwise sent as
permitted by Article 24.1 is conclusive evidence of that fact.
24.4
Notice
to Joint Shareholders
A notice, statement, report or other record may be
provided by the Company to the joint shareholders of a share by providing the notice to
the joint shareholder first named in the central securities register in respect
of the share.
24.5
Notice
to Trustees
A notice, statement, report or other record may be
provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or
incapacity of a shareholder by:
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(1)
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mailing the record, addressed to them:
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(a)
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by name, by the title of the legal personal
representative of the deceased or incapacitated shareholder, by the
title of trustee of the bankrupt shareholder or by any similar description;
and
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(b)
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at the address, if any, supplied to the Company for
that purpose by the persons claiming to be so entitled; or
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(2)
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if an address referred to in paragraph (l)(b) has not
been supplied to the Company, by giving the notice in a manner in which it
might have been given if the death, bankruptcy or incapacity had not
occurred.
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-28-
25.
Seal
25.1
Who
May Attest Seal
Except as provided in Articles 25.2 and 25.3, the
Company’s seal, if any, must not be impressed on any record except when that impression is attested by
the signatures of:
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(1)
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any
two directors;
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(2)
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any
officer, together with any director;
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(3)
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if
the Company only has one director, that director; or
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(4)
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any
one or more directors or officers or persons as may be determined by the
directors.
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25.2
Sealing
Copies
For the purpose of certifying under seal a certificate of
incumbency of the directors or officers of the Company or a true copy of any
resolution or other document, despite Article 25.1, the impression of the seal
may be attested by the signature
of any director or officer.
25.3
Mechanical
Reproduction of Seal
The directors may authorize the seal to be impressed by
third parties on share certificates or bonds, debentures or other securities of
the Company as they may determine appropriate from time to time. To enable the
seal to be impressed on any share certificates or bonds, debentures or other
securities of the Company, whether in definitive or interim form, on which
facsimiles of any of the signatures of the directors or officers of the Company
are, in accordance
with the
Business Corporations Act
or
these Articles, printed or otherwise mechanically reproduced, there may be
delivered to the person employed to engrave, lithograph or print such
definitive or interim share certificates or bonds, debentures or other securities
one or more unmounted dies reproducing the seal and the chair of the board or any
senior officer together with the secretary, treasurer, secretary-treasurer, an
assistant secretary, an assistant treasurer or an assistant secretary-treasurer
may in writing authorize such person to cause the seal to be impressed on such
definitive or interim share certificates or bonds, debentures or other
securities by the use of such dies. Share certificates or bonds, debentures or other
securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the
seal impressed on them.
26.
Prohibitions
26.1 Definitions
In this Article 26:
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(1)
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“designated security” means:
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(a)
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a voting security of the Company;
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(b)
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a security of the Company that is not a debt security
and that carries a residual right to participate in the earnings of the
Company or, on the liquidation or winding up of the Company, in its assets; or
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(c)
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a security of the Company convertible, directly or
indirectly, into a security described in paragraph (a)or(b);
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(2)
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“security” has the meaning assigned in the
Securities Act
(British Columbia);
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-29-
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(3)
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“voting security” means a security of the Company that:
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(a)
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is
not a debt security, and
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(b)
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carries
a voting right either under all circumstances or under some circumstances
that have occurred and
are continuing.
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26.2 Application
Article 26.3 does not apply to the Company if and for so
long as it is a public company or a pre-existing reporting company which has
the Statutory Reporting Company Provisions as part of its Articles or to which
the Statutory Reporting
Company Provisions apply.
26.3 Consent Required for Transfer of
Shares or Designated Securities
No
share or designated security may be sold, transferred or otherwise disposed of
without the consent of the directors and the directors are not required
to give any reason for refusing to consent to any such sale, transfer or other
disposition.
-30-
WILLIAM
MARSH RICE UNIVERSITY
SPONSORED
RESEARCH AGREEMENT
Agreement
No.___________
THIS SPONSORED RESEARCH
AGREEMENT, dated as of _September 1
st
, 2009__ (“Agreement”), is made and entered into by and between __Natcore
Technology, Inc.__ with a principal address at __47 Club Way Red Bank,
NJ 07701___, (“Sponsor”), and William Marsh Rice University, a Texas non-profit
corporation, with a principal address at
6100 Main Street, Houston, TX 77005 (“Rice”), with reference to the following:
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A.
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Sponsor is interested
in scientific research related to __quantum dot containing thin films__, (“Research Area”), and Rice has certain faculty,
students, and postdoctoral and staff scientists with knowledge and
experience in substantive fields related to the Research Area.
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B.
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The
research project contemplated by this Agreement is of mutual interest to
Sponsor and Rice, and furthers
Rice’s educational, scholarship and research objectives as an institution of
higher education.
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C.
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Sponsor
desires to fund and support, and Rice desires to conduct, the research
project contemplated by this Agreement subject to the provisions set
forth herein.
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NOW,
THEREFORE, in consideration of the foregoing, the provisions set forth herein
and the mutual benefits to be
derived herefrom, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Sponsor and Rice agree
as follows:
SECTION 1. DEFINITIONS
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1.1
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“Project
Period” shall mean the period commencing as of __September 1
st
,
2009__, and ending on __August 31,
2010__. The Project Period may be extended by written agreement of duly
authorized representatives of Sponsor and Rice.
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1.2
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“Intellectual
Property” shall mean all patentable inventions, discoveries, software,
formulae, processes, methods, techniques, data, and databases.
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1.3
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“Intellectual Property
Protections” shall mean the registration, application, filing, prosecution or
maintenance of a patent, copyright, or other protective measure for
Intellectual Property.
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1.4
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“Research
Project” shall mean the research project and deliverables pertaining to the
Research Area as described in Exhibit A.
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1.5
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“Principal
Investigator” shall mean _Professor Andrew R. Barron_. The Principal
Investigator shall conduct, supervise and direct the Research Project.
Principal Investigator shall not be changed without
the prior written consent of Sponsor and Rice. The Principal Investigator is
not authorized to amend or modify this Agreement. Any such amendments
or modifications must be approved by Rice’s Office of Sponsored Research.
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1
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1.6
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“Project
Funds” shall mean those funds to be paid by Sponsor to Rice for the Research
Project in the amount of _one
hundred thousand_ dollars ($___100,000___.) as set forth in the budget
attached as Exhibit B.
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1.7
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“Project
Team” shall mean the Principal Investigator and any faculty, staff, or
students supported by the Project Funds.
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1.8
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“Field of Use” shall
mean ___________.
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SECTION 2. PROJECT FUNDS
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2.1
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Sponsor
shall pay Rice the Project Funds for direct and indirect costs incurred in
the conduct of the Research Project. Sponsor acknowledges that this
amount is a good faith estimate only and not a guarantee of the cost to
conduct the Research Project. Rice shall promptly notify Sponsor of any anticipated funding deficiencies, including an
estimate of the additional funds required. Sponsor may, in its discretion, provide Rice all or part of
such additional funds. In no event shall Rice be obligated to incur
costs in excess of the Project Funds paid by Sponsor to Rice.
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2.2
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Sponsor shall make an
advance payment of the Project Funds upon execution of this Agreement and
receipt of invoice from Rice. Invoices shall be sent to:
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Natcore Technology, Inc.
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47 Club Way
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Red Bank, NJ 07701
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All payments shall be in U.S.
dollars and made by check payable to the order of William Marsh Rice University
and delivered to:
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William Marsh Rice University
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Research Accounting, MS-74
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6100 Main Street
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Houston, TX 77005
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Commencement of the Project is
contingent upon the timely receipt of the foregoing advance payment of
the Project Funds.
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2.3
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Rice
shall account for, and maintain records of, direct and indirect costs
incurred in the conduct of the Research
Project in accordance with Rice’s standard policies and practices. Such
records shall be made available
for Sponsor’s review during Rice’s normal business hours upon reasonable
prior notice, but not more frequently than once a year.
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SECTION 3. PUBLICATIONS AND PRESENTATIONS; OTHER RESEARCH
RIGHTS; NAME AND LOGO USE
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3.1
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Publications
and Presentations
.
Sponsor acknowledges that Rice, the Principal Investigator and the other Project Team members shall have the right
to publish or otherwise publicly disclose at academic and professional
conferences and other meetings the results of the Research Project, subject
to the
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2
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following limitations.
A draft copy of the proposed publication or public presentation (except for student theses and dissertations) shall be
provided to Sponsor for its review at least 30 days prior to submission for
publication or public presentation. During such 30 day period, Sponsor may
request that Rice delay the
proposed publication or public presentation for up to an additional 30 days
to allow for patent or copyright filings or other matters related to
the protection of Intellectual Property. In addition, Sponsor may suggest
changes to the proposed publication or public presentation, but the author shall retain final authority; provided,
however, that the author shall be obligated to remove any confidential
information furnished by Sponsor pursuant to the non-disclosure agreement as
contemplated below. Notwithstanding anything in this Agreement to the
contrary, copyrights in publications, public presentations and other
scholarly writings shall be owned by their respective authors.
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3.2
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Other
Research Rights.
Sponsor
acknowledges that this Agreement shall not be construed to limit the freedom
of Rice, the Principal Investigator or the Project Team members to engage in
any other research. Notwithstanding any
license that may be granted to Sponsor with respect to the Intellectual Property
owned by Rice resulting from the Research Project, Rice shall retain an
irrevocable worldwide right to use such Intellectual
Property on a non-exclusive royalty-free basis for research and education purposes, including collaborations
with other researchers. Rice shall further retain the right to publish
and disclose any results of such other research.
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3.3
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Name
and Logo Use
. Neither
Sponsor nor Rice shall use the other party’s name, trademarks or other logos,
or the names of any individuals involved in the Research Project, including,
but not limited to, the Principal Investigator and the other Project
Team members, in any publication or public presentation
without the prior written consent of such other party. The foregoing
restriction shall not apply to the
inclusion of an acknowledgment of Sponsor’s funding of the Research Project
in any such publication or public
presentation. Notwithstanding the above, each party has the right to post on
their websites that an award to Rice has been made and include a short
public abstract.
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SECTION 4. INTELLECTUAL PROPERTY
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4.1
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Any
Intellectual Property invented, reduced to practice, created, or developed
solely by Rice under this Agreement shall be owned by Rice (“Rice
Intellectual Property”).
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4.2
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Any
Intellectual Property invented, reduced to practice, created, or developed
solely by Sponsor under this Agreement shall be owned by Sponsor
(“Sponsor Intellectual Property”).
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4.3
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Any Intellectual
Property invented, reduced to practice, created, or developed jointly by Rice
and Sponsor under this Agreement shall be owned jointly by Rice and Sponsor
(“Joint Intellectual Property”).
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4.4
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Invention
Disclosures.
Rice will
notify Sponsor, in confidence and in writing (“Notification”), of any Intellectual
Property resulting from the Research Project reported to Rice pursuant to
Rice’s Intellectual Property Policy then
in effect (“Disclosure”). Notification shall be made by Rice within sixty
(60) days of receipt of Disclosure. Intellectual Property Disclosures made by
Rice pursuant to this section, and any related discussions between
Sponsor and Rice shall be kept confidential by Sponsor, and shall not be
further disclosed or used by Sponsor in any manner inconsistent with the
provisions of this Agreement. Upon receipt of Disclosure, Sponsor may request
(under either licensing option) that Rice
pursue Intellectual Property Protections in a particular country at Sponsor’s
expense.
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3
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4.5
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Joint
Intellectual Property.
In the event that either party desires to obtain any Intellectual Property Protections concerning Joint Intellectual
Property, such party will notify the other party and the parties shall
mutually agree upon patent strategy and cost allocation. Each party agrees to
execute documentation necessary in connection therewith. Title to all patents
issued on Joint Intellectual Property
shall be joint and each party shall have the right to license such Joint
Intellectual Property to third parties, with the right to sublicense
thereunder, without accounting to the other and without seeking the consent of the other. In the event
that consent by each joint owner is necessary for either joint owner to non-exclusively license the Joint
Intellectual Property, the parties hereby consent to the other party’s
grant of one or more licenses under the Joint Intellectual Property to third
parties and shall execute any document or do any other reasonable act deemed
necessary to evidence such consent.
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SECTION 5. LICENSING OPTIONS
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5.1
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Sponsor’s
Evaluation of Rice’s Intellectual Property
. Intellectual Property owned by Rice resulting from the Research Project disclosed by Rice to
Sponsor may be used by Sponsor on a non-exclusive royalty-free basis, solely for internal
research purposes to evaluate whether or not Sponsor is interested in
licensing the technology from Rice.
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5.2
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License Options
.
Within sixty (60) days after Notification to Sponsor by Rice of a Disclosure,
Sponsor may request (1) a non-exclusive,
non-transferable, limited term, royalty-bearing license, or (2) an
exclusive, non-transferable, limited-term, royalty-bearing license, to Rice
Intellectual Property and/or Rice’s ownership
in Joint Intellectual Property in the Field of Use (“Option Period”);
however, neither option shall be
available to Sponsor if Sponsor is in breach of this Agreement, if Sponsor or
any of Sponsor’s affiliates,
parents or subsidiaries are in breach of any license agreement with Rice, or if this Agreement has been terminated because of
a breach by Sponsor. The license will be to make, have made, use, import, lease, sell, or
otherwise dispose of products and/or services (a) in the United States and/or any other country for which
Sponsor alone or Sponsor and Rice jointly choose to obtain Intellectual
Property Protections and (b) in the Field of Use which embodies some or all
of such Intellectual Property covered by
the Disclosure. Sponsor agrees to demonstrate reasonable efforts to commercialize such Intellectual Property. The
license shall be based on mutually-agreeable economic conditions and in
accordance with standard Rice terms and conditions. Sponsor shall have ninety
(90) days from the date of written notification to Rice of its
intention to license the Rice Intellectual Property to negotiate a license
agreement with Rice (“Negotiation Period”). Sponsor agrees to reimburse Rice for all Intellectual Property
Protection costs and related expenses during the Option and
Negotiation Periods. After expiration of the Negotiation Period, Sponsor
shall have no further rights to Rice Intellectual Property. Such Negotiation
Period, however, may be extended by the mutual consent of both parties.
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5.3
|
Rice’s Research License
.
Rice will have a non-exclusive, non-transferable, non-royalty bearing license to use and make derivative works of all
Sponsor Intellectual Property solely for the purpose of fulfilling its
obligations to complete the Research Project.
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SECTION 6.
|
DISCLAIMER OF WARRANTIES; LIABILITY LIMITATION; INDEMNIFICATION;
EXPORT COMPLIANCE
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4
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6.1
|
Disclaimer
of Warranties
. Notwithstanding anything in this Agreement
to the contrary, Rice makes no
representations or warranties of any kind, express or implied, concerning the
results of the Research Project or any related Intellectual Property,
including, but not limited to, representations and warranties as to
non-infringement, merchantability and fitness for any particular purpose.
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6.2
|
Liability Limitation
. Neither Sponsor nor Rice shall be liable for
any incidental, consequential, special
or other economic damages, such as loss of anticipated business or profits,
suffered by the other party in connection with this Agreement, the
Research Project or any related Intellectual Property, including, but not
limited to, any use or commercialization thereof.
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6.3
|
Indemnification.
Notwithstanding anything in this Agreement to the contrary, Sponsor shall
indemnify, hold harmless and defend Rice (including, but not limited to, its
trustees, officers, employees, agents and
representatives, the Principal Investigator and the other Project Team members) for, from and against any and all
demands, claims, causes of action, damages, losses, liabilities, costs
and expenses (including, but not limited to, attorney’s fees and court
costs), related to any property damage or
loss, bodily injury or death, directly or indirectly arising as a result of or in connection with Sponsor’s use
or commercialization of the results of the Research Project or any related Intellectual Property,
whether arising at law or in equity, and whether under contract, tort
or strict liability principles. Sponsor’s defense obligations shall be with
attorneys approved by Rice, which approval shall not be unreasonably
withheld.
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6.4
|
Sponsor’s
Export Compliance
. All
rights granted to Sponsor in connection with this Agreement, the Research
Project and the Intellectual Property resulting from the Research Project are
subject to compliance with U.S. laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities. Sponsor shall not, directly or
indirectly, export any such controlled
commodities in connection with this Agreement, the Research Project or the
Intellectual Property resulting from the Research Project, unless the
required authorization and/or license is obtained
from the proper governmental authorities prior to export. By granting Sponsor
rights in this Agreement, the Research Project and the Intellectual
Property resulting from the Research Project, Rice does not represent that an
export authorization and/or license will not be necessary or, if necessary,
that such authorization and/or license will be granted.
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SECTION 7. SPONSOR’S CONFIDENTIAL PROPRIETARY INFORMATION
Sponsor’s Confidential
Proprietary Information
. Sponsor does not intend to disclose
any of its confidential proprietary
information to Rice. In the event it becomes necessary for Sponsor to furnish
any of its confidential proprietary
information to Rice for purposes of the Research Project, Sponsor may request
that the Principal Investigator and
the other Project Team members individually execute appropriate non-disclosure
agreements with Sponsor.
Notwithstanding the foregoing, Sponsor shall not disclose to Rice, the
Principal Investigator or the other Project Team members, any
information subject to U.S. export laws or regulations. Sponsor acknowledges that Rice shall not be obligated to
accept any confidential proprietary information from Sponsor, and Rice
shall not bear any institutional responsibility with respect to any such
information provided by Sponsor.
5
SECTION 8. TERMINATION; ACTIONS UPON TERMINATION; SURVIVAL OF
OBLIGATIONS
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8.1
|
Termination
.
This Agreement may be terminated prior to the expiration of the Project
Period as follows:
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(a)
|
By written agreement of
the parties, effective upon the date set forth in such agreement;
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(b)
|
By either Sponsor or
Rice in the event the other party fails to cure any material breach of this
Agreement within 30 days after receipt of written notice of such breach from
the terminating party, effective upon
receipt of written notice from the terminating party, after the expiration of
the 30 day cure period; and
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(c)
|
By
either Sponsor or Rice in the event the Principal Investigator is no longer
able to conduct the Research Project on behalf of Rice, effective upon
receipt of written notice from the terminating party.
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8.2
|
Actions
upon Termination
. Upon
any expiration or termination of this Agreement:
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(a)
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Sponsor
shall not be obligated to make any further payments of Project Funds to Rice
pursuant to Exhibit B;
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(b)
|
Rice shall be entitled
to retain any prior payments of Project Funds by Sponsor for direct and
indirect costs incurred in connection with the Research Project prior to
termination of this Agreement, including
non-cancelable commitments for property or services, such as student or postdoctoral
support;
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(c)
|
Rice shall deliver to
Sponsor within 90 days after termination of this Agreement a final accounting
report of all Project Funds received and direct and indirect costs incurred
in connection with the Research,
including non-cancelable commitments for property or services, such as
student or postdoctoral support; and
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(d)
|
Rice
shall return to Sponsor any excess Project Funds indicated in such final
accounting report within 30 days after delivery of such report to
Sponsor.
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8.3
|
Survival
of Obligations
.
Notwithstanding anything in this Agreement to the contrary, the provisions of Sections 3.2, 3.3, 4, 5 and 6 shall survive
any expiration or termination of this Agreement, and each party shall remain obligated under any other
provisions that expressly or by their nature survive any expiration or
termination of this Agreement.
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SECTION 9. NOTICES
Any notice or other
communication of the parties required or permitted to be given or made under
this Agreement shall be in writing and be deemed effective upon receipt if
delivered personally, by reputable courier,
by facsimile or electronic transmission, or by certified registered mail,
postage prepaid, return receipt requested, addressed to the other party
as follows (or as changed by written notice pursuant to Section 9):
6
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Sponsor
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Rice
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Contractual and Administrative:
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Contractual and Administrative:
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Charles Provini
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Natcore Technology, Inc.
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Office of Sponsored Research
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47 Club Way
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Rice University
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Red Bank, NJ 07701
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6100 Main Street, MS-16
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Houston, TX 77005
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Phone: 732-530-6737
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Phone: 713.348.
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Email: info@natcoresolar.com
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Email: @rice.edu
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Technical
:
|
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Technical
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Charles Provini
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Natcore Technology, Inc.
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Department of
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47 Club Way
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Rice University
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Red Bank, NJ 07701
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6100 Main Street, MS-
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Houston, TX 77005
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Phone: 732-530-6737
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Phone: 713.348.
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Email: info@natcoresolar.com
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Email:
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SECTION 10. MISCELLANEOUS
|
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10.1
|
Power and Authority;
Due Authorization; No Conflict; Enforceability; Binding Effect
.
Each party represents and warrants to the
other party that (i) such party has the power and authority to execute, deliver and perform its obligations under this
Agreement, (ii) the execution, delivery and performance of this Agreement have been duly authorized by
such party and does not and shall not conflict with any agreement or instrument to which it is
bound, (iii) this Agreement constitutes the legal, valid and binding
obligation of such party, enforceable against it in accordance with its
terms, and (iv) this Agreement, and the interests, rights, duties and
obligations hereunder, shall be binding upon, and inure to the benefit of,
the parties and their respective successors and permitted assigns.
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10.2
|
Entire
Agreement; Further Assurances
. This Agreement, including Exhibits A and B attached hereto, constitutes
the entire agreement between the parties, and supersedes any prior or
contemporaneous negotiations,
understandings and agreements, with respect to the subject matter hereof. In
addition, the terms of any purchase order or other purchasing document issued
for this Research Project, and prepared and executed subsequent to
signing this Agreement, shall not be applicable to this Agreement other than to provide for funding as
identified herein. Each party shall execute and deliver such further documents and take such further
actions as may be required or reasonably requested by the other party
to effectuate the purposes of this Agreement.
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10.3
|
No
Assignment; No Amendment; No Waiver
. This Agreement (i) may not be assigned or transferred, in whole or
in part, by operation of law or otherwise, by seither party without the prior
written consent of the other
party, and (ii) may not be amended or modified, by course of conduct or
otherwise, except in a writing duly
executed by each of the parties. Any waiver of any provision of this
Agreement shall be in writing duly
executed by the waiving party. The failure or delay by either party to seek
redress for any breach or default
under this Agreement, or to insist upon the strict performance of any
provision of this Agreement, shall not constitute a waiver thereof or of any
other provision of this Agreement, and such party shall have all remedies
provided herein and at law and in equity with respect to such act and any
subsequent act constituting the same.
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7
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10.4
|
Force
Majeure; Remedies Cumulative
. Either party’s delayed performance under this Agreement may be temporarily excused without liability, if
such delay is a result of causes or conditions beyond that party’s control
and without that party’s fault or negligence (such causes or conditions
specifically do not include the
financial incapacity to pay); provided, however, that such party must
diligently pursue actions to remedy
such cause or condition. The rights and remedies provided in this Agreement
are cumulative in nature and shall be in addition to any such other
rights and remedies available at law and in equity.
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10.5
|
Resolution of Disputes
.
In the event of any dispute or disagreement between the parties either in interpreting any provision of this Agreement or
about the performance of either party and upon the written request of either party, each of the
parties will appoint a designated representative to attempt to resolve
such dispute or disagreement. The designated representatives will discuss the
problem and negotiate in good faith in an
effort to resolve the dispute without any formal proceedings. The specific
format of such discussion shall be left to the discretion of the designated
representatives. No litigation for
the resolution of such dispute may be commenced until the designated
representatives have met and either party has concluded in good faith that
amicable resolution through continued negotiation does not appear likely
(unless either party fails or refuses to appoint a designated representative
and schedule a meeting of such
representatives within thirty (30) days after a request to do so by the other
party).
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10.6
|
Governing
Law; Jurisdiction and Venue; Attorneys’ Fees
. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the United States and
the laws of the State of Texas (without regard to the conflicts or
choice of law principles thereof). Sponsor and Rice irrevocably consent to
the jurisdiction of the State of Texas, and agree that any court of competent
jurisdiction sitting in Harris County,
Texas, shall be an appropriate and convenient place of venue to resolve
any dispute with respect to this Agreement. In the event either party
commences any proceeding against the other
party with respect to this Agreement, the prevailing party (as determined by the authority before whom such proceeding is
commenced) shall be entitled to recover reasonable attorneys’ fees and court costs as may be
incurred in connection therewith in addition to any such other relief
as may be granted.
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10.7
|
Severability
.
In the event any provision of this Agreement is determined to be invalid or unenforceable, it is the desire and intention
of the parties that such invalidity or unenforceability not invalidate
or render unenforceable the remainder of the Agreement and that such
provision be reformed and construed in such a manner that it will, to the
maximum extent practical, be deemed valid and enforceable, and the rights and
obligations of the parties hereto shall be construed and enforced
accordingly.
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10.8
|
Construction
of Agreement
. The
provisions of this Agreement shall not be construed more favorably toward
one party than the other party as a result of one party being the primary
drafter of the Agreement. This section
and other headings in this Agreement are for convenience of reference only and shall not affect, expressly or by
implication, the meaning or interpretation of any of the provisions hereof.
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10.9
|
Independent Contractor
Relationship; No Third Party Beneficiaries.
Sponsor and
Rice intend that their relationship under
this Agreement shall be as independent contractors, and neither Sponsor nor
|
8
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|
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Rice shall conduct
themselves in a manner inconsistent with such independent contractor status. Nothing in this Agreement nor any performance
hereunder is intended, or shall be construed, to create a partnership,
joint venture or other form of business enterprise, or relationship of agency
or employment, between Sponsor and Rice
(including, but not limited to, the Principal Investigator and the
other Project Team members). Moreover, neither party shall have the authority
to enter into contracts on behalf of the
other party. Nothing in this Agreement, express or implied, is intended to confer,
any benefits, rights or remedies on any person, other than the parties hereto
and their successors and permitted assigns.
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10.10
|
Counterparts
. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
|
IN
WITNESS WHEREOF, Sponsor and Rice have each duly executed and delivered this
Agreement as of the date first written above.
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t
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Natcore Technology, Inc.
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William Marsh Rice
University
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By:
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By:
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Charles R. Provini
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9
Exhibit
A
Research Project
DELIVERABLES:
[Please list all deliverables (i.e. interim and/or final
reports and other
tangible items).]
10
Exhibit B
Budget
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Category
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Amount
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Personnel
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Materials and Supplies
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Direct Costs
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Indirect Costs
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Total
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11
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before September 9, 2009.”
“Without prior written approval of the TSX Venture Exchange
and compliance with all applicable securities legislation, the securities
represented by this certificate may not be sold, transferred, hypothecated or otherwise traded on or through the
facilities of the TSX Venture Exchange or otherwise in Canada or to or
for the benefit of a Canadian resident before September 9, 2009.”
“The
securities represented hereby have been acquired for investment, and have not
been and will not be registered under the United States Securities Act of 1933,
as amended (the “U.S. Securities Act”),
or state securities laws, but have been issued or transferred pursuant to an
exemption from the registration requirements of the U.S. Securities Act. The
holder hereof, by purchasing such securities, agrees for the benefit of the Issuer that such securities may be
offered, sold, pledged or otherwise transferred only (a) to the Issuer, (b)
outside the United States in accordance with Rule 904 of Regulation Sunder the U.S. Securities Act if
applicable, (c) inside the United States (1) pursuant to the exemption from the registration requirements
Sunder the U.S. Securities Act provided by Rule 144 thereunder, if available,
and in accordance with applicable State securities laws, or (2) in a
transaction that does not require
registration under the U.S. Securities Act or any applicable State laws and regulations governing the offer and sale of
securities, and the holder has prior to such sale furnished to the Issuer an
opinion of counsel or other evidence of exemption in form and substance
reasonably satisfactory to the Issuer. Provided that if the Issuer is a
“foreign issuer” as that term is defined by Regulation S of the U.S. Securities Act at the time of sale, a new
certificate bearing no restrictive legend, delivery of which will constitute
“Good Delivery” may be obtained form the transfer agent, upon delivery of this certificate and a duly
executed declaration, in form satisfactory to the Issuer and its transfer agent, to the effect that the sale
of the securities represented hereby is being made in compliance with
Rule 904 of Regulation Sunder the U.S. Securities Act.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER,
PROVINCE OF BRITISH COLUMBIA, ON MAY
7, 2014
WARRANTS TO PURCHASE COMMON SHARES OF
SYRACUSE CAPITAL CORP.
(incorporated under the
Business Corporations
Act
,
British Columbia)
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No. WCAQ-
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WARRANTS
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|
|
NOTE:
One Warrant is Required
|
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to
purchase one common share.
|
THIS IS TO CERTIFY THAT
for value received the holder, (the “
Holder
”), of this certificate (the “
Warrant Certificate
”) is entitled to purchase one fully paid and
non-assessable common share Syracuse Capital Corp. (herein called the “
Corporation
”) for each Warrant represented hereby, as such
shares were constituted on May 8,
2009 at any time up to 4:00 p.m. (local time) in the City of Vancouver, Province of British Columbia on May 7, 2014, (the
“
Expiry Date
”) at and for a price
of
$0.40
per share, of lawful money of Canada, upon and
subject to the terms and conditions referred to in this Warrant Certificate and the Acquisition Agreement
dated March 26, 2009 entered into between the Corporation and the
Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the offices of the Corporation’s transfer
agent, Computershare Trust Company of Canada at 2
nd
Floor, 510
Burrard Street, Vancouver, B.C.,V6C 3B8.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be executed.
SYRACUSE CAPITAL CORP.
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Per:
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C/S
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Director
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TERMS, CONDITIONS AND
INSTRUCTIONS
1. The holder of this warrant may subscribe for the number
of shares of the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant on or
before the Expiry Date, payment must be made in the amount of
$0.40
per share. All payments must be made in Canadian Funds, in
cash or by certified cheque, bank draft or money order payable, at par, in
Vancouver, British Columbia. If payment is made by way of an uncertified cheque, the
Corporation reserves the right to deem that the payment has not been received
until the cheque has cleared the account upon which it has been drawn.
3. To
exercise the rights evidenced by this warrant, this warrant with the following
Warrant Exercise Form completed, must be
delivered or mailed to and received by the offices of the Corporation’s transfer agent, Computershare Trust Company of
Canada at 2
nd
Floor, 510 Burrard Street, Vancouver, British
Columbia, V6C 3B8.
4. The
rights evidenced by this warrant expire at 4:00 p.m. local time in Vancouver,
British Columbia, on the Expiry Date.
5. The rights evidenced by this warrant may not be
transferred.
6. If this warrant or the purchase price are forwarded by
mail it is suggested that registered mail be used as the Corporation will not be responsible
for any losses which occur through the use of mails.
7. The rights evidenced by this warrant are to purchase
common shares in the capital stock of the Corporation as they were constituted on May 8,
2009 If there shall, prior to the exercise of any of the rights evidenced hereby,
be any reorganization of the authorized capital of the Corporation by way of consolidation, merger,
sub-division, amalgamation or otherwise, or the payment of any stock dividends,
then there
shall automatically be an adjustment in either or both the number of shares of
the Corporation which may be purchased pursuant hereto or the price at which such
shares may be purchased, by corresponding amounts, so that the right evidenced hereby
shall thereafter be as reasonably as possible equivalent to those originally granted hereby. The
Corporation shall have the sole and exclusive power to make adjustments as it considers necessary
and desirable.
APPENDIX 1
WARRANT EXERCISE FORM
TO:
SYRACUSE CAPITAL
CORP.
The undersigned hereby exercises the right to purchase
___________ Common Shares of
SYRACUSE CAPITAL
CORP.
(the
“Corporation”
)
(or such number of other securities or property to which such Warrants (the
“Warrants”
) entitle the undersigned in lieu thereof or in
addition thereto under the provisions of the Warrant Certificate for the time being
governing the holding of the Warrants in the Corporation) in accordance with
and subject to the provisions of such Warrant Certificate which may be
obtained, free of charge, from the Corporation
at Suite 2080-777 Hornby Street, Vancouver, British Columbia, V6Z 1S4.
The Common Shares (or other securities or property) are
to be issued as follows:
Name:
_________________________________________________________________________________________
Address in full: _____________________________________________________________________________________
______________________________________________________________________________________________
Number of Common Shares: ____________________________________________________________________________
Note: If further nominees intended, please attach (and
initial) a schedule giving these particulars.
(CHECK ONE)
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|
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|
o
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The
undersigned hereby represents and warrants to the Corporation that at the
time of exercise the undersigned is not a
U.S. person or a person within the United States (as such terms are defined
in Regulation Sunder the Securities
Act of 1933 (the
“U.S. Securities Act”
)
and the Warrant is not being exercised on behalf of a U.S. person or
any person with the United States.
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o
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The undersigned is tendering with this exercise form a
written opinion of counsel or other evidence satisfactory to them
to the effect that the Common Shares to be delivered upon exercise of this
Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the
United States or are exempt from registration thereunder; or
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|
o
|
The
undersigned does not make the representation set forth above and the
undersigned hereby represents, warrants
and agrees that: (i) the undersigned will not offer or sell the Common Shares
except pursuant to registration
under the U.S. Securities Act or in accordance with an exemption from registration thereunder or in compliance with
Regulation Sunder the U.S. Securities Act; and (ii) the certificates
representing the Common Shares subscribed for may have endorsed thereon a
legend to such effect.
|
DATED
this ____ day of ________,20__.
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Signature Guaranteed
|
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(Signature of Warrant
Holder)
|
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Print full name
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Print full address
|
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Instructions
.
|
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|
1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a certified cheque, bank draft or
money order in lawful money of Canada, payable
to the order Syracuse Capital Corp. and by completing this form and
surrendering this form and the original Warrant Certificate representing the
Warrants being exercised to the Corporation’s
transfer agent, Computershare Trust Company of Canada at 2
nd
Floor, 510 Burrard Street, Vancouver, B.C., V6C 3B8. Certificates for
Common Shares will be made available for pick
up or mailed by registered mail within five business days after the exercise
of the Warrant.
|
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2.
|
If
the Exercise Form indicates that Common Shares are to be issued to a person
or persons other than the registered holder of the Warrant Certificate, the
signature of such holder of the Exercise Form must be guaranteed by an
authorized officer of a chartered bank, trust company or medallion guaranteed
by an investment dealer who is a member of a recognized stock exchange.
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3.
|
If the Exercise Form is
signed by a trustee, executor, administrator, curator, attorney, officer of a
corporation or any person acting in a judiciary or representative capacity,
the certificate must be accompanied by
evidence of authority to sign satisfactory to the Corporation
|
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before September 9, 2009.”
“Without prior written approval of the TSX Venture Exchange
and compliance with all applicable securities legislation, the securities
represented by this certificate may not be sold, transferred, hypothecated or otherwise traded on or through the
faculties of the TSX Venture Exchange or otherwise in Canada or to or
for the benefit of a Canadian resident before September 9, 2009.”
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “U.S. SECURITIES ACT”) OR UNDER ANY STATE SECURITIES LAWS, AND THE
SECURITIES REPRESENTED HEREBY MAY BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B)
OUTSIDE THE UNITED STATES IN ACCORDANCE WITH
RULE 904 OF REGULATION SUNDER THE U.S. SECURITIES ACT, (C) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT PROVIDED BY RULE 144 OR 144A UNDER THE U.S. SECURITIES ACT, IF APPLICABLE, AND IN COMPLIANCE WITH APPLICABLE
U.S. STATE SECURITIES LAWS, OR (D) WITH THE PRIOR WRITTEN CONSENT OF THE
CORPORATION (WHICH WILL BE DELIVERED PROMPTLY AND WILL NOT BE UNREASONABLY
WITHHELD, BUT WHICH MAY BE CONDITIONAL ON DELIVERY OF A LEGAL OPINION IN FORM AND
SUBSTANCE SATISFACTORY TO THE CORPORATION), PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT
“GOOD DELIVERY” OF THE SECURITIES
REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE.”
VOID
AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF VANCOUVER,
PROVINCE OF BRITISH COLUMBIA, ON May 7, 2011
WARRANTS
TO PURCHASE COMMON SHARES OF
SYRACUSE
CAPITAL CORP.
(incorporated
under the
Business Corporations
Act
, British Columbia)
|
|
|
|
No. WCQTPP-
|
WARRANTS
|
|
|
NOTE: One Warrant is
Required to purchase one common share.
|
THIS IS
TO CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant Certificate”
) is entitled to purchase one fully paid and
non-assessable common share Syracuse Capital Corp. (herein called the
“Corporation”) for each Warrant represented hereby, as such shares were constituted on May 8, 2009at any time up to 4:00
p.m. (local time) in the City of Vancouver, Province of British Columbia
on May 7, 2011, (the
“Expiry Date”
)
at and for a price of
$0.75
per share, of lawful money of Canada,
upon and subject to the terms and conditions referred to in this Warrant Certificate and the Subscription Agreement
entered into between the Corporation and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the offices of the Corporation’s transfer agent, Computershare
Trust Company of Canada at 2
nd
Floor, 510 Burrard Street, Vancouver,
B.C., V6C 3BS.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be executed.
SYRACUSE CAPITAL CORP.
|
|
|
|
|
|
Per:
|
|
C/S
|
|
|
|
|
|
|
|
Director
|
|
TERMS, CONDITIONS AND INSTRUCTIONS
1. The holder of this warrant may subscribe for the number
of shares of the Corporation indicated on the face hereof.
2. For
each share purchased pursuant to this warrant on or before the Expiry Date,
payment must be made in the amount of
$0.75
per share. All payments must be made in Canadian Funds, in cash or by certified
cheque, bank draft or money order payable, at par, in Vancouver, British
Columbia. If payment is made by way of an uncertified cheque, the Corporation
reserves the right to deem that the payment has not been received until the
cheque has cleared the account upon which it has been drawn.
3. To
exercise the rights evidenced by this warrant, this warrant with the following
Warrant Exercise Form completed, must be delivered or mailed to and received by
the offices of the Corporation’s transfer agent, Computershare Trust Company of
Canada at 2
nd
Floor, 510 Burrard Street, Vancouver, British
Columbia, V6C 3B8.
4. Subject
to Section 5, the rights evidenced by this warrant expire at 4:00 p.m. local
time in Vancouver, British Columbia, on the Expiry Date.
5. Notwithstanding
Section 4 above, in the event that the closing price of the Corporation’s
shares on the TSX Venture Exchange exceeds $1.50 per share for a period of 20
consecutive trading days, at the Corporation’s election, the 24 month period
within which this warrant is exercisable will be reduced and the Holder of this
warrant will be entitled to exercise this warrant for a period (the
“Exercise Period”
) of 30 days commencing on
the date the Corporation mails notice of the commencement of the Exercise
Period to the Purchaser of the Units of which this warrant formed a part, and
this Warrant will thereafter expire at 4:00 p.m. (Vancouver time) on the last
day of the 30 day exercise period referenced above.
6. The
rights evidenced by this warrant may not be transferred.
7. If
this warrant or the purchase price is forwarded by mail it is suggested that
registered mail be used as the Corporation will not be responsible for any
losses which occur through the use of mails.
8. The
rights evidenced by this warrant are to purchase common shares in the capital
stock of the Corporation as they were constituted on May 8, 2009. If there
shall, prior to the exercise of any of the rights evidenced hereby, be any
reorganization of the authorized capital of the Corporation by way of
consolidation, merger, sub-division, amalgamation or otherwise, or the payment
of any stock dividends, then there shall automatically be an adjustment in
either or both the number of shares of the Corporation which may be purchased
pursuant hereto or the price at which such shares may be purchased, by
corresponding amounts, so that the right evidenced hereby shall thereafter be
as reasonably as possible equivalent to those originally granted hereby. The
Corporation shall have the sole and exclusive power to make adjustments as it
considers necessary and desirable.
APPENDIX 1
WARRANT EXERCISE FORM
TO:
SYRACUSE CAPITAL CORP.
The
undersigned hereby exercises the right to purchase __________ Common Shares of
SYRACUSE CAPITAL CORP.
(the
“Corporation”
) (or such number of other
securities or property to which such Warrants (the
“Warrants”
) entitle the undersigned in lieu thereof or in
addition thereto under the provisions of the Warrant Certificate for the time
being governing the holding of the Warrants in the Corporation) in accordance
with and subject to the provisions of such Warrant Certificate which may be
obtained, free of charge, from the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4.
The
Common Shares (or other securities or property) are to be issued as follows:
Name:
____________________________________________________________________________________________
Address in full:
______________________________________________________________________________________
__________________________________________________________________________________________________
Number
of Common Shares: ____________________________________________________________________________
Note:
If further nominees intended, please attach (and initial) a schedule giving
these particulars.
(CHECK ONE)
|
|
|
|
□
|
The undersigned hereby represents and warrants to
the Corporation that at the time of exercise the undersigned is not a U.S.
person or a person within the United States (as such terms are defined in
Regulation Sunder the Securities Act of 1933 (the “U.S. Securities Act”) and
the Warrant is not being exercised on behalf of a U.S. person or any person
with the United States.
|
|
|
|
|
□
|
The
undersigned is tendering with this exercise form a written opinion of counsel
or other evidence satisfactory to them to the effect that the Common Shares
to be delivered upon exercise of this Warrant have been registered under the
U.S. Securities Act and the Securities laws of all applicable States of the
United States or are exempt from registration thereunder; or
|
|
|
|
|
□
|
The
undersigned does not make the representation set forth above and the
undersigned hereby represents, warrants and agrees that: (i) the undersigned
will not offer or sell the Common Shares except pursuant to registration
under the U.S. Securities Act or in accordance with an exemption from
registration thereunder or in compliance with Regulation Sunder the U.S.
Securities Act; and (ii) the certificates representing the Common Shares
subscribed for may have endorsed thereon a legend to such effect.
|
DATED
this ____ day of __________, 20__.
|
|
|
|
|
|
|
|
|
|
|
Signature Guaranteed
|
|
(Signature of Warrant
Holder)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Print full name
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Print full address
|
|
Instructions
.
|
|
|
|
1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a certified cheque, bank draft or money
order in lawful money of Canada, payable to the order Syracuse Capital Corp.
and by completing this form and surrendering this form and the original
Warrant Certificate representing the Warrants being exercised to the
Corporation’s transfer agent, Computershare Trust Company of Canada at 2
nd
Floor, 510 Burrard Street, Vancouver, B.C., V6C 3B8. Certificates for Common
Shares will be made available for pick up or mailed by registered mail within
five business days after the exercise of the Warrant.
|
|
|
|
|
2.
|
If
the Exercise Form indicates that Common Shares are to be issued to a person
or persons other than the registered holder of the Warrant Certificate, the
signature of such holder of the Exercise Form must be guaranteed by an
authorized officer of a chartered bank, trust company or medallion guaranteed
by an investment dealer who is a member of a recognized stock exchange.
|
|
|
|
|
3.
|
If the Exercise Form is
signed by a trustee, executor, administrator, curator, attorney, officer of a
corporation or any person acting in a judiciary or representative capacity,
the certificate must be accompanied by evidence of authority to sign
satisfactory to the Corporation
|
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before April 23, 2011.”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities
legislation, the securities represented by this certificate may not be sold,
transferred, hypothecated or otherwise traded on or through the facilities of
the TSX Venture Exchange or otherwise in
Canada or to or for the benefit of a Canadian resident before April 23, 2011.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON DECEMBER 22, 2013
WARRANTS
TO PURCHASE COMMON SHARES OF
NATCORE
TECHNOLOGY INC.
(incorporated
under the
Business Corporations Act,
British Columbia)
|
|
|
|
No.
|
WARRANTS
|
|
|
NOTE:
One Warrant is Required to purchase
one common share.
|
THIS IS
TO CERTIFY THAT
for value received the holder, of this certificate (the
“Warrant Certificate”
) is entitled to
purchase one fully paid and non-assessable
common share of Natcore Technology Inc. (herein called the
“Corporation”
) for each Warrant represented hereby, as such shares were
constituted on December 22, 2010 at any time up to 4:00 p.m. (local time) in the City of Vancouver, Province of
British Columbia on December 22, 2013, (the
“Expiry
Date”
) at and
for a price of
$1.00
per share, of
lawful money of Canada, upon and subject to the terms and conditions referred
to in this Warrant Certificate and the Subscription Agreement entered into
between the Corporation and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE
TECHNOLOGY INC.
|
|
|
|
|
|
Per:
|
|
C/S
|
|
|
|
|
|
|
|
Director
|
|
TERMS,
CONDITIONS AND INSTRUCTIONS
1. The holder of this warrant may subscribe for the
number of shares of the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant
on or before the Expiry Date, payment must be made in the amount of
$1.00
per share. All payments must be made
in Canadian Funds, in cash or by certified cheque, bank draft or money order
payable, at par, in Vancouver, British Columbia. If payment is made by way of
an uncertified cheque, the Corporation reserves the right to deem that the
payment has not been received until the cheque has cleared the account upon
which it has been drawn.
3. To
exercise the rights evidenced by this warrant, this warrant with the following
Warrant Exercise Form completed, must be delivered or mailed to and received by
the registered offices of the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4.
4. Subject
to Section 5, the rights evidenced by this warrant expire at 4:00 p.m. local
time in Vancouver, British Columbia, on the Expiry Date.
5. Notwithstanding
Section 4 above, in the event that the closing price of the Corporation’s
shares on the TSX Venture Exchange exceeds $1.75 per share for a period of 20
consecutive trading days, at the Corporation’s election, the 36 month period
within which this warrant is exercisable will be reduced and the Holder of this
warrant will be entitled to exercise this warrant for a period (the
“Exercise Period”
) of 30 days commencing on
the date the Corporation disseminates a press release providing notice of the
commencement of the Exercise Period, and this Warrant will thereafter expire at
4:00 p.m. (Vancouver time) on the last day of the 30 day exercise period
referenced above.
6. The
rights evidenced by this warrant may not be transferred.
7. If this warrant or the purchase price is
forwarded by mail it is suggested that registered mail be used as the
Corporation will not be responsible for any losses which occur through the use
of mails.
8. The
rights evidenced by this warrant are to purchase common shares in the capital
stock of the Corporation as they were constituted on December 22, 2010. If
there shall, prior to the exercise of any of the
rights evidenced hereby, be any reorganization of the authorized capital of the
Corporation by way of consolidation, merger, sub-division, amalgamation
or otherwise, or the payment of any stock dividends, then there shall automatically be an adjustment in either or both the
number of shares of the Corporation which may be purchased pursuant
hereto or the price at which such shares may be purchased, by corresponding
amounts, so that the right evidenced hereby shall thereafter be as reasonably
as possible equivalent to those originally granted hereby. The Corporation
shall have the sole and exclusive power to make adjustments as it considers
necessary and desirable.
APPENDIX
1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY INC.
The
undersigned hereby exercises the right to purchase _______________
Common Shares of
NATCORE TECHNOLOGY INC.
(the
“Corporation”
) (or such
number of other securities or property to which such Warrants (the
“Warrants”
)
entitle the undersigned in lieu thereof or in addition thereto under the
provisions of the Warrant Certificate for the time being governing the
holding of the Warrants in the Corporation) in accordance with and subject to
the provisions of such Warrant Certificate which may be obtained, free of
charge, from the Corporation at Suite 2080-777 Hornby Street, Vancouver,
British Columbia, V6Z 1S4.
The Common Shares (or
other securities or property) are to be issued as follows:
Name:
___________________________________________________________________________________________
Address in full:
_____________________________________________________________________________________
_________________________________________________________________________________________________
Number
of Common Shares: ____________________________________________________________________________
Note: If further nominees
intended, please attach (and initial) a schedule giving these particulars.
(CHECK ONE)
|
|
|
|
□
|
The undersigned hereby
represents and warrants to the Corporation that at the time of exercise the
undersigned is not a U.S. person or a person within the United States (as
such terms are defined in Regulation
Sunder the Securities Act of 1933 (the “U.S. Securities Act”) and the Warrant
is not being exercised on behalf of a U.S. person or any person with
the United States.
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□
|
The undersigned is
tendering with this exercise form a written opinion of counsel or other
evidence satisfactory to them to the effect
that the Common Shares to be delivered upon exercise of this Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the United States or are exempt from registration
thereunder; or
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□
|
The undersigned does
not make the representation set forth above and the undersigned hereby
represents, warrants and agrees that: (i) the undersigned will not offer or
sell the Common Shares except pursuant to registration under the U.S.
Securities Act or in accordance with an exemption from registration
thereunder or in compliance with Regulation Sunder the U.S. Securities Act;
and (ii) the certificates representing the Common Shares subscribed for may
have endorsed thereon a legend to such effect.
|
DATED this ___ day of
_________, 20 ___.
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Signature Guaranteed
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(Signature of Warrant
Holder)
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Print full name
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Print full address
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Instructions
.
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1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a certified cheque, bank draft or
money order in lawful money of Canada, payable to the order Natcore
Technology Inc. and by completing this form and surrendering this form and
the original Warrant Certificate representing the Warrants being exercised to
the Corporation at Suite 2080-777 Hornby Street, Vancouver, British Columbia,
V6Z 1S4. Certificates for Common Shares will be made available for pick up or
mailed by registered mail within five business days after the exercise of the
Warrant.
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2.
|
If the Exercise Form
indicates that Common Shares are to be issued to a person or persons other than the registered holder of the Warrant
Certificate, the signature of such holder of the Exercise Form must be
guaranteed by an authorized officer of a chartered bank, trust company or medallion guaranteed by an investment dealer
who is a member of a recognized stock exchange.
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3.
|
If
the Exercise Form is signed by a trustee, executor, administrator, curator,
attorney, officer of a corporation or any person acting in a judiciary
or representative capacity, the certificate must be accompanied by evidence
of authority to sign satisfactory to the Corporation
|
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before May 5, 2011.”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities
legislation, the securities represented by this certificate may not be sold,
transferred, hypothecated or otherwise traded on or through the facilities of
the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a
Canadian resident before May 5, 2011.”
VOID AFTER 4:00 PM (VANCOUVER TIME)
IN THE CITY OF VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON JANUARY 4, 2014
WARRANTS
TO PURCHASE COMMON SHARES OF
NATCORE
TECHNOLOGY INC.
(incorporated
under the
Business Corporations Act
,
British Columbia)
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No.
|
WARRANTS
|
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|
NOTE:
One Warrant is Required
|
|
|
to
purchase one common share.
|
THIS IS
TO CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant Certificate”
) is entitled to
purchase one fully paid and non-assessable
common share of Natcore Technology Inc. (herein called the “Corporation”) for
each Warrant represented hereby, as such shares were constituted on January 4,
2011 at any time up to 4:00 p.m. (local time) in the City of Vancouver, Province of British Columbia on January
4, 2014, (the
“Expiry Date”
) at and
for a price of
$1.00
per share, of
lawful money of Canada, upon and subject to the terms and conditions referred to in this Warrant
Certificate and the Subscription Agreement entered into between the Corporation
and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE
TECHNOLOGY INC.
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Per:
|
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C/S
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Director
|
|
TERMS,
CONDITIONS AND INSTRUCTIONS
1. The holder of this warrant may subscribe for the
number of shares of the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant
on or before the Expiry Date, payment must be made in the amount of
$1.00
per share. All payments must be made
in Canadian Funds, in cash or by certified cheque, bank draft or money order
payable, at par, in Vancouver, British Columbia. If payment is made by way of
an uncertified cheque, the Corporation reserves the right to deem that the
payment has not been received until the cheque has cleared the account upon
which it has been drawn.
3. To
exercise the rights evidenced by this warrant, this warrant with the following
Warrant Exercise Form completed, must be delivered or mailed to and received by
the registered offices of the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4.
4. Subject
to Section 5, the rights evidenced by this warrant expire at 4:00 p.m. local
time in Vancouver, British Columbia, on the Expiry Date.
5. Notwithstanding
Section 4 above, in the event that the closing price of the Corporation’s
shares on the TSX Venture Exchange exceeds $1.75 per share for a period of 20
consecutive trading days, at the Corporation’s election, the 36 month period
within which this warrant is exercisable will be reduced and the Holder of this
warrant will be entitled to exercise this warrant for a period (the “
Exercise Period
”) of 30 days commencing on
the date the Corporation disseminates a press release providing notice of the
commencement of the Exercise Period, and this Warrant will thereafter expire at
4:00 p.m. (Vancouver time) on the last day of the 30 day exercise period
referenced above.
6. The
rights evidenced by this warrant may not be transferred.
7. If this warrant or the purchase price is
forwarded by mail it is suggested that registered mail be used as the
Corporation will not be responsible for any losses which occur through the use
of mails.
8. The
rights evidenced by this warrant are to purchase common shares in the capital
stock of the Corporation as they were
constituted on January 4, 2011. If there shall, prior to the exercise of any of
the rights evidenced hereby, be any reorganization of the authorized
capital of the Corporation by way of consolidation, merger, sub-division,
amalgamation or otherwise, or the payment of any stock dividends, then there shall automatically be an adjustment
in either or both the number of shares of the Corporation which may be
purchased pursuant hereto or the price at which such shares may be purchased,
by corresponding amounts, so that the right evidenced hereby shall thereafter
be as reasonably as possible equivalent to those originally granted hereby. The
Corporation shall have the sole and exclusive power to make adjustments as it
considers necessary and desirable.
APPENDIX
1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY INC.
The
undersigned hereby exercises the right to purchase
________________
Common Shares of
NATCORE TECHNOLOGY INC.
(the “
Corporation
”) (or such number of other
securities or property to which such Warrants
(the “
Warrants
”) entitle the
undersigned in lieu thereof or in addition thereto under the provisions of the
Warrant Certificate for the time being governing the holding of the Warrants in
the Corporation) in accordance with and subject to the provisions of such
Warrant Certificate which may be obtained, free of charge, from the Corporation
at Suite 2080-777 Hornby Street, Vancouver, British Columbia, V6Z 1S4.
The Common Shares (or
other securities or property) are to be issued as follows:
Name:
___________________________________________________________________________________________
Address in full:
_____________________________________________________________________________________
_________________________________________________________________________________________________
Number
of Common Shares:
____________________________________________________________________________
Note: If further nominees
intended, please attach (and initial) a schedule giving these particulars.
(CHECK ONE)
|
o
|
The undersigned hereby
represents and warrants to the Corporation that at the time of exercise the
undersigned is not a U.S. person or a person within the United States (as
such terms are defined in Regulation
Sunder the Securities Act of 1933 (the “
U.S.
Securities Act
”) and the Warrant is not being exercised on
behalf of a U.S. person or any person with the United States.
|
|
o
|
The undersigned is
tendering with this exercise form a written opinion of counsel or other
evidence satisfactory to them to the effect
that the Common Shares to be delivered upon exercise of this Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the United States or are exempt from registration
thereunder; or
|
|
o
|
The undersigned does
not make the representation set forth above and the undersigned hereby
represents, warrants and agrees that: (i) the undersigned will not offer or
sell the Common Shares except pursuant to registration under the U.S.
Securities Act or in accordance with an exemption from registration
thereunder or in compliance with Regulation Sunder the U.S. Securities Act;
and (ii) the certificates representing the Common Shares subscribed for may
have endorsed thereon a legend to such effect.
|
DATED this ___ day of
__________, 20 ___.
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Signature Guaranteed
|
|
(Signature of Warrant
Holder)
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Print full name
|
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Print full address
|
|
Instructions
.
|
|
|
|
1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a certified cheque, bank draft or
money order in lawful money of Canada, payable to the order Natcore
Technology Inc. and by completing this form and surrendering this form and
the original Warrant Certificate representing the Warrants being exercised to
the Corporation at Suite 2080-777 Hornby Street, Vancouver, British Columbia,
V6Z 1S4. Certificates for Common Shares will be made available for pick up or
mailed by registered mail within five business days after the exercise of the
Warrant.
|
|
|
|
|
2.
|
If the Exercise Form
indicates that Common Shares are to be issued to a person or persons other than the registered holder of the Warrant
Certificate, the signature of such holder of the Exercise Form must be
guaranteed by an authorized officer of a chartered bank, trust company or medallion guaranteed by an investment dealer
who is a member of a recognized stock exchange.
|
|
|
|
|
3.
|
If
the Exercise Form is signed by a trustee, executor, administrator, curator,
attorney, officer of a corporation or any person acting in a judiciary
or representative capacity, the certificate must be accompanied by evidence
of authority to sign satisfactory to the Corporation
|
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before November 21, 2012.”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities legislation, the securities
represented by this certificate may not be sold, transferred, hypothecated
or otherwise traded on or through the facilities of the TSX Venture Exchange or
otherwise in Canada or to or for the
benefit of a Canadian resident before November 21, 2012.”
“THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “US SECURITIES
ACT”). THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO
THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION SUNDER THE US SECURITIES ACT, (C) WITHIN THE UNITED STATES IN
ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF
APPLICABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR
(D) IN COMPLIANCE WITH CERTAIN OTHER PROCEDURES SATISFACTORY TO THE
CORPORATION. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA. IF, AT ANY TIME WHEN THE CORPORATION IS A “FOREIGN
ISSUER” AS DEFINED IN REGULATION SUNDER THE
US SECURITIES ACT, THESE SECURITIES ARE BEING SOLD IN COMPLIANCE WITH RULE 904 OF REGULATION SUNDER THE
US SECURITIES ACT, A NEW CERTIFICATE
BEARING NO LEGEND MAY, SUBJECT TO COMPLIANCE WITH APPLICABLE NON-U.S. LAWS, BE OBTAINED FROM THE TRANSFER AGENT
OF THE CORPORATION, UPON DELIVERY OF
THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY
TO THE CORPORATION, TO THE EFFECT THAT SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION SUNDER THE US SECURITIES
ACT.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON JULY 20, 2014
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC.
(incorporated under the
Business Corporations Act,
British Columbia)
|
|
|
|
No.
|
WARRANTS
|
|
|
NOTE: One Warrant is
Required
|
|
|
to
purchase one common share.
|
THIS IS TO
CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant
Certificate”
) is entitled to purchase one fully paid and
non-assessable common share of Natcore Technology Inc. (herein called the
“Corporation”
) for each Warrant represented
hereby, as such shares were
constituted on July 20, 2012 at any time up to 4:00 p.m. (local time) in the
City of Vancouver, Province of British Columbia on July 20, 2014, (the
“Expiry Date”
) at and for a price of
$0.90
per share, of lawful money of Canada, upon and
subject to the terms and conditions referred to in this Warrant Certificate and
the Subscription Agreement entered into between the Corporation and the Holder.
These
Warrants are transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby
Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE TECHNOLOGY INC.
|
|
|
|
|
|
Per:
|
|
C/S
|
|
|
|
|
|
|
|
Authorized
Signatory
|
|
TERMS,
CONDITIONS AND INSTRUCTIONS
1. The holder of this warrant may subscribe for the
number of shares of the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant
on or before the Expiry Date, payment must be made in the amount of
$0.90
per share. All payments must be made
in Canadian Funds, in cash or by certified cheque, bank draft or money order
payable, at par, in Vancouver, British Columbia. If payment is made by way of
an uncertified cheque, the Corporation reserves the right to deem that the
payment has not been received until the cheque has cleared the account upon
which it has been drawn.
3. To exercise the rights
evidenced by this warrant, this warrant with the following Warrant Exercise
Form completed, must be delivered or mailed to and received by the registered
offices of the Corporation at Suite 2080-777 Hornby Street, Vancouver, British
Columbia, V6Z 1S4.
4. Subject to Section 5,
the rights evidenced by this warrant expire at 4:00 p.m. local time in
Vancouver, British Columbia, on the Expiry Date.
5. Notwithstanding
Section 4 above, in the event that the closing price of the Corporation’s
shares on the TSX Venture Exchange exceeds $1.20 per share for a period of 20 consecutive
trading days, at the Corporation’s election, the 24 month period within which
this warrant is exercisable will be reduced and the Holder of this warrant will
be entitled to exercise this warrant for a period (the
“Exercise Period”
) of 30 days commencing on
the date the Corporation disseminates a press release providing notice of the
commencement of the Exercise Period, and this Warrant will thereafter expire at
4:00 p.m. (Vancouver time) on the last day of the 30 day exercise period
referenced above.
6. The rights evidenced
by this warrant may be transferred. Subject to applicable securities legislation and the rules, policies, notices and
orders issued by applicable securities regulatory authorities, including
the TSX Venture Exchange (or any other stock exchange on which the Common
Shares are listed), the Warrants evidenced hereby (or any portion thereof) may
be assigned or transferred by the holder by duly completing and executing the
transfer form attached hereto as Appendix “II”. The rights and obligations of the parties hereunder shall be
binding upon and enure to the benefit of their successors and permitted
assigns.
7. If this warrant or the purchase price is
forwarded by mail it is suggested that registered mail be used as the
Corporation will not be responsible for any losses which occur through the use
of mails.
8. The rights evidenced
by this warrant are to purchase common shares in the capital stock of the
Corporation as they were constituted on
July
20, 2012
. If there shall, prior to the exercise of any of the rights
evidenced hereby, be any reorganization of the authorized capital of the
Corporation by way of consolidation, merger, sub-division, amalgamation or
otherwise, or the payment of any stock dividends, then there shall automatically be an adjustment in either or both the
number of shares of the Corporation which may be purchased pursuant
hereto or the price at which such shares may be purchased, by corresponding
amounts, so that the right evidenced hereby shall thereafter be as reasonably
as possible equivalent to those originally granted hereby. The Corporation
shall have the sole and exclusive power to make adjustments as it considers
necessary and desirable.
APPENDIX
1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY INC.
The
undersigned hereby exercises the right to purchase ______________ Common
Shares of
NATCORE TECHNOLOGY INC.
(the
“Corporation”
) (or such
number of other securities or property to which such Warrants (the
“Warrants”
)
entitle the undersigned in lieu thereof or in addition thereto under the
provisions of the Warrant Certificate for the time being governing the
holding of the Warrants in the Corporation) in accordance with and subject to
the provisions of such Warrant Certificate which may be obtained, free of charge,
from the Corporation at Suite 2080-777 Hornby Street, Vancouver, British
Columbia, V6Z 1S4.
The Common Shares (or
other securities or property) are to be issued as follows:
Name:
____________________________________________________________________________________________
Address
in full:
______________________________________________________________________________________
__________________________________________________________________________________________________
Number
of Common Shares: _____________________________________________________________________________
Note: If further nominees
intended, please attach (and initial) a schedule giving these particulars.
(CHECK ONE)
|
|
|
|
o
|
The undersigned hereby
represents and warrants to the Corporation that at the time of exercise the
undersigned is not a U.S. person or a person within the United States (as
such terms are defined in Regulation
Sunder the Securities Act of 1933 (the
“U.S.
Securities Act”
) and the Warrant is not being exercised on
behalf of a U.S. person or any person with the United States.
|
|
|
|
|
o
|
The undersigned is
tendering with this exercise form a written opinion of counsel or other
evidence satisfactory to them to the effect
that the Common Shares to be delivered upon exercise of this Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the United States or are exempt from registration
thereunder; or
|
|
|
|
|
o
|
The undersigned does
not make the representation set forth above and the undersigned hereby
represents, warrants and agrees that: (i) the undersigned will not offer or
sell the Common Shares except pursuant to registration under the U.S.
Securities Act or in accordance with an exemption from registration
thereunder or in compliance with Regulation Sunder the U.S. Securities Act;
and (ii) the certificates representing the Common Shares subscribed for may
have endorsed thereon a legend to such effect.
|
DATED
this ____ day of _________, 20__.
|
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|
|
|
|
|
|
|
|
Signature Guaranteed
|
|
(Signature of Warrant
Holder)
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
Print full name
|
|
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|
|
|
|
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|
|
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|
|
|
|
Print full address
|
|
Instructions
.
|
|
|
|
1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a certified cheque, bank draft or
money order in lawful money of Canada, payable to the order Natcore
Technology Inc. and by completing this form and surrendering this form and
the original Warrant Certificate representing the Warrants being exercised to
the Corporation at Suite 2080-777 Hornby Street, Vancouver, British Columbia,
V6Z 1S4. Certificates for Common Shares will be made available for pick up or
mailed by registered mail within five business days after the exercise of the
Warrant.
|
|
|
|
|
2.
|
If the Exercise Form
indicates that Common Shares are to be issued to a person or persons other than the registered holder of the Warrant
Certificate, the signature of such holder of the Exercise Form must be
guaranteed by an authorized officer of a chartered bank, trust company or medallion guaranteed by an investment dealer
who is a member of a recognized stock exchange.
|
|
|
|
|
3.
|
If
the Exercise Form is signed by a trustee, executor, administrator, curator,
attorney, officer of a corporation or any person acting in a judiciary
or representative capacity, the certificate must be accompanied by evidence
of authority to sign satisfactory to the Corporation
|
APPENDIX
1I
WARRANT TRANSFER FORM
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
____________________________________________________________________________________________________________
(Please print or typewrite name and address of assignee)
____________________________________________________________________________________________________________
____________Warrant(s)
represented by the within certificate, and do(es) hereby irrevocably constitute
and appoint
_____________________________________________________________________________________________________________
___________the attorney of the
undersigned to transfer the said Warrants maintained by the transfer agent of
the Company with full power of substitution hereunder.
DATED this _______ day of
______________, ______________.
|
|
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|
|
|
|
|
|
|
|
Signature of Holder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature Guarantee
|
|
Name of Holder (please print)
|
The signature of the
Holder to this assignment must correspond exactly with the name of the Holder
as set forth on the face of this Warrant certificate in every particular,
without alteration or enlargement or any change whatsoever and the signature
must be guaranteed by a Canadian chartered bank or by a Canadian trust company
or by a medallion signature guarantee from a member of a recognized Signature
Medallion Guarantee Program.
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before December 21, 2013,”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented
by this certificate may not be sold, transferred, hypothecated or
otherwise traded on or through the facilities of the TSX Venture Exchange or
otherwise in Canada or to or for the benefit of a Canadian resident before
December 21, 2013.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON AUGUST 20, 2016
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC
(incorporated under the
Business Corporations Act,
British Columbia)
|
|
|
|
No.
|
WARRANTS
|
|
|
NOTE: One Warrant is
Required
|
|
|
to
purchase one common share.
|
THIS IS
TO CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant Certificate”
) is entitled to
purchase one fully paid and non-assessable common share of Natcore Technology Inc. (herein called the “Corporation”) for
each Warrant represented hereby, as
such shares were constituted on August 20, 2013 at any time up to 4:00 p.m.
(local time) in the City of Vancouver, Province of British Columbia on August
20, 2016, (the
“Expiry Date”
) at
and for a price of
US$0.62
per share, of lawful money of Canada, upon and
subject to the terms and conditions referred to in this Warrant
Certificate and the Subscription Agreement entered into between the Corporation
and the Holder.
These
Warrants are transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE TECHNOLOGY INC.
|
|
|
|
|
|
Per:
|
|
C/S
|
|
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|
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Authorized Signatory
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|
TERMS,
CONDITIONS AND INSTRUCTIONS
1.
The holder of this warrant may
subscribe for the number of shares of the Corporation indicated on the
face hereof.
2. For
each share purchased pursuant to this warrant on or before the Expiry Date,
payment must be made in the amount of
US$0.62
per share. All payments must be made in United States Funds, in cash or by
certified cheque, bank draft or money order payable. If payment is made by way
of an uncertified cheque, the Corporation reserves the right to deem that the
payment has not been received until the cheque has cleared the account upon
which it has been drawn.
3. To
exercise the rights evidenced by this warrant, this warrant with the following
Warrant Exercise Form completed, must be delivered or mailed to and received by
the registered offices of the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4.
4. The
rights evidenced by this warrant expire at 4:00 p.m. local time in Vancouver,
British Columbia, on the Expiry Date.
5. The
rights evidenced by this warrant may be transferred. Subject to applicable
securities legislation and the rules,
policies, notices and orders issued by applicable securities regulatory
authorities, including the TSX Venture Exchange (or any other stock
exchange on which the Common Shares are listed), the Warrants evidenced hereby
(or any portion thereof) may be assigned or transferred by the holder by duly
completing and executing the transfer form attached hereto as Appendix “II”.
The rights and obligations of the parties hereunder shall be binding upon and
enure to the benefit of their successors and permitted assigns.
6. If this warrant or the purchase price is
forwarded by mail it is suggested that registered mail be used as the
Corporation will not be responsible for any losses which occur through the use
of mails.
7. The
rights evidenced by this warrant are to purchase common shares in the capital
stock of the Corporation as they were constituted on
August 20, 2013
. If there shall, prior to the exercise of any
of the rights evidenced hereby, be any reorganization of the authorized capital
of the Corporation by way of consolidation, merger, sub-division, amalgamation
or otherwise, or the payment of any stock dividends, then there shall
automatically be an adjustment in either or both the number of shares of the
Corporation which may be purchased pursuant hereto or the price at which such
shares may be purchased, by corresponding amounts, so that the right evidenced
hereby shall thereafter be as reasonably as possible equivalent to those
originally granted hereby. The Corporation shall have the sole and exclusive
power to make adjustments as it considers necessary and desirable.
APPENDIX 1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY
INC.
The undersigned hereby exercises the right to purchase
_____________ Common Shares of
NATCORE
TECHNOLOGY
INC.
(the
“Corporation”
) (or such
number of other securities or property to which such Warrants (the
“Warrants”
) entitle the undersigned in lieu
thereof or in addition thereto under the provisions of the Warrant Certificate
for the time being governing the holding of the Warrants in the Corporation) in
accordance with and subject to the provisions of such Warrant Certificate which
may be obtained, free of charge, from the Corporation at Suite 2080-777 Hornby
Street, Vancouver, British Columbia, V6Z 1S4.
The Common Shares (or other securities or property) are
to be issued as follows:
Name:
___________________________________________________________________________________________
Address in full:
______________________________________________________________________________________
________________________________________________________________________________________________
Number of Common Shares: ______________________________________________________________________________
Note: If further nominees intended, please attach (and
initial) a schedule giving these particulars.
(CHECK ONE)
|
|
|
|
o
|
The undersigned hereby represents and warrants to the
Corporation that at the time of exercise the undersigned is not a U.S. person
or a person within the United States (as such terms are defined in Regulation
Sunder the Securities Act of 1933 (the
“U.S.
Securities Act”
) and the Warrant is not being exercised on behalf of a U.S. person or any
person with the United States.
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|
o
|
The undersigned is tendering with this exercise form a
written opinion of counsel or other evidence satisfactory to them
to the effect that the Common Shares to be delivered upon exercise of this
Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the
United States or are exempt from registration thereunder; or
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|
o
|
The
undersigned does not make the representation set forth above and the
undersigned hereby represents, warrants
and agrees that: (i) the undersigned will not offer or sell the Common Shares
except pursuant to registration
under the U.S. Securities Act or in accordance with an exemption from
registration thereunder or in compliance with Regulation Sunder the U.S.
Securities Act; and (ii) the certificates
representing the Common Shares subscribed for may have endorsed thereon a
legend to such effect.
|
DATED this ____ day of __________, 20__.
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Signature Guaranteed
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(Signature of Warrant
Holder)
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Print full name
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Print full address
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Instructions
.
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1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a certified cheque, bank draft or
money order in lawful money of the United States of America, payable to the
order Natcore Technology Inc. and by completing this form and surrendering
this form and the original Warrant Certificate representing the Warrants
being exercised to the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4. Certificates for Common Shares will be
made available for pick up or mailed by registered mail within five business
days after the exercise of the Warrant.
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2.
|
If the Exercise Form
indicates that Common Shares are to be issued to a person or persons other
than the registered holder of the Warrant Certificate, the signature of such
holder of the Exercise Form must be guaranteed by an authorized officer of a
chartered bank, trust company or medallion guaranteed by an investment dealer
who is a member of a recognized stock exchange.
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3.
|
If the Exercise Form is
signed by a trustee, executor, administrator, curator, attorney, officer of a
corporation or any person acting in a judiciary or representative capacity,
the certificate must be accompanied by evidence of authority to sign
satisfactory to the Corporation.
|
APPENDIX
1I
WARRANT TRANSFER FORM
FOR VALUE RECEIVED the
undersigned hereby sells, assigns and transfers unto
___________________________________________________________________________________________________
(Please print or
typewrite name and address of assignee)
___________________________________________________________________________________________________
____________ Warrant(s)
represented by the within certificate, and do(es) hereby irrevocably constitute
and appoint
___________________________________________________________________________________________________
_________ the attorney of
the undersigned to transfer the said Warrants maintained by the transfer agent
of the Company with full power of substitution hereunder.
DATED
this _______ day of _______________, _____________.
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Signature of Holder
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Signature Guarantee
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Name of Holder (please print)
|
The signature of the
Holder to this assignment must correspond exactly with the name of the Holder
as set forth on the face of this Warrant certificate in every particular,
without alteration or enlargement or any change whatsoever and the signature
must be guaranteed by a Canadian chartered bank or by a Canadian trust company
or by a medallion signature guarantee from a member of a recognized Signature
Medallion Guarantee Program.
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before December 24, 2013,”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities legislation, the securities
represented by this certificate may not be sold, transferred, hypothecated
or otherwise traded on or through the facilities of the TSX Venture Exchange or
otherwise in Canada or to or for the benefit of a Canadian resident before
December 24, 2013.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON AUGUST 23, 2016
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC.
(incorporated under the
Business Corporations Act,
British Columbia)
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No.
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WARRANTS
|
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|
NOTE: One Warrant is
Required
|
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|
to
purchase one common share.
|
THIS IS TO CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant Certificate”
) is entitled to
purchase one fully paid and non-assessable
common share of Natcore Technology Inc. (herein called the
“Corporation”
) for each Warrant represented
hereby, as such shares were constituted on August 23,2013 at any time up to
4:00 p.m. (local time) in the City of
Vancouver, Province of British Columbia on August 23, 2016, (the
“Expiry Date”
) at and for a price of
US$0.62
per share, of lawful money of Canada, upon and subject
to the terms and conditions referred
to in this Warrant Certificate and the Subscription Agreement entered into
between the Corporation and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE TECHNOLOGY INC.
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Per:
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C/S
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Authorized Signatory
|
|
TERMS, CONDITIONS AND
INSTRUCTIONS
1. The holder of this warrant may subscribe for the number
of shares of the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant on or
before the Expiry Date, payment must be made in the amount of
US$0.62
per share. All payments must be made in United States
Funds, in cash or by certified cheque, bank draft or money order payable. If payment is
made by way of an uncertified cheque,
the Corporation reserves the right to deem that the payment has not been
received until the cheque has cleared the account upon which it has been drawn.
3. To exercise the rights evidenced by this warrant, this
warrant with the following Warrant Exercise Form completed, must be delivered or mailed to
and received by the registered offices of the Corporation at Suite 2080-777
Hornby Street, Vancouver, British Columbia, V6Z 1S4.
4. The rights evidenced by this warrant expire at 4:00 p.m.
local time in Vancouver, British Columbia,
on the Expiry Date.
5. The rights evidenced by this warrant may be not be
transferred.
6. If this warrant or the purchase price is forwarded by
mail it is suggested that registered mail be used as the Corporation will not
be responsible for any losses which occur through the use of mails.
7. The rights evidenced by this warrant are to purchase
common shares in the capital stock of the Corporation as they were constituted on
August 23, 2013
. If there shall, prior to
the exercise of any of the rights evidenced hereby, be any reorganization of the
authorized capital of the Corporation by way of consolidation, merger, sub-division, amalgamation
or otherwise, or the payment of any stock dividends, then there shall
automatically be an adjustment in either or both the number of shares of the
Corporation which
may be purchased pursuant hereto or the price at which such shares may be
purchased, by corresponding amounts, so that the right evidenced hereby shall
thereafter be as reasonably as possible equivalent to those originally granted hereby. The
Corporation shall have the sole and exclusive power to make adjustments as it considers necessary
and desirable.
APPENDIX 1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY
INC.
The undersigned hereby exercises the right to purchase
____________ Common Shares of
NATCORE
TECHNOLOGY
INC.
(the
“Corporation”
) (or such
number of other securities or property to which such Warrants (the
“Warrants”
) entitle the undersigned in lieu
thereof or in addition thereto under the provisions of the Warrant Certificate
for the time being governing the holding of the Warrants in the Corporation) in
accordance with and subject to the provisions of such Warrant Certificate which
may be obtained, free of charge, from the Corporation at Suite 2080-777 Hornby
Street, Vancouver, British Columbia, V6Z 1S4.
The Common Shares (or other securities or property) are
to be issued as follows:
Name:
___________________________________________________________________________________________
Address in full:
______________________________________________________________________________________
________________________________________________________________________________________________
Number of Common Shares: ______________________________________________________________________________
Note: If further nominees intended, please attach (and
initial) a schedule giving these particulars.
(CHECK ONE)
|
|
|
|
o
|
The undersigned hereby represents and warrants to the
Corporation that at the time of exercise the undersigned is not a
U.S. person or a person within the United States (as such terms are defined
in Regulation
Sunder the Securities Act of 1933 (the
“U.S.
Securities Act”
) and the Warrant is not being exercised on behalf of a U.S. person or any
person with the United States.
|
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|
|
o
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The undersigned is tendering with this exercise form a
written opinion of counsel or other evidence satisfactory to them
to the effect that the Common Shares to be delivered upon exercise of this
Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the
United States or are exempt from registration thereunder; or
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|
o
|
The
undersigned does not make the representation set forth above and the
undersigned hereby represents, warrants
and agrees that: (i) the undersigned will not offer or sell the Common Shares
except pursuant to registration
under the U.S. Securities Act or in accordance with an exemption from
registration thereunder or in compliance with Regulation Sunder the U.S.
Securities Act; and (ii) the certificates
representing the Common Shares subscribed for may have endorsed thereon a
legend to such effect.
|
DATED this ____ day of __________, 20__.
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Signature Guaranteed
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(Signature of Warrant
Holder)
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Print full name
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Print full address
|
|
Instructions
.
|
|
|
|
1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a
certified cheque, bank draft or money order in lawful money of the United States of America, payable to the order Natcore
Technology Inc. and by completing this form and surrendering this form and the original Warrant
Certificate representing the Warrants being exercised to the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4.
Certificates for Common Shares will be made available for pick up or mailed
by registered mail within five business days after the exercise of the
Warrant.
|
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|
|
|
2.
|
If
the Exercise Form indicates that Common Shares are to be issued to a person
or persons other than the registered holder of the Warrant Certificate, the
signature of such holder of the Exercise Form must be guaranteed by an authorized officer of a chartered bank,
trust company or medallion
guaranteed by an investment dealer who is a member of a recognized stock
exchange.
|
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|
3.
|
If the Exercise Form is
signed by a trustee, executor, administrator, curator, attorney, officer of a
corporation or any person acting in a judiciary or representative capacity,
the certificate must be accompanied by
evidence of authority to sign satisfactory to the Corporation.
|
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before December 28, 2013.”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented
by this certificate may not be sold, transferred, hypothecated or
otherwise traded on or through the facilities of the TSX Venture Exchange or
otherwise in Canada or to or for the benefit of a Canadian resident before
December 28, 2013.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON AUGUST 27, 2016
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC.
(incorporated
under the
Business Corporations Act,
British Columbia)
|
|
|
|
No.
|
WARRANTS
|
|
|
NOTE: One Warrant is
Required
|
|
|
to
purchase one common share.
|
THIS IS TO CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant Certificate”
) is entitled to
purchase one fully paid and non-assessable common share of Natcore
Technology Inc. (herein called the
“Corporation”
)
for each Warrant represented hereby, as such shares were constituted on August
27, 2013 at any time up to 4:00 p.m. (local time)
in the City of Vancouver, Province of British Columbia on August 27, 2016, (the
“Expiry Date”
) at and for a price of
US$0.62
per share, of lawful money of Canada, upon and subject
to the terms and conditions referred
to in this Warrant Certificate and the Subscription Agreement entered into
between the Corporation and the Holder.
These
Warrants are transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE TECHNOLOGY INC.
|
|
|
|
|
|
Per:
|
|
C/S
|
|
|
|
|
|
|
|
Authorized Signatory
|
|
TERMS, CONDITIONS AND
INSTRUCTIONS
1. The holder of this warrant may subscribe for the number
of shares of the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant on or
before the Expiry Date, payment must be made in the amount of
US$0.62
per share. All payments must be made in United States
Funds, in cash or by certified cheque, bank draft or money order payable. If payment is
made by way of an uncertified cheque,
the Corporation reserves the right to deem that the payment has not been
received until the cheque has cleared the account upon which it has been drawn.
3. To exercise the rights evidenced by this warrant, this
warrant with the following Warrant Exercise Form completed, must be delivered or mailed to
and received by the registered offices of the Corporation at Suite 2080-777
Hornby Street, Vancouver, British Columbia, V6Z 1S4.
4. The rights evidenced by this warrant expire at 4:00 p.m.
local time in Vancouver, British Columbia,
on the Expiry Date.
5. The rights evidenced by this warrant may be transferred.
Subject to applicable securities legislation and the rules, policies, notices and orders
issued by applicable securities regulatory authorities, including the TSX
Venture Exchange (or any other stock exchange on which the Common Shares are listed), the Warrants
evidenced hereby (or any portion thereof) may be assigned or transferred by the
holder by
duly completing and executing the transfer form attached hereto as Appendix
“II”. The rights and obligations of the parties hereunder shall be binding upon and enure
to the benefit of their successors and
permitted assigns.
6. If this warrant or the purchase price is forwarded by
mail it is suggested that registered mail be used as the Corporation will not
be responsible for any losses which occur through the use of mails.
7. The rights evidenced by this warrant are to purchase
common shares in the capital stock of the Corporation as they were constituted on
August 27, 2013
. If there shall, prior to
the exercise of any of the rights evidenced hereby, be any reorganization of the
authorized capital of the Corporation by way of consolidation, merger, sub-division, amalgamation
or otherwise, or the payment of any stock dividends, then there shall
automatically be an adjustment in either or both the number of shares of the
Corporation which
may be purchased pursuant hereto or the price at which such shares may be
purchased, by corresponding amounts, so that the right evidenced hereby shall
thereafter be as reasonably as possible equivalent to those originally granted hereby. The
Corporation shall have the sole and exclusive power to make adjustments as it considers necessary
and desirable.
APPENDIX 1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY
INC.
The undersigned hereby exercises the right to purchase __________ Common
Shares of
NATCORE
TECHNOLOGY INC.
(the
“Corporation”
)
(or such number of other securities or property to which such Warrants (the
“Warrants”
)
entitle the undersigned in lieu thereof or in addition thereto under the
provisions of the Warrant
Certificate for the time being governing the holding of the Warrants in the
Corporation) in accordance with and subject to the provisions of such Warrant
Certificate which may be obtained, free of charge, from the Corporation at Suite 2080-777 Hornby Street, Vancouver,
British Columbia, V6Z 1S4.
The Common Shares (or other securities or property) are
to be issued as follows:
Name:
___________________________________________________________________________________________
Address in full:
______________________________________________________________________________________
________________________________________________________________________________________________
Number of Common Shares: ______________________________________________________________________________
Note: If further nominees intended, please attach (and
initial) a schedule giving these particulars.
(CHECK ONE)
|
|
|
|
o
|
The undersigned hereby represents and warrants to the
Corporation that at the time of exercise the undersigned is not a U.S. person
or a person within the United States (as such terms are defined in Regulation Sunder the
Securities Act of 1933 (the
“U.S.
Securities Act”
) and the Warrant is not being exercised on behalf of a U.S. person or any
person with the United States.
|
|
|
|
|
o
|
The undersigned is tendering with this exercise form a
written opinion of counsel or other evidence satisfactory to them
to the effect that the Common Shares to be delivered upon exercise of this
Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the
United States or are exempt from registration thereunder; or
|
|
|
|
|
o
|
The
undersigned does not make the representation set forth above and the
undersigned hereby represents, warrants
and agrees that: (i) the undersigned will not offer or sell the Common Shares
except pursuant to registration
under the U.S. Securities Act or in accordance with an exemption from
registration thereunder or in compliance with Regulation Sunder the U.S.
Securities Act; and (ii) the certificates
representing the Common Shares subscribed for may have endorsed thereon a
legend to such effect.
|
DATED this ____ day of __________, 20__.
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Signature Guaranteed
|
|
(Signature of Warrant
Holder)
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Print full name
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Print full address
|
|
Instructions
.
|
|
|
|
1.
|
The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a
certified cheque, bank draft or money order in lawful money of the United States of America, payable to the order Natcore
Technology Inc. and by completing this form and surrendering this form and the original Warrant
Certificate representing the Warrants being exercised to the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4.
Certificates for Common Shares will be made available for pick up or mailed
by registered mail within five business days after the exercise of the
Warrant.
|
|
|
|
|
2.
|
If
the Exercise Form indicates that Common Shares are to be issued to a person
or persons other than the registered holder of the Warrant Certificate, the
signature of such holder of the Exercise Form must be guaranteed by an authorized officer of a chartered bank,
trust company or medallion
guaranteed by an investment dealer who is a member of a recognized stock
exchange.
|
|
|
|
|
3.
|
If
the Exercise Form is signed by a trustee, executor, administrator, curator,
attorney, officer of a corporation or any person acting in a judiciary or
representative capacity, the certificate must be accompanied by evidence of
authority to sign satisfactory to the Corporation.
|
APPENDIX
1I
WARRANT TRANSFER FORM
FOR
VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
_____________________________________________________________________________________________________________________
(Please
print or typewrite name and address of assignee)
___________ Warrant(s) represented by the within certificate,
and do(es) hereby irrevocably constitute and appoint
__________________________________________________________________________________________________________________
________ the
attorney of the undersigned to transfer the said Warrants maintained by the
transfer agent of the Company with
full power of substitution hereunder.
DATED
this ________ day of
________________, ___________.
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Signature of Holder
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|
|
Signature Guarantee
|
|
Name of Holder (please print)
|
The signature of the
Holder to this assignment must correspond exactly with the name of the Holder
as set forth on the face of this Warrant certificate in every particular,
without alteration or enlargement or any change whatsoever and the signature must be guaranteed by a Canadian
chartered bank or by a Canadian trust company or by a medallion signature
guarantee from a member of a recognized Signature Medallion Guarantee Program.
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before December 29, 2013.”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented
by this certificate may not be sold, transferred, hypothecated or
otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a
Canadian resident before December 29, 2013.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON AUGUST 28, 2016
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC.
(incorporated under the Business Corporations Act,
British Columbia)
|
|
|
|
No.
|
WARRANTS
|
|
|
NOTE: One Warrant is
Required
|
|
|
to
purchase one common share.
|
THIS IS
TO CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant
Certificate”
) is entitled to purchase one fully paid and
non-assessable common share of Natcore Technology Inc. (herein called
the
“Corporation”
) for each
Warrant represented hereby, as such shares
were constituted on August 28, 2013 at any time up to 4:00 p.m. (local time) in
the City of Vancouver, Province of British Columbia on August 28, 2016, (the
“Expiry Date”
) at and for a price of
USS0.62
per share, of lawful money of Canada, upon and subject
to the terms and conditions referred to in this Warrant Certificate and
the Subscription Agreement entered into between the Corporation and the Holder.
These
Warrants are transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE TECHNOLOGY INC.
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Per:
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C/S
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Authorized Signatory
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TERMS, CONDITIONS AND
INSTRUCTIONS
1. The holder of this warrant may subscribe for the number
of shares of the Corporation indicated on the face hereof.
2. For each share purchased pursuant to this warrant on or
before the Expiry Date, payment must be made in the amount of
US$0.62
per share. All payments must be made in United States
Funds, in cash or by certified cheque, bank draft or money order payable. If payment is
made by way of an uncertified cheque, the Corporation reserves the right to deem that
the payment has not been received until the cheque has cleared the account upon which it has been drawn.
3. To exercise the rights evidenced by this warrant, this
warrant with the following Warrant Exercise Form completed, must be delivered or mailed to
and received by the registered offices of the Corporation at Suite 2080-777 Hornby Street,
Vancouver, British Columbia, V6Z 1S4.
4. The rights evidenced by this warrant expire at 4:00 p.m.
local time in Vancouver, British Columbia,
on the Expiry Date.
5. The rights evidenced by this warrant may be transferred.
Subject to applicable securities legislation and the rules, policies, notices and orders
issued by applicable securities regulatory authorities, including the TSX
Venture Exchange (or any other stock exchange on which the Common Shares are listed), the Warrants
evidenced hereby (or any portion thereof) may be assigned or transferred by the
holder by
duly completing and executing the transfer form attached hereto as Appendix
“II”. The rights and obligations of the parties hereunder shall be binding upon and enure
to the benefit of their successors and
permitted assigns.
6. If this warrant or the purchase price is forwarded by
mail it is suggested that registered mail be used as the Corporation will not be responsible
for any losses which occur through the use of mails.
7. The rights evidenced by this warrant are to purchase
common shares in the capital stock of the Corporation as they were constituted on
August 28, 2013
. If there shall, prior to the exercise of any
of the rights evidenced hereby, be any
reorganization of the authorized capital of the Corporation by way of
consolidation, merger, sub-division, amalgamation or otherwise, or the payment
of any stock dividends, then there shall automatically be an adjustment in
either or both the number of shares of the Corporation which may be purchased pursuant hereto or the
price at which such shares may be purchased, by corresponding amounts, so that the right evidenced hereby shall
thereafter be as reasonably as possible equivalent to those originally granted
hereby. The Corporation shall have the sole and exclusive power to make
adjustments as it considers necessary and desirable.
APPENDIX 1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY
INC.
The undersigned hereby exercises the right to purchase ___________ Common Shares of
NATCORE
TECHNOLOGY INC.
(the
“Corporation”
)
(or such number of other securities or property to which such Warrants (the
“Warrants”
) entitle the undersigned in lieu
thereof or in addition thereto under the provisions of the Warrant
Certificate for the time being governing the holding of the Warrants in the
Corporation) in accordance with and subject to the provisions of such Warrant
Certificate which may be obtained, free of charge,
from the Corporation at Suite 2080-777 Hornby Street, Vancouver, British
Columbia, V6Z 1S4.
The Common Shares (or other securities or property) are
to be issued as follows:
Name:
___________________________________________________________________________________________
Address in full:
______________________________________________________________________________________
________________________________________________________________________________________________
Number of Common Shares: ______________________________________________________________________________
Note: If further nominees intended, please attach (and
initial) a schedule giving these particulars.
(CHECK ONE)
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o
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The undersigned hereby represents and warrants to the
Corporation that at the time of exercise the undersigned is not a U.S. person
or a person within the United States (as such terms are defined in Regulation
Sunder the Securities Act of 1933 (the
“U.S.
Securities Act”
) and the Warrant is not being exercised on behalf of a U.S. person or any
person with the United States.
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o
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The undersigned is tendering with this exercise form a
written opinion of counsel or other evidence satisfactory to them
to the effect that the Common Shares to be delivered upon exercise of this
Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the
United States or are exempt from registration thereunder; or
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o
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The undersigned does not make the representation set
forth above and the undersigned hereby represents, warrants and agrees that: (i) the undersigned will not
offer or sell the Common Shares except
pursuant to registration under the U.S. Securities Act or in accordance with
an exemption from registration thereunder or in compliance with Regulation
Sunder the U.S. Securities Act; and (ii) the certificates representing the Common Shares subscribed for may have
endorsed thereon a legend to such effect.
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DATED this ____ day of __________, 20__.
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Signature Guaranteed
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(Signature of Warrant
Holder)
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Print full name
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Print full address
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Instructions
.
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1.
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The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a
certified cheque, bank draft or money order in lawful money of the United States of America, payable to the order Natcore
Technology Inc. and by completing this form and surrendering this form and
the original Warrant Certificate representing the Warrants being exercised to
the Corporation at Suite 2080-777 Hornby Street, Vancouver, British Columbia,
V6Z 1S4. Certificates for Common Shares will be made available for
pick up or mailed by registered mail within five business days after the
exercise of the Warrant.
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2.
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If
the Exercise Form indicates that Common Shares are to be issued to a person
or persons other than the registered holder of the Warrant Certificate, the
signature of such holder of the Exercise Form must be guaranteed by an authorized officer of a chartered bank,
trust company or medallion guaranteed by an investment dealer who is a
member of a recognized stock exchange.
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3.
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If
the Exercise Form is signed by a trustee, executor, administrator, curator,
attorney, officer of a corporation or any person acting in a judiciary or
representative capacity, the certificate must be accompanied by evidence of
authority to sign satisfactory to the Corporation.
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APPENDIX
1I
WARRANT TRANSFER FORM
FOR VALUE RECEIVED the
undersigned hereby sells, assigns and transfers unto
_____________________________________________________________________________________________________
(Please print or
typewrite name and address of assignee)
___________________________________________________________________________________________________
___________ Warrant(s)
represented by the within certificate, and do(es) hereby irrevocably constitute
and appoint
_____________________________________________________________________________________________________
________ the attorney of
the undersigned to transfer the said Warrants maintained by the transfer agent
of the Company with full power of
substitution hereunder.
DATED
this ________ day of
________________, ___________.
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Signature of Holder
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Signature Guarantee
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Name of Holder (please print)
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The signature of the
Holder to this assignment must correspond exactly with the name of the Holder
as set forth on the face of this Warrant certificate in every particular,
without alteration or enlargement or any change whatsoever and the signature
must be guaranteed by a Canadian chartered bank or by a Canadian trust company
or by a medallion signature guarantee from a member of a recognized Signature
Medallion Guarantee Program.
“Unless permitted under securities legislation, the holder
of the securities shall not trade the securities before May 22, 2015.”
“Without prior written approval of
the TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented
by this certificate may not be sold, transferred, hypothecated or
otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a
Canadian resident before May 22, 2015.”
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “US SECURITIES ACT”). THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B)
OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE US SECURITIES ACT, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH
THE EXEMPTION FROM REGISTRATION UNDER THE US
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF APPLICABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS, OR (D) IN COMPLIANCE WITH CERTAIN OTHER PROCEDURES SATISFACTORY TO
THE CORPORATION. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD
DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF, AT ANY TIME WHEN THE CORPORATION IS A “FOREIGN
ISSUER” AS DEFINED IN REGULATION S
UNDER THE US SECURITIES ACT, THESE SECURITIES ARE BEING SOLD IN COMPLIANCE WITH
RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT, A NEW CERTIFICATE BEARING
NO LEGEND MAY, SUBJECT TO COMPLIANCE WITH APPLICABLE NON-U.S. LAWS, BE OBTAINED FROM THE TRANSFER AGENT
OF THE CORPORATION, UPON DELIVERY OF
THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY
TO THE CORPORATION, TO THE EFFECT THAT SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION SUNDER THE US SECURITIES
ACT.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF
VANCOUVER, PROVINCE OF BRITISH COLUMBIA, ON JANUARY 21, 2018
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC.
(incorporated under the Business Corporations Act,
British Columbia)
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No.WC0115
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WARRANTS
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NOTE:
One Warrant is Required
to purchase one common share.
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THIS IS
TO CERTIFY THAT
for value received the holder, (the
“Holder”
), of this certificate (the
“Warrant Certificate”
) is entitled to
purchase one fully paid and non-assessable
common share of Natcore Technology Inc. (herein called the “Corporation”) for each
Warrant represented hereby, as such shares were constituted on January
21, 2015 at any time up to 4:00 p.m. (local
time) in the City of Vancouver, Province of British Columbia on January 21,
2018, (the
“Expiry
Date”
) at and for a price of
CDNS0.70
per share, of lawful money of
Canada, upon and subject to the terms and conditions referred to in this
Warrant Certificate and the Subscription Agreement entered into between
the Corporation and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby
Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
NATCORE TECHNOLOGY INC.
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Per:
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C/S /
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Authorized
Signatory
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APPENDIX
1
WARRANT EXERCISE FORM
TO:
NATCORE TECHNOLOGY INC.
The
undersigned hereby exercises the right to purchase __________ Common
Shares of
NATCORE TECHNOLOGY INC.
(the
“Corporation”
) (or such
number of other securities or property to which such Warrants (the
“Warrants”
)
entitle the undersigned in lieu thereof or in addition thereto under the
provisions of the Warrant Certificate for the time being governing the
holding of the Warrants in the Corporation) in accordance with and subject to
the provisions of such Warrant Certificate which may be obtained, free of
charge, from the Corporation at Suite 2080-777 Hornby Street, Vancouver,
British Columbia, V6Z 1S4.
The Common Shares (or
other securities or property) are to be issued as follows:
Name:
_____________________________________________________________________________________________
Address
in full:
________________________________________________________________________________________
____________________________________________________________________________________________________
Number
of Common Shares: ______________________________________________________________________________
Note: If further nominees
intended, please attach (and initial) a schedule giving these particulars.
(CHECK ONE)
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o
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The undersigned hereby
represents and warrants to the Corporation that at the time of exercise the
undersigned is not a U.S. person or a person within the United States (as
such terms are defined in Regulation S
under the Securities Act of 1933 (the “U.S. Securities Act”) and the Warrant
is not being exercised on behalf of a U.S. person or any person with
the United States.
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o
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The undersigned is
tendering with this exercise form a written opinion of counsel or other
evidence satisfactory to them to the
effect that the Common Shares to be delivered upon exercise of this Warrant have
been registered under the U.S. Securities Act and the Securities laws of all
applicable States of the United States or are exempt from registration
thereunder; or
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o
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The undersigned does
not make the representation set forth above and the undersigned hereby
represents, warrants and agrees that: (i) the undersigned will not offer or
sell the Common Shares except pursuant to registration under the U.S.
Securities Act or in accordance with an exemption from registration
thereunder or in compliance with Regulation S under the U.S. Securities Act;
and (ii) the certificates representing the Common Shares subscribed for may
have endorsed thereon a legend to such effect.
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DATED
this ______ day of ____________, 20__.
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Signature Guaranteed
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(Signature of Warrant Holder)
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Print full name
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Print full address
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Instructions
.
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1.
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The
registered holder may exercise his/her right to receive Common Shares by
enclosing payment by way of cash, a certified cheque, bank draft or
money order in lawful money of the United States
of America, payable to the order Natcore Technology Inc. and by completing
this form and surrendering this form and the original Warrant
Certificate representing the Warrants being exercised
to the Corporation at Suite 2080-777 Hornby Street, Vancouver, British
Columbia, V6Z 1S4. Certificates for Common Shares will be made
available for pick up or mailed by registered mail within five business days
after the exercise of the Warrant.
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2.
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If the Exercise Form
indicates that Common Shares are to be issued to a person or persons other than the registered holder of the Warrant
Certificate, the signature of such holder of the Exercise Form must be
guaranteed by an authorized officer of a chartered bank, trust company or medallion guaranteed by an investment dealer
who is a member of a recognized stock exchange.
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3.
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If the Exercise Form is
signed by a trustee, executor, administrator, curator, attorney, officer of a
corporation or any person acting in a judiciary or representative capacity,
the certificate must be accompanied by evidence of authority to sign
satisfactory to the Corporation.
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AMENDMENT
No. 3
Agreement No. 10081902
between
Natcore Solar Technology, Inc.
and
William Marsh Rice University
RECITALS
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A.
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The Parties entered into sponsored research
agreement no. 10081902 on September 1, 2009;
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B.
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The Parties wish to amend their sponsored research
agreement to extend the period of performance at no additional cost,
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Now, therefore, the Parties agree as follows:
The Period of Performance is extended through November
30, 2012.
All
other terms and conditions remain unchanged and in full force and effect.
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AGREED:
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NATCORE SOLAR TECHNOLOGY, INC.
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WILLIAM MARSH RICE UNIVERSITY
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By:
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By:
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Charles Provini
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Nila Bhakuni, Interim Director
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President
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Office of Sponsored Research
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Date:
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5-10-2012
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Date:
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5-11-12
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F
IRST
A
MENDMENT TO
L
EASE
A
GREEMENT
T
HIS
F
IRST
A
MENDMENT TO
L
EASE
A
GREEMENT
(this “First Amendment”) is made and entered
into as of this 1
st
day of March, 2013 (the “Effective Date”) by and
between
E
ASTMAN
K
ODAK
C
OMPANY
, a New Jersey corporation (“Landlord”) and
N
ATCORE
T
ECHNOLOGY
, I
NC
.,
a
Delaware corporation (“Tenant”).
W
ITNESSETH
:
W
HEREAS
,
pursuant to that certain
Lease Agreement between Landlord and Tenant dated as of July 18, 2011
(the “Original Lease” and together with this First Amendment, the “Lease”),
Tenant currently leases from Landlord
approximately 4,053 usable square feet of space located on the first floor of that certain building known as Building 308,
located at the manufacturing plant known as Eastman Business Park, in the City
of Rochester, County of Monroe, and the State of New York; and
W
HEREAS
,
Tenant desires and Landlord has agreed to allow
Tenant to occupy additional space and to extend the Lease Term; and
W
HEREAS
,
the Original Lease requires Landlord to provide
Tenant with certain utilities upon the terms and conditions more
particularly described in the Original Lease; and
W
HEREAS
,
Landlord has entered into a contract with RED-
Rochester, LLC (“RED”) to sell its utility business; and
W
HEREAS
,
subject to the terms and conditions of this First
Amendment, Landlord and Tenant desire
to amend the terms of the Original Lease to: (i) expand the Premises; (ii)
extend the Lease Term; and (iii)
reflect changes in the utility charges and method of calculating such utility
charges resulting from the above-referenced sale.
N
OW
, T
HEREFORE
,
in consideration of the mutual promises contained herein and other
good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties hereto, Landlord
and Tenant agree to amend the Original Lease as follows:
1.
P
REMISES
.
The first sentence of Section 1(a) of the Original Lease entitled “Definition of the Premises” is hereby deleted in its entirety
and replaced with the following:
Landlord
hereby leases unto Tenant and Tenant hereby accepts from Landlord, approximately 19,376 usable square feet of space
(the “Premises”) located in that certain building known as Building 308 (the
“Building”), located at the manufacturing plant known as Eastman Business Park (“EBP”),
in the Town of Greece, County of Monroe and State of New York.
2.
S
UBSTITUTION OF
E
XHIBIT
A
.
Exhibit A attached to the Lease is hereby deleted in its entirety and replaced with
E
XHIBIT
A-1
attached hereto and made a part hereof.
3.
T
ERM
.
(a)
The Lease Term is hereby extended until the earlier of (i) June 30, 2015; or
(ii) the earlier termination or
cancellation of the Lease, in accordance with the terms of the Lease. All references to “Expiration Date” in the Original
Lease shall mean the Expiration Date, as extended by this Section 3 of
this First Amendment.
1
(b) Section 2(c) of the Original Lease is hereby
deleted in its entirety.
4.
R
ENT
. Beginning on June 1, 2013, the Base Rent set forth in Section 4(a) of
the Original Lease shall increase
to
O
NE
H
UNDRED
T
HREE
T
HOUSAND
S
IX
H
UNDRED
D
OLLARS
A
ND
34/100
($103,596.00)
per year, payable in equal monthly installments of
E
IGHT
T
HOUSAND
S
IX
H
UNDRED
T
HIRTY
T
HREE
D
OLLARS AND
00/100 ($8,633.00)
.
5.
S
UBSTITUTION OF
E
XHIBIT
D
. Effective for Utility
Services provided after the last meter
read prior to the closing date of the sale of Landlord’s utility business to
RED (the “Switchover Time”),
E
XHIBIT
D
attached to the Lease (the
“Existing Exhibit D”) shall be replaced with
E
XHIBIT
D-l
attached to this
Amendment (the “Substitute Exhibit D”). For Utility Services provided through
the Switchover Time, the charges
shall be determined in accordance with the Existing Exhibit D; provided, if the closing date of the sale of Landlord’s
utility business to RED (the “Closing Date”) occurs on or prior to May 31, 2013 there shall be no reconciliation
as contemplated by paragraph 4 of the Existing Exhibit D with respect to the period from the last meter
read prior to January 1, 2013 through the Switchover Time (the “Stub Period”), otherwise, there shall be a
reconciliation as contemplated by paragraph 4 of the Existing Exhibit D with respect to the Stub
Period where the references to “calendar year” in such paragraph 4 shall mean the Stub Period. Landlord
shall provide Tenant with written notice promptly following the Closing Date, which written notice
shall set forth the date on which the Substitute Exhibit D has taken effect. Failure to send such notice
shall not affect the validity of this Amendment.
6.
R
ATIFICATION
. Except as
modified herein, all other terms and conditions of the Original Lease shall remain unchanged and in full force and effect and
are hereby ratified and confirmed by the parties hereto.
7.
C
APITALIZED
T
ERMS
;
C
ONFLICT
W
ITH
L
EASE
. Except as expressly
provided herein, all capitalized terms used
herein shall have the meanings ascribed to them in the Original Lease. Any inconsistencies or conflicts between the terms and
provisions of the Original Lease and the terms and provisions of this Amendment
shall be resolved in favor of the terms and provisions of this Amendment.
8.
M
ODIFICATION
. This
Amendment shall not be modified except in writing signed by both parties.
9.
C
OUNTERPARTS
.
This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of
this Amendment and all of which, when taken together, will be deemed to
constitute one and the same agreement.
10.
N
O
A
SSUMPTION
. Nothing herein is intended or shall
be deemed to: (a) be an assumption or
rejection of the Original Lease pursuant to section 365 of title 11 of the
United States Code (the “Bankruptcy Code”); (b) be a determination that
the Original Lease is a postpetition lease or agreement;
or (c) impair, prejudice, waive or otherwise affect any rights of the Landlord
and its estate in connection with
the Landlord’s chapter 11 cases or under the Bankruptcy Code, including,
without limitation, the rights of the Landlord and its estate to reject the
Original Lease. For the avoidance of doubt,
the parties hereby acknowledge and agree that the Original Lease shall remain a
prepetition lease or agreement
subject to rejection under section 365 of the Bankruptcy Code by the Landlord
and its estate notwithstanding the
parties entry into this document, and in the event that the Landlord and its
estate rejects the Original Lease,
any allowed claims for damages arising from the Landlord’s rejection shall be
treated as a general unsecured claim against the Landlord’s estate in
accordance with section 365(g)(1) of the Bankruptcy Code.
2
I
N
W
ITNESS
W
HEREOF
, the undersigned have executed this Amendment
effective as of the Effective Date.
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L
ANDLORD
:
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E
ASTMAN
K
ODAK
C
OMPANY
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By:
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Name:
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Title:
|
Director
of Real Estate
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T
ENANT
:
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N
ATCORE
T
ECHNOLOGY
, I
NC
.
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By:
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Name:
|
Charles Provini
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Title:
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President and CEO.
|
3
E
XHIBIT
A-l
Floor Plan Depicting the Premises
4
E
XHIBIT
A-1
Eastman
Business Park, Building 308, Floor 1
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Building
Code
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Floor
Code
|
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Room
Code
|
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Room
Area
|
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Room
Cateqory
|
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308-KP
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01
|
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134
|
|
1,958.85
|
|
MFG
|
|
308-KP
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|
01
|
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134
A
|
|
6,897.05
|
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STOR
|
|
308-KP
|
|
01
|
|
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135
|
|
2,652.76
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
135
A
|
|
62.34
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
136
|
|
697.27
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
136
B
|
|
57.91
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
137
|
|
160.69
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
138
|
|
141.52
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
139
|
|
422.24
|
|
OFF
|
|
308-KP
|
|
01
|
|
|
140
A
|
|
428.21
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
141
|
|
3,893.89
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
141
A
|
|
162.50
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
141
B
|
|
96.82
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
141
C
|
|
100.29
|
|
MFG
|
|
308-KP
|
|
01
|
|
|
14O
|
|
1,644.04
|
|
MFG
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,376.38
|
|
Overall Total
|
5
E
XHIBIT
D-l
Utility Services Charges
|
|
|
|
1.
|
Utility Services Charges
. In consideration for the Utility Services
consumed at the Building, Tenant
shall pay charges, all as more fully described in this
E
XHIBIT
D-l.
|
|
|
|
|
2.
|
Definitions
. For the purposes of this
E
XHIBIT
D-l
the following terms shall have the following definitions:
|
|
|
|
|
|
“Overhead Charge”
means, with respect to each billing month, the Tenant Base Amount for
such billing month multiplied by twenty-five percent (25%).
|
|
|
|
|
|
“RED”
means RED-Rochester, LLC, a Delaware limited liability company.
|
|
|
|
|
|
“Sanitary Sewer Charges”
means for each billing month an amount equal
to $83.33 (equivalent to $1,000 per year).
|
|
|
|
|
|
“Standard Base Rate”
means, with respect to each Utility Service
for each billing month, the rate
reported by RED as the standard average rate per unit for such Utility
Service with respect to such
billing month charged by RED to customers of Eastman Business Park generally.
|
|
|
|
|
|
“Tenant Base Amount”
means, with respect to each billing month, the
sum of the results of the Standard
Base Rate with respect to each Utility Service for such billing month
multiplied by the number of units
of such Utility Service consumed or deemed to be consumed by Tenant during such
billing month.
|
|
|
|
|
|
“Utility Services Charges”
means the charges payable by Tenant for
Utility Services as determined in accordance with paragraph 4 of this
E
XHIBIT
D-l.
|
|
|
|
|
3.
|
Usage Determination.
Tenant’s consumption of each of the Utility
Services shall be computed in
accordance with meters measuring actual delivery of such Utility Service to
the Premises, or if no such meter exists, then in accordance with the
reasonable estimate of Landlord based on the meters measuring the actual delivery of such Utility Service to the
Building or portion of the Building in which the Premises is located or, if
no such meter exists, based upon Landlord’s reasonable estimate derived in a manner similar to Landlord’s
estimates for allocation of Utility Services
charges to other occupants of the Building or other adjacent buildings in
Eastman Business Park.
|
|
|
|
|
4.
|
Utility Services Charges.
For each billing month, the Utility Services
Charges shall be equal to the
Tenant Base Amount for such billing month, the Overhead Charge for such
billing month and the Sanitary Sewer Charges for such billing month.
|
|
|
|
|
5.
|
Operating
Dividend.
Landlord shall credit to Tenant a pro rata
portion, based on utility consumption and
the Standard Base Rates during the relevant period, of each operating
dividend actually received by
Landlord from RED. Landlord shall credit such amount to Tenant on the invoice issued to Tenant after the receipt by
Landlord of the Operating Dividend from RED. For purposes of this
paragraph 5, the date of the invoice on which Landlord receives a credit
attributable to an Operating Dividend shall be deemed to be receipt by
Landlord of such Operating Dividend.
|
|
|
|
|
6.
|
Calculations
.
The number of units of wastewater treatment and sewer provided to Tenant
during any billing month shall be deemed
to be the number of units of process water provided to Tenant during
such billing month. A billing month that straddles two calendar quarters or
two calendar years shall be deemed to
occur in the calendar quarter or calendar year in which the majority of the
days comprising such billing month fall.
|
6
L
EASE
AGREEMENT
D
ATED
A
S
O
F
J
ULY
18,2011
B
Y
A
ND
B
ETWEEN
E
ASTMAN
K
ODAK
C
OMPANY
,
L
ANDLORD
A
ND
N
ATCORE
T
ECHNOLOGY
, I
NC
.,
T
ENANT
P
REMISES
:
P
ORTION
O
F
E
ASTMAN
B
USINESS
P
ARK
B
UILDING
308,
R
OCHESTER
,
N
EW
Y
ORK
L
EASE
A
GREEMENT
T
HIS
L
EASE
A
GREEMENT
,
dated as of July 18, 2011
(this “Lease” or this “Agreement”), is entered into by and between
E
ASTMAN
K
ODAK
C
OMPANY
,
a New Jersey
corporation (“Landlord”), and
N
ATCORE
T
ECHNOLOGY
, I
NC
.,
a Delaware corporation (“Tenant”).
1. P
REMISES
.
(a)
Definition of Premises
. Landlord hereby leases unto Tenant and
Tenant hereby accepts from Landlord,
approximately 4,053 usable square feet of space (the “Premises”) located on the
first floor of that certain building known as Building 308 (the “Building”),
located at the manufacturing plant known as Eastman Business Park (“EBP”), in
the Town of Greece, County of Monroe, and the State of New York. Floor plans
showing the location of the Premises in the Building are attached hereto as
E
XHIBIT
A
and made a part hereof. A map showing the location of the Building
is attached hereto as
E
XHIBIT
B
and made a part
hereof. The Premises shall also include the right to use in common with other
occupants of the Building access and delivery areas designated by Landlord from
time to time as reasonably required for the use of the Premises, cafeteria
areas (if any) and other common areas appurtenant to the Building (including
the loading docks and hallway to the south
of the Premises for access to the clean room portion of the Premises) (collectively,
the “Common Areas”), subject to reasonable rules and regulations imposed by
Landlord.
(b)
Condition of Premises
. Tenant accepts the Premises in its
present, “as-is” condition. Tenant’s taking possession of the Premises shall be
conclusive evidence against Tenant that the Premises
were in good order and satisfactory condition when Tenant took possession. No
promises of Landlord to alter, remodel, repair or improve the Premises
or the Building and, other than those expressly set forth herein, no
representations respecting the condition of the Premises or the Building have
been made by Landlord to Tenant.
2. T
ERM
.
(a)
Lease Term
. The term of this Lease (the “Lease Term”) shall
commence on August 1, 2011 (the
“Commencement Date”), and shall end on the earlier of (i) midnight on June 30,
2013, or (ii) the earlier termination or cancellation of this Lease in
accordance with the terms hereof (the “Expiration Date”).
(b)
Landlord’s Termination Right
. If at any time during the term of
this Agreement, Landlord shall decide to sell, close or demolish the Building
of which the Premises is a part, Landlord
shall have the right to terminate this Lease at any time upon six (6) months
prior written notice to Tenant and Tenant shall surrender the Premises
to Landlord on such date in accordance with the provisions of Sections 11(d)
and 34 hereof.
(c)
Tenant’s Renewal Right
. Tenant shall have the right to renew this
Lease for up to one (1) additional term of
two (2) years (the “Renewal Term”), on the same terms and conditions
1
provided herein (except that this clause shall not
apply relative to any further renewals), by delivering written notice to
Landlord of its intent to renew no less than six (6) months prior to the
expiration of the Lease Term or the applicable Renewal Term hereof, as the case
may be, provided that at the date of
exercise of each option to renew, and on the effective date of such Renewal
Term, there is no default by Tenant in the performance of any of its
obligations under this Lease. During the Renewal Term, Tenant shall continue to
pay Base Rent as described in Section 4(a) hereof.
3. T
ENANT’S
U
SE
O
F
A
ND
A
CCESS
T
O
T
HE
P
REMISES
(a)
Permitted Uses
. The Premises shall be occupied and used by Tenant
for research and development of
photovoltaic cells and related compounds and for general office purposes
associated therewith, and for no other purpose whatsoever, except as may be
reasonably agreed upon in writing by Landlord and Tenant. Tenant is
expressly prohibited from using the Premises for any purpose (including
storage) which involves any processes and/or materials (including but not
limited to any chemicals) if Landlord advises Tenant that such are reasonably
deemed by Landlord to cause any additional liability to Landlord.
(b)
Tenant’s Access to the Premises
. Subject to the security and
operating policy of Landlord, reasonable
written notice of which shall be provided to Tenant, Tenant and its employees shall
have the right of 24 hours per day, seven days per week access to the Premises.
(c)
Restrictions on Tenant’s Activities
.
(i)
Food Service
. Landlord and Tenant acknowledge that Landlord has an
exclusive agreement with certain food service providers at the Building. Tenant
shall have the right to use the food service providers selected by Landlord to
provide food services to Tenant and its employees and invitees at the Premises,
on a basis and in a manner consistent with the use of such providers by other
occupants of the Building. Tenant shall not have the right to allow other food
service providers access to the Premises.
(ii)
Wireless Network
. Tenant shall not install at the Premises any wireless
network (“Wireless Network”) without advance written consent of Landlord, which
consent shall not be unreasonably withheld. In the event Tenant desires to
install a Wireless Network, Tenant shall first submit to Landlord plans and
specifications therefor for Landlord’s review as part of Landlord’s
determination of whether to approve the Wireless Network installation. If
Landlord shall determine, in its sole
discretion, that the Wireless Network proposed to be installed by Tenant fails
to comply with Landlord’s standards for such networks in the Building or at
Kodak Park, or would cause interference with the operation of wireless or other
networks of Landlord at the Building or at Kodak Park, then Landlord shall have
the right to withhold its consent to Tenant’s proposed Wireless Network, and
such failure to consent shall not be deemed unreasonable for purposes of this
subparagraph 3(c)(ii).
(d)
Tenant’s Rights to Use IT Facilities
. During the Lease Term, at
no additional cost to Tenant, Tenant and its employees shall have the right to
use, and access to, the telecommunication facilities located in the Premises
and the Building as described below:
2
(i)
Frame/Demarcation Room
. Tenant shall have the right to have access to,
in common with Landlord, the existing frame/demarcation room (the “Demarcation
Room”) in the Building (in which the telecommunications connections from the
Building to areas outside the Building are located) from time to time upon
advance request by Tenant to Landlord. Landlord, Tenant and any other tenant or occupant having access to the
Demarcation Room shall reasonably cooperate to isolate, to the extent
reasonably possible within the Demarcation Room, each party’s equipment
and cabling located in the Demarcation Room. Landlord may require Tenant to be
escorted by a representative of Landlord to the Demarcation Room.
(ii)
Conditions Upon Surrender
. Upon the Expiration Date, Tenant shall,
subject to Sections 11(d) and 34, surrender in place to Landlord any
horizontal, Premises cabling and any riser cabling used by Tenant at the
Building, regardless of whether such cabling exists on the Commencement Date or
is later installed by Tenant.
4. R
ENT
(a)
Base Rent
. Tenant shall pay to Landlord as
base or fixed rent (the “Base Rent”), in U.S. legal tender, at the following
address: Eastman Kodak Company, 343 State Street, Rochester, New York
14650-1265, Attention: Lease Administration & Field Operations, or as
otherwise directed from time to time by Landlord’s written notice, the sum of
S
EVENTY
T
WO
T
HOUSAND
N
INE
H
UNDRED
F
IFTY
F
OUR
A
ND
00/100 DOLLARS ($72,954.00)
per year, such Base Rent to be paid in equal monthly installments of
S
IX
T
HOUSAND
S
EVENTY
N
INE
A
ND
50/100 DOLLARS ($6,079.50)
each. The
first installment of Base Rent shall be paid on the Commencement Date and,
thereafter, each installment of Base Rent shall be paid promptly on the first
day of every calendar month of the Lease
Term, and pro rata, in advance, for any partial month, without demand, the same
being hereby waived, and without any set-off or deduction whatsoever
except as otherwise expressly provided in this Lease. Any payment required to
be made by Tenant under the provisions of
this Lease not made by Tenant when and as due shall thereupon be deemed to be
due and payable by Tenant to Landlord on demand with interest thereon at
the rate of ten percent (10%) per annum computed from the date when the
particular amount became due to the date of payment thereof to Landlord. In
addition, subject to the terms of Section 17 of this Lease, if Tenant fails to
timely pay any installment of Base Rent or Additional Rent (as hereinafter
defined), a late charge will be due and owing at the rate prescribed in Section
17 of this Lease upon any Base Rent and/or Additional Rent not paid by the
fifth (5th) business day after the date on which such Rent is due.
(b)
Costs and Expenses Deemed Rent
. All costs and expenses which
Tenant agrees to pay to Landlord pursuant
to this Lease shall be deemed additional rent (“Additional Rent”) and, in the
event of non-payment thereof, Landlord shall have all the rights and remedies
herein provided for in case of non-payment of Rent.
(c)
Sales Tax
. In the event any sales, rent or occupancy tax should
be assessed against all or part of the Base
Rent or any Additional Rent, Tenant shall reimburse Landlord for such tax as Additional
Rent hereunder within twenty (20) days of invoice by Landlord.
(d)
Rent
. The Base Rent together with the Additional Rent described
in this Section 4 will be collectively referred to herein as Rent.
3
5. S
ERVICES
Except
as otherwise provided, the following services shall be provided by Landlord at
no additional cost to Tenant, except as otherwise specified in this
Section 5 below:
(a)
Utilities
. Subject to and on the terms, limitations and conditions
contained in this subsection (a) and subsections (c), (f) and (h) of this
Section 5, Tenant shall purchase from Landlord
and Landlord shall use its reasonable efforts to supply to Tenant at the
Premises the utility services (the “Utility Services”) listed below in the
quantities and at the times reasonably requested by Tenant; and
furthermore provided that Landlord shall apply commercially reasonable efforts
to, in the case of service interruption, restore services to Tenant at the
Premises. Landlord shall be responsible for delivering such Utility Services to
the point of entry at the Premises, and Landlord shall maintain, at Landlord’s
cost and expense, all necessary infrastructure to make such deliveries to the
point of entry at the Premises. Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all costs, expenses, liabilities and
damages of any kind (including reasonable attorneys’ fees) resulting from
damage or injury of any kind to Tenant’s property located at the Premises, or
to Tenant’s employees, agents, contractors or invitees or their property while located at the Premises, arising in connection
with Landlord’s providing of the services listed below in this
subsection (a), except to the extent directly resulting from the gross
negligence or willful misconduct of Landlord, its employees or agents.
(i)
Steam
. Landlord shall provide steam services used by Tenant for heating
the Premises and in the conduct of its operations in the Premises.
(ii)
Electric Energy
. Landlord shall provide electrical energy used by Tenant
for heat, air-conditioning, lighting and other services, and for the conduct of
its operations in the Premises.
(iii)
Water
. Landlord shall furnish hot and cold water to the Building for
drinking and ordinary cleaning purposes. In addition, Landlord shall provide to
the Building a source of fire protection water and an independent source of
process water for Tenant’s use in the conduct of its operations at the
Premises. Furthermore, Landlord shall provide an independent source of demineralized water for use by Tenant in the
conduct of its operations at the Premises; provided that such
demineralized water shall be made available to Tenant at Landlord’s building
known as EBP Building 321, and Tenant shall be responsible (at its sole cost
and expense) to arrange for delivery of the demineralized water by tanker truck
from Building 321 to the Premises using Landlord’s approved intra-plant
trucking contractor.
(iv)
Chilled Water
. Landlord shall provide chilled water services used by
Tenant for cooling the Building and in the conduct of its operations in the
Premises.
(v)
Compressed Air
. Landlord shall provide compressed air used by Tenant in
the conduct of its operations in the Premises.
(vi)
Nitrogen
. Landlord shall provide nitrogen used by Tenant in the conduct
of its operations in the Premises.
4
(vii)
Sanitary Sewer Service
. Landlord shall provide Tenant with the right to
use the existing sanitary sewer currently
owned by Landlord and the public sanitary sewer (collectively called the
“Sanitary Sewer”), to the extent each of these service the Building in which
the Premises is located, provided that Tenant shall, with respect to its
use of the Sanitary Sewer, promptly comply
with the requirements imposed by Landlord now or in the future on all users of
the Sanitary Sewer of which Tenant is given notice.
(viii)
Industrial Sewer Service
.
(1)
General Provisions.
Landlord shall provide wastewater removal and
treatment services to Tenant by means of Landlord’s private, industrial sewer
system (the “Industrial Sewer”) in the
quantities and at the times reasonably requested by Tenant; provided that
Tenant shall, with respect to its use of the Industrial Sewer, promptly comply
with the requirements imposed by Landlord now or in the future on all
users of the Industrial Sewer of which Tenant is given notice, including
without limitation, the requirements set forth in the remainder of this
subsection 5(a)(viii). If permit conditions or other requirements imposed by
any governmental authority as a condition to or arising as a result of Landlord’s
providing such wastewater removal and treatment services result in increased
costs of operation to Landlord, Tenant shall reimburse Landlord for the amount
of such increased costs allocable to the service provided to the Tenant within
thirty (30) days following Tenant’s receipt of a statement from Landlord
requesting such reimbursement.
(2)
Approved Tenant Discharges.
Tenant and Landlord acknowledge that
as of the date of this Lease, Tenant’s approved discharges into the Industrial
Sewer are characterized on the Approved KWIC Profiles attached hereto as
E
XHIBIT
E
,
which provides a list of the approved discharges for each discharge point (a
“Discharge Point”) in the Building. Tenant shall not, at any time, discharge to
the Industrial Sewer at any Discharge Point any effluent in an amount or of a
type which is not authorized for such Discharge Point in
E
XHIBIT
E
,
and Tenant shall be solely responsible for removal from its wastewater of any
and all other, non-approved chemical and biological wastes, unless such
additional effluent is approved in writing by Landlord in the manner described
below. If Tenant desires to make any new discharge or any change to an approved
discharge to the Industrial Sewer at any Discharge Point, except for any change
that eliminates or reduces an approved discharge, Tenant shall provide written
notice of the proposed change to Landlord’s Health Safety and Environment
organization (“Kodak HSE Organization”), 1999 Lake Avenue, Rochester, New York
14650-2208, attention: HSE Director, Kodak Rochester Sites (or her designee).
Such notice shall be given a reasonable time prior to the proposed date of
implementation of any such proposed change. Such changes shall be implemented
by Tenant only after obtaining the prior written approval of Landlord, which
approval Landlord may withhold in Landlord’s reasonable discretion if Landlord
reasonably determines that such changes are likely to have a material adverse
impact on the Industrial Sewer. Within five (5) business days after receipt of
such notice from Tenant, Landlord shall make an initial determination regarding
whether Tenant’s proposed change may have a potential, material adverse impact
on the Industrial Sewer, and if Landlord
determines that the proposed change is not material, Landlord shall so notify
Tenant within such five (5) business day period of its approval of such change.
If Landlord determines that the proposed change has a potential material
adverse impact on the Industrial Sewer, Landlord shall use its commercially
reasonable efforts to evaluate such potential impact and notify Tenant of its
determination within thirty (30) days after receipt of such notice from Tenant.
5
(3)
Tenant Reporting and Other Obligations.
As a further condition of
Landlord’s providing Tenant the rights to use of the Industrial Sewer
hereunder, and without limiting Tenant’s compliance and reporting obligations
set forth in any other provisions of this Lease, Tenant hereby agrees that: (A)
Tenant shall promptly provide to Landlord any and all documents or information
required by Landlord and shall fully cooperate with Landlord as and when
requested to the extent necessary to allow Landlord to comply with all laws,
regulations and requirements of any
governmental authority having jurisdiction over the provision of such services at
the Premises, including those requirements imposed under the Clean Water Act
and the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 et. seq. (“CERCLA”);
and (B) Tenant shall implement and comply with applicable best management practices required by Landlord’s discharge permit
and in effect as of the Commencement Date, and any later changes to
those best management practices of which Landlord provides Tenant reasonable
and timely notices.
(4)
Additional Rights.
Tenant shall have the right to cease obtaining
wastewater treatment and removal services
from Landlord and to acquire such services from a third party at any time by
delivering written notice to Landlord at least sixty (60) days prior to the
date of termination of such services. Landlord may cease providing such
services at any time with reasonable notice if for any reason any necessary
permit or approval required by law to allow Landlord to provide wastewater
removal and treatment services shall lapse or be revoked.
(b)
Site Services to be Supplied by Landlord
. Subject to subsections (c),
(f) and (h) of this Section 5, Landlord shall provide the following services to
Tenant at the Premises:
(i)
Elevator Service
. Building elevator service, if any, shall be available
at all times, subject to reasonable maintenance requirements.
(ii)
Emergency Services; Security
. Landlord shall provide fire and explosion
prevention, pressure vessel safety, hazmat, emergency medical services and
related services with respect to the Premises (collectively, the “Emergency
Services”) at the Building throughout the Lease Term and shall also provide
perimeter security services (the “Alarm Services”) at the Building. Such
Emergency Services and Alarm Services shall be provided in the manner provided
by Landlord to, and as part of the fire and emergency protection system and
perimeter security services established by Landlord to provide Emergency
Services and Alarm Services to the operations
conducted by Landlord adjacent to the Premises in the Building and at other
buildings at Eastman Business Park. Landlord shall provide security
badges to Tenant’s employees and non employees (contractors) to access the
Premises. In addition, Landlord shall provide Tenant with fire protection
services, including emergency response and related services (“Fire Protection Services”), in the manner provided by Landlord
from time to time during the Lease Term to, and as a part of the fire
protection system established by Landlord to provide fire protection services
to, the manufacturing operations conducted in the Building and other
buildings owned by Kodak adjacent to or in
the vicinity of the Building. Notwithstanding anything else to the contrary
contained in this Lease, Landlord shall not be responsible to Tenant,
its employees or contractors for losses, injury (including personal injury) or
damage sustained by Tenant as a result of a fire, explosion or any other event
the presence of Emergency Services, Alarm Services and/or Fire Protection
Services is designed to prevent or control, except to the extent that such
losses or damages are the result of gross
negligence or willful misconduct on the part of Landlord, its agents, employees
or contractors.
6
(iii)
Trash Removal
. Landlord shall provide trash and refuse removal services
to Tenant on the same frequency as such services are provided to other
occupants of the Building, which shall consist of the removal from the Premises
by Landlord of normal quantities of trash and other non-hazardous materials
discarded by Tenant, provided that such trash and material is placed by Tenant in designated dumpsters or other
appropriate receptacles. Notwithstanding the foregoing, the parties
expressly agree that Landlord shall have no obligation to remove or dispose of
and no responsibility for any chemicals and/or any specially controlled or
regulated waste (irrespective of whether such waste is hazardous or not)
arising out of, generated or resulting from or otherwise released in connection
with Tenant’s use of and operations in the Premises, and Tenant shall be solely
responsible for the removal and disposal of all such waste. Tenant will segregate
trash as reasonably requested by Landlord
to facilitate recycling as opportunities to recycle are developed by Landlord
or required by law.
(iv)
Site and Building Maintenance
. Landlord shall maintain in good condition
and repair the exterior of the Building,
the Building’s structural, mechanical and electrical systems, and all common
areas of the Building (except for maintenance required within the Premises
which shall be the responsibility of Tenant at its sole cost and
expense), together with the Building grounds and utility delivery systems.
(v)
Snow Removal
. Landlord shall cause snow to be removed from the parking
areas and walkways adjacent to the Building to the same extent of snow removal
provided to the parking areas and walkways at or adjacent to other buildings in
EBP.
(c)
Interruptions in Service
. It is understood that Landlord does not
warrant that any of the services referred to above, or any other services which
Landlord may supply, will be free from interruption. Tenant acknowledges that
any one or more of such services may be suspended by reason of accident or of
repairs, alterations or improvements necessary to be made, or by strikes or lockouts, or by reason of operation of law, or
causes beyond the reasonable control of Landlord. No such interruption
of service shall be deemed an eviction or disturbance of Tenant’s use and
possession of the Premises, or any part thereof, or render Landlord liable to
Tenant for damages by abatement of Rent or otherwise, direct or consequential,
nor shall any such interruption relieve Tenant from performance by Tenant of
its obligations under this Lease.
(d)
Additional Work or Services
. Notwithstanding any other provisions
herein, should Tenant require any work or services other than those described
above in this Section 5, Landlord may upon advance request by Tenant furnish
such additional service and Tenant agrees to pay Landlord, within twenty (20)
days after invoice from Landlord, such charges as may be agreed on but in no event less than Landlord’s actual cost
plus overhead plus any applicable taxes imposed for the additional
services provided. Any such request shall require at least one business day’s
advance notification. Nothing in this Subsection 5(d) shall imply an obligation
upon Landlord to furnish such additional services or a restriction against
Tenant contracting with a third party, or third parties, for the provision of
such services. In the event Tenant contracts with a third party for the provision of any additional work or services,
Tenant shall pay the cost thereof directly to such third party and no overhead,
taxes or any other fee or charges shall be payable to Landlord in connection therewith.
7
(e)
Excluded Services
. Notwithstanding the foregoing, Tenant shall be
responsible for supplying and paying directly for the costs of the following:
(i)
All data and telecommunications services (including internet access and service).
(ii)
Removal, disposal and management of any hazardous waste and for all chemical
and/or specially controlled or regulated waste (irrespective of whether such is
hazardous or not) arising out of, generated
or resulting from or otherwise released in connection with Tenant’s use
of and operations in the Premises.
(iii)
Maintenance and repair of the Premises and all of Tenant’s furniture, fixtures and
equipment located within the Premises together with any necessary services
related to same.
(iv)
All mail service and package delivery in and to the Building.
(v)
Maintenance and repair of any lights and lighting fixtures within the Premises.
(vi)
Except for Building perimeter security as described above, Tenant shall be responsible for all security (including
installation and maintenance of same, subject expressly to the terms of
this Lease).
(vii)
All air handling for any industrial processes. Any changes required to the Premises or the Building as a result of such
responsibility shall be made in full compliance with the provisions of
this Lease.
(viii)
All cleaning and janitorial services necessary to keep the Premises in a clean,
neat and orderly manner.
(f)
Discontinuance of Services
. Notwithstanding the foregoing,
Landlord may elect to cease to provide one
or more of the services listed in this Section 5 to Tenant if Landlord has
ceased to provide such service to a substantial portion of the Building
and adjacent buildings in EBP, by delivering
notice of the cancellation of such service no less than six (6) months prior to
the effective date of such cancellation, provided that replacement
service or services are at such time generally available to Tenant, or if
Landlord is prohibited from providing such services to Tenant by law,
regulation or requirement of a governmental entity having jurisdiction over the
Premises by delivering notice of the
cancellation to Tenant promptly upon notice to Landlord of such application of
such law, regulation or requirement and in any event no less than twenty (20)
days prior to the effective date of such cancellation.
(g)
Charges for Services
.
(i)
Charges for Utility Services
. Tenant agrees to pay Landlord, as
Additional Rent, for the Utility Services,
the amounts of Utility Services Charges (as defined in paragraph 2 of
E
XHIBIT
D
attached hereto and made a
part hereof) computed in accordance with the provisions of such
E
XHIBIT
D
, which is entitled “Utility Services Charges”.
8
(ii)
Payments for Services and Expenses
. Landlord shall deliver to Tenant electronic or other form of statements of charges
for Utility Services Charges on or after the last day of each month
during the Lease Term for Utility Services provided by Landlord or made
available to Tenant during such month. The Utility Services Charges provided on
the statement shall be an amount equal to
the rate per unit applicable to the calendar year including the month with
respect to which the statement relates multiplied by the number of units
actually consumed by Tenant at the Building during such month or, where such
actual consumption cannot be measured, Landlord’s reasonable estimate of the number of units actually consumed by Tenant
at the Building during such month. Each such statement of charges shall be due
and payable by Tenant within twenty (20) days after receipt of the
statement.
(h)
Landlord’s Obligations Relating to Providing Utilities and Services
.
Subject to and on the terms, limitations and conditions contained in this
Section 5, Landlord shall use its reasonable efforts to supply to Tenant at the
Premises, the utilities and services listed herein. Landlord shall be
responsible for delivering such utilities and services to the point of entry at
the Premises, and Landlord shall maintain,
at Landlord’s cost and expense, all necessary infrastructure to make
such deliveries to the point of entry at the Premises.
6. W
AIVER
O
F
C
ERTAIN
C
LAIMS
Except
to the extent that the following is inconsistent with the provisions of
Sections 19 and 30, Tenant, to the extent permitted by law, waives all claims
it may have against Landlord, and against Landlord’s agents, employees and
contractors for damages for injuries to person or damage to property sustained
by Tenant or by any occupant of the Premises, or by any other person, resulting
from any part of the Premises or any equipment or appurtenances becoming out of
repair, or resulting from any accident in or about the Building or the Premises
or resulting directly or indirectly from
any act or neglect of Tenant, its employees, agents, representatives or
contractors or of any other person, except that this waiver shall not apply to,
and Landlord shall indemnify, defend and hold Tenant and its agents,
employees and contractors harmless against any damages (other than indirect or
consequential damages) for injuries to persons or damage to property to the
extent caused by or directly resulting from the gross negligence or willful
misconduct of Landlord or its employees or agents unless, with respect to
property damage, such loss is or would be covered by the standard form of all
risk property damage insurance whether or not Tenant self-insures part or all
of said coverage and whether or not such insurance would actually provide
compensation to Tenant after taking into
account deductibles and other similar policy limitations. This waiver, when
applicable, shall include not only direct damages but also claims for
consequential damages and any claims for abatement of Rent due hereunder, it
being intended that this waiver be absolute, except as otherwise
expressly provided herein.
7. I
NSURANCE
Tenant
shall, at its expense, procure and maintain during the Lease Term the following
insurance coverage which may be satisfied
by any combination of primary and excess or umbrella liability insurance
policies:
9
(a)
Workers’ Compensation
. Insurance protecting Tenant from any and
all claims under applicable Workers’ Compensation statutes or any similar
statutes or requirements.
(b)
Employer’s Liability
. Employer’s Liability coverage with a limit
of liability not less than
O
NE
H
UNDRED
T
HOUSAND
D
OLLARS
($100,000.00).
(c)
Commercial General Liability
. Commercial General Liability Insurance covering
all claims of damages for all injuries, including death and all claims
on account of property damage with a limit
of liability not less than
F
IVE
M
ILLION
D
OLLARS
($5,000,000.00)
per occurrence and aggregate,
combined single limit for bodily injury (“BI”) and property damage (“PD”). Such
commercial general liability insurance
shall include coverage of the contractual liability assumed in this
Lease. Tenant shall have the right to insure and maintain the liability
insurance coverages set forth in this paragraph 7(c) using any combination of
primary and excess coverage and under blanket insurance policies covering other
premises occupied by Tenant so long as such blanket policies comply as to terms
and amounts with the insurance provisions set forth in this Lease; and Landlord
shall be named as an additional insured on each such policy.
(d)
Comprehensive Automobile Liability
. Comprehensive Automobile
Liability Insurance with respect to any and
all owned, hired and non-owned vehicles to be used by Tenant or any
agent, employee, representative or subcontractor of Tenant on or about the
Premises or in connection with the use of property or any other real property
owned by Landlord with a limit of liability
not less than
O
NE
M
ILLION
D
OLLARS
($1,000,000.00)
combined single limit BI and PD, naming
Landlord as an additional insured. Notwithstanding the foregoing, if and for so
long as Tenant is not the registered owner
or lessee of any vehicles, Tenant may satisfy the requirements of this
Section 7(d) by providing liability coverage with a limit of liability of not
less than
O
NE
M
ILLION
D
OLLARS
($1,000,000.00)
with
respect to non-owned vehicles only, and such coverage may be obtained as
part of Tenant’s commercial general liability policy instead of in a separate
policy.
(e)
All Risk Property Damage
Insurance
. All risk property
damage insurance covering all personal property of Tenant at the
Premises, including equipment, machinery, stock, supplies and leasehold
improvements for the full replacement value of such property. It is understood
and agreed that Landlord shall have absolutely no liability or responsibility
for any damage or loss occurring to Tenant’s personal property.
(f)
Requirements
. The primary insurance required to be maintained
hereunder shall be maintained under policies issued by insurers rated not less
than A in Best’s insurance reports or a comparable rating in an equivalent
insurance report and which are licensed to do business in the State of New York
and being of recognized responsibility. Tenant’s policies shall:
(i)
Name Landlord as additional insured on the commercial general and any excess
liability policy required hereunder;
(ii)
Use commercially reasonable efforts to provide for thirty (30) days’ notice to
Landlord prior to any amendment, change, modification, lapse or cancellation of
coverage; and
(iii)
Be written on an “occurrence” basis and as primary policy coverage and not
contributing with or in excess of any coverage which Landlord may carry.
10
(g)
Certificates
. Tenant shall furnish Landlord with a certificate of
insurance within ten (10) days before the Commencement Date showing the
coverage required and thereafter such evidences
of coverage shall be furnished by Tenant to Landlord not less than ten (10)
days prior to the expiration date of each such policy.
(h)
Third Parties
. If Tenant contracts with any third party to perform any
services or permits such a third party to conduct any activity of any kind at
the Premises, Tenant shall direct such third party to maintain insurance in the
types and amounts reasonably sufficient to protect Landlord and Tenant from any
and all liabilities and damages. The amount of such insurance carried by any
third party shall not limit Tenant’s liability hereunder. Tenant shall be
responsible for the consequences of any
failure of any such third party to maintain such insurance, and Tenant shall
indemnify, defend and hold Landlord harmless from each and every claim for
liability for injuries to persons or damage to or loss of property occurring at
the Premises due to any act or negligence by Tenant’s contractors or agents.
(i)
No Limitations on Liability
. The liability of Tenant and Landlord or any
third parties relating to either Landlord
or Tenant shall not be limited to the insurance required to be maintained
as part of this Lease.
8. M
UTUAL
R
ELEASE
A
ND
W
AIVER
O
F
S
UBROGATION
Landlord
and Tenant hereby waive on behalf of themselves and their respective insurers,
any claims that either actually may have against the other for loss or damage
to their respective property resulting from perils covered by the standard form
of all risk property damage insurance, including vandalism and malicious
mischief coverage. It is understood that this waiver is intended to extend to
all such loss or damage whether or not the same is caused by the fault or
neglect of either Landlord or Tenant and
whether or not insurance is in force. If required by policy conditions, each
party shall secure from its property insurer a waiver of subrogation
endorsement to its policy, and deliver a copy of such endorsement to the other
party to this Lease if requested.
9. H
OLDING
O
VER
If
Tenant fails to vacate the Premises (or any portion thereof) on the Expiration
Date, then Tenant shall pay Landlord Base Rent at 150% of the monthly rate then
in effect immediately prior to such holdover period as specified in Section 4
for the time Tenant thus remains in possession. Tenant shall also indemnify and hold Landlord harmless from and against
any and all cost, expense, damage, claim, loss or liability resulting
from any delay or failure by Tenant in so surrendering the Premises, including
any consequential damages (including, but not limited to, (i) any rent or other
income foregone by Landlord from another tenant; (ii) any and all additional
costs incurred by Landlord in preparing the Premises or any other space for use
by another tenant or for Landlord’s own use
arising as a result of Tenant’s retention of possession; and (iii) any damages,
holdover rent charges or other amounts payable by or chargeable against
Landlord as a direct or indirect result of Tenant’s retention of
possession) suffered by Landlord and any claims made by any succeeding occupant
founded on such delay or failure, and any and all reasonable attorneys’ fees,
disbursements and court costs incurred by Landlord in connection with any of
the foregoing. The provisions of this
Section 9 do not exclude Landlord’s rights of re-entry or any other right or remedy
of Landlord hereunder.
11
10. A
SSIGNMENT
A
ND
S
UBLETTING
(a)
Prohibition
. This Lease may not be assigned or the Premises or
any part thereof sublet or used or occupied by any third party, nor may Tenant
otherwise transfer the Lease or any rights to use the Premises (including any
transfers by operation of law, including by merger of Tenant with or into
another entity, or transfers of the majority of any stock of any corporate Tenant
or any majority partnership or limited
liability company interests of any partnership Tenant) without the prior
written consent of Landlord, which consent may be granted or withheld by
Landlord in its sole discretion. An
assignment by Tenant of this Lease or a sublease of any portion of the Premises
to a wholly-owned direct or indirect subsidiary of Tenant may be
effected without Landlord’s consent. Any attempted transfer of this Lease in
contravention hereof shall be null and void. Notwithstanding
the foregoing, Tenant shall be entitled to assign this Lease or sublet all or
any part of the Premises at any time without the consent of Landlord to
any person or entity controlling, controlled by or under common control with
Tenant. No transfer of this Lease shall operate to release Tenant from its
obligations under this Lease.
(b)
Requirements
. If Tenant desires to assign, sublease or
otherwise transfer any right or interest in and to the Lease or the
Premises, or any right to occupy the Premises, to any party, Tenant shall
notify Landlord in writing of such proposed assignment, sublease or transfer.
Such notice shall include a copy of the proposed written assignment, sublease
or other agreement of transfer and such other information concerning the proposed
assignment, sublease or transfer as Landlord
may request. If Landlord grants its consent to such assignment, sublease or
other transfer, Tenant shall promptly provide Landlord with a fully executed
copy of the final assignment, sublease or other agreement of transfer.
(c)
Deemed Assignment/Sublet
. For purposes of this Section 10 the following
shall be deemed an assignment or sublease, as the case may be, subject to the
requirements of this Section:
(i)
the transfer of more than thirty percent (30%) of the outstanding capital stock
of any corporate tenant or subtenant or any increase in the amount of
issued and/or outstanding shares of capital
stock and/or the creation of one or more additional classes of common stock of
any corporate tenant or subtenant with the result that the beneficial and
record ownership in and to such tenant or subtenant changes by more than
thirty percent (30%) from the beneficial and record ownership as of the
Commencement Date, or the transfer of more than thirty percent (30%) of any
partnership interest in Tenant or any subtenant, if Tenant or subtenant is a
partnership, however accomplished, whether in a single transaction or in a
series of related or unrelated transactions;
(ii)
any agreement by any other person or entity directly or indirectly, to assume Tenant’s
obligations under this Lease;
(iii)
any transfer or series of transfers, by operation of law or otherwise, of Tenant’s interest in this Lease, including
without limitation the transfer of this Lease to a subsidiary or
affiliate of Tenant and the subsequent transfer of stock or other ownership
interest in such subsidiary or affiliate; and
12
(iv)
each modification, amendment or extension of any sublease to which Landlord
has previously consented shall be deemed a new sublease.
(d)
Tenant agrees to furnish Landlord
upon demand at any time, such information and assurances as Landlord may
reasonably request that neither Tenant, nor any previously permitted subtenant,
has violated the provisions of this Section.
(e)
Rights of Landlord Upon Subletting
. If, with the consent of
Landlord, the Premises or any part thereof shall be sublet or occupied by
anyone other than Tenant, Landlord may, after default by Tenant, collect rent
from the subtenant or other occupant, and apply the net amount collected to the
Rent herein reserved. If, without the consent of Landlord, the Premises or any
part thereof shall be sublet or occupied by
anyone other than Tenant, Landlord may collect rent from the subtenant
or other occupant, and apply the net amount collected to the Rent herein
reserved, provided, however, that no such
collection shall be deemed a waiver by Landlord of the requirement to
obtain its consent to such sublease or other occupancy nor an acceptance by
Landlord of such sublease or other occupancy. In neither of the foregoing
circumstances shall Tenant be relieved from
its obligations under the Lease or from further performance by Tenant of any
covenants on the part of Tenant herein contained.
(f)
Rights of Landlord Upon
Assignment
. If this Lease or any
interest herein is validly assigned under this Section 10 to another
party, such assignment shall not relieve Tenant from its obligations under the Lease or from further
performance by Tenant of any covenants on the part of Tenant herein
contained, and Tenant shall at all times remain directly and primarily
responsible therefor.
(g)
Review and Approval Costs
. Tenant agrees to pay to Landlord, on
demand, the reasonable out-of-pocket costs incurred by Landlord in connection
with any request by Tenant for Landlord to
consent to any assignment or subletting by Tenant, including reasonable
attorneys’ fees.
11. U
SE
O
F
P
REMISES
Landlord
and Tenant agree to comply with the following provisions regarding the use of
the Premises.
(a)
Compliance with Law.
(i)
Generally
. Tenant shall comply in all material respects with the
covenants, agreements, terms, provisions and conditions of this Lease and any
mortgage on the Premises of which Tenant has actual knowledge and any
applicable public law, ordinance or governmental regulation (including, without
limitation, all environmental laws, rules, regulations or orders relating to
the Premises). Tenant shall not make or permit to be made any use of the
Premises or any part thereof that would
reasonably be likely to be dangerous to life, limb, or property, or which would
reasonably be likely to invalidate or increase the premium of any policy of
insurance carried on the Building, the Premises or covering its operation.
Tenant shall not use or permit the Premises or any part thereof to be used in
any manner, nor shall it permit anything to be brought into or kept therein
which, in the reasonable judgment of Landlord, would in any way impair the
character, reputation or appearance of the
Premises as a high quality facility or which would materially impair
13
or interfere with any of the services performed by
Landlord for the Premises. Tenant agrees to change, reduce or stop any such use
or install at its expense necessary equipment, safety devices, pollution
control systems or other installations at any time during this Lease to comply
with the foregoing upon the written request of Landlord. Tenant shall have the
right, upon written notice to Landlord, to contest the application of any such
legal or other requirement to Tenant or its operations at the Premises,
provided that Tenant shall pursue such contest with due diligence and also
provided that Tenant shall indemnify, defend and hold Landlord harmless from
any costs, penalties, losses, liabilities
or other damages incurred or suffered by Landlord arising from Tenant’s violation
or alleged violation of any of the requirements of this subsection 11(a).
(ii)
Health, Safety and Environmental Issues
. Tenant agrees to comply with
all health, safety and environmental rules
and regulations of Landlord of which written notice has been provided to Tenant
and of any governmental entities and/or regulatory agencies having jurisdiction
over the Premises. Tenant agrees to designate, by written notice to
Landlord, a representative who shall have authority to participate in facility
meetings and other meetings of Landlord with respect to health, safety and
environmental issues in the Building and at EBP. Such representative shall also
serve as the contact person for any governmental entity (including any
regulatory agencies) which has need to identify a contact person for such
health, safety and environmental issues. Tenant shall maintain reasonably
detailed records (and, subject to confidentiality and privilege considerations,
make same available to Landlord upon reasonable request for same) relating to
inventories of chemicals used and/or stored on or about the Premises and
tracking records pertaining thereto. In no event shall the foregoing constitute
Landlord’s consent to the use and/or storage of any such chemicals and Tenant
is expressly prohibited from using the Premises for any purposes (including
storage) which involve any processes and/or materials (including, but not limited to, any chemicals) if such are deemed by
Landlord to cause additional liability to Landlord, except as otherwise
provided in Section 3(a) hereof.
(iii)
Certification of Compliance
. At the request of the Landlord, which shall
in no event occur more than once in any calendar year, an officer of
Tenant (in the case of a corporation) or such other person authorized to bind
Tenant (in the case of another form of legal entity)
shall certify in writing to Landlord that Tenant’s operations, activities and
occupancy of the Premises are in full compliance with all applicable federal,
state and local laws, orders, regulations and ordinances. Any
exceptions, deviations or non-compliance shall be identified in such
certificate, together with a detailed description of Tenant’s plan for
remedying such non-compliance.
(b)
Rules
. Tenant shall comply and shall cause all of its
agents, contractors, employees, visitors and any others using the Premises to
comply with the “Site Requirements” attached hereto as
E
XHIBIT
C.
Landlord hereby advises Tenant that the “Kodak Representative”
(as defined in the Site Requirements) is
Donna Simonds (585-477-3635), subject to change by Landlord upon written notice
to Tenant.
(c)
Signs
. Tenant shall not display, inscribe, print,
paint, maintain or affix on any place on the exterior of the Building nor on
the land on or adjacent to which the Building is located, any sign, notice,
legend, direction, figure, or advertisement display materials without first
obtaining the written approval of Landlord, which shall not unreasonably
be withheld. In addition to the foregoing, Landlord shall provide, at Landlord’s
cost and expense, a listing of Tenant’s business name on the Building directory, if any. All such signs must comply
fully with all applicable laws, rules and regulations of any
governmental authority.
14
(d)
Alterations
.
(i)
Prohibitions and Limitations on Same
. Tenant shall not make any
alterations, improvements, or additions of or to the Premises
(collectively, “Alteration”) without Landlord’s advance written consent in each
and every instance, which consent shall not be unreasonably withheld; provided,
however, Tenant shall not require Landlord’s consent to make de minimus
alterations, such as painting or installing carpeting, or to make any other
alterations not affecting any Building
system or the structure of the Building that, on an individual project basis,
do not cost in excess of
T
WENTY
F
IVE
T
HOUSAND
D
OLLARS
($25,000.00).
Notwithstanding the foregoing, Tenant shall require Landlord’s consent for any
Alteration proposed by Tenant that calls for any modification to the
foundation, structural or mechanical components (including the heating,
ventilating, air conditioning, plumbing, electrical, fire protection, sprinkler
and fire alarms systems including the fire
walls and fire doors), and Landlord shall have the right to withhold its
consent for any reason or no reason to such Alterations. Any Alteration in or
to the fire protection systems, fire alarms, sprinkler systems and/or
fire walls and fire doors shall expressly require the prior written consent and approval of any insurance company of
Landlord (and may be given or withheld for any reason or no reason) and must be
in full compliance with all rules and regulations of such company. The parties
hereto agree that Landlord may reasonably withhold its consent to a proposed
Alteration requiring Landlord consent if such Alteration is not
consistent, in Landlord’s reasonable judgment, with Landlord’s internal
aesthetic, engineering, insurance and construction standards and the standards
of Landlord’s property insurance company for the Building or other buildings
owned by Landlord (if any) adjacent to the Building. In the event Tenant
desires to make any Alteration that requires Landlord’s consent hereunder,
Tenant shall first submit to Landlord plans and specifications therefor for
Landlord’s review as part of Landlord’s determination of whether to approve the
Alteration pursuant to this subparagraph 1 l(d)(i). In addition, any
contractor(s) which Tenant intends to engage in the making of any Alteration
shall be subject to Landlord’s prior approval which shall not be unreasonably
withheld. Any contractor, agent and/or subcontractor hired by Tenant must maintain insurance at the levels, of the types,
with the companies and subject to conditions reasonably required by
Landlord, which insurance requirements shall be delivered in writing by
Landlord to Tenant at the time of delivery of Landlord’s consent, if such
consent is delivered. Tenant shall indemnify, defend and hold Landlord harmless
from each and every claim for liability for
injuries to persons or damage to or loss of property occurring at the Premises
due to any act or negligence by Tenant or Tenant’s contractors,
subcontractors or agents.
(ii)
Additional Requirements
. Each Alteration must comply fully with all laws
and be performed in a good and workmanlike manner. Landlord must be advised of
any requests for permits or governmental applications made or filed by Tenant
prior to such filings. Upon Tenant’s request, and at Tenant’s sole cost and
expense, Landlord shall cooperate in connection with the securing of any such permits or the filing of any such
governmental applications. Each and every Alteration, whether temporary
or permanent in character, made by Landlord or Tenant in or upon the Premises
shall become Landlord’s property (with the exception only of Tenant’s movable
office furniture, trade fixtures, office and professional, manufacturing and
process equipment) and shall remain upon the Premises at the expiration or
earlier termination of this Lease without compensation to Tenant unless
Landlord notifies Tenant in writing, at the time of Landlord’s
15
consent to the Alteration, that such Alteration must
be removed upon the expiration or termination of
the Lease. Tenant shall remove such Alteration as herein required upon such
expiration or earlier termination, repair any damage caused by such
removal and restore the Premises to the condition specified in Section 34 of
this Lease. Notwithstanding anything to the contrary herein provided, Landlord and Tenant intend and agree that during
the Lease Term any Alteration shall be treated as the property of Tenant for
accounting and income tax purposes such that Tenant shall be entitled to deductions,
if any, for depreciation or amortization of such Alterations, excluding,
however, any Alteration funded by Landlord which shall be owned by and treated
as the property of Landlord.
(e)
Security
. If during the Lease Term Tenant (subject to compliance
with Section 11(d)) desires to install a separate security system to
accommodate Tenant’s use of the Premises, Landlord
shall cooperate with Tenant in accomplishing the same, provided however, that
Landlord shall not be required to accommodate such improvements or
systems if they would materially interfere with such Landlord’s conducting
business at the Building or the Premises and further provided that Tenant shall be responsible for the entire cost of the
design, installation and operation thereof.
(f)
Energy Conservation
. Tenant shall comply with any applicable federal
laws, rules, ordinances or administrative enactments on energy
conservation, and shall cooperate with reasonable energy conservation programs
voluntarily implemented by Landlord in the Building notice of which shall be provided to Tenant, to the extent that such
programs do not materially and adversely affect Tenant’s conduct of the
Business.
(g)
Nuisance
. Tenant shall not use, keep or permit the Premises to be
occupied or used to cause an unreasonable nuisance or in a manner offensive or
objectionable to Landlord and/or other
occupants of the Building or adjacent facilities owned by Landlord by reason of
noise, odors and/or vibrations, or interfere in any way with Landlord’s
business, nor shall any animals (except service animals) or birds be brought in
or kept in or about the Premises.
In
addition to any liability for breach of any covenant of this Section, Tenant
shall pay to Landlord an amount equal to any increase in insurance
premiums payable by Landlord, caused by such breach, default or carelessness on
the part of Tenant.
12. R
EPAIRS
Tenant
shall maintain the Premises in good condition (ordinary wear and tear and loss
or damage due to a casualty not required to be restored by Tenant excepted) and
shall, subject to the terms of Section 12
herein, repair any damage to the Premises occurring on or after the date
hereof, other than any repairs which are the responsibility of Landlord
hereunder, as expressly provided herein. Tenant shall be responsible for prompt
maintenance and repair of all leasehold improvements within the Premises and
Tenant’s furniture and fixtures located within or about the Premises. In
addition, Tenant shall be responsible for any maintenance and repair to the
Premises required as a result of the
negligent use or misuse of the Premises by Tenant or Tenant’s employees, agents,
contractors or invitees; provided that any such maintenance or repair required
hereunder to be made by Tenant to the Premises shall be subject to the Landlord
approval requirements applicable to
alterations as provided in Section 11 (d), and further provided that Landlord,
as part of such approval, may elect
to perform such maintenance or repair itself, at Tenant’s cost (to be paid as additional
rent within twenty (20) days after receipt of an invoice therefor.
16
13. D
ESTRUCTION
O
F
P
REMISES
If
the Building shall be damaged by fire or other casualty and such damage
prevents Tenant from using the Premises in substantially the same manner as it
was used prior to such casualty or damage,
and such damage is not repaired by Landlord within ninety (90) days after the
date of such fire or casualty (or, in the case of damage the repair of
which reasonably requires more than ninety (90) days, if Landlord has not
commenced such repair or is not proceeding with reasonable diligence under the
circumstances to complete such required repairs) or if such damage cannot
reasonably be repaired or restored within one hundred eighty (180) days after
the date of such fire or casualty, Tenant or Landlord shall have the right to
terminate this Lease by written notice to the other delivered not more than one
hundred and twenty (120) days following the occurrence of the damage. If
Landlord elects not to seek to repair such damage, but does not simultaneously
elect to terminate the Lease, Landlord
shall notify Tenant of its election not to repair within thirty (30) days after
the date of such fire or casualty, and Tenant’s right to terminate this Lease
shall begin upon receipt of such notice from Landlord. In the event of any such
termination, with respect to any portion of the Premises which was not damaged,
Tenant shall be required to comply with all of the other requirements of this Lease relating to the termination, cancellation
or expiration of this Lease, including without limitation the
requirements of Section 34 relating to surrender of the Premises. From the date of the casualty until the effective
date of such termination, the Rent shall be abated by multiplying the Rent
then due by a fraction the numerator of which shall be the number of square
feet of the Premises which is not usable and in fact is not used by Tenant and
the denominator of which shall be the total number of square feet of the
Premises. In the event, however, that such damage is due to the gross
negligence or willful misconduct of the Tenant, Tenant’s servants, employees,
agents, visitors or licensees, there shall be no apportionment or abatement of
Rent.
If
the Building shall be damaged by fire or other casualty and neither Tenant nor
Landlord elects to terminate this Lease, as provided above, Landlord, at its
sole cost and expense, shall promptly
repair or reconstruct the damage to the Building and Tenant, at its cost and
expense, shall promptly repair or reconstruct any damage to Tenant’s
leasehold improvements, alterations or modifications to the Premises made after
the Commencement Date. Until such time that the damage is substantially
repaired, the Rent shall be abated by multiplying the Rent then due by a
fraction the numerator of which shall be the number of square feet of the
Premises which is not usable and in fact is
not used by Tenant and the denominator of which shall be the total number of
square feet of the Premises. In the event, however, that such damage is due to
the gross negligence or willful misconduct of the Tenant, Tenant’s
servants, employees, agents, visitors or licensees, there shall be no
apportionment or abatement of Rent.
14. C
ONDEMNATION
If
the Premises or any part thereof shall be taken by any public or private
authority through condemnation or eminent domain, Landlord shall immediately
notify Tenant in writing. The entire amount of any condemnation award related
to the value of the Premises shall be the property of and
17
payable to Landlord. Nothing herein shall preclude
Tenant from pursuing any claims it may have against
the condemning authority based upon the value of its personal property taken or
other costs incurred by Tenant (such as relocation costs) associated
with such taking of the Premises.
If
such taking reduces the square feet of the Premises by a material amount
(whether by a single taking or a series of takings), Tenant or Landlord may
terminate this Lease at any time by written
notice to the other to be given within ninety (90) days after the effective
date of the taking. As used herein, the term “material amount” means
that the portion taken shall, in the reasonable opinion of Landlord and/or
Tenant, be so significant that the remaining portion of the Premises cannot be used in substantially the same manner
by Tenant as was used prior to such taking. In the event of such
termination by Tenant, with respect to any portion of the Premises which was
not taken as part of the condemnation, Tenant shall be required to comply with
all of the other requirements of this Lease relating to the termination,
cancellation or expiration of this Lease, including without limitation the
requirements of Section 34 relating to surrender of the Premises.
15. C
ERTAIN
R
IGHTS
R
ESERVED
T
O
LANDLORD
Landlord
reserves the following rights:
(a)
Pass Keys
. To have pass keys to the Premises at all times.
(b)
Exhibition
. On reasonable prior notice to Tenant, and at times
which result in minimal business disruption
to Tenant, to exhibit the Premises to prospective tenants and to any prospective
purchaser, mortgagee, or assignee of any mortgage on the Premises and to others
having a legitimate interest during the Lease Term.
(c)
Access for Repairs
. At any time and without notice in the event
of an emergency, and otherwise upon reasonable notice and at reasonable times,
to enter and/or to cause its representatives to enter onto the Premises to take
any and all measures, including inspections, repairs,
alterations, additions and improvements to the Premises, as may be necessary or
desirable for the safety, protection or preservation of the Premises,
the Building or the land on which the Building
is located, or Landlord’s interests, or as may be necessary or desirable in the
operation or improvement of the Premises, the Building s or the land on
which the Building is located, or in order to comply with all laws, orders and
requirements of governmental or other authority.
(d)
Other Access
. At any time and without notice in the event of an
emergency, and otherwise upon reasonable
notice and at reasonable times, to enter onto the Premises to inspect or repair
any portions of the Premises which are used by Landlord in connection with the
continuing operation of its business.
16. L
ANDLORD’S
R
EMEDIES
All
rights and remedies of Landlord herein enumerated shall be cumulative, and none
shall exclude any other right or remedy allowed by law. In addition to the
other remedies in this Lease provided, Landlord shall be entitled to the
restraint by injunction of any material violation or attempted material violation of any of the covenants, agreements or
conditions of this Lease, subject
18
to any applicable written notice
and opportunity to cure and further provided that the nature of the material
violation is one that could reasonably be expected to endanger the health or
safety of the Building occupants or occupants of any adjoining
buildings.
(a)
Bankruptcy; Re-organization
. If Tenant shall (i) apply for or
consent to the appointment of a receiver, trustee or liquidator of Tenant or of
all or a substantial part of its assets, (ii) admit in writing its inability to
pay its debts as they come due, (iii) make a general assignment for the benefit
of creditors, (iv) file a petition or an answer seeking reorganization or
arrangement with creditors or to take advantage of any insolvency law other
than the federal Bankruptcy Code, or (v) file an answer admitting the material
allegations of a petition filed against Tenant in any reorganization or
insolvency proceeding, other than a proceeding commenced pursuant to the
federal Bankruptcy Code, or if any order, judgment or decree shall be entered
by any court of competent jurisdiction,
except for a bankruptcy court or a federal court sitting as a bankruptcy court,
adjudicating Tenant insolvent or approving a petition seeking
reorganization of Tenant or appointing a receiver, trustee or liquidator of
Tenant or of all or a substantial part of its assets, and Tenant is unable to
restore its financial position, stay any bankruptcy proceeding or cure any of
the aforementioned events of default within sixty (60) days after such
occurrence, then, in any such event and upon the passage of sixty (60) days
thereafter, Landlord may give to Tenant a written notice of intention to end
the Lease Term specifying a day not earlier than ten (10) days thereafter, and
upon the giving of such notice the Lease Term and all right, title and interest
of Tenant hereunder shall expire as fully and completely on the day so
specified as if that day were the date herein specifically fixed for the
expiration of the Lease Term.
(b)
Default in Tenant Obligations
. If Tenant defaults in the payment
of Rent and such default continues for five (5) days after written notice, or,
except as otherwise provided in this Section 16 hereof, defaults in the prompt
and full performance of any other provision of this Lease and such default
continues for thirty (30) days after written notice, or if such default cannot
be cured within thirty (30) days, Tenant does not commence to cure such default
within thirty (30) days and diligently pursue the same to completion
thereafter, or if the leasehold interest of Tenant be levied upon under
execution or be attached by process of law and such levy or attachment is not
removed or bonded within thirty (30) days thereafter, or if Tenant ceases to
pay Rent hereunder for a period in excess of thirty (30) days, then and in any
such event Landlord may, at its election, either terminate the Lease and
Tenant’s right to possession of the Premises, or without terminating this
Lease, endeavor to relet the Premises. Nothing herein shall be construed so as
to relieve Tenant of any obligation, including the payment of Rent, as provided
in this Lease, provided that if Landlord
relets all or any portion of the Premises, all rent and additional rent
collected by Landlord pursuant to such reletting shall be applied
against any ongoing obligation of Tenant hereunder for the payment of Rent.
(c)
Surrender of Possession; Landlord’s Right to Re-Enter
. Upon any
valid termination of this Lease, Tenant shall surrender possession and vacate
the Premises immediately, and deliver possession
thereof to Landlord, all in the manner that the Premises is to be surrendered
as provided in Section 34 hereof, and hereby grants to Landlord full and
free license to enter into and upon the Premises
to repossess Tenant of the Premises as of Landlord’s former estate and to expel
or remove Tenant and any others who may be occupying or within the
Premises and to remove any and all property
therefrom, using such force as may be reasonably necessary, without being
deemed in any manner guilty of trespass, eviction or forcible entry or
detainer, and without relinquishing
19
Landlord’s right to Rent or any other right given to
Landlord hereunder or by operation of law, except
as otherwise expressly provided herein. Any costs incurred by Landlord in
connection with Landlord’s re-entry into the Premises, Landlord’s
removal of Tenant’s property therefrom, and Landlord’s performance of any
obligations of Tenant under Section 34 hereof in connection with such re-entry,
shall be payable by Tenant to Landlord as Additional Rent hereunder.
(d)
Damages and Acceleration
. If Landlord elects to terminate this
Lease for any of the reasons specified in this Section 16 of the Lease, it
being understood that Landlord may elect to terminate the Lease after and
notwithstanding its election to terminate Tenant’s right to possession as in
Section 16(b) Landlord shall forthwith upon such termination be entitled to
recover as damages and not as a penalty, an
amount equal to the then present value of the Rent provided in this Lease
for the residue of the stated Lease Term, less the present value of the fair
rental value of the Premises for the
residue of the stated Lease Term. The discount rate used to calculate present
value shall be five percent (5%).
(e)
Landlord’s Right to Perform Tenant’s Obligations
. Tenant agrees
that if it shall at any time fail to make any material payment to a third party
other than Landlord or its designee or fail
materially to perform any other act on its part to be made or performed under
this Lease beyond any applicable notice and cure period, Landlord may,
but shall not be obligated to, and after reasonable
written notice or demand and without waiving, or releasing Tenant from, any
obligation under this Lease, make such payment or perform such other act
to the extent Landlord may deem desirable, and in connection therewith,
Landlord may pay expenses and employ counsel. If legal action is required to
enforce performance by Tenant of any condition, obligation or requirement
hereunder, the costs of such action including reasonable attorneys’ fees will
be paid solely by the party not prevailing in such action. All sums so paid by
Landlord and all expenses incurred by Landlord in connection therewith
(provided that Landlord is the prevailing party in any such legal action),
together with interest thereon at the maximum rate permitted by law from the
date of payment, shall be deemed Additional Rent hereunder and payable at the
time of any installment of Rent thereafter becoming due and Landlord shall have
the same rights and remedies for the non-payment thereof, or of any other
Additional Rent, as in the case of default in the payment of Rent.
(f)
Tenant’s Personal Property
. Any and all property to which Tenant
is or may be entitled which may be removed from the Premises by Landlord
pursuant to the authority of the Lease or of applicable law upon termination of
the Lease or upon default by Tenant after any applicable
notice and cure period, may be handled, removed or stored by Landlord at the
risk, cost and expense of Tenant, and Landlord shall in no event be responsible
for the value, preservation or safekeeping thereof. Tenant shall pay to
Landlord, upon demand, any and all expenses incurred in such removal and
all storage charges against such property. Any such property of Tenant not removed from the Premises or retaken from storage
by Tenant within thirty (30) days after the end of the Lease Term or of
Tenant’s right to possession of the Premises, however terminated, shall be conclusively
deemed to have been forever abandoned by Tenant and either may be retained by
Landlord as its property or may be disposed of in such manner as Landlord may
see fit.
20
17. L
ATE
C
HARGE
In
the event Tenant fails on two separate occasions during the Term to pay any
installment of Base Rent or Additional Rent on the day when due and payable,
then during the balance of the Term and with respect to any subsequent
installment of Rent not received by Landlord by the fifth (5th) business day after the due date, a late
charge will be due and owing in an amount equal to five percent (5%) of
the then unpaid monthly Base Rent or Additional Rent. Such late charge shall be
billed by Landlord to Tenant with the Rent
for the calendar month next following and shall be paid by Tenant
together with the Rent due for such month.
18. S
UBORDINATION
O
F
L
EASE
The
rights of Tenant under this Lease shall be and are subject and subordinate at
all times to all ground leases, and/or underlying leases, if any, now or
hereafter in force against the Premises, and to the lien of any mortgage or
mortgages now or hereafter in force against such leases and/or the Premises, and to all advances made or
hereafter to be made upon the security thereof, and to all renewals,
modifications, consolidations and replacements thereof. This Section 18 is
self-operative and no further instrument of subordination is required.
In confirmation of such subordination, however, Tenant shall promptly execute
such further instruments as may be reasonably requested by Landlord, provided that no such document increases, in any material
respect, Tenant’s monetary obligations or liability under the Lease or
decreases, in any material respect, Tenant’s rights under the Lease. Tenant, at
the option of any mortgagee, agrees to attorn to such mortgagee in the event of
a foreclosure sale or deed in lieu thereof.
19. E
NVIRONMENTAL
R
ESPONSIBILITIES
(a)
Indemnification
. To the extent that any violation of applicable
Environmental Law (as hereinafter defined) or the environmental condition
requiring remediation under such law arose out
of Tenant’s use of or operation at the Premises occurring after the
Commencement Date, Tenant shall indemnify, defend and hold Landlord, its
affiliates, and, if applicable, their respective directors, officers,
shareholders, partners, attorneys, accountants, agents and employees and their
heirs, successors and assigns harmless from and against any claims, losses,
liabilities, charges, actions, suits,
proceedings, deficiencies, taxes, interest, penalties and reasonable costs and
expenses (including, without limitation, reasonable attorneys’ fees,
removal costs, remediation costs, closure costs, fines, penalties and expenses
of investigations and ongoing remediation) arising from (i) any violation or
alleged violation of applicable Environmental Law, including, without
limitation, any operations, actions or omissions by Tenant which would cause
the Building or the site in which the Building
or the Premises is located as a whole (or any part thereof) to be out of
compliance with any such Environmental Law, or (ii) any requirement to
remediate under applicable Environmental Law (arising during the Lease
Term or thereafter) any environmental condition to the extent arising out of
Tenant’s use of or operations at the Premises imposed or required by either a
governmental authority having appropriate jurisdiction thereof, including
without limitation those requirements imposed under CERCLA or by a third party.
21
(b)
Reporting Requirements
. Tenant agrees to promptly report to
Landlord (and, as required by law, to any
regulatory agency) any release at the Premises by Tenant at the time Tenant first
becomes aware thereof of any hazardous substance as defined in or required to
be reported under any federal, state and
local laws, including, but not limited to, CERCLA and any other release which
is required to be reported under Landlord’s written protocol for the reporting
of such releases at the Building or the site within which the Premises is
located, as such written protocol is modified from time to time and
which protocol has been delivered to Tenant. In addition, Tenant shall provide
Landlord, with copies of any and all material correspondence between Tenant and
any environmental regulatory agencies of
any federal, state or local governmental authorities relating to a
violation or alleged violation of applicable Environmental Law. Tenant shall
not perform any environmental testing or remediation at or of the Premises
without obtaining Landlord’s prior written consent, which Landlord may withhold
in its sole discretion; provided, however, that nothing herein shall prevent
Tenant from complying with applicable law or requirements of any governmental
agency. Any testing required of Tenant under the proviso in the immediately
preceding sentence shall, at Landlord’s option, be subject to Landlord’s
control. Tenant shall provide Landlord with a complete copy of the results of
any such tests and any reports analyzing such results.
(c)
Environmental Permits
. Tenant, at Tenant’s sole cost and expense,
shall be responsible to obtain and maintain in place all permits and
notifications required by applicable Environmental
Law with respect to waste, air emissions or other materials discharged as a
result of any of Tenant’s manufacturing or other processes conducted at
the Premises. Tenant shall provide to Landlord, within ten days of a request by
Landlord, all information reasonably requested by Landlord with respect to such
permits. Tenant shall also notify Landlord within ten days of any changes made to any such permits currently in
force or obtained by Tenant in the future. Landlord, at the sole cost and
expense of Tenant, shall reasonably cooperate to assist Tenant, as necessary,
in securing the transfer, amendment or re-issue of existing
environmental permits and in obtaining new environmental permits in order for
Tenant to operate the Business.
(d)
Survival
. The provisions of this Section 19 shall survive
the expiration or earlier termination of this Lease.
(e)
Environmental Law
. “Environmental Law” means any Law concerning
the protection of human health as it
relates to Hazardous Substances exposure, the environment, worker safety
as it relates to Hazardous Substance exposure, or the use, storage, recycling,
treatment, generation, transportation, arrangement for transportation,
processing, handling, labeling, management, release or disposal of any
Hazardous Substance.
(f)
Hazardous Substance
. “Hazardous Substance” means any substance
that is listed, defined, designated or classified as hazardous, toxic or
otherwise harmful or as a pollutant or contaminant
under applicable Environmental Laws including petroleum products and
byproducts, asbestos-containing material, polychlorinated biphenyls and
radon.
(g)
Law
. “Law” means any law, statute, ordinance, rule, regulation,
code, order, judgment, injunction or decree
enacted, issued, promulgated, enforced or entered by a government entity
or self-regulatory organization.
22
20. L
ANDLORD’S
A
CCESS
A
ND
A
SSESSMENT
R
IGHTS
(a)
Landlord’s Right of Access for Health, Safety and Environmental
(“HS&E”) Compliance
. Landlord shall have the right to enter on the
Premises and any part thereof, after reasonable notice and at reasonable times,
to engage in any activities reasonably required by Landlord to ensure the
compliance of the Premises with applicable health, safety and/or environmental
laws, regulations, licenses and permits and any State or Federal order or agreement
entered into by Landlord relating to the Premises, including the performance of
any such activities required to be performed by Tenant hereunder or under
applicable laws or regulations. Landlord shall use all reasonable efforts to
minimize any disruption to Tenant’s business. In the event of a release or other health, safety or environmental
emergency at the Premises, Landlord shall have the right to enter the
Premises for purposes of responding to such release or emergency without giving
Tenant notice in advance. If Landlord is required by law, regulation, ordinance
or any order of any governmental authority to grant to any federal, state or
local government, or agency thereof, access to the Premises, then such
government or governmental agency shall have such right of access notwithstanding anything to the contrary in the
Lease, and the exercise of such access right shall not constitute a
breach of this Lease or an eviction from the Premises.
(b)
Landlord’s Rights to Perform
Health, Safety and Environmental Assessments of the Premises
.
Landlord, acting through its employees, agents or contractors, shall have the
right to enter upon the Premises for the purpose of conducting a health, safety
and environmental assessment of all or any
part thereof. To the extent Landlord in its sole discretion does not claim an enforceable
attorney-client privilege for any reports of such assessment, copies of any
reports prepared by Landlord summarizing the results of such assessment shall
be made available to Tenant. Tenant shall notify Landlord reasonably in advance
of any scheduled or unscheduled visit to or
inspection of the Premises or any other portion thereof by representatives of
any federal, state or local regulatory agency, and Tenant and Landlord shall
supply to each other copies of any correspondence which either may have with
any such regulators relating to noncompliance or subsurface contamination
issues at the Premises. Landlord shall have no liability to Tenant, its
employees, agents or any other party, associated with Landlord’s performance of
any assessment conducted by or on behalf of
Landlord as contemplated herein, except for any negligence or willful misconduct
of Landlord or Landlord’s agents or contractors and neither shall Landlord have
any responsibility to actually conduct an assessment at any time during the
Lease Term, and Landlord shall have no
liability to Tenant, its employees, agents or any other party for the failure
of Landlord to conduct any such assessment.
(c)
Inspection of Premises
. Landlord and its authorized
representatives shall have the right, at any time and without notice in the
event of an emergency, and otherwise upon reasonable notice and at reasonable times, to enter and/or to cause its
representatives to enter onto the Premises or any part thereof, to engage in
any activities deemed reasonably necessary by Landlord including, but
not limited to, inspections, measurements, repairs, alterations, additions and
improvements to the Premises, as may be necessary or desirable for the safety,
protection or preservation of the Premises or Landlord’s interests, or as may
be necessary or desirable in the operation or improvement of the Premises or in
order to comply with all laws, orders and requirements of governmental or other
authority. Landlord shall attempt to minimize any disruption to Tenant’s
business. The exercise of the access rights granted to Landlord and its
representatives hereunder shall not constitute a breach of this Lease or an
eviction from the Premises.
23
21. N
OTICES
A
ND
C
ONSENTS
All
notices, demands, requests, consents or approvals (collectively, “Notice”)
which may or are required to be given by either party to the other shall be in
writing and shall be deemed given if by personal delivery upon the party for
whom it is intended on the day so delivered, if delivered by registered
or certified mail, return receipt requested, on the third business day
following such mailing, if delivered by a
national courier service on the next business day following such mailing, any
such Notice mailed or delivered to the following:
if
to Tenant:
|
|
|
Natcore
Technology, Inc.
|
|
87
Maple Avenue
|
|
Red
Bank, NJ 07701
|
|
Attention:
Charles R. Provini
|
with
a copy to:
|
|
|
Tagliaferro
& LoPresti, LLP
|
|
45
Broadway, Suite 2200
|
|
New
York, NY 10006
|
|
Attention:
Marc LoPresti
|
if
to Landlord:
|
|
|
Eastman
Kodak Company
|
|
343
State Street
|
|
Rochester,
New York 14650-1265
|
|
Attention:
Real Estate Lease Management Office
|
with
a copy to:
|
|
|
Eastman
Kodak Company
|
|
343
State Street
|
|
Rochester,
New York 14650-0218
|
|
Attention:
General Counsel
|
The
parties may by written notice to the other designate a different person or
entity to receive notices hereunder and/or
a different address or addresses. If the term Tenant as used in this Lease
refers to more than one person any Notice given as aforesaid to any one of such
persons shall be deemed to have been duly given to Tenant.
22. L
OCKS AND
K
EYS
No
additional locks or similar devices shall be attached to any exterior door or
window at the Premises or in the Building without Landlord’s prior written
consent and no keys for any exterior door other than those provided by Landlord
shall be made. If Landlord consents to the installation of additional locks or
similar devices, Tenant shall provide Landlord with copies of keys, electronic access or other access through
such devices. If more than two keys for one lock are desired, Landlord
will provide same upon payment by Tenant. All keys must be returned to Landlord
at the expiration or termination of this Lease.
24
23. I
NVALIDITY
O
F
P
ARTICULAR
P
ROVISIONS
If
any clause or provision of this Lease is or becomes illegal, invalid, or
unenforceable because of present or future law or any rule or regulation of any
governmental body or entity, effective
during the Lease Term, the intention of the parties hereto is that the
remaining parts of this Lease shall not be affected thereby unless such
invalidity is essential to the rights of either party in which event a suitable and equitable provision
shall be substituted therefore in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable provision and the remainder of this Lease and the
application of such provision shall not be affected by such invalidity
or unenforceability.
24. C
ONFIDENTIALITY
In
the course of performance under this Lease, either party or its employees may
receive information from the other party which is identified by the disclosing
party as confidential, is prominently marked as confidential or which the
receiving party otherwise knows or has reason to know is confidential
information of the disclosing party. The receiving party shall take all reasonable steps to safeguard such confidential
information and shall not disclose it to others except with the written
consent of the disclosing party or to the extent that such disclosure is
required by law, in which case the
receiving party shall first notify the disclosing party of the legal
requirement so that the disclosing party may seek to take action to
challenge the application of such legal requirement.
25. M
ISCELLANEOUS
T
AXES
Tenant
shall pay prior to delinquency all taxes assessed against or levied upon its
occupancy of the Premises, or upon the fixtures, furnishings, equipment
and all other personal property of Tenant located in the Premises other than
those furnished and paid for by Landlord, if nonpayment thereof shall give rise to a lien on the real estate, and when possible
Tenant shall cause said fixtures, furnishings, equipment and other
personal property to be assessed and billed separately from the property of
Landlord. In the event any or all of Tenant’s fixtures, furnishings, equipment
and other personal property, or upon
Tenant’s occupancy of the Premises, shall be assessed and taxed with the property
of Landlord, Tenant shall pay to Landlord its share of such taxes within twenty
(20) days after delivery to Tenant by
Landlord of a statement in writing setting forth the amount of such taxes applicable
to Tenant’s occupancy or fixtures, furnishings, equipment or personal property.
Landlord shall pay any and all real estate taxes assessed and levied against
the Premises, in each case prior to the respective delinquency dated thereof.
If such taxes may be paid in installments, Landlord shall have the right to do
so.
26. B
ROKERAGE
Except
for CB Richard Ellis/Rochester (the “Broker”), Tenant and Landlord represent
and warrant that they have dealt with no other broker, agent or other
real estate sales person in connection with
this Lease and that no other broker, agent or such other person brought about
this transaction. Tenant and Landlord agree to indemnify and hold each
other harmless from and
25
against any claims by any other broker, agent or other
real estate sales person claiming a commission
or other form of compensation by virtue of this Lease or of having dealt with
Tenant or Landlord with regard to this leasing transaction and should a
claim for such commission or other compensation be made it shall be promptly
paid or bonded by the party who has dealt with the person or entity making such claim. The provisions of this Section 26
shall survive the termination of this Lease. Landlord shall pay the
Broker pursuant to the terms of a separate agreement.
27. F
ORCE
M
AJEURE
Except
as to the payment of Rent or other monies due under this Lease, neither party
shall be responsible for delays or inability to perform its obligations
hereunder for causes beyond the reasonable
control of such party including acts of other tenants, governmental
restriction, regulation or control, labor dispute, accident, mechanical
breakdown, shortages or inability to obtain labor, fuel, steam, water,
electricity or materials, acts of God, enemy action, civil commotion, or fire
or other casualty which are beyond the reasonable control of such party.
28. P
ARKING
Tenant
and its employees, invitees, and guests may use, in common with, and on a basis
and in a manner consistent with the use by such other tenants and
occupants of the Building and other buildings at EBP on a non-designated,
non-reserved basis in the lot known as Lot 71. The parking areas described herein are shown on
E
xhibit
B
attached hereto and made a part hereof. Any use of the parking areas shall be
in strict compliance with all reasonable rules and regulations of Landlord, provided
that such rules are consistently applied to Tenant and other occupants of the
Building, shall be at the cost per parking space (if any) established from
time-to-time by Landlord and consistently
applied to Tenant and other occupants of the Building, and shall be expressly
at the sole risk of Tenant and its employees, invitees, and guests.
29. I
NDEMNIFICATION
Subject
to the provisions of Section 19, which shall control to the extent applicable:
(a)
By Tenant
. Except to the extent caused by the gross negligence or
intentional misconduct of Landlord or to the extent of the claims otherwise
waived by Landlord in Section 8 hereof,
Tenant covenants and agrees, at its sole cost and expense, to indemnify,
protect, defend and save harmless Landlord from and against any and all
damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, actions, proceedings, costs, disbursements
and/or expenses (including, without limitation, reasonable attorneys’ and
experts’ fees, expenses and disbursements) of any kind or nature whatsoever
which may at any time be imposed upon,
incurred by or asserted or awarded against Landlord, its affiliates and, if
applicable, their respective directors, officers, shareholders,
partners, attorneys, accountants, agents and employees
and their heirs, successors and assigns relating to, resulting from or arising
out of (i) any act or omission by Tenant or its employees, contractors,
subcontractors, agents or guests, (ii) any breach or default by Tenant in
performance or observance of its representations, warranties, covenants or
obligations under this Lease, and (iii) Tenant’s possession, operation,
maintenance, repair of the Premises or the
failure of Tenant to operate, maintain or repair the Premises, in each case
to the extent required hereunder.
26
(b)
By Landlord
. Except to the extent caused by the negligence or
misconduct of Tenant and except to the
extent of the claims otherwise waived by Tenant in Section 8 hereof, and except
as otherwise set forth in Section 5 hereof, Landlord covenants and
agrees, at its sole cost and expense, to indemnify, protect, defend and save
harmless Tenant from and against any and all damages, losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, judgments,
suits, actions, proceedings, costs, disbursements and/or expenses (including,
without limitation, reasonable attorneys’ and experts’ fees, expenses and
disbursements) of any kind or nature whatsoever which may at any time be
imposed upon, incurred by or asserted or awarded against Tenant, its affiliates
and, if applicable, their respective directors, officers, shareholders,
partners, attorneys, accountants, agents and employees and their heirs,
successors and assigns relating to, resulting from or arising out of (i) any
breach or default by Landlord in performance or observance of its representations, warranties, covenants or
obligations under this Lease, (ii) any act or omission by Landlord or
its employees, contractors, subcontractors, agents or guests, or (iii)
Landlord’s maintenance and repair of the
Premises or the failure of Landlord to maintain or repair the Premises, in
each case to the extent required hereunder.
(c)
Indemnification Limitations
. The foregoing indemnification of
Landlord set forth above shall be expressly inapplicable to and have no force
and effect with respect to the Alarm Services to be provided by Landlord to the
Building pursuant to the terms herein and shall be further expressly
inapplicable to and have no force and effect with respect to the Emergency
Services to be provided by Landlord to the Building pursuant to the terms
herein. With respect to both the Emergency Services and Alarm Services,
Landlord agrees to make reasonable efforts to provide all such necessary
Emergency Services and/or Alarm Services at or to the Building. However, Tenant hereby expressly agrees to hold
Landlord harmless from and against any failure to provide, successfully
deliver or otherwise deliver any and all such Emergency Services and Alarm
Services at or to the Building. It is understood, agreed and expressly
bargained for between the parties to this Lease, that the failure of Landlord
to provide and/or successfully deliver any or all such Emergency Services
and/or Alarm Services shall result in no liability to or responsibility of
Landlord, its affiliates and, if applicable, their respective directors,
officers, shareholders, partners, attorneys,
accountants, agents and employees and their heirs, successors and assigns for
any claims, losses, damages, costs, expenses, fees (including, but not
limited to expert and attorneys’ fees), charges, injuries or damage to persons
or property howsoever and wheresoever caused.
(d)
Consequential Damages
. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS LEASE, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER UNDER THE TERMS OF OR AS A
RESULT OF THE VIOLATION OF THIS LEASE, INCLUDING WITHOUT LIMITATION A VIOLATION
BY LANDLORD OF ITS DUTIES WITH RESPECT TO THE PERFORMANCE OF SERVICES
PURSUANT TO SECTION 5 HEREOF, FOR ANY INDIRECT, CONSEQUENTIAL OR INCIDENTAL
DAMAGES, INCLUDING LOSS OF GOODWILL OR LOSS OF PROFITS.
27
30. S
PECIAL
S
TIPULATIONS
(a)
No Extension
. No receipt of money by Landlord from Tenant after
the termination of this Lease or after the service of any notice or after the
commencement of any suit or after final judgment
for possession of the Premises shall reinstate, continue or extend the Lease
Term or affect any such notice, demand or suit or imply consent for any
action for which Landlord’s consent is required.
(b)
No Waiver
. No waiver of any default of Tenant or of Landlord
hereunder shall be implied from any omission by Landlord or Tenant, as the case
may be, to take any action on account of such default if such default persists
or be repeated, and no express waiver shall affect any default other than the default specified in the express waiver and
that only for the time and to the extent therein stated.
(c)
Landlord
. The term “Landlord” as used in this Lease, so far as
covenants or agreements on the part of the
Landlord are concerned, shall be limited to mean and include only the owner
or owners of Landlord’s interest in this Lease at the time in question, and in
the event of any transfer or transfers of
such interest, Landlord herein named (and in case of any subsequent transfer, the
then transferor) shall be automatically freed and relieved of any claims
arising from and after the date of such transfer of all liability from events
which occur after the date transfer. Any such release of Landlord under this
section shall become effective only at such time as Landlord’s transferee is
deemed to be bound to the terms and provisions of this Lease. It is understood,
however, that Landlord shall reimburse Tenant for any overpayment of Rent made
by Tenant prior to the assignment and any prepayment of Rent for months
subsequent to the assignment.
(d)
Waiver of Trial by Jury
. It is mutually agreed by and between
Landlord and Tenant that the respective parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other or any matters whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant’s use or occupancy of the
Premises, and any emergency statutory or other statutory remedy.
(e)
Waiver of Right of Redemption
. Tenant hereby expressly waives any
and all rights of redemption granted by or under any present or future laws in
the event of Tenant being dispossessed or
removed from the Premises because of default by Tenant pursuant to the
covenants or agreements contained in this Lease.
(f)
Review of Lease
. The parties acknowledge that each party and its
respective counsel have reviewed this Lease and that no rule of construction to
the effect that any ambiguities are to be resolved against the drafting
party shall be employed in the interpretation of this Lease or any amendment or
exhibits hereto.
31. Q
UIET
E
NJOYMENT
Except
as otherwise provided herein, so long as Tenant shall observe and perform the covenants and agreements binding on it hereunder
and shall not be in default beyond any applicable grace period, Tenant shall at
all times during the Lease Term peacefully and quietly have and enjoy possession
of the Premises without any encumbrance or hindrance by, from or through
Landlord.
28
32. E
STOPPEL
C
ERTIFICATE
Landlord
and Tenant agree that from time to time upon not less than fifteen (15) days
prior request of the other, to deliver to the party making the request a
statement in writing certifying (a) that
this Lease is unmodified and in full force and effect (or if there have been
modifications that the same is in full force and effect as modified and
identifying the modification), (b) the dates to which the Rent and other
charges have been paid, and (c) that, so far as the person making the certificate knows, the other party is not in
default under any provision of this Lease, or if such were not to be the
fact, then certifying such default of which the person making the certificate
may have knowledge, it being understood that any such certificate so delivered
may be relied upon by any landlord under any ground or underlying lease, or any
prospective purchaser, lender, mortgagee, or any assignee of any mortgage on
the Premises or any party purchasing the assets of Landlord or Tenant, as the
case may be, or acquiring the same by merger, succession or otherwise.
Notwithstanding the foregoing, Tenant shall have no right to assign this Lease
or permit the use or occupancy of the Premises except in strict accordance with
the provisions of this Lease.
33. S
URVIVAL
O
F
T
HE
P
ARTIES
’ O
BLIGATIONS
Except
with respect to the duties, responsibilities, obligations and indemnities
described in Section 19 of this Lease, all obligations, indemnities, covenants,
agreements and warranties (the “Responsibilities”) of Tenant and Landlord
hereunder to the extent that they require action prior to the termination or
earlier cancellation of this Lease shall survive the expiration or earlier
termination of this Lease, such that to the extent that Tenant or Landlord
shall have failed to perform or comply with
any of such Responsibilities prior to such expiration or earlier cancellation,
such party’s obligation to complete and perform such Responsibility arising
prior to such expiration or cancellation date shall in no way be
eliminated or affected by the occurrence of such expiration or cancellation.
Section 19 of this Lease shall not be terminated or cancelled, and shall not
expire with the remainder of this Lease, but the parties intend that the
duties, responsibilities, obligations and
indemnities contained in Section 19 shall continue to apply after such
termination, cancellation or expiration until all of such duties,
responsibilities, obligations and indemnities have been fulfilled.
34. S
URRENDER
O
F
T
HE
P
REMISES
Upon
the Expiration Date, Tenant shall surrender possession of the Premises to
Landlord, broom clean and in good condition,
reasonable wear and tear and damage from fire or other casualty excepted.
In addition, Tenant shall remove (i) all utility drops, wireways, piping and
other similar infrastructure to the nearest main junction box or shut-off
valve, to the extent that any of the foregoing
is required to operate Tenant’s equipment at the Premises or otherwise, in
connection with the operation of Tenant’s Business at the Premises, (ii)
all tenant improvements to the Premises made by Tenant after the Commencement
Date if so requested by Landlord at the time of Landlord’s consent to such
improvement, (iii) all of Tenant’s equipment and machinery, and (iv)
29
any other personal property
owned by Tenant, from the Premises no later than the Expiration Date. In
addition, upon such termination, cancellation or expiration of this Lease,
Tenant shall be responsible for the costs
of all closure and post-closure activities which may be required by law or applicable
regulatory authority arising from Tenant’s use of the Premises for the conduct
of Tenant’s business or Tenant’s surrender of the Premises. If Tenant shall
fail to comply with the requirements of
this Section 34 regarding the removal from the Premises on the Expiration Date
of those items referenced in clauses (i) through (iv) herein, Tenant
shall be deemed to have failed to vacate the Premises and as a result shall be
subject to the provisions of Section 9 hereof regarding “Holding Over,” provided, however, that if Tenant commences the removal
of such property on or prior to the Expiration Date, and diligently
pursues the same to completion as soon as reasonably practicable thereafter,
but in no event more than ten (10) days after the Expiration Date then, provided, further, that Tenant otherwise complies
with all of its obligations under this Lease during such period
(including the payment of all Rent due hereunder on a per diem basis during
such period of compliance with the requirements of this Section 34), Tenant
shall not be deemed to be “Holding Over.”
35. A
UTHORITY
Tenant and Landlord each warrant and represent that
their respective representatives executing this Lease have full power and
authority to execute this Lease on behalf of Tenant and Landlord, respectively, and that this Lease, once executed by the
signatory of Tenant or Landlord, as the case may be, shall constitute a
legal and binding obligation of that party and is fully enforceable in
accordance with its terms.
36. M
ECHANIC’S
L
IENS
Tenant
shall indemnify and save harmless Landlord against all loss, liability, costs,
reasonable attorneys’ fees, damages or interest charges as a result of any
mechanic’s lien or any other lien filed against the Premises as a result of any
act or omission or as a result of any repairs, improvements, alterations or
additions made by Tenant or its agents or employees. Tenant shall, within
thirty (30) days of the filing of any such lien and notice given to Tenant,
remove, pay or cancel such lien or secure the payment of any such lien or liens
by bond or other acceptable security.
Landlord, at its option, may, but shall not be required to, upon expiration of
the thirty (30) day period, pay the lien or bond at its discretion
without inquiring into the validity thereof, and Tenant shall forthwith reimburse Landlord for the total expense
incurred by Landlord in discharging or bonding the lien as additional
rent hereunder, together with interest at the maximum rate permitted by law.
37. M
ISCELLANEOUS
(a)
Captions
. The captions of this Lease are for convenience
and reference only and in
no way define, limit or describe the scope or intent of this Lease, nor in any
way affect this Lease.
(b)
Exhibits
.
E
XHIBIT
A, E
XHIBIT
B, E
XHIBIT
C, E
XHIBIT
D and E
XHIBIT
E
are attached hereto and are part of this Lease.
30
(c)
Binding Effect
. The covenants and agreements herein contained
shall bind and inure to the benefit of Landlord, its heirs, legal
representatives, transferees, successors and assigns, and Tenant, its heirs,
legal representatives, permitted transferees, successors and assigns.
Notwithstanding the foregoing, Tenant shall have no right to assign this Lease
or permit the use or occupancy of the Premises except in strict accordance with
the provisions of this Lease.
(d)
Capitalized Terms
. All capitalized terms not defined in this Lease
shall have the meaning assigned to them herein.
(e)
Counterparts
. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
(f)
Landlord’s Occupancy of Building
. It is understood that Landlord
may occupy portions of the Building in the conduct of Landlord’s business. In
such event, all references herein to other tenants of the Building shall be
deemed to include Landlord as an occupant.
38. S
ECURITY
D
EPOSIT
.
On
or before the Commencement Date, Tenant will deposit with Landlord the sum of
S
IX
T
HOUSAND
S
EVENTY
N
INE
A
ND
50/100 DOLLARS ($6,079.50)
as security for the full and faithful performance of every provision of
this Lease to be performed by Tenant. If Tenant defaults with respect to any
provision of this Lease, including but not limited to the provisions relating
to the payment of Rent, Landlord may use, apply or retain all or any part of
this security deposit for the payment of any Rent or any other sum in default
or for the payment of any other amount which, Landlord may spend or become
obligated to spend by reason of Tenant’s default. If any portion of said
deposit is to be used or applied, Tenant shall, within five (5) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount and Tenant’s failure to do
so shall be a breach of this Lease. Landlord shall not, unless otherwise required by law, be required to keep this security
deposit separate from its general funds. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the
security deposit or any balance thereof shall be returned to Tenant (or, at
Landlord’s option, to the last transferee of Tenant’s interest hereunder) at
the expiration of the Lease term and upon Tenant’s vacation of the Premises. In
the event the Building is sold, the security deposit will be transferred to the
new owner.
31
I
N
W
ITNESS
W
HEREOF
,
Landlord and Tenant have respectively signed this Lease as of the day
and year first above written.
E
ASTMAN
K
ODAK
C
OMPANY
, L
ANDLORD
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By:
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Name:
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Brad kruchten
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Title
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Senior Vice President
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N
ATCORE
T
ECHNOLOGY
, I
NC
., T
ENANT
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By:
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Name:
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Charles Provini
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Title
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President and CEO.
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32
E
XHIBIT
A
Floor
Plans Showing Location of Premises
33
E
XHIBIT
B
Map
Showing Location of Building
(including designated parking areas)
34
E
XHIBIT
C
Site
Requirements
35
E
XHIBIT
D
Utility Services Charges
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1.
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Fully Burdened Charge Rates
. In
consideration for the Utility Services consumed at the Building, Tenant shall pay the Fully Burdened
Charge Rates, all as more fully described in this Section 1 and in
Section 5 of this
E
XHIBIT
D,
of producing and providing the Utility Services
and delivering the Utility Services to the Premises. In particular, the
parties agree that for this purpose, in recognition of the fact that
Tenant is the only occupant of any portion
of the clean room space in the Building, Tenant shall be deemed to have
consumed at the Premises, and therefore shall be responsible for, one
hundred percent (100%) of the cost of
Utility Services delivered to the entire clean room space in the Building
(the “Clean Room Area”), of which the Premises is a part. Landlord’s
computation of Fully Burdened Charge Rates for purposes of computing Utility
Services Charges (as defined below) hereunder shall be performed consistently
from year to year, but allowing reasonable modifications to the method of
cost allocations based upon usage.
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2.
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2012 Charges
. For Services
provided during any portion of calendar year 2012, the following estimated
rates shall apply to determine the estimated charges for the Utility Services (the “Utility Services Charges”),
subject to adjustment as provided in Sections 3 and 4 of this
E
XHIBIT
D
below:
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S
ERVICES
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2011 E
STIMATED
S
ERVICES
C
HARGE
R
ATES
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140# Steam
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$15.91 per million BTU
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Low Pressure Steam
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$13.13 per million BTU
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Electricity
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$88.55 per mWh
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Waste Water Treatment and Industrial
Sewer
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$2.65 per thousand gallons
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Demineralized Water
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$4.33 per thousand gallons
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Kodak Water
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$0.94 per thousand gallons
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Chilled Water
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$4.68 per ton-day
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Compressed Air
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$0.51 per thousand scf
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Nitrogen
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$3.33 per thousand scf
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Tenant’s consumption of each of the above listed
Utility Services shall be determined by existing
meters measuring the Utility Services delivered to the Clean Room Area;
provided, however, that if at any time during the Lease Term any of
such meters are not functioning properly, then Tenant’s consumption shall be
computed in accordance with the reasonable estimate of Landlord.
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3.
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Determination of Estimated Utility
Services Charge Rates.
Once each calendar year during the
Lease Term (beginning with estimates for calendar year 2012), Landlord shall complete its estimated annual operating plan
charge rates for each of the Utility Services and shall submit to
Tenant a schedule of estimated Utility Services Charge rates for the next
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36
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succeeding (or then-current, as the case may be)
calendar year in substantially the same format
as detailed in paragraph 2 above, which shall constitute the estimated Fully
Burdened Charge Rate per unit of the Utility Services for the next
succeeding (or then-current, as the case may be) calendar year. Tenant’s
payments of estimated Utility Services Charges due hereunder on a monthly
basis during such succeeding year shall be computed using such estimated
Utility Services Charges rates. Landlord shall use its commercially
reasonable efforts to submit such proposed schedule of Utility Services
charges to Tenant for each calendar year by December 1 of the preceding year.
Landlord may at any time or from time to time furnish to Tenant a revised
estimate and, in such case, the Utility Services Charge rates for the
remainder of the applicable calendar year shall be based upon such revised
rates.
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4.
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Energy Price Adjustment to Utility
Services Charges.
As soon as practical after the expiration
of each calendar year during the Lease Term (beginning with December 31, 2012), Landlord shall reconcile its estimated
Fully Burdened Charge Rates against its actual Fully Burdened Charge Rates
computed using Landlord’s actual, allocated costs incurred in providing
the Utility Services. Once such reconciliation has been accomplished,
Landlord shall give Tenant a statement comparing Tenant’s Utility Services
Charges computed using such actual Fully
Burdened Charge Rates to the amounts paid by Tenant as estimated Utility Services
Charges during the prior calendar year. If the estimated Utility Services
Charges paid by Tenant are less than Tenant’s Utility Services Charges computed
using actual Fully Burdened Charge Rates
as reported in accordance with the preceding sentence, Tenant shall pay any
such shortfall within twenty (20) days after receipt of an invoice from
Landlord for same. If such estimated Utility Services Charges paid by
Tenant are more than Tenant’s Utility Services Charges computed using actual
Fully Burdened Charge Rates, Landlord shall credit Tenant with any such
overpayments against Utility Services Charges thereafter becoming due during
the next calendar year of the Lease Term or, if such reconciliation is made
after the expiration hereof, Landlord shall refund any such overage to Tenant
within twenty (20) days after determination of same.
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5.
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Definition of Fully Burdened Charge
Rates.
The term “
Fully Burdened Charge Rate
”
represents the total cost per unit to provide a Utility Service. The intent
is to assign to Utility Services all
direct utilities division costs (including, but not limited to, direct labor
at average labor rates, fuel costs, direct supervision, depreciation,
benefits, travel and related costs, service-related training, utility
regulatory compliance costs, any direct third party costs incurred to provide the Utility Services and fuel hauling and
waste hauling incurred to provide the Utility Services) as well as a
reasonable estimate of overhead. Overhead includes the necessary costs to
support the provision of Utility Services including, but not limited to, indirect labor, building occupancy
costs, information technology costs, site costs and supplies. Actual
material purchase prices are used to charge direct materials to a product or
Utility Service.
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37
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Methodology
.
Landlord will use a methodology similar to the following to calculate the
Fully Burdened Charge Rates to provide Utility Services:
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1.
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Direct utilities division costs will be allocated to
Utility Services being provided using appropriate and available cost drivers
or based on an effort study to determine
the portion of the total effort in a cost center utilized to provide
each of the Utility Services.
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2.
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An allocation of overhead to the Utility Services
being provided will be added to the total
direct costs allocated to a Utility Service as provided above. For
purposes of this Agreement, the allocation of overhead to a Utility Service
shall be twenty-five percent (25%) of the total direct costs allocated to the
Utility Service hereunder.
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3.
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Fully Burdened Charge Rates are equal to the sum of
direct costs as determined in A. and
allocated overhead as determined in B, divided by the total
forecast/actual distributed units of each Utility Service.
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38
E
XHIBIT
E
KWIC
Profiles
39
Exhibit “A”
Natcore
First Floor, Building 308
4,053.21 Sq Ft
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Buildoig
Code
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Floor Code
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Room Code
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Room
Area
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Room Categor
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Room Type
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Division Code
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308-KP
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01
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135
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2,652.76
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MFG
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CLNRM
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NATCORE
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308-KP
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01
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135A
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62.34
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MFG
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CLNRM
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NATCORE
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308-KP
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01
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139
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422.24
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OFF
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CLOSED
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NATCORE
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308-KP
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01
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136B
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57.91
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MFG
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CLNRM
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NATCORE
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308-KP
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01
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137
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160.69
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MFG
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CLNRM
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NATCORE
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308-KP
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01
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136
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697.27
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MFG
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CLNRM
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NATCORE
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4,053.21
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Overall Total
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40
E
XHIBIT
B
Map Showing Location of Building
(including designated parking areas)
41
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Jennifer
S. Ramsey
Licensing Contract Administrator
National Renewable Energy Laboratory
303-275-4435
Jennifer.Ramsey@nrel.gov
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Charles Provini
Natcore Technology, Inc.
87 Maple Avenue
Redbank, NJ 07701
RE: Signed License Agreement
Between NREL and Natcore Technology
Dear
Mr. Provini,
Enclosed,
please find a signed copy of the Exclusive Patent License Agreement between
NREL and Natcore Technology, Inc.,
for your records. A copy will be sent to Tagliaferro & LoPresti LLP
as well.
Please
feel free to contact me at (303) 275-4435 or at
jennifer.ramsey@nrel.gov
if you have any questions.
Regards,
Jennifer S. Ramsey
National Renewable Energy Laboratory
1617 Cole Blvd,MS5230
Golden, CO 80401
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1617 Cole Blvd. • Golden, CO 80401-3305 • (303)
275-3000 • NREL is a national laboratory of the U.S. Department of Energy
Office of Energy Efficiency & Renewable Energy, operated by the Alliance
for Sustainable Energy, LLC
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EXCLUSIVE PATENT LICENSE AGREEMENT
Between
Alliance for Sustainable Energy, LLC
And
NATCORE TECHNOLOGY INC.
This
License Agreement (hereinafter “Agreement”), which shall be effective on the
date it is executed by the last
Party to sign (the “Effective Date”), below is between Alliance for Sustainable
Energy, LLC (hereinafter “Alliance”),
Management and Operating Contractor for the National Renewable Energy Laboratory (hereinafter “NREL”)
located at 1617 Cole Blvd., Golden, Colorado 80401 and
NATCORE TECHNOLOGY INC.,
(hereinafter
“Licensee”), a company incorporated pursuant
to the laws of the Province of British Columbia and having an office located at
located at 47 Club Way, Red Bank, New
Jersey, USA, 07701, hereinafter referred to individually as “Party” and jointly
as “Parties”. This Agreement shall be effective on the date the last Party
signs this Agreement (hereinafter “Effective Date”).
BACKGROUND:
Alliance
manages and operates NREL under authority of its Prime Contract No. DE-AC36-08GO28308 (hereinafter “Prime Contract”) with the
United States Government as represented by the Department of Energy
(hereinafter “DOE”);
Researchers
at NREL have developed certain inventions pertaining to the production of silicon wafers using a nanocatalytic wet-chemical
etch (collectively hereinafter referred to as “Black Silicon”), as part of their employment at NREL,
and which were conceived or first reduced to practice in the performance of work at NREL under the above Prime
Contract. Pursuant to the terms of
the Prime Contract and existing laws of the United States, Alliance acquired
rights in and to the patent rights covering such inventions;
Licensee
is a research and development company located in State of New Jersey, and as applicable, has worked closely with NREL on the
development of certain applications related to black silicon, and
related projects;
Licensee
is interested in acquiring certain rights to Alliance’s Inventions and plans
develop and commercialize a line of
products related to the production of Black Silicon based on such inventions and in combination with Licensee’s
proprietary intellectual property and patents;
The
Parties intend to, or have entered into a Cooperative Research and Development Agreement
related to this Agreement to develop commercial prototypes that embody the
Inventions; and
Alliance
is willing to grant such rights so that the Inventions will be developed and be
used to the fullest extent possible for the benefit of the general
public.
TERMS & CONDITIONS:
THEREFORE,
in consideration of the foregoing premises, covenants and agreements contained
herein, the Parties agree to be bound as follows:
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1. Definitions.
1.1
“Licensed
Patents” means Alliance’s United States and foreign patents and patent applications that are
protected as NREL Protected Information under 35 U.S.C. §205. The Licensed
Patents are listed in Exhibit A, “Licensed Patents” which is hereby
incorporated into this Agreement by reference. Any United States and foreign
patents issuing from the patent applications and that will be licensed by Licensee
pursuant to the terms of this Agreement listed in Exhibit A will be added to Exhibit A upon issuance.
Licensed Patents shall also include divisions, continuations (excluding
continuations-in-part claiming new subject matter), reissues, re-examinations,
substitutes, and extensions of
the patents and patent applications as they arise.
1.2
“Licensed
Product(s)” means any material, composition, or other product or service, the
manufacture, use, import, offer to sell or sale of which would constitute, but
for the license granted to Licensee herein, an infringement of a claim of the
Licensed Patents (infringement shall include, but is not limited to, direct, contributory, or
inducement to infringe).
1.3
“Affiliate”
of a Party means any person or entity that, at any time during the term of this
Agreement,
directly or indirectly controls, is controlled by, or is under common control
with such Party, where “control” means ownership of fifty percent (50%) or more
of the voting power of the outstanding voting securities (but only as long as such
person or entity meets these requirements).
1.4
“Net
Sales” means the payments and other consideration received by Licensee and its
Affiliates from the manufacture, use, sale, offer to sell or importation of
Licensed Products during a particular accounting period minus actual costs Licensee
or its Affiliates incurred due to returns of Licensed Products, freight, and excise or other
taxes (excluding income taxes) imposed on the production, sale, delivery, or use of the Licensed Products. For
non-case and partial-cash transactions, Net
Sales shall include any cash consideration received plus an amount equal to the
fair market value of the non-cash
consideration received. For sales not at arms-length (ie - sales to
Affiliates), Net Sales shall be equal to the fair market value of such Licensed
Products as when transferred in comparable arms-length transactions.
1.5
“Government”
shall mean the United States of America.
1.6
“Patenting
Costs” means any ongoing costs incurred or to be incurred, including but not limited to government
fees and attorneys’ or other legal personnel fees, in the course of preparing, filing, prosecuting and
maintaining any of the Licensed Patents, including continuations, re-examinations, reissues and appeals.
1.7
“Field of Use” means the
field of use as defined in Exhibit B, “Fields of Use and Financial
Considerations”.
1.8
“7AC
Field” means the field of (A) combination photovoltaic and solar thermal
modules that
provide both electricity and hot liquid, and/or (B) any system that uses
combination photovoltaic and solar thermal modules that provide both
electricity and hot liquid whereby the hot liquid is used for hot liquid
dehumidification. The term “hot liquid” specifically excludes hot air.
1.9
“Liquid-Phase-Deposited
Passivation” means passivation of photovoltaic cell by applying a liquid to the silicon
surface, wherein the liquid produces a surface coating layer that provides passivation, with or without subsequent
annealing steps.
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1.10
“Improvements” means any
improvements to the Licensed Inventions that (a) either directly or indirectly claim priority from the
patents or patent applications of the Licensed Inventions and (b) are conceived or first reduced to
practice during the term of this Agreement solely by Alliance employees as a result of research and
development activities for NREL and which if practiced without licensed rights
would infringe one or more claims of the patent and patent applications
covering the Licensed Inventions.
1.11
“Sublicensee” means any
non-Affiliate third party to whom Licensee has granted a Sublicense. “Sublicense” means an arms-length
agreement in which Licensee, or Alliance, as applicable:
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(a)
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grants
or otherwise transfers any of the rights granted hereunder or other rights
that are relevant to designing,
developing, testing, making, using, or selling of Licensed Products,
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(b)
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agrees
not to assert the Licensed Patents or agrees not to sue, prevent or seek a
legal remedy for the practice of same, and
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(c)
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is
under an obligation to do any of the foregoing, or to forebear from offering
or doing any of the foregoing with
any other entity, including licenses, option agreements, right of first refusal agreements, standstill agreements,
settlement agreements or other agreements.
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1.12
“Licensed Chemicals” means a Licensed
Product further comprising a chemical or gas covered by Licensed
Patents.
2. Grants.
2.1
Subject to Alliance’s rights in the
Licensed Patents and to the terms and conditions of this Agreement,
including the terms as set forth in Exhibit B, “Fields of Use and Financial Considerations”, which is attached to this
Agreement and hereby incorporated by reference, Alliance hereby grants to Licensee and its Affiliates the
exclusive right and license, subject to certain Government rights set forth below in Section 2.2., and subject to the
conditions set forth in Section 9.4,
to make, have made, use, import or sell, including but not limited to in
combination with Licensee’s
intellectual property, the Licensed Products worldwide, subject to the patent
coverage of the Licensed Patents.
2.2
The right and license granted in
Section 2.1 is subject to the following Government rights: (a) the Government
has a paid-up, royalty-free, worldwide, nontransferable, irrevocable license to practice or have practiced by or on
behalf of the Government the inventions covered by the Licensed Patents, and
(b) the DOE’s march-in rights as required by the Prime Contract and 35 U.S.C. §203.
2.3
Licensee agrees that any Licensed
Products for use or sale in the United States shall be substantially manufactured
in the United States.
2.4
Licensee shall mark all Licensed
Products made or sold in the U.S. in accordance with 35 U.S.C. §287(a) and will mark all Licensed Products
made or sold in other countries in accordance with laws and regulations then applicable in each such country.
Licensee acknowledges that it will be liable
to Alliance for infringement damages lost due to improper or defective patent
marking.
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2.5
Alliance hereby grants Licensee a
thirty (30) day right of first refusal to enter into negotiations with Alliance
to incorporate Improvements into this Agreement by amendment provided that: (a) Alliance obtains title to such
Improvements; (b) there are no pre-existing legal constraints or obligations that would prevent Alliance
from licensing Improvements to Licensee; and (c) Improvements are applicable within the Field of Use. If
Alliance and Licensee agree to incorporate such Improvements into this
Agreement, the Improvements will be added to the list of Licensed Inventions included in Exhibit A and
other negotiated terms that serve to amend this Agreement will be added
or deleted as appropriate.
2.6
Sublicenses
2.5.1
Alliance hereby grants Licensee the
right to grant Sublicenses to make, use, import and sell Licensed
Products, in the Field of Use.
2.5.2
Sublicenses shall be subject to the
requirements for substantial U.S. manufacture consistent with this
Agreement.
2.5.3
Alliance shall have the right to
deny approval of any Sublicense granted hereunder if it chooses to do so,
including the terms and conditions of the Sublicense if the grant of the
Sublicense violates a DOE policy. Licensee shall not Sublicense any rights that
are not consistent with the terms,
scope, and Field of Use of this Agreement.
2.5.4
Licensee shall provide Alliance with
a signed copy of each Sublicense it executes within fourteen (14) days
after the Sublicense is executed.
2.5.5
The Parties agree that termination of this Agreement, for any reason, shall not
affect existing Sublicenses granted
in good faith by Licensee pursuant to Section 2.5. Upon termination of this Agreement as aforesaid,
Licensee agrees that it will assign to Alliance all Sublicenses entered into by
Licensee and Sublicensees, and Alliance agrees to assume such assigned Sublicenses. Alliance will not be bound
by duties or obligations contained in Sublicenses that are not contained
in this Agreement.
2.5.6
To the extent that Licensed Patents
include any information marked “NREL Protected
Information” pursuant to this Agreement; Licensee will be required to ensure
that upon termination of
Sublicenses, Licensee will recover all such information from its Sublicensees
and return NREL Protected Information to Alliance.
2.5.7
Unless such agreement is not
permitted under the law of any country, or by precedence practice of the
European Commission, Licensee shall contractually require that each such Sublicensee not at any time, directly or
indirectly, oppose the grant of, nor dispute the validity of, nor cooperate in
any suit against, any patent or claim included in the Licensed Patents.
3. Financial Obligations and Commercialization Plan.
3.1
In consideration of the rights and license granted herein, Licensee agrees to
the provisions of Exhibit B, “Fields
of Use and Financial Considerations” and Exhibit C, “Development and Commercialization Plan”, attached to this
Agreement and hereby incorporated by reference.
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3.2
Licensee shall owe no royalties to
Alliance on any acquisitions involving Government funds if such sales reflect a discount that is
greater than or equal to the amount Licensee would owe to Alliance under this
license, because of the Government’s retained license in the Licensed Patents.
3.3
Licensee shall report the Net Sales
price paid by the purchaser for acquisitions or use of the Licensed Products involving Government funds
under the Records, Reports, and Royalty Payments Section of this Agreement. This report will also include (a) a
Government control number (if available); and (b) identification of the
Government agency for each sale.
3.4
Upon termination of this Agreement
for any reason whatsoever, Licensee shall report and pay to Alliance, within thirty (30) days of such
termination, any financial obligations including, but not limited to, fees,
payments, royalties, reimbursements, interest, and other forms of
consideration, due and owing Alliance.
4. Records, Reports, and Royalty Payments.
4.1
Licensee agrees to: (a) keep
adequate and sufficiently detailed records to enable Licensee’s financial obligations as required under
this Agreement to be readily determined; and (b) up to two (2) times per annum, forty-eight (48) hours provide such
records for inspection and copying
by Alliance’s authorized representatives, with reasonable notice, at any time
during Licensee’s regular business
hours. In the event an examination of Licensee’s records reveals an underpayment of more than five percent (5%) of the
accurate amounts due hereunder, Licensee shall pay all costs incurred by Alliance related to the examination or records
in addition to paying the balance
due, plus any applicable interest at the rate specified in Section 4.4 herein
below.
4.1.1
Licensee agrees that it shall also
provide Alliance with any additional records that Alliance reasonably
determines are necessary to verify any records that Licensee is required to generate
or maintain to fulfill the requirements listed in Exhibits B and C.
4.1.2
Licensee agrees to make any records
that it is required to generate or maintain under the terms of this Agreement
available for inspection by Alliance’s authorized representatives under the procedures provided in Section 4.1 for
three (3) years after the last royalty period to which the records
refer.
4.2
Licensee shall provide Alliance with
a written report certified by an officer of Licensee that complies with the
requirements of the Notices and Payments Section and Section 3.3 of this Agreement no later than thirty (30) days after
the end of each calendar year for the life of this Agreement that identifies the following
information for the immediately preceding calendar year: (a) all Net Sales of the Licensed Products made by
Licensee in U.S. Dollars itemized by domestic and/or foreign rights that are subject to this Agreement
including acquisitions involving Government funds and all export Net Sales, and if none to so
indicate; (b) amount of each payment due Alliance for patent costs reimbursement, upfront fees, minimum
annual royalties and continuous royalties based on Net Sales of Licensed Products. Accompanying the annual written
report will be the full payment due in U.S. Dollars, for the preceding calendar
year, pursuant to the terms of this Agreement.
4.3
Licensee shall make financial
payments to the order of Alliance in U.S. dollars in accordance with
Exhibit B and Section 4.2 above.
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4.4
If Licensee fails to make any payment to Alliance that may be required under
this Agreement within the time period
prescribed for such payment, then the unpaid amount shall bear interest at the
rate of one and one half percent (1.5%) per month, or other authorized statutory
rate, if higher, from the date when the payment was due until payment in full,
with interest, is made. Should Licensee
have need to delay a payment when due, Alliance will consider Licensee’s needs
as presented, in writing to Alliance
at the address set forth in Section 12.1, by Licensee and received by Alliance thirty (30) days before the required
reporting and payment date. Under such conditions, Alliance may, at its sole discretion, extend the
date upon which an annual payment is required.
5. Infringement by
Third Parties.
5.1
Licensee and Alliance shall promptly
give notice in writing to each other of any known actual or potential infringement of the Licensed
Patents. In the event any Licensed Patents are infringed by an unlicensed third party, Licensee and Alliance shall have
the right to abate or prevent such infringement as follows.
5.1.1
Alliance shall have the right, but
not the obligation, to take appropriate action in connection with any proceeding or suit to abate
or to prevent an infringement. Notwithstanding the foregoing, Alliance shall provide cooperation as
may be reasonably required by Licensee in connection with any such proceeding(s) commenced by Licensee. Before
commencing any action to abate or to
prevent the infringement, Alliance will first consult with the DOE, as required
by the Litigation and Claims
provision of the Prime Contract between DOE and Alliance, and in the event DOE authorizes Alliance to undertake an
infringement suit, Alliance shall further consult with Licensee to determine if Licensee also wishes to
enter into such suit. With respect to any suit brought by Alliance, Licensee shall have the right to be represented by
counsel at the suit proceedings and
to participate therein at its own cost, but shall not have the right to control
the suit. Licensee agrees to
cooperate with, and give reasonable assistance to, Alliance in abating or preventing
an infringement.
5.1.2
The cost and expenses of all suits
brought by Alliance under Section 5.1.1 above shall be equally shared by Alliance and each licensee entering
into the suit, out of any settlement
amount, damages or other monetary awards recovered in favor of Alliance.
Alliance and Licensee shall share, on
a pro rata basis, any award or judgment resulting from a suit brought by either
party pursuant to this Section 5.
5.2
Alliance and the Government shall
not be liable for any costs or losses incurred as a result of an action for infringement brought against the
Licensee as a result of Licensee’s exercise of any right granted under this Section 5, and Licensee
shall indemnify and hold Alliance, the Government, their officers, employees and agents harmless
against all liability, expenses and costs, including attorneys’ fees
incurred as a result of any such suit.
6. Representations
and Warranties.
6.1
Alliance represents and warrants
that Alliance can grant the rights, licenses, and privileges granted by
this Agreement.
6.2
Alliance represents that Alliance has
no actual knowledge of any infringement claims filed against Alliance for practicing the Licensed Patents anywhere in
the world.
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6.3
Except as set forth in this Section
6, Alliance makes
NO REPRESENTATIONS OR
WARRANTIES,
express or implied, with regard to infringement of any
Licensed Patents.
6.4
Licensee represents and warrants that
it shall not export any technical information (or the direct product thereof)
furnished to Licensee, either directly or indirectly by Alliance in the grant
of a license to the Licensed Patents, from the United States of America,
directly or indirectly without first complying
with all requirements of the Export Administration Regulations, including the requirement
for obtaining any export license, as applicable.
6.5
Licensee warrants that it will not
grant any rights inconsistent with the terms, scope and Fields of Use of
this Agreement.
6.6
Licensee agrees to indemnify, defend
and hold harmless Alliance, DOE and the Government, its officers, agents and employees from all liability
involving the violation of such export regulations, either directly or
indirectly, by Licensee.
6.7
Licensee acknowledges it may be
subject to criminal liability under U.S. laws for Licensee’s failure to
obtain any required export licenses.
7. Limitations of Warranties, Indemnification and Insurance.
7.1
Neither NREL, Alliance, the DOE, the
Government nor persons acting on their behalf will be responsible for any injury to or death of persons, or damage to
or destruction of any property, or
for any other loss, damage, or injury of any kind whatsoever resulting from
Licensee’s manufacture, use,
importation or sale of the Licensed Patents, or Licensed Products, in whatever form furnished hereunder, absent any negligent act
or omission on the part of NREL, Alliance, DOE and/or the Government.
7.2
THE PARTIES AGREE THAT NEITHER NREL,
ALLIANCE, DOE, THE GOVERNMENT, NOR PERSONS ACTING ON THEIR BEHALF MAKE
ANY WARRANTY, EXPRESS OR IMPLIED:
7.2.1
WITH RESPECT TO THE MERCHANTABILITY, ACCURACY, COMPLETENESS, OR USEFULNESS OF ANY LICENSED PATENTS, PATENT APPLICATIONS, ISSUED PATENTS, LICENSED PRODUCTS,
OR NREL PROTECTED INFORMATION FURNISHED HEREUNDER;
7.2.2
THAT THE USE OF ANY LICENSED
PATENTS, PATENT APPLICATIONS, ISSUED
PATENTS, LICENSED PRODUCTS, OR NREL PROTECTED INFORMATION MAY NOT INFRINGE ANY PRIVATELY OWNED RIGHTS;
7.2.3
THAT ANY LICENSED PATENTS, PATENT
APPLICATIONS, ISSUED PATENTS,
LICENSED PRODUCTS, OR NREL PROTECTED INFORMATION FURNISHED HEREUNDER WILL NOT RESULT IN INJURY OR DAMAGE WHEN USED FOR
ANY PURPOSE; OR
7.2.4
THAT ANY LICENSED PATENTS, PATENT
APPLICATIONS, ISSUED PATENTS,
LICENSED PRODUCTS, OR NREL PROTECTED INFORMATION FURNISHED HEREUNDER WILL ACCOMPLISH THE INTENDED RESULT OR ARE SAFE OR FIT FOR ANY PURPOSE, INCLUDING THE
INTENDED OR PARTICULAR PURPOSE;
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7.2.5
NREL, DOE, ALLIANCE AND THE
GOVERNMENT HEREBY SPECIFICALLY
DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, FOR ANY LICENSED PATENTS, PATENT APPLICATIONS,
ISSUED PATENTS, NREL PROTECTED
INFORMATION, OR LICENSED PRODUCTS MANUFACTURED, USED, OR SOLD BY
LICENSEE.
7.2.6
NEITHER NREL, DOE, ALLIANCE NOR THE
GOVERNMENT SHALL BE LIABLE FOR LOST PROFITS, LOST SAVINGS, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR OTHER INDIRECT
DAMAGES IN ANY EVENT, EVEN IF SUCH PARTY IS MADE AWARE OF THE POSSIBILITY
THEREOF.
7.3
Except for any liability resulting
from any negligent act or omission of NREL, the DOE, the Government or
Alliance, Licensee shall indemnify and hold harmless NREL, the DOE, the Government and Alliance, and their officers,
employees, and agents, for all damages, costs, and expenses, including
attorneys’ fees, arising from death, personal injury or property damage to
third parties occurring as a result
of the commercialization and utilization of the Licensed Patents by Licensee and its Affiliates including but not
limited to, the making, using, selling, or exporting of Licensed Products, processes, or services by or on
behalf of the Licensee, its Affiliates, its assigns, or licensees which was
derived from the work or activities performed under this Agreement. This indemnification shall include, but not be limited
to, indemnification for any product liability resulting from the
commercialization and utilization of the Licensed Patents by Licensee and its
Affiliates. The indemnity set forth
in this Section 7.3. shall apply only if Licensee shall have been informed as
soon as practical by NREL, Alliance and/or the DOE or the Government of the
action alleging such claim and shall
have been given an opportunity, to the extent afforded by applicable laws,
rules, or regulations, to
participate in and control its defense, and the NREL, Alliance and/or the DOE
or the Government shall have provided reasonably available information and
reasonable assistance (at Licensee’s
cost) as requested by Licensee. No settlement for which Licensee shall be
responsible shall be made without
Licensee’s consent unless required by final decree of a court of competent jurisdiction.
7.4
Beginning at the time when any
Licensed Products are being distributed or sold (including for the purpose of obtaining regulatory approvals) Licensee
shall, at its sole cost and expense, procure and maintain commercial general
liability insurance in amounts not less than $1,000,000 per incident and $5,000,000 annual aggregate, and Licensee
shall have the DOE, the Government, NREL and Alliance, its officers, employees and
agents named as additional insureds. Such
commercial general liability insurance shall provide (i) product liability
coverage; (ii) broad form
contractual liability coverage for Licensee’s indemnification under this
Agreement; and (iii) coverage for litigation costs. The minimum amounts of
insurance coverage required shall not be construed to create a limit of Licensee’s liability with respect to its
indemnification obligations under this Agreement.
7.5
Licensee shall provide Alliance with
written evidence of such insurance upon Alliance’s written request. Licensee shall provide Alliance
with written notice of at least fifteen (15) days before a material
change in such insurance.
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7.6
Licensee shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement
during (a) the period that any Licensed Products are practiced or processes covered by this Agreement
are being commercially distributed or sold by Licensee or agent of Licensee; and (b) the three (3) year period
immediately after such period described in subsection (a).
8. Patent
Prosecution and Technical Assistance.
8.1
Alliance is the owner of the
Licensed Patents and shall have exclusive responsibility for the preparation, filing, prosecution and
maintenance of the Licensed Patents, including choice of patent counsel. As requested, Licensee shall
cooperate with Alliance to insure that the claims for each Licensed Patent reflects and will reflect, to
the extent practicable and to the best of Licensee’s knowledge, all items of commercial interest to
Licensee that are contemplated to be sold or procedures to be practiced
under this Agreement.
8.2
Licensee will reimburse Alliance for
all Patenting Costs for all Licensed Patents as listed in Exhibit A accruing on and after the Effective
Date of this Agreement. In the case where Licensed Patents are licensed to
other licensees, Licensee will reimburse Alliance for actual Patenting Costs on
a pro rata basis with Alliance and other licensees for said non-exclusively
licensed Licensed Patents. Invoices
for such costs will not exceed actual costs and are due and payable no later
than thirty (30) days after receipt of invoices by Licensee.
8.3
Alliance agrees, upon the written
request of Licensee, to assist Licensee in obtaining technical assistance from
NREL subject to the availability of the required resources and under the appropriate agreements. Licensee shall pay full
cost in accordance with the Prime Contract with the Government for the
cost of such technical assistance.
8.4
If Licensee declines to pay in full
any Patenting Costs within the period specified in Paragraph 8.2 which are
necessary to the protection of certain rights at issue, Alliance shall have the
right to (i) abandon some or all of such rights at Alliance’s sole discretion,
or (ii) incur those costs at its own
expense; in either case, Alliance shall have the right to exclude such rights
from the licenses granted hereunder. In such event, Alliance shall be free to
license such rights to third parties without further obligation to
Licensee.
9. Term of
Agreement and Early Termination.
9.1
Subject to early termination as set
forth in this Section and the terms and conditions set forth in Exhibits B and C, this Agreement shall be
effective for as long as the Licensed Patents are enforceable.
9.2
Either Party shall have the right to
terminate this Agreement with cause and without judicial resolution upon written notice to the other after the
non-breaching Party notifies the asserted breaching Party of a breach of any
provision of this Agreement and the asserted breach has not been cured by the asserted breaching Party within sixty
(60) calendar days from receipt of such notice (“Cure Period”). If at the end of the Cure Period the asserted breach
has not been cured and there remains a dispute or controversy, the Parties may
agree to seek to resolve the matter through the use of the procedures set forth
in Section 19.1 below. If Alliance is the non-breaching Party under this Section 9.2, then Licensee shall, within thirty
(30) calendar days, owe Alliance all payments due, including but not
limited to then appropriate Patenting Costs reimbursements, if applicable,
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milestones
payments and continuous royalties due or the pro rata portion of any minimum
annual royalties due at the end of
the calendar year of such termination, whichever is greater. Licensee acknowledges and agrees that Alliance shall be
entitled to seek any additional remedies available at law to Alliance
for Licensee’s breach of this Agreement.
9.3
This Agreement shall terminate
automatically upon a final adjudication of invalidity, unenforceability, or the extinguishment of all
Licensed Patents, for any reason.
9.4
If Licensee fails to satisfy the
requirements of Exhibits B or C then Alliance shall have the right, to exercise at its sole discretion
with thirty (30) days written notice to Licensee, to terminate this Agreement in accordance with its
early termination requirements.
9.5
The Parties agree that Alliance, at
its sole discretion, may immediately terminate this Agreement upon any attempted transfer of
Licensee’s interest in this Agreement, in whole or in part, except as
otherwise permitted by the terms of this Agreement.
9.6
Licensee agrees that this Agreement
shall automatically terminate if Licensee attempts, in any way, to pledge its rights under this Agreement
as collateral to a third party.
9.7
Licensee hereby agrees that in the
event Licensee by its own actions or the action of any of its shareholders or creditors (if applicable),
files or has filed against it, with an order for relief being entered, a case
under the Bankruptcy Code of 1978, as previously or hereafter amended, Alliance
shall be entitled to relief from the automatic stay of Section 362 of Title 11
of the U.S. Code, as amended, on or
against the exercise of the rights and remedies available to Alliance; and Licensee hereby waives the benefits of such
automatic stay and consents and agrees to raise no objection to such relief. Licensee further agrees
that Alliance, at its sole discretion, may immediately terminate this Agreement by means of a written
notice to Licensee in the event that a creditor or other claimant takes possession of, or a receiver,
administrator or similar officer is appointed over any of the assets of Licensee, or in the event
that Licensee makes any voluntary arrangement with its creditors or becomes subject to any court or
administration order pursuant to any U.S. Bankruptcy proceeding or insolvency law. Licensee will
promptly inform Alliance of its intention to file a voluntary petition in bankruptcy or of another’s
communicated intention to file an involuntary petition in bankruptcy.
9.8
Licensee may terminate this
Agreement without cause if Licensee provides Alliance with sixty (60) days prior notice and pays Alliance:
(a) all Patenting Cost reimbursement, as applicable, and all upfront fees due
at the time of termination; and (b) the greater of: the sum of the accrued
continuous royalties due or the sum of the pro rata portion of any minimum
annual royalties due at the end of the accounting period of such
termination.
10. Rights of Parties after Termination.
10.1
Neither Party shall be relieved of
any obligation or liability under this Agreement arising from any act or
omission committed prior to the termination date.
10.2
From and after any termination of
this Agreement, Licensee shall have the right to sell only those Licensed Products in Licensee’s
inventory at the time of termination, provided that Licensee has
satisfied all financial obligations and reporting requirements required by this Agreement. Except as otherwise provided for
herein, Licensee shall not exercise any of the rights granted under this
Agreement after it is terminated.
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10.3
The rights and remedies granted
herein, and any other rights or remedies which the Parties may have, either at law or in equity, are
cumulative and not exclusive of others. On any termination, Licensee shall duly account to Alliance and transfer to it
all rights to which Alliance may be entitled under this Agreement.
10.4
The following Sections are intended
to survive the termination of this Agreement: 2.5 (if applicable), 3, 4,
6, 7, 8, 9, 10, 14, 15, 16,18, and 19.
11. Force Majeure.
No failure or omission by
Alliance or by Licensee in the performance of any obligation under this Agreement shall be deemed a
breach of this Agreement or create any liability if the same shall arise from acts of God, acts or
omissions of any government or agency thereof, compliance with rules, regulations, or orders of any governmental
authority or any office, department,
agency, or instrumentality thereof, fire, storm, flood, earthquake, accident,
acts of the public enemy or
terrorism, war, rebellion, insurrection, riot, sabotage, invasion, quarantine, restriction, transportation embargoes, or
failures or delays in transportation. The circumstances surrounding such
failure or omission shall be communicated to the affected Party in writing
within fifteen (15) business days of such event.
12. Notices and
Payments.
12.1
All notices and reports shall be addressed to the Parties as follows:
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If to Alliance:
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National Renewable Energy
Laboratory Facsimile No.
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Attn: Commercialization &
Technology Transfer (303)275-3040
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1617 Cole Blvd., MS 17/33
Telephone No.
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Golden, CO 80401 (303)
275-3690
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E-mail Contact
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technology transfer@nrel.gov
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If to Licensee:
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Natcore Technology, Inc.
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87 Maple Avenue
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Red Bank New Jersey 07701
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Attention: Charles Provini
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Email: provini@natcoresolar.com
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Telephone No: (732) 576-8800
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with a copy to Licensee’s US
legal counsel:
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Tagliaferro & LoPresti LLP
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45 Broadway, Suite 2200
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New York, NY 10006
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Attention: Marc X. LoPresti,
Esq.
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Email: Mxl@tlcorplaw.com
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Telephone: (212) 732-4029
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11
12.2
All financial obligations due to Alliance shall be sent to:
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National Renewable Energy
Laboratory
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Attn: Royalty Cashier
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1617 Cole Blvd., MS 1723A
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Golden, CO 80401
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All
such payments shall be accompanied by documentation identifying this Agreement,
including the License Agreement
Number and the names of the Parties. A copy of all financial obligations shall
be sent to NREL’s Office of Commercialization & Technology Transfer at the
above address in Section 12.1.
Alliance will NOT send invoices for payments due on a
fixed schedule. It is Licensee’s
responsibility to make all payments in accordance with
this Agreement and all late payments will
be charged interest in accordance with Paragraph 4.4 of this Agreement.
12.3
Any notice, report or any other communication required or permitted to be given
by one Party to the other Party by
this Agreement shall be in writing and either: (a) served personally on the
other Party; (b) sent by express, registered or certified first-class mail,
postage prepaid, addressed to the
other Party at its address as indicated above, or to such other address as the
addressee shall have previously furnished to the other Party by proper notice;
(c) delivered by commercial courier to the other Party; or (d) sent by
facsimile to the other Party at its facsimile number indicated above or to such other facsimile number as the Party shall
have previously furnished to the other Party by proper notice, with
machine confirmation of transmission.
13. Non-Abatement
of Royalties.
Alliance and
Licensee acknowledge that certain of the Licensed Patents may expire prior to the conclusion of the
term of this Agreement. However, Alliance and Licensee agree that the royalty rates provided for in Exhibit B shall be
uniform and undiminished for as long
as any claim of, or other intellectual property right in, any of the Licensed
Patents are enforceable except as otherwise provided in this Agreement.
14. Confidential
Information.
14.1
The Parties agree that all information, marked by Licensee as “Proprietary” or
Alliance as “NREL Protected
Information” and forwarded to one by the other for the purposes of this Agreement (a) are to be received in strict
confidence, (b) are to be used only for the purposes of this Agreement, and (c)
are not to be disclosed by the recipient Party, its agents or employees without
the prior written consent of the
other Party, except to the extent that the recipient Party can establish by competent
written proof that such information:
14.1.1
was in the public domain at the time
of disclosure;
14.1.2
later became part of the public
domain through: (A) no act or omission of the recipient, its employees, agents, successors or assigns and (B) no
breach by a third party and was lawfully
disclosed to the DOE or recipient Party by a third party having the right to
disclose it;
12
14.1.4
was already known by the DOE or
recipient Party at the time of disclosure which can be shown by
competent evidence;
14.1.5
was independently developed by the
DOE or recipient Party without the utilization of the other Party’s
protected property and information; or
14.1.6
is required by law or regulation to
be disclosed, provided however, that the disclosing Party shall first give the recipient written notice and
adequate opportunity to object to such order for disclosure or to
request confidential treatment.
15. Waivers.
15.1
The failure of either Party at any
time to enforce any provisions of this Agreement or to exercise any right or remedy shall not be
construed to be a waiver of such provisions or of such rights or remedy or the right of such Party thereafter to
enforce each and every provision, right or remedy.
15.2 The
waiver of a specific breach hereunder may be effectuated only by a written document, signed by the waiving Party, and
delivered to the breaching Party. Such formal waiver shall not
constitute a waiver of any other breach.
16. Entire
Agreement and Legal Amendments.
16.1
The Parties expressly understand and
agree that this instrument contains the entire agreement between the Parties with respect to the subject matter of this
Agreement and that all prior representations,
warranties, or agreements relating to this subject matter have been merged into
this instrument and are thus
superseded in totality by this Agreement. This Agreement may be amended only by
a written instrument signed by the duly authorized representatives of both of
the Parties.
16.2
The Parties agree that if any part,
term, or provision of this Agreement shall be found illegal or in conflict with
any valid controlling law, the validity of the remaining provisions shall not be
affected thereby.
16.3
In the event that a court of
competent jurisdiction of any country in which this Agreement applies shall determine, by
non-appealable decision, that any provision of this Agreement shall be illegal, Alliance, by written notice to
Licensee, may revise the provision in question or may delete it entirely
so as to comply with the decision of said court.
17. Headings.
The headings for the Sections set forth in this
Agreement are strictly for the convenience
of the Parties hereto and shall not be used in any way to restrict the meaning
or interpretation of the substantive language of this Agreement.
18. Successor
Contractor and Assignment.
18.1
Licensee acknowledges and agrees
that Alliance may transfer this Agreement and all rights, duties and obligations hereunder, to the
DOE or a successor management and operating contractor of NREL as may be required under the Prime Contract with DOE.
18.2
Licensee may assign this entire
Agreement or any of its rights hereunder, upon the written authorization of Alliance, such
authorization shall not to be unreasonably withheld, in connection with the sale of all or a material
portion of any subsidiary, division, or business unit of Licensee,
whether by merger, sale of assets, sale of stock, or otherwise.
13
19. Disputes and
Governing Laws.
19.1
This Agreement, and the rights and
liabilities of the Parties with respect to this Agreement and its subject matter, shall be governed by the laws of the
State of Colorado, without reference
to the principles of conflicts of laws thereof. Any dispute arising out of or
relating to this Agreement or its
subject matter not settled by the Parties may be resolved only by the courts of
the State of Colorado, or if subject
matter jurisdiction exists, by the United States federal courts, with venue in the County of Denver (in the case of
state court) or in the U.S. District Court for the District of Colorado (in the case of federal court). Each
of the Parties hereby consents to the jurisdiction of such courts over it in any action involving any
such dispute. Each of the Parties agree not to commence or maintain a legal proceeding involving any such dispute in
any forum except a court of the State of Colorado located in Denver County or
the United States District Court for the District of Colorado (other than to enforce a judgment
obtained in such courts) and agrees not to contest the venue of any action involving any such dispute in
the County of Denver or the District of Colorado, as the case may be, nor to assert in any such
court the doctrine of forum non conveniens, or the like.
19.2
If any provisions of this Agreement
are held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or
unenforceability will not affect any other provisions of this Agreement. This Agreement will be construed as if
the invalid, illegal, or unenforceable revision were never in this
Agreement.
19.3
Alliance will release information
concerning this Agreement if required by law. In publicizing anything made,
used, offered for sale, sold or imported under this Agreement, Licensee shall
not use the name of Alliance, NREL or DOE or otherwise refer to any
organization related to Alliance or
DOE, except with the prior written approval of Alliance and DOE.
20. Non-Use of
Names.
In publicizing
anything made, used, offered for sale, sold or imported under this Agreement, Licensee shall not use the name
of Alliance, NREL or DOE or otherwise refer to any organization related to
Alliance or DOE, except with the prior written approval of Alliance and DOE. However, Licensee may state that it licensed from
Alliance one or more of the patents and/or patent applications comprising the
Licensed Patents, and Alliance may state that it licensed to Licensee one or more of the patents and/or patent applications
comprising the Licensed Patents, and may further include (i) Alliance inventor
names, (ii) invention titles and summaries, (iii) technology field of use, and (iv) the type and extent of the license, but
may not include terms and conditions of this Agreement unless such
disclosure is required by law, rule or regulation.
21. Counterparts.
This Agreement may be executed in separate
counterparts, each of which so executed
and delivered shall constitute an original, but all such counterparts shall
together constitute one and the same
instrument. Any such counterpart may comprise one or more duplicates or duplicate signature pages, any of which may be
executed by less than all of the Parties, provided that each Party executes at least one such duplicate
or duplicate signature page. The Parties stipulate that a photo static copy of
an executed original will be admissible in evidence for all purposes in any proceeding
as between the Parties.
14
IN WITNESS WHEREOF,
the Parties hereto have
caused this Agreement to be duly executed in
their respective names by their duly authorized representatives.
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For
Alliance
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C. Porto
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By:
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Sr. Vice President
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Name:
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(typed)
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Commercialization &
Deployment
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Title:
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Date:
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12|12|11
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For
Licensee
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By:
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Name:
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Charles R Provini
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Title:
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President & CEO
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15
EXHIBIT A: LICENSED PATENTS
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NREL ROI
No.
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Country
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Title
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Patent/Patent
Application No.
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Filing/Issue
Date
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07-10
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USA
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|
“Nanoparticle-Based Etching of Silicon Surfaces”
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|
12/053,372
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|
07-17
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|
USA
|
|
“Anti-reflection
Etching of Silicon Surfaces
Catalyzed with Ionic Metal Solutions”
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12/053,445
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|
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07-17CN
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|
China
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|
“Anti-reflection
Etching of Silicon Surfaces
Catalyzed with Ionic Metal Solutions”
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|
2009801102743
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|
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|
07-17EU
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|
European .Union
|
|
“Anti-reflection
Etching of Silicon Surfaces
Catalyzed with Ionic Metal Solutions”
|
|
09722988.4
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|
09-10
|
|
PCT
|
|
“Wet-Chemical
Systems and Methods for Producing Black Silicon Substrates”
|
|
PCT/US10/56417
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|
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|
11-43
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|
PCT
|
|
“Efficient
Black Silicon Photovoltaic Devices
with Enhanced Blue Response”
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|
PCT/US11/27479
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|
|
Initials
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Alliance:
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Licensee:
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Date:
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12|12|11
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Date:
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9
December, 2011
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16
EXHIBIT B: FIELDS OF USE AND FINANCIAL CONSIDERATIONS
A.
Fields of Use:
Equipment and Chemicals to produce photovoltaic
cells integrating the Licensed
Intellectual Property using diffused emitter and Liquid-Phase-Deposited
Passivation.
B.
Upfront
Fee: An up-front cash payment of Twenty Thousand
($20,000) in U.S. dollars due within
thirty (30) days of the Effective Date. If such payment is not timely received,
this Agreement shall be null, void and without effect.
C.
Continuous Royalty Rate Structure:
Throughout the term of the Agreement, Licensee shall pay annually, in accordance with Section
4.2 of this Agreement, to Alliance a running royalty of two and one half percent (2.5%) on all Net Sales
of Licensed Products (excluding Licensed Chemicals) sold by or on behalf of Licensee, Affiliates and
Sublicensees. Licensee shall also pay annually
to Alliance a running royalty of ten percent (10%) of Net Sales of Licensed
Chemicals sold by or on behalf of
Licensee, Affiliates and Sublicensees. In the event that Licensee is required
is required to pay a Third Party
Royalty for the sale of a particular Licensed Product, then the royalty payments made by Licensee hereunder may be
reduced by an amount equal to one half percent (0.5%). In no event shall the continuous royalty payment due hereunder
be less than 2.0% of Net Sales.
F.
Sublicensing Royalties:
As appropriate, sublicensing
royalty payments due Alliance from Licensee
for Net Sales by Sublicensees will be at the same rate and schedule as set forth in Section C above. In addition, Licensee
shall pay to Alliance an amount equal to 15% (15%) of Sublicensing
Revenues received by Licensee. Licensee will be responsible for overseeing, collecting, reporting, and submitting
royalties and Sublicensing Revenues from Sublicensees to Alliance.
D.
Minimum Annual Royalty Payments:
For the 2013 calendar year and each subsequent calendar year during the term of this Agreement,
Licensee shall pay to Alliance a minimum annual royalty payment in the amount of Twenty Five Thousand ($25,000) in U.S.
dollars annually. Licensee shall
make such payment to Alliance within thirty days of the end of the calendar
year in which it is due. For each
calendar year, that year’s Minimum Annual Royalty payment shall be fully creditable against continuous royalties paid to
Alliance, under Exhibit B, paragraph C above, for such calendar year, but shall not be creditable against
any other payment due under this Agreement, including past or future
continuous royalties that may be or become due.
Alliance
will NOT send invoices for payments due on a fixed schedule. It is Licensee’s responsibility to make all payments in accordance
with this Agreement and all late payments will be charged interest in
accordance with Paragraph 4.4 of this Agreement.
NOTICE
This
Exhibit contains financial and commercial information that is BUSINESS SENSITIVE and the Parties hereby agree not to use
or disclose this Exhibit to any third party without the advance written approval of the other Party, except: (1) to
those necessary to enable the
Parties to perform under this Agreement; (2) as may be required by the Alliance
Prime Contract with the DOE under the
same restrictions as set forth herein; or (3) in event of
17
breach of any provision of this Agreement by either Party, to
those deemed necessary by the non-breaching Party to enforce the non-breaching
Party’s rights under the Agreement.
Initials
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Alliance:
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Licensee:
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Date:
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12|12|11
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Date:
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9
December, 2011
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18
EXHIBIT C: DEVELOPMENT AND COMMERCIALIZATION PLAN
Licensee
shall use commercially reasonable efforts to bring the Licensed Products to
market though a thorough, vigorous
and diligent commercialization program, which program shall include but not be limited to the development, marketing,
promotion, distribution and sale of Licensed Products. In partial satisfaction
of such obligations, Licensee represents and warrants that it will invest in
the development of the technology and market for Licensed Products by
committing Licensee’s resources, at a minimum, to the following requirements:
1)
Technical
Milestones:
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1.
|
Achieve
an AMI .5G efficiency of 17.5% or more on a 4 inch diameter silicon solar
cell using black silicon
antireflection control technology, coupled with LPD passivation, by March 1, 2012.
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2.
|
Achieve
an average reflectance of 2% or less on 156 x 156 mm monocrystalline silicon wafers using black silicon antireflection
control technology coupled with LPD passivation by April 1,2012.
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3.
|
Achieve
an AM1.5G efficiency of 17.0% or more on a 156 x 156 mm monocrystalline
silicon solar cell using black
silicon antireflection control technology coupled with LPD passivation and
screen printed contacts by August 1,2012.
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4.
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Achieve
an AM1.5G efficiency of 18.5% or more on multiple 156 x 156 mm
monocrystalline silicon solar cell by July 1,2013.
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2)
Market Milestones:
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1)
|
Achieve first commercial sale
of a Licensed Product covered by the Black Silicon Patents on or
before December 1,2012.
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2)
|
Achieve cumulative Net Sales
of Licensed Products in excess of $1 million on or before December 1,
2013.
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|
3)
|
Achieve cumulative Net Sales
of Licensed Products in excess of $2 million on or before December 1,
2014.
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4)
|
Achieve cumulative Net Sales
of Licensed Products in excess of $3 million on or before December 1,
2015.
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Progress
and substantiation of Licensee meeting these development and commercialization requirements shall be provided to Alliance in the
form of a report to be presented in writing no later than thirty (30) days from the end of each
calendar year and each anniversary thereafter of the Effective Date
thereof.
NOTICE
This Exhibit contains financial and commercial information
that is BUSINESS SENSITIVE and the
Parties hereby agree not to use or disclose this Exhibit to any third party without the advance written approval of the other
Party, except: (1) to those necessary to enable the Parties to perform under
this Agreement; (2) as may be required by the Alliance
19
Prime Contract with the DOE under the same restrictions as
set forth herein; or (3) in event of breach of any provision of this Agreement
by either Party, to those deemed necessary by the non-breaching Party to enforce the non-breaching
Party’s rights under the Agreement.
Initials
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|
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|
Alliance:
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|
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Licensee:
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|
|
|
|
|
|
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Date:
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12|12|11
|
Date:
|
9
December, 2011
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20
AMENDMENT
NO. 1 TO PATENT LICENSE AGREEMENT
Between
Alliance
for Sustainable Energy, LLC and
Natcore
Technology Inc.
This Amendment to License Agreement LIC-12-00206
(hereinafter “License”), shall be effective on the date it is executed by the
last Party to sign below, is between Alliance for Sustainable Energy, LLC
(hereinafter “Alliance”), as Manager and Operator of the National Renewable
Energy Laboratory (“NREL”) located at 15013 Denver West Parkway, Golden,
Colorado 80401 and Natcore Technology Inc., (hereinafter “Licensee”), a
for-profit company organized and existing under the laws of Province British
Columbia and having a principal place of business at 47 Club Way, Red Bank, New
Jersey, USA 07701. The parties to this agreement may be hereinafter referred to
individually as “Party” and jointly as “Parties”.
BACKGROUND:
Alliance manages and operates NREL under authority of
its Prime Contract No. DE-AC36-08G028308 with the United States Government as
represented by the Department of Energy;
The Parties executed the Patent License Agreement on
December 12, 2011 (Exclusive Patent License Agreement 12-00206). The Parties
wish to modify a section of the License pertaining to Licensed Intellectual
Property.
TERMS
& CONDITIONS:
THEREFORE, in consideration of the foregoing covenants
and agreements contained herein and for a payment of $7,500 due within thirty
(30) days of the execution of this Amendment 1, the Parties agree to the
following amendments to the License:
1.
Exhibit A: Licensed Patents shall be deleted and replaced with the following:
EXHIBIT A: LICENSED PATENTS
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|
NREL ROI
No.
|
|
Country
|
|
Title
|
|
Patent/Patent
Application No.
|
|
Filing/Issue
Date
|
|
|
|
|
|
|
|
|
|
|
|
07-10
|
|
USA
|
|
“Nanoparticle-Based Etching of Silicon Surfaces”
|
|
8,075,792
|
|
|
|
07-17
|
|
USA
|
|
“Anti-reflection Etching of Silicon Surfaces Catalyzed with Ionic Metal
Solutions”
|
|
12/053,445
|
|
|
|
07-17CN
|
|
China
|
|
“Anti-reflection Etching of Silicon Surfaces Catalyzed with Ionic Metal
Solutions”
|
|
2009801102743
|
|
|
|
07-17EU
|
|
European Union
|
|
“Anti-reflection Etching of Silicon Surfaces Catalyzed with Ionic Metal
Solutions”
|
|
09722988.4
|
|
|
|
09-10
|
|
PCT
|
|
“Wet-Chemical Systems and
Methods for Producing Black Silicon
Substrates”
|
|
PCT/US10/56417
|
|
|
|
09-69
|
|
USA
|
|
Forming High-Efficiency Silicon Solar Cells Using Density-Graded
Anti-Reflection Surfaces
|
|
12/797,590
|
|
|
|
n-43
|
|
PCT
|
|
“Efficient Black Silicon Photovoltaic Devices with Enhanced Blue
Response”
|
|
PCT/US11/27479
|
|
|
|
12-18
|
|
USA
|
|
Copper-Assisted, Anti-Reflection
Etching of Silicon Surfaces
|
|
13/423,745
|
|
|
2.
All other terms and conditions of the License, and its authorized
modifications, shall remain
unchanged.
IN
WITNESS WHEREOF, the Parties hereto have caused this Amendment No. 1 to be duly
executed
in their respective names by their duly authorized representatives.
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|
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ALLIANCE FOR SUSTAINABLE
ENERGY, LLC
|
|
NATCORE TECHNOLOGY INC.
|
|
|
|
|
|
By:
|
|
|
By:
|
|
|
|
|
|
|
|
|
Name:
|
Bobi Garrett
|
|
Name:
|
Chuck
Provini
|
|
|
|
|
|
|
|
Title:
|
Deputy Lab Director
|
|
Title:
|
President
&CEO
|
|
|
|
|
|
|
|
Date:
|
27-July-2012
|
|
Date:
|
7-27-2012
|
|
|
|
|
|
|
National Renewable
Energy Laboratory
Funds-in
Cooperative Research and Development Agreement
STEVENSON-WYDLER (15 U.S.C. 3710)
COOPERATIVE RESEARCH AND DEVELOPMENT
AGREEMENT
(hereinafter “CRADA”) No. CRD-12-475
between
Alliance for Sustainable Energy, LLC, Operator of
The National Renewable Energy
Laboratory
under its U.S. Department of Energy Contract No. DE-AC36-08GO28308,
1617 Cole Blvd., Golden, CO 80401
(hereinafter “Contractor”)
and
Natcore Technology Inc.
87 Maple Avenue
Red Bank NJ 07701
(hereinafter
“Participant”),
both being hereinafter jointly referred to as the “Parties.”
ARTICLE
I.
Definitions
|
|
|
|
A.
|
“Government” means the Federal
Government of the United States of America and agencies thereof.
|
|
|
|
|
B.
|
“DOE” means the Department of
Energy, an agency of the Federal Government.
|
|
|
|
|
C.
|
“Contracting Officer” means the
DOE employee administering the Contractor’s DOE contract.
|
|
|
|
|
D.
|
“Generated Information” means
information produced in the performance of this CRADA.
|
|
|
|
|
E.
|
“Proprietary Information” means
information which embodies (i) trade secrets or (ii) commercial or financial information which is privileged or
confidential under the Freedom of Information Act (5 U.S.C. 552 (b)(4)),
either of which is developed at private expense outside of this CRADA and which
is marked as Proprietary Information.
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F.
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“Protected CRADA Information”
means Generated Information which is marked as being Protected CRADA Information by a Party to this
CRADA and which would have been Proprietary Information had it been obtained
from a non-Federal entity.
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G.
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“Subject Invention” means any
invention of the Contractor or Participant conceived or first actually reduced to practice in the performance
of work under this CRADA.
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H.
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“Intellectual Property” means
Patents, Trademarks, Copyrights, Mask Works, Protected CRADA Information and other forms of comparable
property rights protected by Federal Law and foreign counterparts,
except trade secrets.
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I.
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“Trademark” means a distinctive
mark, symbol, or emblem used in commerce by a producer or manufacturer to
identify and distinguish its goods or services from those of others.
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J.
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“Service Mark” means a
distinctive word, slogan, design, picture, symbol, or any combination thereof, used in commerce by a
person to identify and distinguish its services from those of others.
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K.
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“Mask Work” means a series of
related images, however fixed or encoded, having or representing the
predetermined, three-dimensional pattern of metallic, insulating, or semiconductor material present or removed from
the layers of a semiconductor chip product and in which series the relation
of the images to one another is that each image has the pattern of the surface of one form of
the semiconductor chip product.
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L.
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“Background Intellectual
Property” means the Intellectual Property identified by the Parties (in an
Appendix titled “Background Intellectual Property” if applicable), which was
in existence prior to or is first produced outside of this CRADA, except that
in the case of inventions in those identified items, the inventions must have been conceived outside of this CRADA
and not first actually reduced to practice under this CRADA to qualify as
Background Intellectual Property.
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M.
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“Foreign Interest” is defined
as any of the following:
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(1)
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A foreign government or foreign
government agency;
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(2)
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Any form of business
enterprise organized under the laws of any country other than the United States
or its possessions;
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(3)
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Any form of business enterprise
organized or incorporated under the laws of the United States, or a State or
other jurisdiction within the United States, which is owned, controlled, or
influenced by a foreign government, agency, firm, corporation or
person; or
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(4)
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Any person who is not a U.S. citizen.
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N.
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“Foreign ownership, control,
or influence (FOCI)” means the situation where the degree of ownership, control, or influence over a
participant by a foreign interest is such that a reasonable basis exists for
concluding that compromise of classified information or special nuclear
material, as defined in 10 CFR Part 710, may result.
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ARTICLE II.
Joint Work Statement
Appendix A, Joint Work Statement,
is an integral part of this CRADA.
ARTICLE
III.
Term, Funding, and Costs
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A.
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The effective date of this
CRADA shall be the latter date of (1) the date on which it is signed by the
last of the Parties or (2) the date on which it is approved by DOE. The work
to be performed under this CRADA
shall be completed within 12 months from the effective date.
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B.
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The Participant’s estimated
contribution is $100,000 funds-in. The Contractor’s estimated in-kind contribution
is $50,000 subject to available funding.
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C.
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Neither Party shall have an
obligation to continue or complete performance of its work at a contribution in excess of its estimated
contribution as contained in Article III B above, including any
subsequent amendment.
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D.
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Each Party agrees to provide at
least thirty- (30) days’ notice to the other Party if the actual cost to complete
performance will exceed its estimated cost.
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E.
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The Participant shall provide
Contractor sufficient advance funds to maintain approximately a 90-day
advance of funds during the entire period of work. If this is a 100% funds-in
CRADA, no work will begin before
the receipt of a sufficient cash advance. Failure of the Participant to provide the necessary advance funding is cause
for termination of the CRADA.
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ARTICLE
IV.
Personal Property
All tangible personal property
produced or acquired under this CRADA (specifically excluding Intellectual Property rights, Background Intellectual
Property, and Proprietary Information) shall become the property of the Participant or the Government, depending
upon whose funds were used to obtain it. Such property is identified in Appendix A, Joint Work Statement.
Personal property shall be disposed of as directed by the owner at the owner’s expense. There shall not be
any jointly funded property under this CRADA except by the mutual
agreement of the Parties.
ARTICLE
V.
Disclaimer
THE GOVERNMENT, THE PARTICIPANT,
AND THE CONTRACTOR MAKE NO EXPRESS OR IMPLIED
WARRANTY AS TO THE CONDITIONS OF THE RESEARCH OR ANY INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR PRODUCT MADE
OR DEVELOPED UNDER THIS CRADA, OR THE OWNERSHIP, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF THE RESEARCH
OR RESULTING PRODUCT. NEITHER THE GOVERNMENT, THE PARTICIPANT, NOR THE CONTRACTOR SHALL BE LIABLE
FOR LOST PROFITS, LOST SAVINGS,
SPECIAL, CONSEQUENTIAL, INCIDENTAL OR OTHER INDIRECT DAMAGES, EVEN IF SUCH PARTY IS MADE AWARE OF THE
POSSIBILITY THEREOF.
ARTICLE
VI.
Product Liability
Except for any liability
resulting from any negligent acts or omissions of Contractor, the Participant
indemnifies the Government and the Contractor for all damages, costs and
expenses, including attorney’s fees, arising from personal injury or property
damage occurring as a result of the making, using or selling of a product,
process or service by or on behalf of the Participant, its assignees or
licensees, which was derived from the
work performed under this CRADA. In respect to this article, neither the
Government nor the Contractor shall
be considered assignees or licensees of the Participant, as a result of
reserved Government and Contractor rights. The indemnity set forth in this
paragraph shall apply only if the Participant shall have been informed as soon
and as completely as practical by the Contractor and/or the Government of the
action alleging such claim and shall have been given an opportunity, to the maximum
extent afforded by applicable laws, rules, or regulations, to participate in
and control its defense, and the Contractor
and/or the Government shall have provided all reasonably available information
and reasonable assistance requested
by the Participant. No settlement for which the Participant would be
responsible shall be made without the Participant’s consent unless required by
final decree of a court of competent jurisdiction.
ARTICLE
VII.
Obligations As To Proprietary Information
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A.
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Each Party agrees to not
disclose Proprietary Information provided by another Party to anyone other than the CRADA Participant and Contractor
without written approval of the providing Party, except to Government
employees who are subject to the statutory provisions against disclosure of
confidential information set forth in the Trade Secrets Act (18 U.S.C. 1905).
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B.
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If Proprietary Information is
orally disclosed to a Party, it shall be identified as such, orally, at the time
of disclosure and confirmed in a written summary thereof, appropriately
marked by the disclosing Party, within ten (10) days as being Proprietary
Information.
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C.
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All Proprietary Information shall be returned to the
provider thereof at the conclusion of this CRADA at the provider’s expense.
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D.
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All Proprietary Information shall be protected for a
period of five (5) years from the effective date of this CRADA, unless such
Proprietary Information becomes publicly known without the fault of the
recipient, shall come into recipient’s possession without breach by the
recipient of any of the obligations set forth herein, or is independently
developed by recipient’s employees who did not have access to such
Proprietary Information.
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E.
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In no case shall the Contractor provide Proprietary
Information of the Participant to any person or entity for commercial
purposes, unless otherwise agreed to in writing by such Participant.
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ARTICLE
VIII.
Obligations As To Protected CRADA Information
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A.
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Each Party may designate as Protected CRADA Information
any Generated Information produced by its employees which meets the
definition of Article I.F and, with the agreement of the other Party, so
designate any Generated Information produced by the other Party’s employees
which meets the definition of Article I. F. All such designated Protected
CRADA Information shall be appropriately marked.
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B.
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For a period of five (5) years from the date
Protected CRADA Information is produced, the Parties agree not to further
disclose such information except:
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(1)
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as necessary to perform this CRADA;
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(2)
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as provided in Article XI [REPORTS AND ABSTRACTS];
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(3)
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as requested by the DOE Contracting Officer to be
provided to other DOE facilities for use only at those DOE facilities with
the same protection in place;
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(4)
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to existing or potential licensees, affiliates,
customers, or suppliers of the Parties in support of commercialization of the
technology with the same protection in place. Disclosure of the Participant’s
Protected CRADA Information under this subparagraph shall only be done with
the Participant’s consent; or
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(5)
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as mutually agreed in writing by the Parties in
advance.
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C.
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The obligations of paragraph B. above shall end
sooner for any Protected CRADA Information which shall become publicly known
without fault of either Party, shall come into a Party’s possession without
breach by that party of the obligations of paragraph B above, or shall be
independently developed by a Party’s employees who did not have access to the
Protected CRADA Information.
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ARTICLE
IX.
Rights in Generated Information
The Parties agree that they shall have no obligations
of nondisclosure or limitations on their use of, and the Government shall have
unlimited rights in, all Generated Information produced and information
provided
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by the Parties under this CRADA,
except for (a) information which is marked as being Copyrighted (subject to
Article XIII) or as Protected CRADA Information (subject to Article VIII B) or
as Proprietary Information (subject
to Article VII B), or (b) information that discloses an invention which may
later be the subject of a U.S. or foreign Patent application.
ARTICLE X.
Export Control
THE PARTIES UNDERSTAND THAT
MATERIALS AND INFORMATION RESULTING FROM THE PERFORMANCE OF THIS CRADA MAY BE SUBJECT TO EXPORT CONTROL LAWS AND
THAT EACH PARTY IS RESPONSIBLE FOR
ITS OWN COMPLIANCE WITH SUCH LAWS.
ARTICLE XI.
Reports and Abstracts
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A.
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The Parties agree to produce
the following deliverables:
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(1)
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an initial abstract suitable
for public release at the time the CRADA is approved by DOE;
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(2)
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other abstracts (final when
work is complete, and others as substantial changes in scope and
dollars occur);
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(3)
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a final report, upon completion
or termination of this CRADA, to include a list of Subject Inventions;
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(4)
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an annual signed financial
report of the Participant’s in-kind contributions to the project;
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(5)
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other topical/periodic reports,
when the nature of research and magnitude of dollars justify, as set
forth in Appendix A; and
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(6)
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computer software in source and
executable object code format as defined within the Joint Work
Statement or elsewhere within the CRADA documentation.
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Each of the above-identified
deliverables shall include the project identification number as described in DOE’s Research and Development
(R&D) Tracking System Data and Process
Guidance Document (
http://www.osti.gov/rdprojects/guidance.j
sp).
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B.
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The Parties acknowledge that
the Contractor has the responsibility to provide the above information at the
time of its completion to the DOE Office of Scientific and Technical Information.
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C.
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The Participant agrees to
provide the above information to the Contractor to enable full compliance
with paragraph B of this article.
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D.
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The Parties acknowledge that
the Contractor and the DOE have a need to document the long-term economic
benefit of the cooperative research under this CRADA. Therefore, the
Participant shall respond to the Contractor’s reasonable requests, during the
term of this CRADA and for a period of two (2) years thereafter for
pertinent information.
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ARTICLE XII.
Prepublication Review
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A.
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The Parties anticipate that
their employees may wish to publish technical developments and/or research findings generated in the course of
this CRADA. On the other hand, the Parties recognize that an objective of this CRADA is to provide business
advantages to the Participant. In order to reconcile publication and
business concerns, the Parties agree to a review procedure as follows:
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1.
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Each Party (“Submitter”) shall submit to the other
Party (“Recipient”), in advance, proposed written and oral publications
pertaining to work under the CRADA. Proposed oral publications shall be
submitted to the Recipient in the form of a written presentation synopsis and
a written abstract.
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2.
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The Recipient shall provide a written response to
the Submitter within 30 clays, either objecting or not objecting to the
proposed publication. The Submitter shall consider all objections of the
Recipient and shall not unreasonably refuse to incorporate the suggestions
and meet the objections of the Recipient. The proposed publication shall be
deemed not objectionable, unless the proposed publication contains
Proprietary Information, Protected CRADA Information, export controlled
information or material that would create potential statutory bars to filing
the United States or corresponding foreign Patent applications, in which case
express written permission shall be required for publication. In the event an
objection is raised because of potential statutory bar, the Recipient shall
file its Patent application within 30 days of making such objection, after
which time the Submitter is free to publish.
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B.
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The Parties agree that neither will use the name of
the other Party or its employees in any promotional activity, such as
advertisements, with reference to any product or service resulting from this
CRADA, without prior written approval of the other Party.
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ARTICLE
XIII.
Copyrights
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A.
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The Parties may assert Copyright in any of their
Generated Information. Assertion of Copyright generally means to enforce or
give an indication of an intent or right to enforce such as by marking or
securing Federal registration.
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B.
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Each Party shall have the first option to assert
Copyright in works authored by its employees. Copyrights in co-authored works
by employees of the Parties shall be held jointly, and use by either Party
shall be without accounting. A Party electing not to assert Copyright in a
work authored by its employees agrees to assign such Copyright to the other
Party upon the request of, and at the expense of, the other Party.
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C.
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For Generated Information, the Parties acknowledge
that the Government has for itself and others acting on its behalf, a
royalty-free, non-transferable, nonexclusive, irrevocable worldwide Copyright
license to reproduce, prepare derivative works, distribute copies to the
public, and perform publicly and display publicly, by or on behalf of the
Government, all Copyrightable works produced in the performance of this
CRADA, subject to the restrictions this CRADA places on publication of
Proprietary Information and Protected CRADA Information.
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D.
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For all Copyrighted computer software produced in
the performance of this CRADA, the Party owning the Copyright will provide
the source code, an expanded abstract as described in Appendix A, the
executable object code and the minimum support documentation needed by a
competent user to understand and use the software to U.S. Department of
Energy Office of Scientific and Technical Information - Energy, Science, and
Technology Software Center, P.O. Box 62, 1 Science Gov Way, Oak Ridge, TN
37831-1020. The expanded abstract will be treated in the same manner as Generated
Information in paragraph C. of this article.
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E.
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The Contractor and the Participant agree that, with
respect to any Copyrighted computer software produced in the performance of
this CRADA, DOE has the right, at the end of the period set forth in
paragraph B. of Article VIII hereof and at the end of each 2-year interval
thereafter, to request the Contractor and the Participant and any assignee or
exclusive licensee of the Copyrighted software to grant a nonexclusive,
partially exclusive, or exclusive license to a responsible applicant upon
terms that are reasonable under the circumstances, provided such grant does
not cause a termination of any licensee’s right to use the Copyrighted
computer software. If the Contractor or the Participant or any assignee or
exclusive licensee refuses such request, the Contractor and the Participant
agree that DOE has the right to grant the license if DOE determines that the
Contractor, the Participant, assignee, or licensee has not made a
satisfactory demonstration that it is actively pursuing commercialization of
the Copyrighted computer software.
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Before requiring licensing under this paragraph E,
DOE shall furnish the Contractor/Participant written notice of its intentions
to require the Contractor/Participant to grant the stated license, and the
Contractor/Participant shall be allowed 30 days (or such longer period as may
be authorized by the cognizant DOE Contracting Officer for good cause shown
in writing by the Contractor/ Participant) after such notice to show cause
why the license should not be required to be granted.
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The Contractor/Participant shall have the right to
appeal the decision by DOE to the grant of the stated license to the
Invention Licensing Appeal Board as set forth in paragraphs (b) - (g) of 10
CFR 781.65, “Appeals.”
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F.
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The Parties agree to place Copyright and other
notices, as appropriate for the protection of Copyright, in human-readable
form onto all physical media, and in digitally encoded form in the header of
machine-readable information recorded on such media such that the notice will
appear in human-readable form when the digital data are off-loaded or the
data are accessed for display or printout.
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ARTICLE
XIV.
Reporting Subject Inventions
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A.
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The Parties agree to disclose to each other each
Subject Invention which may be patentable or otherwise protectable under the
Patent Act. The Parties agree that the Contractor and the Participant will
disclose their respective Subject Inventions to DOE and each other within two
(2) months after the inventor first discloses the Subject Invention in
writing to the person(s) responsible for Patent matters of the disclosing
Party.
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B.
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These disclosures should be in sufficiently complete
technical detail to convey a clear understanding, to the extent known at the
time of the disclosure, of the nature, purpose and operation of the Subject
Invention. The disclosure shall also identify any known actual or potential
statutory bars, i.e., printed publications describing the Subject Invention
or the public use or “on sale” of the Subject Invention in this country. The
Parties further agree to disclose to each other any subsequently known actual
or potential statutory bar that occurs for a Subject Invention disclosed but
for which a Patent application has not been filed. All Subject Invention
disclosures shall be marked as confidential under 35 U.S.C. 205.
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ARTICLE
XV.
Title to Subject Inventions
Wherein DOE has granted the Participant and the
Contractor the right to elect to retain title to their respective Subject
Inventions, and wherein the Participant has the option to choose an exclusive
license, for reasonable compensation, for a pre-negotiated field of use to the
Contractor’s Subject Inventions,
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A.
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Each Party shall have the
first option to elect to retain title to any Subject Invention made by its employees, and that election shall be made: (1)
for the Participant, within 12 months of disclosure of the Subject Invention to DOE, or (2) for the
Contractor, within 12 months of disclosure of the Subject Invention to DOE.
If a Parly elects not to retain title to any Subject Invention of its
employees, the other Party shall have the second option to elect to retain
title to such Subject Invention. DOE may obtain title to any Subject
Invention which is not retained by any Party. For Subject Inventions
conceived or first actually reduced to practice under this CRADA, which are
joint Subject Inventions made by the Contractor and the Participant, title to
such Subject Inventions shall be jointly owned by the Contractor and
the Participant.
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B.
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The Parties acknowledge that
DOE may obtain title to each Subject Invention reported under Article XIV for which a Patent application or
applications are not filed pursuant to Article XVI and for which any issued Patents are not
maintained by any Party to this CRADA.
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C.
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The Parties acknowledge that
the Government retains a nonexclusive, nontransferable, irrevocable, paid-up license to practice or to have
practiced for or on behalf of the United States every Subject Invention under
this CRADA throughout the world. The Parties agree to execute a Confirmatory License
to affirm the Government’s retained license.
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D.
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During the term of this CRADA
and for a period of 6 months after the termination or completion of the CRADA, the Participant shall have the
opportunity, pursuant to 15 U.S.C. 3710a, to obtain a license to Contractor
Subject Inventions. In particular, the Participant shall have the option to obtain up to and including an exclusive license
to Contractor Subject Inventions within a defined field of use on agreed-upon reasonable terms
and conditions, including the payment of negotiated license fees and
royalties.
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ARTICLE XVI.
Filing Patent Applications
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A.
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The Parties agree that the Party
initially indicated as having an ownership interest in any Subject Inventions
(“Inventing Party”) shall have the first opportunity to file U.S. and foreign
Patent applications. If the
Participant does not file such applications within one year after election,
or if the Contractor does not file
such applications within the filing time specified in its prime contract, the other Party to this CRADA exercising an
option pursuant to Article XV may file Patent applications on such Subject
Inventions. If a Patent application is filed by the other Party (Filing
Party), the Inventing Party shall reasonably cooperate and assist the Filing
Party, at the Filing Party’s
expense, in executing a written assignment of the Subject Invention to the
Filing Party and in otherwise
perfecting the Patent application, and the Filing Party shall have the right
to control the prosecution of the Patent application. The Parties shall agree
between themselves as to who will file Patent applications on any
joint Subject Invention.
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B.
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The Parties agree that DOE has
the right to file Patent applications in any country if neither Party desires
to file a Patent application for any Subject Invention. Notification of such
negative intent shall be made in
writing to the DOE Contracting Officer within three (3) months of the
decision of the non-Inventing
Party to not file a Patent application for the Subject Invention pursuant to Article XV or not later than 60 days prior to
the time when any statutory bar might foreclose filing of a U.S. Patent
application.
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C.
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The Parties agree to include
within the beginning of (he specification of any U.S. Patent applications and
any Patent issuing thereon (including foreign Patents) covering a Subject Invention, the following statement: “This
invention was made under a CRADA (identify CRADA number) between (name of Participant) and (name
of laboratory) operated for the United States Department of Energy. The
Government has certain rights in this invention.”
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D.
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A Party electing title or filing
a Patent application in the United States or in any foreign country shall
advise the other Party and DOE if it no longer desires to continue
prosecution, pay maintenance fees,
or retain title in the United States or any foreign country. The other Party
and then DOE will be afforded the opportunity to take title and retain the
Patent rights in the United States or in any such foreign country.
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ARTICLE XVII.
Trademarks
[Reserved]
ARTICLE XVIII.
Mask Works
[Reserved]
ARTICLE XIX.
Cost of Intellectual Property Protection
Each Party shall be responsible
for payment of all costs relating to Copyright, Trademark, and Mask Work
filing; U.S. and foreign Patent application filing and prosecution; and all
costs relating to maintenance fees for U.S. and foreign Patents hereunder which
are solely owned by that Party. Government/DOE laboratory funds contributed as DOE’s cost share to a CRADA
cannot be given to the Participant for payment of the Participant’s costs of
filing and maintaining Patents or filing for Copyrights, Trademarks, or Mask
Works.
ARTICLE XX.
Reports of Intellectual Property Use
The Participant agrees to submit,
for a period of five (5) years from the date of termination or completion of
this CRADA and upon request of DOE, a non-proprietary report no more frequently
than annually on efforts to utilize any Intellectual Property arising
under the CRADA.
ARTICLE XXI.
DOE March-In Rights
The Parties acknowledge that DOE
has certain march-in rights to any Subject Inventions in accordance with
48 CFR 27.304-l(g) and 15 U.S.C. 3710a(b)(l)(B) and (C).
ARTICLE XXII.
U.S. Competitiveness
The Parties agree that a purpose
of this CRADA is to provide substantial benefit to the U.S. economy.
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A.
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In exchange for the benefits
received under this CRADA, the Participant therefore agrees to the following:
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1.
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Products embodying Intellectual
Property developed under this CRADA shall be substantially manufactured
in the United States; and
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2.
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Processes, services, and
improvements thereof which are covered by Intellectual Property developed
under this CRADA shall be incorporated into the Participant’s manufacturing facilities in the United States either prior to
or simultaneously with implementation outside the United States. Such processes, services, and
improvements, when implemented outside the United States, shall not result in
reduction of the use of the same processes, services, or improvements
in the United States.
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B.
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The Contractor agrees to a
U.S. Industrial Competitiveness clause in accordance with its prime contract with respect to any licensing and
assignments of its intellectual property arising from this CRADA, except that
any licensing or assignment of its intellectual property rights to the Participant shall be in accordance with the
terms of paragraph A of this article.
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ARTICLE XXIII.
Assignment of Personnel
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A.
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Each Party may assign personnel
to the other Party’s facility as part of this CRADA to participate in or observe the research to be performed
under this CRADA. Such personnel assigned by the assigning Party shall not
during the period of such assignments be considered employees of the receiving
Party for any purpose.
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|
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B.
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The receiving Party shall have
the right to exercise routine administrative and technical supervisory control of the occupational
activities of such personnel during the assignment period and shall have the
right to approve the assignment of such personnel and/or to later request
their removal by the assigning Party.
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C.
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The assigning Party shall bear
any and all costs and expenses with regard to its personnel assigned to the receiving Party’s facilities under this
CRADA. The receiving Party shall bear the costs of providing an appropriate
workspace, access to a telephone, use of laboratory, manufacturing or other
work areas as appropriate, and any other utilities and facilities related to
such assignments.
|
ARTICLE XXIV.
Force Majeure
No failure or omission by the
Contractor or the Participant in the performance of any obligation under this CRADA shall be deemed a breach of this CRADA or
create any liability if the same shall arise from any cause or causes beyond
the control of the Contractor or the Participant, including but not limited to
the following, which, for the purpose of this CRADA, shall be regarded as
beyond the control of the Party in question: Acts of God, acts or omissions of
any government or agency thereof, compliance with requirements, rules, regulations, or orders of any
governmental authority or any office, department, agency, or instrumentality
thereof, fire, storm, flood, earthquake, accident, acts of the public enemy,
war, rebellion, insurrection, riot, sabotage, invasion, quarantine,
restriction, transportation embargoes, or failures or delays in
transportation.
ARTICLE XXV.
Administration of the CRADA
The Contractor enters into this
CRADA under the authority of its prime contract with DOE. The Contractor is
authorized to and will administer this CRADA in all respects unless otherwise
specifically provided for herein.
Administration of this CRADA may be transferred from the Contractor to DOE or
its designee with notice of such
transfer to the Participant, and the Contractor shall have no further
responsibilities except for the confidentiality, use and/or nondisclosure
obligations of this CRADA.
ARTICLE XXVI.
Records and Accounting for Government
Property
The Participant shall maintain
records of receipts, expenditures, and the disposition of all Government property
in its custody related to the CRADA.
ARTICLE XXVII.
Notices and Project Management
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A.
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Any communications required by
this CRADA, if given by postage prepaid first class U.S. Mail or other verifiable means addressed to the Party to
receive the communication, shall be deemed made as of the day of receipt of
such communication by the addressee, or on the date given if by verified facsimile. Address changes shall be given in
accordance with this article and shall be effective thereafter. All such
communications, to be considered effective, shall include the number of this CRADA.
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10 of 13
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FORMAL NOTICES AND
COMMUNICATIONS, COPIES OF REPORTS
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Participant:
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Dennis J. Flood
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Natcore Technology, Inc
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87 Maple Avenue
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Red Bank, NJ 07701
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Tel: (732) 576-8800
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Fax: (732) 576-8808
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Contractor:
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Anne Miller
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Commercialization &
Technology Transfer
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National Renewable Energy
Laboratory,
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1617 Cole Boulevard
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Golden, CO 80401-3393
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Tel: (303) 384-7353
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Fax: (303) 275-3040
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B.
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Each Party shall assign and
identify in writing a project manager prior to the start of the CRADA. Either party may change its project
manager by providing written notification to the other Party. Each project manager shall be
responsible for coordinating all matters relating to this CRADA, any Joint
Work Statement hereunder, and all other relating matters between the Parties. All communications between the Parties
relating to this CRADA shall take place between the project managers.
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PROJECT MANAGERS, REPORTS,
COPIES OF FORMAL NOTICES AND COMMUNICATIONS:
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Participant:
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Dennis J. Flood
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Natcore Technology, Inc.
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161 Forest Street
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Oberlin, OH 44074
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Tel: (440) 774-2551
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Fax:(440)774-2551
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Contractor:
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Hao-Chih Yuan
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National Renewable Energy
Laboratory,
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1617 Cole Boulevard
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Golden, CO 80401-3393
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Tel: (303) 384-7684
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Fax: (303) 384-7600
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C.
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The Parties will use reasonable
efforts to manage the disclosure of Proprietary Information or Protected CRADA Information through the project
managers or their designees; however,
failure to do so will not cause any marked Proprietary Information or any
marked Protected CRADA Information to lose the protection afforded by
Articles VII and VIII.
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11 of 13
ARTICLE XXVIII. Disputes
At the request of either Party,
after reasonable attempt to settle without arbitration, any controversy or
claim arising out of or relating to the CRADA shall be settled by arbitration
conducted in the State of Colorado in
accordance with the then current and applicable rules of the American
Arbitration Association. Judgment
upon the award rendered by the Arbitrator(s) shall be nonbinding on the
Parties.
ARTICLE XXIX. Entire CRADA and Modifications
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A.
|
This CRADA with its appendices
contains the entire agreement between the Parties with respect to the subject matter hereof, and all prior
representations or agreements relating hereto have been merged into this document and are thus
superseded in totality by this CRADA. This CRADA shall not be
effective until approved by DOE.
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B.
|
Any agreement to materially
change any terms or conditions of this CRADA or the appendices shall be valid
only if the change is made in writing, executed by the Parties hereto, and
approved by DOE.
|
ARTICLE XXX. Termination
This CRADA may be terminated by
either Party upon thirty (30) days written notice to the other Party. This
CRADA may also be terminated by the Contractor in the event of failure by the
Participant to provide the necessary advance funding (if applicable), as agreed
in Article III. In the event of termination by either Party, each Party shall be responsible for its
share of the costs incurred through the effective date of termination, as well as its share of the costs
incurred after the effective date of termination, and which are related
to the termination.
ARTICLE XXXI. Background Intellectual Property
Each Party may use the other
Party’s Background Intellectual Property identified in an Appendix to this CRADA solely in performance of research under the
Joint Work Statement. This CRADA does not grant to either Party any option, grant, or license to commercialize, or
otherwise use the other Party’s Background Intellectual Property. Licensing of
Background Intellectual Property, if agreed to by the Parties, shall be the
subject of separate licensing agreements between the Parties.
Each Party has used reasonable
efforts to list all relevant Background Intellectual Property, but Intellectual
Property may exist that is not
identified. Neither Party shall be liable to the other Party because of failure
to list Background Intellectual Property.
Approval:
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FOR
CONTRACTOR:
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FOR
PARTICIPANT:
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BY
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BY
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TITLE:
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C.Porto
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TITLE:
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Charles
R Provini
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Senior
Vice President
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President
& CEO
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DATE
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2/21/12
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DATE
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2/21/2012
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12 of 13
CRADA No. CRD-12-475
DOE
APPROVAL FOR CONTRACTOR TO ENTER INTO THE AGREEMENT
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BY
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TITLE
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Contracting Officer
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DATE
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2/27/2012
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13 of 13
Statement of Work
National Renewable Energy Laboratory
Cooperative Research and Development Agreement
Appendix A—Joint Work Statement
CRADA#CRD-12-475
Title: Development of Black Silicon Antireflection Control
and Passivation Technology for Commercial Application
Abstract of CRADA work:
The work involves the development
of a commercial manufacturing process for both multicrystalline and monocrystalline solar cells that combines
Natcore’s patent pending passivation technology.
Participant Name and Address:
Natcore Technology, Inc.
87 Maple Avenue
Red Bank, NJ 07701
Participant Type
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Foreign
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o
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University
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o
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Small Business
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x
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Large Business
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o
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State & Local Goverment
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o
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Not-for-Profit
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o
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Schedule
The Period of Performance for
this effort is one year.
Purpose
Natcore seeks to develop a
commercial manufacturing process for both multicrystalline and monocrystalline solar cells that combines
Natcore’s patent pending passivation technology, accomplished using the Company’s patented liquid phase
deposited silica film technology, with NREL’s patent pending technologies for
creating a black silicon antireflection layer integrated into high efficiency
solar cells. The feasibility of the
combined technologies working together has already been demonstrated in an
earlier cooperative effort between
Natcore and NREL that produced a 16.5% cell. The commercial process has the
potential to reduce cell costs by between 2% and 3% per watt and to increase
solar panel energy output in kilowatt-hours from 3% to 10% over the course of a
single day without the aid of a solar tracking mechanism.
Statement
of Work
Tasks
During the first year of this
CRADA, Natcore and NREL will collaborate on the following topics, as budgets permit, with activities of each party
including those detailed below:
1. Development of processes and
parameters that will ensure precise control of the distribution of black silicon pore depths and widths that reduce
reflection while still minimizing recombination. Approaches may include
electroless deposition, electroplating or dissolution plating, among other
options.
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-
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NREL will:
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•
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Transfer present NREL process
details, including demonstration of lab-scale black silicon etching,
to Natcore
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•
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Develop alternative black
silicon etching methods that are lower cost and/or can achieve better solar cell performance, including
possible changes for heavily-doped Si and compatibility with
liquid-phase deposition (LPD)
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•
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Characterize black silicon
surface reflectivity
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•
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Characterize black silicon pore
depth and surface area
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-
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Natcore:
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•
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Send technical staff to NREL to
observe the lab-scale black silicon etching and the rest of NREL solar
cell processing
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•
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Develop
industrially-compatible black silicon etching processes at larger scale
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•
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Demonstrate large-area black
silicon
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2. Investigate the impact on
cell performance of black silicon layer formation on the back and side surfaces of the wafer. Develop low cost means to
control (or eliminate) its formation as required to maintain optimum
cell performance.
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-
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NREL:
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•
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Prepare lab-scale 1-sided and
2-sided black silicon samples
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•
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Perform POCl
3
emitter formation on 1- and 2-sided black silicon samples
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•
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Perform PCD-lifetime
characterization on 1- and 2-sided black silicon samples after LPD passivation to compare the impact on
lifetime and implied V
oc
between 1- and 2-sided black
silicon formation
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-
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Natcore:
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•
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Perform LPD passivation on
1-sided and 2-sided black silicon samples
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•
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Develop low-cost and
industrially-compatible process to control black silicon formation on
the back surface
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•
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Develop, if needed,
single-sided silicon removal process (for example: RENA’s InOxSide, single-sided PSG removal and junction
isolation) if nanostructures on the back side impedes solar cell
performance
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3. Develop metal nanoparticle removal and wafer rinsing techniques that can
be incorporated in a wet bench designed for high volume cell production.
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-
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NREL:
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•
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Develop metal nanoparticle
removal techniques using various chemicals and transfer to Natcore
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•
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Perform surface analysis such
as SIMS to analyze the residual level of catalytic metal near the
surface
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-
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Natcore:
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•
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Develop industrially-compatible
wet bench processes for metal nanoparticle removal and wafer rinsing
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4. Develop an optimized screen printing chemistry
and technique for front contact formation on a black silicon/silica
coated cell front surface.
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-
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NREL:
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•
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Develop
metal firing process effective for the black silicon/silica coated cell front
surface
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•
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Characterize
contact resistance between metal and black silicon emitter
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•
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Characterize
shunting by techniques including I-V measurement and lock-in thermography
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-
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Natcore:
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•
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Develop
metal screen printing processes and select metal paste(s) effective for black silicon/silica coated cell front surface
|
5. Design
a
maximum efficiency
cell structure incorporating a combined black silicon/LPD passivation technology
Funding Table
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Estimated
Costs
|
|
NREL
Shared Resources
|
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Participant
Shared Resources
|
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Participant
Funds In
|
|
Totals
|
|
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|
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|
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Year l
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|
$
|
50,000.00
|
|
$
|
00.00
|
|
$
|
100,000.00
|
|
$
|
150,000.00
|
|
|
TOTALS
|
|
$
|
50,000.00
|
|
$
|
00.00
|
|
$
|
100,000.00
|
|
$
|
150,000.00
|
|
|
Fed Admin Charge on Funds-in
|
|
|
—
|
|
|
—
|
|
|
waiver
requested
|
|
$
|
0
|
|
DOE Mission Area to benefit from this CRADA:
|
|
|
|
Energy
|
x
|
|
Environmental
Quality
|
o
|
|
Science
|
o
|
|
Other, name:
|
o
|
CRADA benefit toDOE,
Participant, and US Taxpayer:
DOE Program Manager:
Ramamoorthy Ramesh 202-287-1473
CRADA format is
Modular CRADA
. If other, such as
multilab or USIC, identify: N/A.
Special
Considerations
Background Intellectual Property:
No
o
Yes
x
If yes, list: As listed in the license agreement
between the parties executed December 12, 2011 and Appendix
B.
Is Participant interested in licensing BIP at this time:
No
o
Yes
x
If yes, identify any known
special issues with a potential license.
Not
applicable.
Are human or animal subjects to be used as part of this
CRADA?
No
x
Yes
o
Have all necessary ES&H and quality (NEPA) reviews been
completed?
Yes
x
o
Are there any organizational or personal conflicts of
interest associated with this CRADA?
No
x
Yes
o
(explain)
NREL maintains on file signed
COI certificates for each employee with a substantial role in this CRADA.
Will export controlled information be produced?
No
x
Yes
o
(if yes, identify)
Fairness of Opportunity requirements have been satisfied by:
x
Participant approached laboratory
o
Participant responded to FedBizOpps announcement
o
Participant was contacted by laboratory after or
during broad public announcement or solicitation
For 100% funds-in CRADAs, the Participant has been notified
of other types of technology transfer agreements, such as Work for
Others.
o
Yes
o
No
x
N/A
Did the Participant require any substantive changes to the
Modular CRADA or any changes to double-underlined language?
No
x
Yes
o
If yes, attach copies of the proposed modified
articles. If substantively altered, attach Participant’s US
Competitiveness justification.
Additional Special
Considerations: NONE
Appendix B
BACKGROUND INTELLECTUAL PROPERTY
Patents, Patent Applications, and Record of Inventions
Agreement No.: CRD-12-475
Title: Development of Black
Silicon Antireflection Control and Passivation Technology for Commercial
Application
The Contractor (National
Renewable Energy Laboratory) and the Participant (Company) have identified and
agreed that the following Background Intellectual Property may be used in the
performance of work under this CRADA and may be needed to practice the results
of this CRADA.
PARTICIPANT:
United States Patent
No.
:
7,718,550
Inventors: Barron and Whitsitt
Issue or Filing
Date: May 18, 2010
|
|
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COOPERATIVE
JOINT VENTURE CONTRACT
|
|
|
COOPERATIVE JOINT
VENTURE CONTRACT
For the establishment of
Natcore Technology (Zhuzhou)
Co., Ltd.
by and between
Zhuzhou Hexing Industrial Co., Ltd.
and
Natcore Asia Technology, Limited
September 21, 2010
Confidential
|
|
|
COOPERATIVE
JOINT VENTURE CONTRACT
|
|
|
TABLE OF CONTENTS
|
|
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|
ARTICLE 1 DEFINITIONS
|
1
|
|
ARTICLE 2
PARTIES TO THE CJV
|
2
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|
ARTICLE 3 ESTABLISHMENT OF THE CJV
|
3
|
|
ARTICLE 4
PURPOSE AND SCOPE OF BUSINESS
|
4
|
|
ARTICLE 5 TOTAL INVESTMENT AND REGISTERED CAPITAL
|
4
|
|
ARTICLE 6 UTILIZATION OF INTELLECTUAL PROPERTY OF THE CJV
|
7
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ARTICLE 7 SALES AND DISTRIBUTION
|
7
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ARTICLE 8 BOARD OF DIRECTORS
|
7
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ARTICLE 9
SUPERVISOR
|
10
|
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ARTICLE 10 OPERATION AND MANAGEMENT
|
11
|
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ARTICLE 11 LABOR MANAGEMENT
|
12
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ARTICLE 12 FINANCIAL AFFAIRS AND ACCOUNTING
|
13
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ARTICLE 13 TAXATION AND INSURANCE
|
16
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ARTICLE 14 CONFTDENTIALITY
|
16
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ARTICLE 15 THE JOINT VENTURE TERM
|
17
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ARTICLE 16 TERMINATION AND LIQUIDATION
|
18
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ARTICLE 17 BREACH OF CONTRACT
|
20
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ARTICLE 18 FORCE MAJEURE
|
20
|
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ARTICLE 19 DISPUTE RESOLUTION
|
21
|
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ARTICLE 20 APPLICABLE LAW
|
21
|
|
ARTICLE 21 MISCELLANEOUS PROVISIONS
|
21
|
2
Confidential
|
|
|
COOPERATIVE
JOINT VENTURE CONTRACT
|
|
|
COOPERATIVE JOINT VENTURE
CONTRACT
This COOPERATIVE JOINT VENTURE CONTRACT (the
“Contract”)
is made and entered into as of
September 20, 2010 in the People’s Republic of China (the
“PRC” or
“China”)
by and between the
following parties in accordance with the
Law
of the People’s Republic of China on Sino-Foreign Cooperative Joint Ventures
and
its implementing
measures (the
“Cooperative Joint Venture
Law”),
and other relevant Chinese laws and regulations adopted in principal
place of the cooperative joint venture:
|
|
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|
(1)
|
Zhuzhou Hexing Industrial
Co.,
Ltd.
a company duly incorporated and validly existing
under the PRC law, whose registered office is at 5
th
Fl. Huanzhou
Town, Lusong District, Zhuzhou City, Hu’nan Province
(“Party A”);
and
|
|
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|
|
(2)
|
Natcore Asia Technology, Limited,
a company duly incorporated and validly existing under the laws of the Hong Kong
Special Administrative Region
(“Hong Kong”),
whose registered office is
at Suite 2208, 22/F, Jardine House,
1 Connaught Place, Central, Hong Kong
(“Party
B”).
|
In this Contract, Party A and Party B hereinafter shall
be referred to as the
“Parties”
collectively and a
“Party”
individually. On the basis of
mutual respects and benefits, the Parties have agreed to establish a Sino-Foreign
Cooperative Joint Venture (the
“CJV”
)
pursuant to the terms and conditions of this Contract.
ARTICLE 1 DEFINITIONS
Unless the terms or context of this Contract otherwise
provided, the following terms shall have the meanings set out below:
|
|
|
|
1.1
|
“Affiliate”
means, in relation to
a Party, any company or entity which, through ownership of voting stock
(shares), membership interests, or otherwise, directly or indirectly through
one or more intermediaries, Controls, is Controlled by, or is under common Control with the Party.
|
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|
|
1.2
|
“Approval Authority”
shall mean the
Ministry of Commerce and/or its local branch offices, or other government
entities required by Chinese Law to grant approval to this Contract.
|
|
|
|
|
1.3
|
“Board”
shall mean the board
of Directors of the CJV.
|
|
|
|
|
1.4
|
“Business Day”
shall mean a day on
which banks are open for business in the PRC and Hong Kong (excluding Saturdays, Sundays
and public holidays).
|
|
|
|
|
1.5
|
“China”
or
“PRC”
shall mean the People’s Republic of
China, exclusive of the Hong Kong Special Administrative Region, the Macau
Special Administrative Region,
and Taiwan.
|
|
|
|
|
1.6
|
“Director”
shall mean any
individual who serves as a member of the Board of the CJV.
|
|
|
|
|
1.7
|
“Effective Date”
shall mean the
effective date of this Contract, which shall be the date of the
approval issued by the Approval Authority in respect of this Contract.
|
1
Confidential
|
|
|
COOPERATIVE
JOINT VENTURE CONTRACT
|
|
|
|
|
|
|
1.8
|
“Joint
Venture Term”
shall mean the term of the CJV as set forth
in Article 15.
|
|
|
|
|
1.9
|
“Renminbi”
or
“RMB”
shall mean the
lawful currency of China.
|
|
|
|
|
1.10
|
“SAFE”
shall mean the State Administration of Foreign Exchange of China and/or its
local branch (as appropriate to the context).
|
|
|
|
|
1.11
|
“SAIC”
shall mean the State Administration of Industry and Commerce of China and/or
its local branches (as appropriate to the context).
|
|
|
|
|
1.12
|
“U.S.”
shall mean the United States of America.
|
|
|
|
|
1.13
|
“United
States Dollars,” “U.S. Dollars”, “USD”
and
“US$”
shall mean the lawful currency of
the United States of America
|
|
|
|
|
1.14
|
“Management
Personnel”
shall mean the General Manager, Chief Financial
Officer (“CFO”) and the other Management Personnel designated as such by the
Board.
|
|
|
|
|
1.15
|
“Working
Personnel”
shall mean the employees of the CJV except the
Management Personnel.
|
ARTICLE
2 PARTIES TO THE CJV
|
|
|
|
|
2.1
|
The Parties
|
|
|
|
|
|
The Parties to the CJV
are:
|
|
|
|
|
|
(1)
|
Zhuzhou
Hexing Industrial Co., Ltd.,
a limited liability company
duly incorporated and validly existing under the laws of China with its
registered address at 5
th
Fl. Huanzhou Town, Lusong District,
Zhuzhou City, Hu’nan Province.
|
|
|
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Legal
Representative: Xu Aimin
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Title: Chairman
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Nationality: PRC
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(2)
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Natcore
Asia Technology, Limited,
a limited liability company duly
incorporated and validly existing under the laws of Hong Kong with its
registered address at Suite 2208, 22/F, Jardine House, 1 Connaught Place,
Central, Hong Kong.
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Legal
Representative: Charles Robert PROVINI
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Title: President
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Nationality: USA
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2.2
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Representations
and Warranties
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The Parties hereby
represent and warrant to each other that:
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(1)
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Such Party is a duly
organized, validly existing company and in good standing under the laws of
the place of its establishment or incorporation.
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(2)
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Such Party has all
requisite power, authority and approval required to enter into this Contract;
and upon the Effective Date, will have all requisite power, authority and
approval to perform fully each and every obligation under this Contract
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(3)
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Such Party has taken
all action necessary to authorize it to enter into this Contract and such
Party’s representative (if applicable) whose signature is affixed to this
Contract is fully authorized to sign this Contract or other similar
documents, and to bind such Party thereby, pursuant to a valid authorization
or other such similar instrument.
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(4)
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Upon the Effective
Date, this Contract shall constitute valid and binding legal obligations of
such Party.
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(5)
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Neither the execution
of this Contract, nor the performance of such Party’s obligations under this
Contract, will conflict with, or result in a breach of, or constitute a
default under, any provision of the articles of incorporation, business
license, by-laws or articles of association of such Party, or any law, rule,
regulation, authorization or approval of any government agency or body, or
any contract or agreement to which it is a party or is subject.
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(6)
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There is no lawsuit,
arbitration or legal, administrative or other proceeding or governmental
investigation pending or, (to the best knowledge of such Party), threatened
against such Party with respect to the subject matter of this Contract that
would affect in any way such Party’s ability to enter into or perform this
Contract.
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ARTICLE
3 ESTABLISHMENT OF THE CJV
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3.1
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Establishment
of the CJV
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The Parties hereby
agree to establish the CJV in accordance with the Cooperative Joint Venture
Law and the provisions of this Contract. The legal service fees paid for the
establishment of the CJV shall be born by the CJV.
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3.2
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Name
and Address of the CJV
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(1)
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Name: The name of the
CJV shall be in Chinese:
and
in English: Natcore Technology (Zhuzhou) Co., Ltd.
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(2)
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Address: The legal
address of the CJV shall be Zone No. 52, Liyu Industry Zone, the National
High-tech Industrial Development Zone, Zhuzhou City, Hu’nan Province.
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3.3
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Commencement
of Operations
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The CJV shall commence
operations upon the issuance of its business license.
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ARTICLE
4 PURPOSE AND SCOPE OF BUSINESS
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4.1
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Purpose
of the CJV
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The purpose of the CJV
is as follows:
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(1)
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Use Party B’s licensing
technology to develop and sell Anti-Reflective Coating on solar cells (the “
ARC System
”) liquid phase deposition
process and equipment; or other similar liquid deposition technology, such as
passivation of LPD / SiN, SiN / PLD technology on crystalline silicon or thin
film cell surface; as well as optical or surface enhancement application of
other crystalline silicon cells or thin film cells (collectively referred to
as the “
Technologies
”).
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(2)
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Promote the
Technologies through China and worldwide sales and marketing channels:
through sales channels distributing the Technologies including licensing
agreements and appropriate franchising;
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(3)
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Promote the
Technologies through appropriate development agreements with research centers
/ national laboratories, equipment manufacturers or end-users;
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(4)
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Develop add-on
intellectual property rights facilitating technology commercialization;
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(5)
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Research & develop
a self-closing, self-compensation prototype for the production of ARC System
or similar materials in crystalline silicon and solar thin film cells;
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(6)
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Produce products
marketable in China and the world markets, the products can be with or
without self-closing, self-compensation ARC System beneficial to subsequent
sales.
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4.2
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Scope
of Business of the CJV
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The scope of business
of the CJV is as follows: to develop, manufacture, distribute and sell
anti-reflective coating and related products, and to provide related
after-sales and consulting services.
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ARTICLE
5 TOTAL INVESTMENT AND REGISTERED CAPITAL
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5.1
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Total
Investment
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The CJV’s total
investment shall be USD $3,000,000.
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5.2
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Total
Amount of Registered Capital
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The CJV’s total amount
of registered capital shall be USD $3,000,000.
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5.3
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Capital
Contribution and Cooperation Condition
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(1)
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Capital
Contribution
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Party A shall contribute to the CJVan amount equivalent to USD $2,500,000
in RMB and Party B shall contribute to the CJV an amount of USD $500,000 in
cash.
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(2)
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Cooperation Condition
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(i)
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Party A shall, within
thirty (30) days upon execution of this Contract, at its own expense,
reconstruct the plant which is located at Zone No. 52, Liyu Industry Zone,
the National High-tech Industrial Development Zone, Zhuzhou City, Hu’nan
Province and owned by Party A’s Affiliate Hunan Chuangke Silicon Co., Ltd.
(“Chuangke Silicon”).
The reconstructed
plant shall meet the following conditions in order to comply with the
standards of usage of common plants and pass the acceptance inspection:
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a.
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The plant shall comply
with the relevant national building standards of the PRC, such as fire
control, power supply, water supply and sewerage and etc., including but not
limited to, applying 380 voltage output, supplying water, refitting the road,
reinforcing the doors and windows, whitewashing walls and reserving ancillary
facilities for telecommunications; and
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b.
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The plant shall conform
to the fire control safety requirements of common plants.
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The CJV shall, within
five (5) Business Days upon the date of issuance of the CJV’s business
license or the date of the reconstructed plant passing the acceptance
inspection (whichever occurs later), enter into a plant lease agreement (the
“Lease Agreement”)
with Chuangke Silicon
to rent the reconstructed plant and the CJV shall pay rent to Chuangke
Silicon in accordance with the prevailing market price in Zhuzhou to lease a
plant which is under the same conditions with the reconstructed one. After
the Lease Agreement is executed, Party A shall, at the cost of the CJV,
assist the CJV to establish a number of research, development and production
facilities to meet relevant requirements on ventilation, water supply,
production scale, electricity, security and waste disposal.
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(ii)
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Party B shall provide
the CJV with a license to use certain technologies related to the operation
of the CJV.
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(3)
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Both Parties shall make
their capital contributions within six (6) months from the date of obtaining
the CJV’s business license. After the CJV has completed the foreign exchange
registration with the SAFE and opened a foreign currency capital account (the
“Account”),
Party B shall
immediately wire transfer its portion of the registered capital in US dollars
in the amount of USD $500,000 to the Account and deliver the copy of the
remittance slip to Party A. Party A shall contribute its portion of the
registered capital in RMB equivalent of USD $2,500,000 to the CJV no later
than three (3) Business Days after receiving the copy of the remittance slip
from Party B.
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(4)
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RMB/USD exchange rate
will be the average between the buying rate and the selling rate based upon
People’s Bank of China’s published exchange rates on the day the capital is
contributed by the Parties.
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(5)
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If a Party fails to
make its registered capital contribution in accordance with the above (1) and
(3), the other Party has the right, but not the obligation to request
amendment to the Contract and other relevant documents in respect of the CJV
to adjust the ratio of the interests held by the Parties in the CJV and of
the profit sharing between the Parties based on their actual contributions.
The breaching party shall cooperate with such amendment. Such amendment shall
be submitted to the Approval Authority for approval and to SAIC for
registration, and shall take effect upon such approval and registration.
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5.4
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Capital
Contribution Certificate
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After each Party has
made its capital contribution or provided its cooperation conditions pursuant
to this Article 5, a Chinese registered accountant shall verify the payment
or the provision in each installment and issue a contribution verification
report. Thereupon, the CJV shall issue within 30 days after the payment or
provision in full of the contribution a final capital contribution
certificate signed by the legal representative of the CJV.
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5.5
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Assignment
of Interest
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(1)
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Subject to Article 15.1
hereunder, in the event that either Party needs to assign its interest in the
CJV in whole or in part to any third party, it shall obtain written consent
from the other Party hereof and the unanimous approval by the Board, and
shall submit relevant documentation to the relevant Approval Authority for
its approval.
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(2)
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Upon receipt of the
approval of the Approval Authority, the CJV shall register the change with
the SAIC.
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5.6
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Increase
of Registered Capital
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(1)
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The registered capital
may be increased during the Joint Venture Term with the written consent of
the Parties and the unanimous approval of the Board.
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(2)
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An agreement to
increase the registered capital must be submitted to the Approval Authority
for examination and approval before it becomes effective. Upon receipt of the
approval of the Approval Authority, the CJV shall register the increase with
the SAIC.
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5.7
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Reduction
of Registered Capital
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The Parties agree that,
during the Joint Venture Term, the CJV shall not reduce the amount of
registered capital.
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5.8
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Encumbrance
of Registered Capital
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Without prior written
consent from other Party, neither Party shall mortgage, pledge, or otherwise
encumber in part or in whole its registered capital, or other rights or
interest in the CJV.
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ARTICLE
6 UTILIZATION OF INTELLECTUAL PROPERTY OF THE CJV
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6.1
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Party B shall ensure
that the liquid phase deposition technology (the
“Technology”)
is developed by the Rice University, and has
received the United States Patent
No US 2006/013 5001 A1.
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6.2
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Party B shall ensure
its sole shareholder, Natcore Technology Inc., has entered into an exclusive
patent licensing agreement on the Technology with the Rice University on
March 31, 2004 (See attachment of the exclusive patent licensing agreement).
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6.3
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Party B shall ensure
that Natcore Technology Inc. or it will authorize the CJV exclusive rights to
use the technology globally by a Letter of Authorization, and that all
intellectual properties generated during the term of the CJV shall belong to
the CJV.
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6.4
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The copyright fees
required for using the technology shall be paid by the CJV by 2%of the difference between sales revenue
and cost, and the royalties should be included in the production costs of the
CJV.
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6.5
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Party B shall authorize
the CJV to use the following intellectual properties, R & D facilities
and personnel: meeting Professor Andrew Barron, meeting with Dr. Dennis
Flood, and using shared R&D
resources of the Rice University and the equipment of the Nanotech West
Laboratory with a reasonable business purposes in order to promote
realization of the established goals of the CJV.
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6.6
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Party A shall ensure
that the intellectual property rights owned by Party B and Natcore Technology Inc. shall not violated by
any other companies or individuals within the territory of PRC. Party
A shall be liable for any infringement caused to the intellectual property
rights owned by Party B and Natcore Technology Inc. conducted by any company
or individual (including the CJV and its employees). Party B shall ensure the
clean and lawful ownership of its intellectual properties.
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ARTICLE
7 SALES AND DISTRIBUTION
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7.1
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The Parties agree that
the CJV shall permanently enjoy exclusive production rights and distribution
rights of the ARC System in China.
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7.2
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The Parties agree that,
from the date the first technology products of the CJV is delivered to users,
the CJV shall have the exclusive right of five (5) years to produce and
distribute the ARC System in the global market.
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ARTICLE
8 BOARD OF DIRECTORS
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8.1
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Formation
of the Board
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(1)
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The date on which the
CJV obtains its business license shall be considered the date of
establishment of the Board.
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(2)
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The Board shall consist
of five (5) Directors, two (2) of whom shall be appointed by Party A and
three (3) of whom shall be appointed by Party B.
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The CJV shall maintain one (1) chairman of the Board,
who shall be appointed by Party B. The legal representative of the CJV shall be
the chairman
of the Board. The CJV shall maintain one (1) vice chairman, who shall be appointed by
Party A. In the event that the chairman is unable to or fails to exercise
his/her rights and duties, the vice chairman or another Director shall be
authorized to temporarily perform the powers of the chairman.
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(3)
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At the time this Contract is executed and each time any
Director is appointed or removed, the Party which made such appointment or removal
shall
promptly notify other Party in writing of the same. Any appointment or
removal of Director(s) shall take effect from the date it is notified to the CJV in writing, and
shall be filed with the SAIC for the record.
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(4)
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Each Director shall be appointed for a term of three
(3) years and may serve consecutive terms if reappointed by the Party which
originally appointed
him. If a seat on the Board is vacant due to retirement, resignation, illness, disability or death of a
Director or by the removal of such
Director by the Party which originally appointed him, the Party which originally appointed such Director shall appoint
a successor to serve the remainder
of such Director’s term. Each Party may replace its appointed Director
at its own discretion.
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8.2
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Meetings and Powers of the Board
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(1)
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The Board shall be the highest authority of the CJV.
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(2)
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The first Board meeting shall be held within fifteen
(15) Business Days after the day of issuance of the business license. The
meeting shall be convened by chairman. Where the chairman fails to
perform his/her duty, the vice chairman shall convene the meeting. Upon the
written request of two or more of the Directors specifying the matters to be discussed,
the chairman
may convene an interim meeting of the Board by a written notice ten (10) Business Days in advance.
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(3)
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Board meetings shall be held at the registered address
of the CJV or a place inside or outside of China as designated by the
chairman. Meetings shall be held at least once per year on prior written notice to
all Directors (Such notice shall be given 15 days prior to the meeting date). A notice of
a Board meeting
shall cover the agenda, all relevant data and documents, time and place for such
meeting. A board meeting convened without proper notice to all Directors shall be
deemed null and void, unless the relevant Director(s) has submitted to the
chairman and vice chairman of the Board a written statement waiving
such notice requirement before or after the meeting. The chairman of the
Board shall be responsible for convening and presiding over such meetings. In
the event that chairman fails to perform his/her duty, the vice chairman
shall convene and preside over such meetings.
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(4)
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In case a Board member is unable to participate in a
Board meeting in person, he may issue a proxy and entrust another person
to participate in the meeting on his behalf. The representative so entrusted
shall exercise rights within the scope of being authorized. If a Board
member fails to participate or to entrust another to participate, he will be deemed
as having waived such right. A Board member may also participate by telephone or other electronic
method, provided that each Director in such a meeting may hear and be heard
by all other Directors. In the event of Directors participating meetings by
telephone or other electronic method, the voting process shall be tape
recorded.
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(5)
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Four (4) or more
Directors present in person, by telephone or other electronic means, or by
proxy shall constitute a quorum which shall be necessary for the conduct of
business at any meeting of the Board.
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(6)
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Each Director present
in person, by telephone or other electronic means, or by proxy at a meeting
of the Board of Directors shall have one vote.
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(7)
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In exercising their
powers, the Directors shall be obliged to act in the best interests of the CJV, which shall prevail in
the event of any conflict between them and the interests of the Party
who appointed that Director.
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(8)
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Resolutions involving
the following matters shall only be adopted upon the unanimous affirmative
vote of all Directors of the Board present at the meeting, whether in person
or by telephone or other electronic means:
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a)
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amendment to the
article of associations;
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b)
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increase or reduction
of the CJV’s registered capital;
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c)
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termination or dissolution
of the CJV; and
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d)
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merger or division of
the CJV.
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(9)
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Except for the issues
listed in Article 8.2(8), all other issues that require resolutions by the
Board may be motioned at a duly convened meeting of the Board and must be
adopted by the affirmative vote by four (4) or more Directors.
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(10)
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Any action by the Board
may be taken without a meeting if all members of the Board consent in writing
to such action. Such written consent shall be filed with the minutes of the
Board and shall have the same effect as a unanimous affirmative vote of all
Directors of the Board at a convened meeting of the Board
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(11)
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The Board will cause
complete and accurate minutes of all meetings to be kept (in both English and
Chinese) (including a copy of the notice of the meeting) and of business
transacted at such meetings. Minutes of all meetings of the Board shall be
distributed to all the Directors as soon as practicable after each meeting
(but not later than 10 Business Days from the day of such meeting). Any
Director who wishes to propose any amendment or addition thereto shall submit
the same in writing to the chairman and the vice-chairman within 10 Business
Days after receipt of the proposed minutes. The minutes shall be finalized by
the chairman not later than 30 Business Days after the relevant meeting and
signed by all the Directors within 10 Business Days after receipt of the
final minutes.
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(12)
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Members of the Board
shall serve without any remuneration, but all reasonable costs incurred by
the Directors, including but not limited to travel and accommodation
expenses, in the performance of their duties as members of the Board, shall
be borne by the CJV.
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(13)
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All information discussed at Board meetings shall be
treated as confidential by the Directors and shall not be disclosed to any
third party unless required by law.
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(14)
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The CJV shall bear all liabilities incurred to any
Directors due to his or her identity as Director, except for such liabilities
caused by the willful misconduct, gross negligence or violation of criminal
causes by such Director.
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ARTICLE
9 SUPERVISOR
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9.1
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Functions of Supervisor
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The CJV shall have two supervisors
(“Supervisors”).
Each of Party A and
Party B has the right to appoint one. The Supervisors shall exercise the
following functions:
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(1)
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to examine the financial affairs of the CJV;
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(2)
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to bring the proposal to dismiss those Directors and
senior executives violating the laws, administrative regulations and/or the
articles of association of the CJV;
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(3)
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to investigate any irregularities in the CJV’s
operations which the supervisor discovers and, if necessary and with the
consent of the investors in writing, engage at the expense of the CJV a
professional services firm to assist in such investigations; and
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(4)
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to perform all other duties which may not be
abrogated by contractual agreement under applicable law.
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9.2
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Term of Office
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The term of the office of each Supervisor is three
years, and may be renewed or shortened by the Party appointing the
Supervisor. A Party removing its designated Supervisor may replace such
Supervisor with someone it otherwise designates.
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93
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Attendance in the Board Meeting
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The Supervisors may attend the meetings of the Board
as non-voting attendees, and may make enquiries and suggestion on the matters
decided by the Board.
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9.4
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Expenses
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All reasonable expenses required by the Supervisors
in the exercise of their functions and powers shall be borne by the CJV.
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9.5
|
Records
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The Supervisors shall keep up to date written records
of decisions and actions taken in discharging their duties. A copy of such
records shall be given to the Parties.
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ARTICLE 10 OPERATION AND MANAGEMENT
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10.1
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The CJV shall adopt a “General Manager Assumes Full
Responsibility” management system under which Management Personnel
shall be responsible to and under the leadership of the Board. The CJV shall
have one General Manager, one CFO, and other Management Personnel confirmed by
the Board. The General Manager shall be jointly nominated by Party A and
Party B, and the CFO shall be nominated by Party B. The Parties agree that
the CFO nominated by Party B shall speak English and shall be competent in U.S.
GAAP standards and procedures. Subject to the aforementioned nominations, the
appointment and removal of the General Manager, CFO and other Management
Personnel shall be decided by a vote cast by the Board. If the General Manager or the
CFO is removed by the Board, a successor shall be nominated and appointed in
the same manner as the original
appointee.
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10.2
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The General Manager shall be in charge of the
day-to-day operations and management of the CJV. The General Manager shall be
responsible to the Board and shall carry out all matters entrusted to him by
the Board. The CFO shall assist and report to the General Manager in their work and
shall be accountable to the General Manager. The General Manager and the CFO shall
perform all duties as described in the Contract and the articles of
association of the CJV. The General Manager, CFO and other Management Personnel shall not hold posts concurrently with other enterprises in competition
with the CJV.
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10.3
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The responsibilities of the General Manager are set
forth as below:
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(1)
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organizes, plans, directs and supervises operations of
the CJV under the leadership
of the Board;
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(2)
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organizes and coordinates the implementation of the
budget plans of the CJV to ensure its compliance with financial policies
and establishing priorities of
the CJV;
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(3)
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formulates and implements a strategy for fiscal and
capital improvement which
are approved by the Board;
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(4)
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formulates, implements and monitors the organizational
budgets which are
approved by the Board;
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(5)
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represents the CJV’s interest before local state
provincial and federal agencies;
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(6)
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attends conferences and public and professional
meetings;
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(7)
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plans,
implements and coordinates technical and administrative programs;
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(8)
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develops internal management structure and integrate
this structure with the technology side of the CJV;
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(9)
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develops the CJV’s
specific rules and regulations;
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(10)
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takes responsibility
for product quality control;
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(11)
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takes responsibility
for establishing the operation policies and strategies of the CJV in
expectation for obtaining profitabilities of the CJV;
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(12)
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takes responsibility
for the technology development and IP worldwide; and
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(13)
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implements all the
resolutions adopted by the Board.
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10.4
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The responsibilities of
the CFO are set forth as below:
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(1)
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directs the fiscal
functions of the CJV in accordance with both US GAAP and China Accounting
Standards;
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(2)
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integrates Chinese
Financial Statements into US Financial Statements for a US public company in
accordance with US GAAP;
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(3)
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provides strategic financial
leadership for the CJV by working with the Management Personnel of the CJV to
establish long-term goals and planning;
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(4)
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supervises bid
activities for commercial and government contracts;
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(5)
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achieves growth through
strategic marketing and sales force management;
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(6)
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takes responsibility
for financial planning and banking relations;
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(7)
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communicates to
government, board, shareholders, investors, brokerage firms; and
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(8)
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takes responsibility
for English and Mandarin Financial Reporting.
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10.5
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Without limiting the
authority of the Board to remove the General Manager, CFO and other
management personnel, the Board shall have the authority to dismiss at any
time the General Manager, CFO and any of the Management Personnel in the
event that the Board determines that the General Manager, CFO or any of the
Management Personnel have engaged in any fraudulent acts or have grossly
neglected their duties or have engaged in criminal activities. In such event,
the General Manager, CFO or the member of the Management Personnel (as the
case may be), shall be personally liable to the CJV for any financial losses
incurred by the fraudulent act, gross neglect of duties or criminal
activities.
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ARTICLE 11 LABOR MANAGEMENT
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11.1
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Governing
Principle
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The General Manager
shall formulate a plan for matters concerning the recruitment, employment,
dismissal, wages, labor insurance, welfare benefits, reward and discipline of
the workers and staff members of the CJV, in accordance with the Labor Law of
the People’s Republic of China and other PRC laws and regulations and modern
management standards, practices and policies. The plan shall be submitted for
the approval of the Board of Directors.
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11.2
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Working
Personnel
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Working Personnel shall
be employed by the CJV in accordance with contracts which shall be entered
into between the CJV and each worker after the establishment of the CJV. Such
contracts shall establish all terms governing the employment, duties and
benefits of such Working Personnel (inclusive of obligations regarding
confidentiality and non-competition). The Board shall approve the general
form and terms and conditions included in such contracts.
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11.3
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Management
Personnel
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(1)
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Management Personnel
shall be employed by the CJV in accordance with the terms of individual
employment contracts.
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(2)
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The salary and benefits
of Management Personnel shall be fixed by the Board.
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11.4
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Conformity
with Labor Protection Regulations
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The CJV shall conform
to rules and regulations of the PRC government concerning labor protection
and ensure safe and civilized operations. Labor insurance for the working
personnel of the CJV shall be handled in accordance with the relevant
regulations of the PRC government.
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ARTICLE
12 FINANCIAL AFFAIRS AND ACCOUNTING 12.1 Accounting System
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(1)
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The CFO of the CJV,
under the leadership of the General Manager, shall be responsible for the
financial management of the CJV.
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(2)
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The General Manager and
the CFO shall establish the accounting system and procedures in accordance
with the “China Accounting System for Business Enterprises”, the
supplementary stipulations promulgated by the Ministry of Finance of the PRC,
and then in accordance with generally accepted accounting principles as
applied by Party B in its own accounts and with Party B’s reporting and
management requirements. The CJV shall adopt, in accordance with the
requirements of the Board, the operating and financial policies and
procedures and shall prepare periodic reports of financial information. The
CJV shall adopt Renminbi and/or USD as legal currency in the accounting
bookkeeping. The CJV shall maintain accurate and complete accounting and
other financial reports made both in English and Chinese and shall procure
that such accounting records are, during normal business hours, available for
inspection by each Party or its respective authorized representatives.
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(3)
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The management of the
CJV shall prepare the following statements and reports for review by the
Board of Directors and the Parties:
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a)
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Complete monthly
financial reporting in response to reporting packages prepared by the
Parties, sufficient for preparation of each Party’s financial reports, within
four Business Days of the end of each calendar month.
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b)
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Quarterly unaudited
financial statements within four weeks of the end of each fiscal quarter.
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c)
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Financial express of
the previous fiscal year, including but not limited to balance sheet, income
statement, cash flow statement and statement of stockholder’s equity, within
five (5) Business Days after the end of the previous fiscal year.
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d)
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Annual unaudited
financial statements and the related report within thirty (30) days after the
end of the previous fiscal year; and annual audited financial statements and
the related auditor’s report within four (4) months after the end of the
previous fiscal year.
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(4)
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Each Director and each
Party shall have the right to inspect, copy, and audit the CJV’s books of
account at any time.
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12.2
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Auditing
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(1)
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An accountant licensed
in China shall be engaged by the CJV.
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(2)
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The Parties shall have
the right to nominate internationally recognized accounting firms as the
auditor of the CJV, among which the Board shall engage one as the auditor of the CJV. In the event that the Board
determines that the audited statements submitted by the retained
accounting firm fail to meet the standards set forth above, the Board may
replace the accounting firm or retain another accounting firm (at the CJV’s
expense) to supplement or adjust the work or to perform specific accounting
and auditing tasks.
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(3)
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The Parties may, during
normal business hours, appoint representatives to inspect and audit the CJV
and the production premises of the CJV, inspect and audit any approved
subcontractor, and any accounts and records relating to the operation of the
CJV. The Parties shall cause the Directors of the CJV appointed by them, as
well as any approved subcontractors, to provide assistance as required by
this provision.
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12.3
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Bank
Account and Foreign Exchange Control
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The CJV shall
separately open a foreign exchange account and a Renminbi account at Bank of
China or the banks designated by the SAFE. The CJV’s foreign exchange
transactions shall be handled in accordance with the Regulations for Exchange
Control of the People s Republic of China.
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12.4
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Foreign
Currency Equilibrium
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The CJV shall use its
best to maintain the foreign currency s equilibrium by all methods permitted
by the PRC laws.
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12.5
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Fiscal Year
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The CJV shall adopt the
calendar year as its fiscal year, which shall begin on January 1 and end on
December 31 of the same year.
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12.6
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Periodic
Reports
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The CJV shall provide
each Party with:
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a)
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monthly accounts and
progress reports;
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b)
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audited accounts of the
CJV;
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c)
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copies of bank
statements on a monthly basis;
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d)
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such further
information as each Party may from time to time reasonably require as to all
matters relating to the businesses or the financial position of the CJV; and
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e)
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a quarterly report on
the CJV’s performance during the current fiscal year of the CJV compared to
budget.
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12.7
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Distribution
of CJV’s Net Profit
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(1)
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If the PRC laws and
regulations require to establish employee bonus and welfare fund and other
statutory reserves, the CJV shall comply with such requirements to the extent
of meeting the lowest standards as required thereby;
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(2)
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The after-tax net
profit shall be determined in accordance with applicable PRC accounting
regulations by the Board according to the annual final accounting;
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(3)
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The distributable net
profit of the CJV shall be distributed among the Parties pursuant to the
following proportions: Party A 45% and Party B 55%.
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(4)
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The Board of Directors
shall determine the distribution of the net profit. The Board of Directors
shall, after deducting necessary reserve as compulsorily required under
relevant laws and regulations, distribute the distributable net profit to the
Parties pursuant to section 11.7(3), and the net profit distributed to the
Parties shall be no less than fifty percent (50%) of the aggregate net profit
of the CJV in that year. In the event the CJV has an investment plan or other
significant business plans, after obtaining the consent of the Parties, the
Board may adjust the proportion of the net profit used to be distributed to
the Parties in the aggregate net profit of the CJV in that year. The Board
and the General Manager shall ensure to distribute CJV’s distributable net
profit to Parties in each fiscal year when it is available. Such distribution
shall be made no later than the end of June in the next calendar year.
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ARTICLE
13 TAXATION AND INSURANCE
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13.1
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Taxes
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The CJV shall pay tax
under the relevant laws of China, Chinese and foreign management and working
personnel shall pay their individual income tax in accordance with the tax
laws of China.
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13.2
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Insurance
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The CJV shall take out
and maintain insurance of the CJV with a PRC insurance company, to protect
the CJV against various types of disasters during its operation. The
insurance coverage, value and duration shall be decided by the Board under
the provisions of the Chinese People’s Insurance Company.
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ARTICLE 14 CONFIDENTIALITY
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14.1
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Confidentiality
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(1)
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From time to time,
prior to and during the Joint Venture Term, either Party has disclosed or may
disclose confidential and proprietary information to the other Party. In
addition, the Parties may, during the term of this Contract, obtain
confidential and proprietary information of the CJV or the other Party in
connection with the operation of the CJV. Alternatively, the CJV may, from
time to time during the term of this Contract, obtain confidential and
proprietary information of the Parties. Each of the Parties receiving such
information shall, during the term of this Contract and for five years
thereafter:
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a)
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Maintain the
confidentiality of such information;
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b)
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Not
disclose it to any person or entity, except to their directors, senior staff
and other employees who need to know such information to perform their
responsibilities; and
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c)
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Not utilize such
information for any purpose other than the transaction contemplated herein.
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(2)
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The provisions of paragraph
(1) shall not apply to information that:
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a)
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could be shown to be
known by the receiving Party by written records made prior to disclosure by
the disclosing Party;
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b)
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is (or becomes) public
knowledge otherwise than through the receiving Party’s breach of this
Contract;
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c)
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was obtained by the
receiving Party from a third party having no obligation of confidentiality
with respect to such information;
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d)
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is under the obligation
to be disclosed according to law of the jurisdiction of either Party, valid
order of any government entity and any court’s judgment or verdict;
importance of complying with the obligations set forth in paragraph (1)
above.
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(4)
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If required by any
Party, the CJV shall execute a separate confidentiality agreement with
provisions similar to those set out above with respect to confidential and
proprietary information obtained by the CJV from any Party or its Affiliates.
Notwithstanding the above, the CJV shall execute non disclosure agreements
with third parties to whom confidential information may be disclosed.
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(5)
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Each of the Parties and
the CJV shall formulate rules and regulations to cause its directors, senior
staff, and other employees, and those of their Affiliates to comply with the
confidentiality obligation set forth in this Article 14. Certain important
Working Personnel shall be required to sign a confidentiality undertaking in
accordance with this section.
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(6)
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The know-how and any
other technical information licensed or provided in any way by any Party or
its Affiliate to the CJV or otherwise acquired in any way or developed by the
CJV shall be used only under the conditions of its license or provision.
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(7)
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This Article 14 and the
obligations and benefits thereunder shall survive for five years after the
expiration or termination of this Contract or the transfer of its equity
interest in the CJV by either Party, notwithstanding the termination,
dissolution or liquidation of the CJV or the transfer of its equity interest
in the CJV by either Party.
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ARTICLE
15 THE JOINT VENTURE TERM
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15.1
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Joint
Venture Term
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The Joint Venture Term
of the CJV shall commence upon the issuance of the Business License and shall
expire 20 years therefrom. During this period, both Parties may not terminate
the joint venture cooperation with any reasons unless any event of force
majeure occurs or both Parties agree in writing.
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15.2
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Extension of the Joint Venture Term
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One year prior to the
expiration of the Joint Venture Term, the Parties shall discuss whether to
extend the cooperation term. If the Parties so decide, an application for
such extension shall be submitted to the Approval Authority for approval no
less than six months prior to the expiration of the Joint Venture Term. If
only one Party wishes to extend the cooperation term, such Party shall be
entitled to acquire the entire interests of the other Party in the CJV based
on a purchase price determined by evaluation by an independent evaluation
agency jointly determined by the Parties.
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15.3
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Intellectual
Property
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If Party B ceases to be
a shareholder of the CJV for any reason, Party B’s license to the CJV to use
certain technologies related to the operation of the CJV shall be
automatically terminated.
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ARTICLE 16 TERMINATION AND LIQUIDATION
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16.1
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Reasons
for Termination
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Neither Party shall
have the right, in its sole discretion and without cause, to terminate this
Contract. However, the Parties may mutually agree in writing to terminate
this contract at any time. Also, any Party may submit written notice to the
other Party of a desire to terminate this Contract (subject to Article 16.2)
at any time if:
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(1)
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Any Party materially
breaches this Contract or violates the articles of association of the CJV,
and such breach or violation is not cured within 60 days of written notice by
the other Party to the breaching Party;
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(2)
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The business license of
the CJV has been revoked or the Joint Venture Term was terminated and not
renewed;
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(3)
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The CJV or any Party
becomes bankrupt, or is the subject of proceedings for liquidation or
dissolution (or a petition for bankruptcy has been filed with a court), or
ceases to carry on business or becomes unable to pay its debts as they come
due;
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(4)
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All or a material part
of the assets of the CJV or any Party has been received, taken-over or
forfeited by the government, such that the either CJV or the Party to
operate;
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(5)
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Any Party transfers or
dispose of its share of the registered capital of the CJV in violation of the
provisions of this Contract;
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(6)
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The conditions or
consequences of Force Majeure (as hereinafter defined) significantly
interfere with the normal functioning of the CJV for a period in excess of
six months; or
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The mere submission by
either Party of a notice indicating a desire to terminate this Contract shall
not by itself constitute a termination of this Contract.
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16.2
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Notification Procedure
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If a Party gives
notice, pursuant to Article 16.1, of a desire to terminate this Contract, the
Parties shall, within 15 Business Days after such notice is given, commence
negotiations and endeavor to resolve the reason for notification of
termination. In the event matters are not resolved to the satisfaction of the
Parties within 15 Business Days after commencement of negotiations or the
non-notifying Party refuses to commence negotiations within the period stated
above, the notifying Party may terminate this Contract by giving the other
Party written notice of termination and such termination shall be effective
upon the approval of the Approval Authority.
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16.3
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Liquidation
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(1)
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If this Contract has
been terminated for any reason and the Parties have not agreed on an
acquisition of the CJV as a going concern by a Party or by a third party,
then all assets of the CJV shall be valued by and liquidated under the
direction of a liquidation committee formed in accordance with relevant
Chinese law.
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(2)
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In valuing and selling
physical assets, the liquidation committee shall use every effort to obtain
the highest possible price for such assets, including the retention of an
independent third party expert, who is knowledgeable in assessing the value
of the types of assets owned or held by the CJV to assist in such valuation.
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(3)
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After liquidation and
the settlement of all outstanding debts of the CJV and subject to the payment
of any applicable taxes, the proceeds shall be paid over to the Parties in
accordance with the following ratio: Party A 45% and Party B 55%.
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16.4
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Sale
of Interests
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Unless there is any
mandatory provision of laws, in the event that a Party or both Parties intend
to transfer or dispose of its or their interests in the CJV, the interest
each Party held in the CJV shall be distributed in accordance with the
following ratio: Party A 45% and Party
B
55%.
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16.5
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Survival
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To the extent permitted
by law,
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(a)
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the liabilities or
duties accruing but have not been satisfied or performed by the Parties
before the date of termination of this contract,
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(b)
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the provisions of
Articles Article 14, Article 16 and Article 19, and
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(c)
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any other provisions of
this Contract required for the interpretation of above mentioned articles
shall survive the termination of this Contract and the termination,
dissolution or liquidation of the CJV.
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19
Confidential
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COOPERATIVE
JOINT VENTURE CONTRACT
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ARTICLE
17 BREACH OF CONTRACT
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17.1
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Liability for Breach of Contract
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(1)
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In the event of either
Party’s breach of this Contract to render this Contract impossible to perform
in part or in whole, such Party shall bear its default liabilities and
compensate all damages incurred by other the Party. In the event that the
Parties breach this contract, each Party shall bear its respective liability.
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(2)
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In the event that
either Party fails to make its capital contribution or provide its
cooperation conditions to the CJV three months beyond the due date stipulated
in this Contract, the non-defaulting Party shall have the right to terminate
this Contract (except in the event of Force Majeure).
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ARTICLE 18 FORCE MAJEURE
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18.1
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Force Majeure
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(1)
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“Force Majeure” shall
mean any event which is beyond the control of the Parties to this Contract,
and which is unforeseen, or if foreseen, unavoidable, and which prevents
total or partial performance by a Party. Such events shall include but are
not limited to any strikes, lockouts, explosions, shipwrecks, acts of nature
or the public enemy, terrorism, fires, flood, sabotage, accidents, wars,
riots, interference by military authorities, insurrections, government
action, government prohibition, and any other similar or different
contingency.
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(2)
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If an event of Force
Majeure occurs, to the extent that the contractual obligations of the
Parties, or either Party that is affected by such event of Force Majeure to
this Contract (except the obligations under Article 17) cannot be performed
as a result of such event, such contractual obligations shall be suspended
during the period of delay caused by the Force Majeure and shall be
automatically extended, without penalty, for a period equal to such
suspension.
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(3)
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The Party claiming
Force Majeure shall promptly inform the other Party in writing of the
occurrence and duration of such event of Force Majeure. The Party claiming
Force Majeure shall also use all reasonable endeavors to eliminate or reduce
the impact of such event of the Force Majeure.
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(4)
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In the event of Force
Majeure, the Parties shall immediately consult with each other in order to
find an equitable solution and shall use all reasonable endeavors to minimize
the consequences of such Force Majeure.
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20
Confidential
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COOPERATIVE
JOINT VENTURE CONTRACT
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ARTICLE
19 DISPUTE RESOLUTION
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19.1
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Consultations
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In the event of any
dispute between the Parties arising out of or relating to the performance or interpretation
of this Contract, representatives of the Parties shall, within 15 Business
Days of service of a written notice from either Party to the other Party
(“Dispute Notice”),
hold a meeting
(“Settlement Meeting”)
in an effort to
resolve the dispute. Tne representatives of the Parties shall make their best
efforts to settle the disputes amicably through consultation.
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19.2
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Arbitration
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(1)
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If the Parties are not
able to resolve a dispute within 30 Business Days after the dispatch of the
Dispute Notice, whether or not a Settlement Meeting has been held, such
dispute shall be referred to and finally settled by arbitration at the
Changsha Arbitration Committee in accordance with then applicable arbitration
rules adopted by Changsha Arbitration Committee. The arbitration tribunal
shall consist of three arbitrators. The language of the arbitration shall be
English and Chinese.
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(2)
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The arbitration award
shall be final and binding on the Parties, and the Parties agree to be bound
thereby and to act accordingly.
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(3)
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Unless otherwise ruled
in the arbitration award, all fees (including attorney and expert fees),
costs, and expenses incurred by the prevailing Party shall be born by the
losing Party.
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(4)
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When any dispute occurs
and when any dispute is under arbitration, except for the matters under
dispute, the Parties shall continue to exercise their remaining respective
rights, and to perform remaining respective obligations under this Contract.
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ARTICLE
20 APPLICABLE LAW
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20.1
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Applicable
Law
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The formation,
validity, interpretation and performance of this Contract shall be subject to
the jurisdiction of the promulgated laws of China, which is publicly
available and then in effective upon the execution of this Contract
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ARTICLE
21 MISCELLANEOUS PROVISIONS
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21.1
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Amendments
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This Contract may not
be changed orally, but may be amended only by a written instrument signed by
all Parties and approved by the Approval Authority, if such approval is
necessary.
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21
Confidential
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COOPERATIVE
JOINT VENTURE CONTRACT
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21.2
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Language
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This
Contract shall be written and executed in five copies in Chinese and English,
and both language versions shall be equally valid. If there is any conflict
between the Chinese and English version of this Contract, the Chinese
version shall prevail. These copies may
be executed in one or more counterparts, each of which shall be an
original but all of which shall together constitute one and the same
instrument.
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21.3
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Severability
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If any provision of
this Contract is invalid, illegal, or incapable of being enforced by any rule
of law or public policy, all other provisions of this Contract shall
nonetheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Contract is not affected
in any manner adverse to any Party. Upon such determination that any
provision is invalid, illegal, or incapable of being enforced, the Parties
shall negotiate in good faith to modify this Contract so as to effect the
original intent of the Parties as closely as possible in an acceptable manner
to the end that the transactions contemplated hereby are fulfilled.
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21.4
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Entire
Agreement
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This Contract and the
appendices attached hereto (if any) constitute the entire agreement between
the Parties with respect to the subject matter of this Contract and supersede
all prior discussions, negotiations and agreements among them. In the event
of any conflict between the terms and provisions of this Contract, and those
of the articles of association or the joint feasibility study, the terms and
provisions of this Contract shall prevail.
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21.5
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Headings
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The headings used
herein are for convenience only and shall not be used to interpret, construe
or otherwise affect the meaning of the provisions of this Contract.
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21.6
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Notices
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Any notice or written
communication provided for in this Contract by one Party to the other Party,
including but not limited to any and all writings or notices to be given
thereunder, shall be given in writing in both English and Chinese and may be
delivered in person or sent by registered airmail letter or by facsimile
confirmed by transmittal report, to other Party at the location or fax number
set forth below. The date and time of receipt of a notice or communication
thereunder shall be deemed at the time of delivery if delivered in person, or
at 10:00 a.m. on the tenth Business Day after its postmark in the case of an
airmail letter, or one Business Day after dispatch in the case of a
facsimile. All notices and communications shall be sent to the appropriate
address or fax number set forth below, until the same is changed by notice
given in writing to the other Party.
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Party
A: Zhuzhou Hexing Industrial Co., Ltd.
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Attn: Wu Zengming
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22
Confidential
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COOPERATIVE
JOINT VENTURE CONTRACT
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Address: 5
th
Fl. Huanzhou Town, Lusong District, Zhuzhou City, Hu’nan Province
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Phone:
86 (0731)28602088
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Facsimile:
86 (0731)28602088
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Party B: Natcore Asia Technology, Limited
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Attn:
Charles Robert PROV1NI
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Address:
Suite 2208, 22/F, Jardine House, 1 Connaught Place, Central, Hong Kong
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Phone:
1(732)576-8800
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Facsimile:
1(732)576-8809
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21.7
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Interpretation
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The Parties acknowledge and agree that (a) each Party
and its counsel reviewed and negotiated the terms and provisions of this
Contract and have contributed to its revision, (b) the rule of construction to
the effect that any ambiguities are resolved against the drafting party shall not
be employed in the interpretation of this Contract, and (c) the terms and
provisions of this Contract shall be construed fairly as to both Parties,
regardless of which Party was generally responsible for the preparation of this Contract.
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21.8
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Approval
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The Contract shall be submitted by Party B to its board
of directors and the Stock Exchange where its sole shareholder, Natcore
Technology Inc., is listed (the
“Stock Exchange”)
for approval. Party B
shall provide Party A with a definite response as to the decisions of its board of
directors and the Stock Exchange within twenty (20) Business Days upon the signing of
this Contract. The Contract shall be deemed to be approved by the board of
directors of Party B and the Stock Exchange if Party B fails to provide Party
A with said response within twenty (20) Business Days upon the signing of this Contract.
Within twenty (20) Business Days after the date on which the Contract is approved
or deemed to be approved, the Parties shall submit the Contract for approval by
the Approval Authority.
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[No text below
but signature page hereto]
23
Confidential
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COOPERATIVE
JOINT VENTURE CONTRACT
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IN WITNESS WHEREOF, each of the Parties hereto has caused
this Contract to be executed by their duly authorized representatives on the
date first set forth above.
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Party A:
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Party B:
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Zhuzhou Hexing Industrial Co., Ltd.
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Natcore Asia Technology, Limited
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(affixed with the company’s chop)
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by:
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by:
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Name: Wu Zengming
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Name:
Charles Robert PROVINI
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Title: General Manager
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Title: Director
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Nationality: PRC
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Nationality: USA
|
Confidential
AMENDMENT
NO. 2 TO PATENT LICENSE AGREEMENT
Between
Alliance for Sustainable Energy, LLC and
Natcore Technology Inc.
This Amendment to License
Agreement LIC-12-00206 (hereinafter “License”), shall be effective on the date it is executed by the last Party to
sign below, is between Alliance for Sustainable Energy, LLC (hereinafter
“Alliance”), as Manager and Operator of the National Renewable Energy
Laboratory (“NREL”) located at 15013 Denver West Parkway, Golden, Colorado
80401 and Natcore Technology Inc., (hereinafter “Licensee”), a
for-profit company organized and existing
under the laws of Province British Columbia and having a principal place of
business at 87 Maple Ave, Red Bank, New Jersey, USA 07701. The parties to this
agreement may be hereinafter referred to individually as “Party” and
jointly as “Parties”.
BACKGROUND:
Alliance manages and operates
NREL under authority of its Prime Contract No. DE-AC36-08G028308 with the United States Government as
represented by the Department of Energy;
The Parties executed the Patent
License Agreement on December 12, 2011 (Exclusive Patent License Agreement 12-00206). The Parties wish to
modify a section of the License pertaining to Licensed Intellectual
Property.
TERMS & CONDITIONS:
THEREFORE, in consideration of the
foregoing covenants and agreements contained herein, the Parties agree
to the following amendment to the License:
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1.
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Exhibit C, 2) Market
Milestones shall be deleted and replaced with the following:
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2)
Market Milestones:
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1)
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Achieve cumulative Net Sales of
Licensed Products in excess of $1 million on or before December
1,2014.
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2)
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Achieve cumulative Net Sales of
Licensed Products in excess of $2 million on or before December 1,
2015.
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3)
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Achieve cumulative Net Sales of
Licensed Products in excess of $3 million on or before December 1,
2016.
|
Progress
and substantiation of Licensee meeting these development and commercialization
requirements shall be provided to Alliance in the form of a report to be
presented in writing no later than
thirty (30) days from the end of each calendar year and each anniversary
thereafter of the Effective Date thereof.
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2.
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All other terms and conditions
of the License, and its authorized modifications, shall remain
unchanged.
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IN WITNESS WHEREOF, the Parties
hereto have caused this Amendment No. 2 to be duly executed in their respective names by their duly
authorized representatives.
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ALLIANCE FOR SUSTAINABLE
ENERGY, LLC
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NATCORE TECHNOLOGY INC.
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By:
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By:
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Name:
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Bobi Garrett
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Name:
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Charles R. Provini
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Title:
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Deputy Laboratory Director
Strategic Programs & Partnerships
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Title:
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President
&CEO
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Date:
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01/22/2014
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Date:
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01/30/2014
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MEMORANDUM
OF UNDERSTANDING
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This
Memorandum is made the ………. 19th …….. day of... September
…….., 2013
BETWEEN
DENZO
PTY LIMITED, as trustee for the MATHEWS No 1 FAMILY TRUST
an Australian Company
Number (ACN) 002 406 206 of Unit 7,
41-55 Terrigal Drive, Terrigal, NSW 2260 Australia (“Denzo”)
AND
NATCORE
TECHNOLOGY, INC
an American Company listed on the Canadian and German Stock Exchanges, of 87
Maple Avenue, Red Bank, New Jersey, 07701, United States of America (“Natcore”)
RECITALS
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A.
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Denzo Pty Limited
is an Australian Company, formed in 1982, with experience in being
involved in businesses in Australia and Internationally. Denzo has
associations with businesses in the Carbon Reduction
Environmental Industry. The Denzo Group has been involved in Alternative
Fuels, Import and Export, Manufacturing, Retail Sales and Public
Company activity.
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Denzo
has recently signed a Terms Sheet to take over a listed Public Company on the Australian Stock Market, as an
Option.
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It has operated in Australia, Singapore, Thailand,
Indonesia, China, South Korea
and the USA.
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B.
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Natcore Technology Inc.,
is a USA listed Company quoted on the Canadian and German Stock Exchanges. It is a
research firm focused on the photovoltaic industry. The technology
will have a significant impact on solar cells, semiconductor devices, optical
and opto electronic components, prescriptive and protective eye wear and
energy-saving architectural coatings,
among other uses. The Company is in the business of investment and
manufacturing.
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C.
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Denzo and Natcore
will progress to endeavour to form an alliance by way of a Heads of Agreement to reflect the
desire to cooperate in a Joint Activity to manufacture, and distribute
products using the Natcore technology.
|
1
STATEMENT OF UNDERSTANDING
1. Objective
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1.1.
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To
determine whether there is a common interest and benefit in the two entities entering into a Heads of Agreement, to
join together a possibility in the development, manufacturing and
distributing of products using the Natcore technology.
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The Joint Venture will move initially with the
technologies that are fully commercialised. Future technologies will be
deployed as they come to hand.
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The JV will explore land costs, facility costs, labour
costs and the export potential,
Government assistance at a Local, State and Federal levels as well as domestic and export sales.
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The
territory of focus will be the Asian Countries with Australia as the Headquarters for this activity.
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1.2.
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To clearly define and document the Rolls of the
Parties.
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1.3
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To define and document the financial considerations
for each Party.
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1.4
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To agree the business proposition.
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1.5
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To develop a vertically integrated business.
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2. Terms of the Heads of Agreement
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2.1
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The Agreement will be for the term of the business.
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2.2
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The
Parties propose to sign the Heads of Agreement within 4 months of the signing of this Memorandum of Understanding
if a mutual agreement is reached on the stated objectives.
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3. Non Exclusive
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3.1
|
This
Memorandum does not restrict or prevent either Party from continuing existing, or entering into new,
discussions or negotiations with third Parties that may impact either
Parties ability to progress to a Heads of Agreement.
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4.
The Governing Law in the
Proposed Heads of Agreement
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4.1
|
This Agreement shall be interpreted and construed, and
legal relations created
therein shall be determined in accordance with the law of Australia.
|
This
Memorandum is not intended to create, or give rise to, any legally binding relationships between the Parties. No such
legally binding relationships shall be formed unless, and except to the extent,
that an Agreement is formally signed by or on behalf of the respective
Parties.
2
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SIGNED by:
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Denzo Pty Limited
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KEN MATHEWS, Managing Director
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Witnessed
by:
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SIGNED
by:
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Natcore Technology, Inc.
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CHARLES PROVINI, President
&
CEO
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Witnessed
by:
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Pat Zubil
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3
“Unless
permitted under securities legislation, the holder of the securities shall not
trade the securities before August 28, 2015.”
“Without
prior written approval of the TSX Venture Exchange and compliance with all
applicable securities legislation, the securities represented by this
certificate may not be sold, transferred, hypothecated or otherwise traded on
or through the facilities of the TSX Venture Exchange or otherwise in Canada or
to or for the benefit of a Canadian resident before August 28, 2015.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON APRIL 27, 2018
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC.
(incorporated under the
Business Corporations Act,
British Columbia)
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No.
WC0415-012
|
XXX
WARRANTS
|
|
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NOTE:
One Warrant is Required
to
purchase one common share.
|
THIS IS TO
CERTIFY THAT
for value received the holder, _____________ (the “
Holder
”), of this certificate
(the “
Warrant Certificate
”) is
entitled to purchase one fully paid and non-assessable common share of Natcore
Technology Inc. (herein called the “
Corporation
”)
for each Warrant represented hereby, as such shares were constituted on April
27, 2015 at any time up to 4:00 p.m. (local time) in the City of
Vancouver, Province of British Columbia on April 27, 2018, (the “
Expiry
Date
”)at and for a price of
CDN$0.95
per share, of lawful
money of Canada, upon and subject to the terms and conditions referred to in
this Warrant Certificate and the Subscription Agreement entered into between
the Corporation and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
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NATCORE TECHNOLOGY INC.
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Per:
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C/S
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Authorized Signatory
|
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TERMS, CONDITIONS AND
INSTRUCTIONS
|
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1.
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The holder of this warrant may subscribe
for the number of shares of the Corporation indicated on the face hereof.
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2.
|
For each share purchased pursuant to this
warrant on or before the Expiry Date, payment must be made in the
amount of
CDN$0.95
per share.
All payments must be made in Canadian Funds, in cash or by certified cheque,
bank draft or money order payable. If payment is made by way of an
uncertified cheque, the Corporation reserves the right to deem that the
payment has not been received until the cheque has cleared the account upon
which it has been drawn.
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3.
|
To exercise the rights evidenced by this
warrant, this warrant with the following Warrant Exercise Form completed,
must be delivered or mailed to and received by the registered offices of the
Corporation at Suite 2080-777 Hornby Street, Vancouver, British Columbia, V6Z
1S4.
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4.
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The rights evidenced by this warrant expire
at 4:00 p.m. local time in Vancouver, British Columbia, on the Expiry Date.
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5.
|
The rights evidenced by this warrant may not be transferred.
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6.
|
If this warrant or the purchase price is forwarded by mail it is
suggested that registered mail be used as the
Corporation will not be responsible for any losses which occur through the
use of mails.
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7.
|
The rights evidenced by this warrant are to
purchase common shares in the capital stock of the Corporation as they were
constituted on
April 27, 2015
.
If there shall, prior to the exercise of any of the rights evidenced hereby,
be any reorganization of the authorized capital of the Corporation by way of
consolidation, merger, sub-division, amalgamation or otherwise, or the
payment of any stock dividends, then there shall automatically be an
adjustment in either or both the number of shares of the Corporation which
may be purchased pursuant hereto or the price at which such shares may be
purchased, by corresponding amounts, so that the right evidenced hereby shall
thereafter be as reasonably as possible equivalent to those originally
granted hereby. The Corporation shall have the sole and exclusive power to
make adjustments as it considers necessary and desirable.
|
APPENDIX
1
WARRANT EXERCISE FORM
TO:
NATCORE
TECHNOLOGY INC.
The undersigned hereby exercises the right to
purchase ____________ Common Shares of
NATCORE
TECHNOLOGY INC.
(the “
Corporation
”)
(or such number of other securities or property to which such Warrants (the “
Warrants
”) entitle the undersigned in lieu
thereof or in addition thereto under the provisions of the Warrant Certificate
for the time being governing the holding of the Warrants in the Corporation) in
accordance with and subject to the provisions of such Warrant Certificate which
may be obtained, free of charge, from the Corporation at Suite 2080-777 Hornby
Street, Vancouver, British Columbia, V6Z 1S4.
The Common Shares (or other securities or
property) are to be issued as follows:
Name:
______________________________________________________________________________________________________
Address in full:
_______________________________________________________________________________________________
____________________________________________________________________________________________________________
Number of Common Shares:
____________________________________________________________________________________
Note: If further nominees intended, please
attach (and initial) a schedule giving these particulars.
(CHECK
ONE)
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o
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The undersigned hereby represents and
warrants to the Corporation that at the time of exercise the undersigned is
not a U.S. person or a person within the United States (as such terms are
defined in Regulation S under the Securities Act of 1933 (the
“U.S. Securities Act”
) and the Warrant is
not being exercised on behalf of a U.S. person or any person with the United
States.
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The undersigned is tendering
with this exercise form a written opinion of counsel or other evidence satisfactory
to them to the effect that the Common Shares to be delivered upon exercise of
this Warrant have been registered under the U.S. Securities Act and the
Securities laws of all applicable States of the United States or are exempt
from registration thereunder; or
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The undersigned does not make the
representation set forth above and the undersigned hereby represents,
warrants and agrees that: (i) the undersigned will not offer or sell the
Common Shares except pursuant to registration under the U.S. Securities Act
or in accordance with an exemption from registration thereunder or in
compliance with Regulation S under the U.S. Securities Act; and (ii) the
certificates representing the Common Shares subscribed for may have endorsed
thereon a legend to such effect.
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DATED this _____ day of ___________, 20
_____.
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Signature
Guaranteed
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(Signature
of Warrant Holder)
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Print full
name
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Print full
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Instructions
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1.
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The registered holder may exercise his/her
right to receive Common Shares by enclosing payment by way of cash, a
certified cheque, bank draft or money order in lawful money of the United
States of America, payable to the order Natcore Technology Inc. and by
completing this form and surrendering this form and the original Warrant
Certificate representing the Warrants being exercised to the Corporation at
Suite 2080-777 Hornby Street, Vancouver, British Columbia, V6Z 1S4. Certificates
for Common Shares will be made available for pick up or mailed by registered
mail within five business days after the exercise of the Warrant.
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2.
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If the Exercise Form indicates that Common
Shares are to be issued to a person or persons other than the registered
holder of the Warrant Certificate, the signature of such holder of the
Exercise Form must be guaranteed by an authorized officer of a chartered
bank, trust company or medallion guaranteed by an investment dealer who is a
member of a recognized stock exchange.
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3.
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If the Exercise Form is signed by a
trustee, executor, administrator, curator, attorney, officer of a corporation
or any person acting in a judiciary or representative capacity, the
certificate must be accompanied by evidence of authority to sign satisfactory
to the Corporation.
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“Unless
permitted under securities legislation, the holder of the securities shall not
trade the securities before December 1, 2015.”
“Without
prior written approval of the TSX Venture Exchange and compliance with all
applicable securities legislation, the securities represented by this
certificate may not be sold, transferred, hypothecated or otherwise traded on
or through the facilities of the TSX Venture Exchange or otherwise in Canada or
to or for the benefit of a Canadian resident before December 1, 2015.”
VOID AFTER 4:00 PM (VANCOUVER TIME) IN THE CITY OF VANCOUVER, PROVINCE
OF BRITISH COLUMBIA, ON JULY 31, 2018
WARRANTS TO PURCHASE COMMON SHARES OF
NATCORE TECHNOLOGY INC.
(incorporated under the
Business Corporations Act,
British Columbia)
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No.
WC0715-00
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XXX
WARRANTS
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NOTE:
One Warrant is Required
to
purchase one common share.
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THIS IS TO
CERTIFY THAT
for value received the holder, _____________ (the “
Holder
”), of this certificate
(the “
Warrant Certificate
”) is
entitled to purchase one fully paid and non-assessable common share of Natcore
Technology Inc. (herein called the “
Corporation
”)
for each Warrant represented hereby, as such shares were constituted on July
31, 2015 at any time up to 4:00 p.m. (local time) in the City of
Vancouver, Province of British Columbia on July 31, 2018, (the “
Expiry
Date
”)at and for a price of
CDN$0.74
per share, of lawful
money of Canada, upon and subject to the terms and conditions referred to in
this Warrant Certificate and the Subscription Agreement entered into between
the Corporation and the Holder.
These
Warrants are non-transferable.
The
Warrants may be exercised only at the registered offices of the Corporation at
Suite 2080-777 Hornby Street, Vancouver, B.C., V6Z 1S4.
IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
executed.
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NATCORE TECHNOLOGY INC.
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Per:
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C/S
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Authorized Signatory
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TERMS, CONDITIONS AND
INSTRUCTIONS
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1.
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The holder of this warrant may subscribe
for the number of shares of the Corporation indicated on the face hereof.
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2.
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For each share purchased pursuant to this
warrant on or before the Expiry Date, payment must be made in the
amount of
CDN$0.74
per share.
All payments must be made in Canadian Funds, in cash or by certified cheque,
bank draft or money order payable. If payment is made by way of an
uncertified cheque, the Corporation reserves the right to deem that the
payment has not been received until the cheque has cleared the account upon
which it has been drawn.
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3.
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To exercise the rights evidenced by this
warrant, this warrant with the following Warrant Exercise Form completed,
must be delivered or mailed to and received by the registered offices of the
Corporation at Suite 2080-777 Hornby Street, Vancouver, British Columbia, V6Z
1S4.
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4.
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The rights evidenced by this warrant expire
at 4:00 p.m. local time in Vancouver, British Columbia, on the Expiry Date.
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5.
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The rights evidenced by this warrant may not be transferred.
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6.
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If this warrant or the purchase price is forwarded by mail it is
suggested that registered mail be used as the
Corporation will not be responsible for any losses which occur through the
use of mails.
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7.
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The rights evidenced by this warrant are to
purchase common shares in the capital stock of the Corporation as they were
constituted on
July 31, 2015
. If
there shall, prior to the exercise of any of the rights evidenced hereby, be
any reorganization of the authorized capital of the Corporation by way of
consolidation, merger, sub-division, amalgamation or otherwise, or the
payment of any stock dividends, then there shall automatically be an
adjustment in either or both the number of shares of the Corporation which
may be purchased pursuant hereto or the price at which such shares may be
purchased, by corresponding amounts, so that the right evidenced hereby shall
thereafter be as reasonably as possible equivalent to those originally
granted hereby. The Corporation shall have the sole and exclusive power to
make adjustments as it considers necessary and desirable.
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APPENDIX
1
WARRANT EXERCISE FORM
TO:
NATCORE
TECHNOLOGY INC.
The undersigned hereby exercises the right to
purchase ____________ Common Shares of
NATCORE
TECHNOLOGY INC.
(the “
Corporation
”)
(or such number of other securities or property to which such Warrants (the “
Warrants
”) entitle the undersigned in lieu
thereof or in addition thereto under the provisions of the Warrant Certificate
for the time being governing the holding of the Warrants in the Corporation) in
accordance with and subject to the provisions of such Warrant Certificate which
may be obtained, free of charge, from the Corporation at Suite 2080-777 Hornby
Street, Vancouver, British Columbia, V6Z 1S4.
The Common Shares (or other securities or
property) are to be issued as follows:
Name:
______________________________________________________________________________________________________
Address in full:
_______________________________________________________________________________________________
____________________________________________________________________________________________________________
Number of Common Shares:
____________________________________________________________________________________
Note: If further nominees intended, please
attach (and initial) a schedule giving these particulars.
(CHECK
ONE)
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The undersigned hereby represents and
warrants to the Corporation that at the time of exercise the undersigned is
not a U.S. person or a person within the United States (as such terms are
defined in Regulation S under the Securities Act of 1933 (the
“U.S. Securities Act”)
and the Warrant is
not being exercised on behalf of a U.S. person or any person with the United
States.
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The undersigned is tendering
with this exercise form a written opinion of counsel or other evidence satisfactory
to them to the effect that the Common Shares to be delivered upon exercise of
this Warrant have been registered under the U.S. Securities Act and the
Securities laws of all applicable States of the United States or are exempt
from registration thereunder; or
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o
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The undersigned does not make the
representation set forth above and the undersigned hereby represents,
warrants and agrees that: (i) the undersigned will not offer or sell the
Common Shares except pursuant to registration under the U.S. Securities Act
or in accordance with an exemption from registration thereunder or in
compliance with Regulation S under the U.S. Securities Act; and (ii) the
certificates representing the Common Shares subscribed for may have endorsed
thereon a legend to such effect.
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DATED this _____ day of ___________, 20
_____.
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Signature
Guaranteed
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(Signature
of Warrant Holder)
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Print full
name
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Print full
address
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Instructions
.
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1.
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The registered holder may exercise his/her
right to receive Common Shares by enclosing payment by way of cash, a
certified cheque, bank draft or money order in lawful money of the United
States of America, payable to the order Natcore Technology Inc. and by
completing this form and surrendering this form and the original Warrant
Certificate representing the Warrants being exercised to the Corporation at
Suite 2080-777 Hornby Street, Vancouver, British Columbia, V6Z 1S4. Certificates
for Common Shares will be made available for pick up or mailed by registered
mail within five business days after the exercise of the Warrant.
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2.
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If the Exercise Form indicates that Common
Shares are to be issued to a person or persons other than the registered
holder of the Warrant Certificate, the signature of such holder of the
Exercise Form must be guaranteed by an authorized officer of a chartered
bank, trust company or medallion guaranteed by an investment dealer who is a
member of a recognized stock exchange.
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3.
|
If the Exercise Form is signed by a
trustee, executor, administrator, curator, attorney, officer of a corporation
or any person acting in a judiciary or representative capacity, the
certificate must be accompanied by evidence of authority to sign satisfactory
to the Corporation.
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