Electra Battery Materials announces upsized brokered private placement and coincident non-brokered placement for gross proceeds of up to $21.5 million.
Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V: ELBM) (“Electra” or the “Company”) announce that due to significant investor demand, the Company has elected to reallocate a portion of its previously announced financing to increase the potential allocation of the brokered private placement (the “Marketed Offering”) from $10 million to $15 million.
Under the revised Marketed Offering, the Company intends to sell up to 13,636,364 units of the Company (the “Units”) at a price of $1.10 per Unit (the “Issue Price”) on a brokered private placement basis. Red Cloud Securities Inc. is acting as lead agent and sole bookrunner on behalf of a syndicate of agents (collectively, the “Agents”).
The balance of the financing will be completed on a non-brokered private placement basis (the “Non-Brokered Offering”) for gross proceeds of $5.0 million on the same terms as the Marketed Offering. The Non-Brokered Offering is being placed with holders of the Company’s senior secured convertible notes. All amounts are in Canadian currency unless noted.
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Each Unit will continue to consist of one common share of the Company (each, a “Common Share”) and one Common Share purchase warrant (each, a “Warrant”). Each Warrant shall entitle the holder thereof to purchase one Common Share at a price of $1.74 at any time on or before the date that is 24 months after the Closing Date (as defined below).
The Company has granted to the Agents an option, exercisable up to 48 hours prior to the Closing Date, to sell up to an additional 1,363,636 Units at the Issue Price for additional gross proceeds of up to $1,500,000 (the “Agents’ Option”, and together with the Marketed Offering and the Non-Brokered Offering, the “Offering”).
The Offering no longer includes, nor is conditional upon, a strategic investment commitment by Three Fires Group Inc. as originally announced by the Company on June 26, 2023. The Company and Three Fires continue to work towards a joint black mass recycling strategy, including Three Fires board representation with Electra, a primary recycling facility joint venture for the shredding of lithium-ion battery waste, and a future strategic investment.
The Company intends to use the net proceeds of the Offering to advance its black mass recycling strategy, its cobalt refinery, for working capital to retire existing payables and general corporate purposes.
The Offering is scheduled to close during the week of August 7, 2023 (the “Closing Date”) and is subject to customary conditions including the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange and notification to The Nasdaq Stock Market.
As consideration for their services, at the Closing Date, the Company shall pay to the Agents a cash commission equal to 6% of the gross proceeds of the Marketed Offering and will issue to the Agents a number of non-transferable warrants of the Company (the “Broker Warrants”) equal to 6% of the number of Units sold under the Marketed Offering.
Each Broker Warrant will entitle the holder to acquire one Common Share exercisable at a price of $1.10, subject to adjustment in certain events, at any time on or before the date that is 24 months following the Closing Date.
The Units are being offered on a private placement basis to purchasers in each of the provinces of Alberta, British Columbia, Manitoba, Ontario and Saskatchewan (the “Canadian Selling Jurisdictions”) pursuant to the accredited investor exemption outlined in Part 2 of National Instrument 45-106 — Prospectus Exemptions (“NI 45-106”), as well as to purchasers resident outside of Canada pursuant to Ontario Securities Commission Rule 72-503 – Distributions Outside Canada.Up to 4,545,454 Units under the Marketed Offering will be offered to purchasers resident in the Canadian Selling Jurisdictions pursuant to the listed issuer financing exemption as outlined in Part 5A of NI 45-106 (the “Listed Issuer Financing Exemption”).
There is an offering document related to the portion of the offering conducted under the Listed Issuer Financing Exemption accessible under the Company’s profile on SEDAR (www.sedar.com) and on the Company’s website. Prospective investors should read this offering document before making an investment decision.
The Common Shares issuable from the sale of up to 4,545,454 Units under the Listed Issuer Financing Exemption will not be subject to a hold period in accordance with Canadian securities laws and are expected to be immediately freely tradeable if sold to purchasers resident in Canada. All other securities issued in the Offering will be subject to a statutory hold period of four months and one day following issuance to the extent required by applicable securities laws.
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Electra Announces Upsized Brokered Private Placement and Coincident Non-Brokered Placement for Gross Proceeds of up to $21.5 Million, Toronto, August 3, 2023
