Neo Battery signs LOI to lease manufacturing facility

Executive Summary

• Neo Battery Materials Ltd. has entered into a Letter of Intent (LOI) to lease an operational, revenue-generating battery component manufacturing facility in South Korea, which has been producing battery electrodes for major automotive OEMs and global cell manufacturers for the past two years.
• In connection with the facility lease and the scale-up of silicon battery material production, the company announced a non-brokered private placement of up to approximately 7,843,138 units at 51 cents per unit, raising aggregate gross proceeds of up to approximately $4 million.
• The private placement includes non-transferable warrants exercisable at 80 cents per share for 36 months, with net proceeds allocated to securing equipment/facilities for drone, UAV, and robotics batteries, purchasing scale-up equipment for silicon material development, and working capital.

Key Details

• Facility Lease (LOI):
  • Target: Operational, revenue-generating battery components manufacturing facility in South Korea.
  • Current Status: Operational for the past two years, producing battery electrodes primarily for major automotive OEMs and global battery cell manufacturers.
  • Product: Electrodes (cathode/anode sheets) which determine battery energy density, charging rates, and cycle lifespan.
  • Strategic Goal: Produce electrodes for existing clients and adapt production for customized solutions in drone, UAV, robotics, electronics, and energy storage sectors.
  • Technology Integration: Incorporation of proprietary silicon battery materials (NBMSiDE) into electrode production lines to fast-track commercialization of silicon-enhanced batteries.
  • Conditions: Contingent on definitive lease agreement, due diligence, and customary closing conditions; no material terms in the LOI.
• Private Placement Details:
  • Structure: Non-brokered private placement.
  • Units Offered: Up to 7,843,138 units.
  • Price: 51 cents per unit.
  • Gross Proceeds: Up to approximately $4 million.
  • Unit Composition: One common share and one non-transferable common share purchase warrant.
  • Warrant Terms: Exercisable to acquire one common share at an exercise price of 80 cents; exercisable for 36 months from closing.
  • Finder’s Fee: Cash commission of up to 6% of gross proceeds for eligible finders introducing subscribers.
  • Use of Proceeds:
    1. Securing battery components, cell equipment, and facilities for drone, UAV, and robotics batteries.
    2. Purchases of scale-up equipment for silicon battery material development.
    3. Working capital and general corporate overhead.
  • Regulatory/Listing: Offered outside Canada under OSC Rule 72-503 (no resale restrictions); not a related party transaction; subject to final acceptance by TSX Venture Exchange.