Li-Metal Announces US$750,000 Equity Financing and Plans to Raise up to US$10.0 Million - Seite 2

The Ratchet is available for 45 days following the Closing Date and, in no case, can the price per Unit be adjusted downward pursuant to the Ratchet below the Discounted Market Price (as defined in the policies of the Canadian Securities Exchange) on the Closing Date.

The Units, and the underlying securities, will be subject to ‎certain resale restrictions, such as a hold period of four months and a day from the Closing Date. Closing of the financing is subject to CSE approval.

The Subscription will constitute a related party transaction as defined in Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, as an insider of the Company is a minority shareholder of Blue Horizon. The Company is relying on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(a) of MI 61-101, as the Company is not listed on a specified market and the fair market value of the insider's interest in the Units to be issued to Blue Horizon does not exceed 25 per cent of the market capitalization of the Company, as determined in accordance with MI 61-101. A material change report will be filed not less than 21 days before the Closing Date. This shorter period was reasonable and necessary in the circumstances as it was necessary for the Company to complete the Subscription to immediately improve the financial position of the company.

Blue Horizon Subsequent Financing and Advisory Agreement

The Company has also entered into an advisory agreement (the "Advisory Agreement") with Blue Horizon pursuant to which Blue Horizon will provide strategic consulting services to Li-Metal on elements of its business including, without limiting, corporate strategy and development, commercial activity and direct client engagement, partnership management and rationalization of Li-Metal's capital structure. The term of the Advisory Agreement shall commence on the Closing Date and continue for 12 months following the Closing Date. If the Subsequent Financing is not completed by June 30, 2024, the Advisory Agreement will terminate unless extended by mutual agreement of the parties.