Electra completes $5M financing, settles accrued interest on converible notes

Electra Battery Materials (ELBM) has closed its previously announced financing transaction with the holders of the existing secured notes issued by the Company on February 13, 2023 for gross proceeds to the Company of $5M, the Financing being on terms previously announced by the Company on October 25, 2024. These funds enable the Company to initiate certain early works and winter preparations at the Ontario Refinery project site in Temiskaming Shores, Ontario, as well as being used for general corporate purposes. In connection with closing the Financing, the Company issued secured convertible notes in the principal amount of $4M and 1,841,620 common shares at $0.543 per share. The notes were issued together with 4,545,454 detachable common share purchase warrants entitling the holders to acquire an equivalent number of common shares at a price of C$1.00 per share until November 26, 2026. The Company has also issued additional Existing Notes to the holders, in the principal amount of US$6,521,000, as payment-in-kind for all outstanding accrued interest owing on the Existing Notes through to August 15, 2024, as previously announced. The additional Existing Notes carry the same payment and conversion terms as the balance of the Existing Notes and were issued pursuant to a supplement to the indenture dated February 13, 2023, entered into among the company, GLAS Trust Company, as trustee for the Existing Notes and their holders. In connection with closing the Financing, the holders of the Existing Notes have waived certain existing events of default regarding the non-payment of interest under the Existing Notes and the minimum required cash balance through until February 15, 2025, and have agreed that the previous failure to register the resale of the common shares issuable pursuant to the terms of the Existing Notes and the Existing Warrants will not constitute an event of default. The holders of the Existing Notes have also agreed to the cancellation of a total of 4,545,454 common share purchase warrants currently exercisable at a price of C$1.74 until August 11, 2025, for no further consideration. The Company has also amended the terms of an aggregate of 10,796,054 outstanding share purchase warrants. The Existing Warrants were issued in connection with the offering of the Existing Notes and were previously exercisable at a price of C$1.00 until February 13, 2028. Following the amendment, the exercise price of the Existing Warrants has been reduced to C$0.85 per Share. In addition, the Existing Warrants now include a revised acceleration clause such that their term will be reduced to thirty-days in the event the closing price of the common shares on the TSX Venture Exchange exceeds C$0.85 by twenty percent or more for ten consecutive trading dates, with the reduced term beginning seven calendar days after such ten consecutive-trading-day period. Upon the occurrence of an acceleration event, holders of the Existing Warrants may exercise the Existing Warrants on a cashless basis, based on the value of the Existing Warrants at the time of exercise, subject to compliance with the policies of the TSX Venture Exchange.