LITHIUM UNIVERSE LIMITED ACN 148 878 782 CLEANSING PROSPECTUS For an offer of 1,000 Shares at an issue price of $0.02 per Share to raise $20 (before expenses) (Offer). This Prospectus has been prepared primarily for the purpose of section 708A(11) of the Corporations Act to remove any trading restrictions on the sale of Shares issued by the Company prior to the Closing Date. IMPORTANT NOTICE This document is important and should be read in its entirety. If after reading this Prospectus you have any questions about the Shares being offered under this Prospectus or any other matter, then you should consult your professional advisers without delay. The Shares offered by this Prospectus should be considered as highly speculative. IMPORTANT NOTICE This Prospectus is dated 10 May 2024 and was lodged with the ASIC on that date. The ASIC, ASX and their respective officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No Shares may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus. It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The Shares offered by this Prospectus should be considered as highly speculative. Applications for Shares offered pursuant to this Prospectus can only be submitted on an original Application Form. No Investment Advice The information contained in this Prospectus is not financial product advice or investment advice and does not take into account your financial or investment objectives, financial situation or particular needs (including financial or taxation issues). You should seek professional advice from your accountant, financial adviser, stockbroker, lawyer or other professional adviser before deciding to subscribe for Securities under this Prospectus to determine whether it meets your objectives, financial situation and needs. Forward-looking statements This Prospectus contains forwardlooking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place. This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus and is only required to contain information in relation to the effect of the issue of securities on a company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and the Company’s management. Representations contained in this Prospectus are made taking into account that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters are publicly available information or may reasonably be expected to be known to investors and professional advisers whom prospective investors may consult. The Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law. The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forwardlooking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forwardlooking statements. These forward-looking statements are subject to various risk factors that could cause our actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in Section 4. Applicants outside Australia The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus does not constitute an offer of Shares in any jurisdiction where, or to any person to whom, it would be unlawful to issue in this Prospectus. Continuous disclosure obligations The Company is a “disclosing entity” (as defined in section 111AC of the Corporations Act) for the purposes of section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Shares. This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest. Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the three months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX. Please refer to Section 5.2 for further details. the sale and purchase procedures under CHESS and issuer sponsorship. registry at the relevant contact number set out in this Prospectus. Electronic Prospectus Electronic sub-registers also mean ownership of securities can be transferred without having to rely upon paper documentation. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month. Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the Application for Shares, the Company may not be able to accept or process your Application. A copy of this Prospectus can be downloaded from the website of the Company at www.lithiumuniverse.com. If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be an Australian resident and must only access this Prospectus from within Australia. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. You may obtain a hard copy of this Prospectus free of charge by contacting the Company. The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered. Company Website No documents or other information available on the Company’s website is incorporated into this Prospectus by reference. Clearing House Electronic SubRegister System (CHESS) and Issuer Sponsorship The Company will apply to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with statements (similar to a bank account statement) that set out the number of Shares issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, Photographs and Diagrams Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown endorses the Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale. Definitions and Time Unless the contrary intention appears or the context otherwise requires, words and phrases contained in this Prospectus have the same meaning and interpretation as given in the Corporations Act and capitalised terms have the meaning given in the Glossary in Section 7. All references to time in this Prospectus are references to Australian Western Standard Time. Privacy statement If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your Application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder. The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the share registry. You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the share Enquiries If you are in any doubt as to how to deal with any of the matters raised in this Prospectus, you should consult with your broker or legal, financial or other professional adviser without delay. Should you have any questions about the Offer or how to accept the Offer please call the Company Secretary on +61 (2) 8046 2799. CORPORATE DIRECTORY Directors Registered Office Ignatius (Iggy) Kim-Seng Tan Non-Executive Chair Suite 9 295 Rokeby Road SUBIACO WA 6008 Gernot Abl Executive Director Fadi Diab Non-Executive Director Patrick Scallan Non-Executive Director Jingyuan Liu Non-Executive Director Joint Company Secretary Kurt Laney Vince Fayad Share Registry* Telephone: +61 (2) 8046 2799 Email: info@lithiumuniverse.com Website: www.lithiumuniverse.com Solicitors Steinepreis Paganin Lawyers and Consultants Level 4 The Read Buildings 16 Milligan Street PERTH WA 6000 Auditor* Moore Australia Audit (VIC) Level 44 600 Burke Street MELBOURNE VIC 3000 Automic Registry Services Level 5 191 St Georges Terrace PERTH WA 6000 Telephone: 1300 288 664 (in Australia) +61 (2) 9698 5414 (outside Australia) ASX Code LU7 * These entities have not been involved in the preparation of this Prospectus and have not consented to being named in this Prospectus. Their names are included for information purposes only. TABLE OF CONTENTS 1. DETAILS OF THE OFFER .................................................................................................. 1 2. PURPOSE AND EFFECT OF THE OFFER ........................................................................... 4 3. RIGHTS AND LIABILITIES ATTACHING TO SHARES ........................................................ 6 4. RISK FACTORS .............................................................................................................. 8 5. ADDITIONAL INFORMATION ...................................................................................... 20 6. DIRECTORS’ AUTHORISATION .................................................................................... 28 7. GLOSSARY .................................................................................................................. 29 i 1. DETAILS OF THE OFFER 1.1 Indicative Timetable Action Date Lodgement of Prospectus with the ASIC and ASX 10 May 2024 Opening Date 10 May 2024 Issue of Shares under the Placement 10 May 2024 Closing Date* 5:00pm WST, 13 May 2024** Expected date for quotation of Shares issued under the Offer on ASX* 13 May 2024 * These dates are indicative only and may change without notice. **The Directors reserve the right to extend the Closing Date at any time after the Opening Date without notice. It is proposed that the Offer will be closed immediately following the issue of Shares under the Placement. 1.2 The Offer Pursuant to this Prospectus, the Company invites investors identified by the Directors to apply for 1,000 Shares at an issue price of $0.02 per Share, to raise $20 (before expenses). The Offer will only be extended and Application Forms will only be provided to specific parties on invitation from the Directors. All of the Shares offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to Section 3 for further information regarding the rights and liabilities attaching to the Shares. 1.3 Background to and purpose of the Offer As announced on 1 May 2024, the Company has received binding commitments from sophisticated and professional investors to raise a total of $3,644,333.34, pursuant to a placement of Shares at an issue price of $0.02 per Share (Placement). The Placement is proposed to be undertaken in two tranches: (a) tranche 1 shall comprise the issue of 95,016,667 Shares pursuant to the Company’s existing placement capacity under ASX Listing Rule 7.1; and (b) tranche 2 shall comprise the issue of 87,200,000 Shares, subject to the receipt of shareholder approval at the Company’s Annual General Meeting, proposed to be held on or about 14 June 2024 (AGM). Participants in the Placement shall also receive one free attaching option (exercisable at $0.03 on or before the date which is 18 months from its date of issue) for every two Shares subscribed for and issued under the Placement. The issue of the free attaching options is subject to shareholder approval at the AGM. 1 The funds raised under the Placement will be applied as set out in Section 2.1.The Company is not currently able to issue a cleansing notice under section 708A(5) of the Corporations Act due to its Shares having been suspended from trading on ASX for more than 5 trading days within the last 12 months. Accordingly, the Company is required to issue this Prospectus in order to remove the trading restrictions attaching to Shares to be issued under tranche 1 of the Placement, on account of those Shares being issued without disclosure under Chapter 6D of the Corporations Act. Relevantly, section 708A(11) of the Corporations Act provides that a sale offer does not need disclosure to investors if: (a) the relevant securities are in a class of securities that are quoted securities of the body; and (b) either: (c) (i) a prospectus is lodged with the ASIC on or after the day on which the relevant securities were issued but before the day on which the sale offer is made; or (ii) a prospectus is lodged with ASIC before the day on which the relevant securities are issued and offers of securities that have been made under the prospectus are still open for acceptance on the day on which the relevant securities were issued; and the prospectus is for an offer of securities issued by the body that are in the same class of securities as the relevant securities. As such, provided that the tranche 1 Placement Shares are issued while the Offer remains open, the Shares will be freely tradable on the ASX from their date of issue. 1.4 Application for Shares Applications for Shares must be made by investors at the direction of the Company and must be made using the Application Form accompanying this Prospectus. 1.5 Minimum subscription There is no minimum subscription. 1.6 Underwriting The Offer is not underwritten. 1.7 Issue of Shares As noted in Section 1.3, the primary purpose of this Prospectus is to “cleanse” the tranche 1 Placement Shares for secondary sale. If the Directors decide to issue Shares under this Prospectus, the issue of Shares under the Offer will be issued in accordance with the ASX Listing Rules and will take place as soon as practicable after the Closing Date. Pending the issue of the Shares or payment of refunds pursuant to this Prospectus, all Application monies will be held by the Company in trust for the 2 Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest. The Directors will determine the recipients of all the Shares. The Directors reserve the right to reject any Application Form or to allocate any Applicant fewer Shares than the number applied for. Where the number of Shares issued is less than the number applied for, the surplus monies will be returned by cheque as soon as practicable after the Closing Date. Where no issue of Shares is made, the amount tendered on Application will be returned in full by cheque as soon as practicable after the Closing Date. Interest will not be paid on monies refunded. The Company’s decision on the number of Shares to be allocated to an Applicant will be final. Holding statements for Shares issued under the Offer will be mailed as soon as practicable after the issue of Shares as soon as practicable after their issue. 1.8 ASX listing Application for Official Quotation of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus. If ASX does not grant Official Quotation of the Shares offered pursuant to this Prospectus before the expiration of three months after the date of issue of the Prospectus, (or such period as varied by the ASIC), the Company will not issue any Shares and will repay all Application monies for the Shares within the time prescribed under the Corporations Act, without interest. The fact that ASX may grant Official Quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares now offered for subscription. 1.9 Applicants outside Australia The distribution of this Prospectus outside Australia may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions constitutes a violation of those laws. The Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. Residents of countries outside Australia should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed should they wish to make an Application to take up Shares on the basis of this Prospectus. The return of a duly completed Application Form will be taken to constitute a representation and warranty that there has been no breach of such laws and that all approvals and consents have been obtained. 3 2. PURPOSE AND EFFECT OF THE OFFER 2.1 Purpose of the Offer The purpose of this Prospectus is to “cleanse” the tranche 1 Placement Shares for secondary sale. The funds raised under the Placement will be applied towards the following: Indicative Use of Funds $ % DFS for Québec Lithium Processing Hub concentrator $1.10m 30.22% DFS for Québec Lithium Processing Hub Li Carb Refinery $1.10m 30.22% Exploration on Canadian and Australian portfolio $0.40m 10.99% Corporate, working capital and offer costs $1.04m 28.57% Total Use of Funds $3.64m 100.00% Under the Offer, an amount of approximately $20 (before expenses) may be raised. Any funds raised from the Offer will be applied towards the expenses of the Offer. Refer to Section 5.8 of this Prospectus for further details relating to the estimated expenses of the Offer. 2.2 Effect on capital structure The effect of the Offer on the capital structure of the Company is set out below. Shares1 Number Shares currently on issue Shares offered under this Prospectus Shares to be issued under tranche 1 of the Placement2 Total Shares on issue after completion of the Offer 636,696,897 1,000 95,016,667 731,714,5643 Notes: 1. The rights and liabilities attaching to the Shares are summarised in Section 3 of this Prospectus. 2. Further details in respect of the Placement are set out in the ASX announcement released by the Company on 1 May 2024. 3. Subject to shareholder approval at the AGM, the Company also proposes to issue an additional 87,200,000 Shares under tranche 2 of the Placement. Options Number Options currently on issue1 Options to be issued under the Offer Total Options on issue on completion of the Offer2 119,500,000 Nil 119,500,0002 Notes: 1. Comprising: (a) 108,500,000 unquoted Options exercisable at $0.03 each on or before 8 August 2026; and 4 (b) 9,000,000 unquoted Options exercisable at $0.03 each on or before 22 August 2026. (c) 2,000,000 unquoted Options exercisable at $0.03 each on or before 11 March 2027 2. Subject to shareholder approval at the AGM, the Company also proposes to issue 91,108,334 free attaching Options to participants in the Placement, and 11,587,500 free attaching Options to participants in the Company’s recently completed share purchase plan. The options will be exercisable at $0.03 on or before the date which is 18 months from their date of issue. The Company intends to apply for quotation of the above Options on ASX. Performance Rights Number Performance Rights currently on issue1 Performance Rights offered under the Offer Total Performance Rights on issue on completion of the Offer1 2.3 60,738,623 Nil 60,738,623 Financial effect of the Offer After expenses of the Offer of approximately $25,000, there will be no proceeds from the Offer. The expenses of the Offer (exceeding $25,000) will be met from the Company’s existing cash reserves. As such, the Offer will have an effect on the Company’s financial position, being receipt of funds of $20 less costs of making the Offer of approximately $24,980 (negative). 5 3. RIGHTS AND LIABILITIES ATTACHING TO SHARES The following is a summary of the more significant rights and liabilities attaching to the Shares being offered pursuant to this Prospectus. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice. Full details of the rights and liabilities attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours. (a) (Ranking of Shares): At the date of this Prospectus, all Shares are of the same class and rank equally in all respects. Specifically, the Shares issued pursuant to this Prospectus will rank equally with existing Shares. (b) (Voting rights): Subject to any rights or restrictions, at general meetings: (c) (i) every Shareholder present and entitled to vote may vote in person or by attorney, proxy or representative; (ii) has one vote on a show of hands; and (iii) has one vote for every Share held, upon a poll. (Dividend rights): Shareholders will be entitled to dividends, distributed among members in proportion to the capital paid up, from the date of payment. No dividend carries interest against the Company and the declaration of Directors as to the amount to be distributed is conclusive. Shareholders may be paid interim dividends or bonuses at the discretion of the Directors. The Company must not pay a dividend unless the Company’s assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend. (d) (Variation of rights): The rights attaching to the Shares may only be varied by the consent in writing of the holders of three-quarters of the Shares, or with the sanction of a special resolution passed at a general meeting. (e) (Transfer of Shares): Shares can be transferred upon delivery of a proper instrument of transfer to the Company or by a transfer in accordance with the ASX Settlement Operating Rules. The instrument of transfer must be in writing, in the approved form, and signed by the transferor and the transferee. Until the transferee has been registered, the transferor is deemed to remain the holder, even after signing the instrument of transfer. In some circumstances, the Directors may refuse to register a transfer if upon registration the transferee will hold less than a marketable parcel. The Board may refuse to register a transfer of Shares upon which the Company has a lien. (f) (General meetings): Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company. 6 The Directors may convene a general meeting at their discretion. General meetings shall also be convened on requisition as provided for by the Corporations Act. (g) (Unmarketable parcels): The Company’s Constitution provides for the sale of unmarketable parcels subject to any applicable laws and provided a notice is given to the minority Shareholders stating that the Company intends to sell their relevant Shares unless an exemption notice is received by a specified date. (h) (Rights on winding up): If the Company is wound up, the liquidator may with the sanction of special resolution, divide the assets of the Company amongst members as the liquidator sees fit. If the assets are insufficient to repay the whole of the paid up capital of members, they will be distributed in such a way that the losses borne by members are in proportion to the capital paid up. (i) (Restricted Securities): A holder of Restricted Securities (as defined in the ASX Listing Rules) must comply with the requirements imposed by the ASX Listing Rules in respect of Restricted Securities. 7 4. RISK FACTORS The Shares offered under this Prospectus are considered highly speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below, together with information contained elsewhere in this Prospectus and to consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus. There are specific risks which relate directly to the Company’s business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this Section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Shares. The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed. 4.1 General Company Specific Risks (a) Future capital requirements The Company’s business model comprises a dual focus on (1) the exploration of its suite of lithium and rare earth assets, predominately in Canada and to a lesser extent in Australia (Projects) and (2) the pursuit of its Quebec lithium processing hub (QLPH) strategy, comprising the proposal to build a lithium concentrator and lithium refinery facility in Canada, with the goal of providing critical materials for batteries in the North American market. The Company is unlikely to generate any operating revenue unless and until the Projects are successfully developed and production commences, or such time as the QLPH lithium concentrator or lithium refinery are operational. As such, the Company will require additional financing to continue its operations and fund exploration on the Projects and design and construction activities for the QLPH. The future capital requirements of the Company will depend on many factors including the strength of the economy, general economic factors and its business development activities. The Company believes its available cash and the net proceeds of the Placement should be adequate to fund its business objectives in the short term, as disclosed in the Company’s announcements released to the ASX. However, within the next 6 to 12 months, the Company will likely need to raise additional capital in order to progress and complete the engineering studies for the QLPH. In the event that the Company completes the definitive feasibility studies for the QLPH concentrator and carbonate refinery, and proceeds to make a final investment deci