Cavalry closes $2.74M subscription receipt financing

Executive Summary

• Cavalry Capital Corp. has closed its non-brokered private placement of subscription receipts on an oversubscribed basis, raising gross proceeds of $2,740,117.
• The financing is a critical condition for the closing of the business combination between Cavalry Capital Corp. and Advanced Energy Fuels Inc.
• Proceeds are held in escrow and will be released to fund the prefeasibility study for the South Woodie Woodie manganese project in Western Australia upon the satisfaction of specific escrow release conditions.

Key Details

• Transaction Structure: Non-brokered private placement of subscription receipts.
• Quantity Issued: 10,960,468 subscription receipts.
• Price: 25 cents per subscription receipt.
• Gross Proceeds: $2,740,117.
• Conversion Terms: Each subscription receipt converts into one unit upon satisfaction of escrow release conditions. Each unit comprises one postconsolidation Cavalry common share and one-half of one common share purchase warrant.
• Warrant Terms: Each warrant is exercisable for 24 months from the escrow release date to purchase one postconsolidation common share at an exercise price of 35 cents per share.
• Escrow Arrangement: Funds held by Computershare Trust Company of Canada. Release contingent on specific conditions.
• Escrow Expiration: If conditions are not satisfied or waived by Dec. 31, 2025 (or later date per agreement), receipts are cancelled, and funds returned to subscribers.
• Finder’s Fees:
  • Aggregate cash fees: $102,275.
  • Aggregate finder warrants: 409,100 non-transferable warrants.
  • Finder warrant exercise price: 35 cents per share.
  • Settlement: $30,875 cash and 123,500 warrants paid/issued on closing; remainder settled upon escrow release.
• Hold Period: Four-month hold period expiring on March 21, 2026.
• Use of Proceeds: To support the completion of the prefeasibility study at the South Woodie Woodie manganese project in the Pilbara region of Western Australia.
• M&A Context: Completion of this private placement was a condition to the closing of the business combination with Advanced Energy Fuels Inc. (previously announced May 16, 2025, and July 29, 2025).
• Corporate Actions: Cavalry will complete a share consolidation of 1.66 preconsolidation shares for each postconsolidation share. The transaction is intended to constitute a qualifying transaction for a Capital Pool Company under TSX-V Policy 2.4.
• Regulatory Approval: Subject to approval of the TSX Venture Exchange.

Notable Quotes

• Gary Lewis, Executive Director, Advanced Energy Fuels Inc.: "We are pleased to announce the successful closing of the Cavalry private placement, with the funds raised to be strategically deployed to support the completion of the prefeasibility study at the South Woodie Woodie manganese project in the Pilbara region of Western Australia. We are grateful for the overwhelming support from our existing shareholders and welcome new investors to the company."
• Brandon Bonifacio, CEO and President, Cavalry Capital: "We are extremely pleased with the strong interest shown by existing and new investors and look forward to working with the Advanced Energy team to realize the potential of their exciting critical mineral projects, upon completion of the transaction."