Electra Appoints Heather Smiles as Vice President, Investor Relations & Corporate Development - Seite 2

In accordance with its Long-Term Incentive Plan, the Company has issued 100,000 stock options. Long-term incentive grants are an important retention and incentive tool for key employees, and a mechanism to align interests with shareholders. The stock options grant holders the right to purchase common shares of Electra at an exercise price of $0.50 and will vest in three equal tranches on the first, second and third anniversary of the grant date over a four-year period. All grants are subject to the approval of the TSX Venture Exchange (the “TSXV”).

Update on Convertible Notes

Further to its news release dated December 1, 2023, Electra has received the approval of the TSXV as well as warrantholders, to amend the terms of 10,796,054 outstanding common share purchase warrants (the “Warrants”) issued on February 13, 2023 and due to expire on February 13, 2028. The Company has entered into a supplemental indenture to effect the amendment with TSX Trust Company, as warrant agent, to the warrant indenture governing the Warrants dated February 13, 2023 between the Company and the warrant agent. The Warrants were issued in connection with a private placement transaction for US$51 million in principal amount of 8.99% senior secured convertible notes due February 2028 (the “Notes”) that closed on February 13, 2023. When issued, the Warrants were exercisable at US$2.48 per common share.

Pursuant to the amendment, the exercise price of the Warrants was reduced to CAD$1.00 per common share. In addition, the Warrants were amended to include an acceleration clause such that the term of the Warrants will be reduced to 30 days (the “Reduced Term”) in the event the closing price of the common shares on the TSXV exceeds CAD$1.20 for ten consecutive trading dates (the “Acceleration Event”), with the Reduced Term to begin upon release of a press release by the Company within seven calendar days after such ten consecutive trading day period. Upon the occurrence of an Acceleration Event, warrantholders may exercise the Warrants on a cashless basis, based on the value of the Warrants at the time of exercise.

The amendment was agreed upon with the warrantholders following constructive negotiations and more closely aligns the terms of the Warrants with current market conditions. At the same time, certain pricing adjustment provisions in the Notes will not be exercised, and as a result, the Notes have not been re-priced at a lower exchange rate and no amendments have been made in respect of the debt conversion ratio. As a result, potential dilution in Company capitalization has been reduced in the event the Notes are converted into equity, while the cashless exercise feature added to the Warrants will serve to concurrently reduce the dilutive effect of future exercises of Warrants upon the occurrence of an Acceleration Event.