NEO Battery Closes Non-Brokered Private Placement Offering of $7 Million

Executive Summary

• NEO Battery Materials Ltd. closed a non‑brokered private placement of 11,666,667 units at CAD $0.60 per unit, generating up to approximately CAD $7 million in gross proceeds.
• Proceeds are earmarked for expanding battery manufacturing equipment at the Gimje factory and an expansion site, as well as general working capital to accelerate defense‑battery programs and scale‑up production.
• Each unit includes one common share and a non‑transferable warrant exercisable at CAD $0.85 per share for 36 months; the company also issued cash commissions of CAD $420,000 and 700,000 stock options (exercise price CAD $0.60) as part of the transaction.

Key Details

• Units Offered: 11,666,667 units
• Price per Unit: CAD $0.60
• Aggregate Gross Proceeds: Approximately CAD $7 million (subject to closing conditions and TSXV acceptance)
• Unit Composition:
• 1 common share of NEO Battery Materials Ltd.
• 1 non‑transferable common share purchase warrant (exercisable at CAD $0.85 per share for 36 months, expiring Jan 21 2029)
• Use of Proceeds:
  1. Install additional battery manufacturing equipment—including formation and cylindrical/prismatic cell assembly—at the operational Gimje factory and expansion site.
  2. General working capital to accelerate the Defense Battery Development Program for military drones/unmanned systems and support scale‑up of production activities.
• Transaction Costs: Cash commission paid of CAD $420,000; issuance of 700,000 non‑transferable stock options (exercise price CAD $0.60, 36‑month term).
• Regulatory Notes: Offering made to purchasers outside Canada under OSC 72‑503 exemption; not a related‑party transaction per MI 61‑101; pending final acceptance by the TSX Venture Exchange.
• Restrictions: Securities issued under OSC 72‑503 are not subject to resale restrictions; offering not registered in the United States and cannot be sold to U.S. persons without registration or an exemption.

Notable Quotes

“This financing further strengthens our balance sheet and provides the capital required to continue executing on our recently announced OEM engagements… It supports our transition from development and qualification into execution and delivery, as we advance multiple commercial programs…” – Spencer Huh, President & CEO

Materiality Assessment: Material – Positive (significant financing that materially enhances liquidity and enables key operational expansions).