Li-Metal Secures Funding and Strategic Advisory for Anode Technology Development
Li-Metal has received a financial commitment of US$750,000 from Blue Horizon Advisors for the purchase of units from the company. This transaction is part of a broader strategy that includes a planned equity financing aiming to raise an additional US$10 million. The initial funding and subsequent financing are intended to support the commercialization of Li-Metal's lithium metal anode and production technologies, crucial for next-generation batteries.
The terms of the initial subscription, set to close on April 25, 2024, involve Blue Horizon subscribing for over 5 million units at an issue price of CDN$0.20 each. These units each consist of one common share and a half-share purchase warrant. The warrants allow for the purchase of additional shares at $0.63 each over the next three years, with provisions to accelerate the expiry date under certain conditions.
Additionally, the agreement includes a ratchet provision that adjusts the warrant exercise price if Li-Metal issues securities at lower prices in the subsequent financing. This adjustment mechanism is safeguarded by a floor set by the Canadian Securities Exchange's policies.
The units and their underlying securities are subject to resale restrictions, including a hold period of four months and a day, and the transaction requires approval from the Canadian Securities Exchange. It's also noted that this subscription involves a related party transaction, as an insider of Li-Metal is a minority shareholder in Blue Horizon, but exemptions under applicable securities regulations have been applied.
Furthermore, Li-Metal has entered into an advisory agreement with Blue Horizon, effective from the closing date. This agreement, set for a 12-month term, includes strategic consulting on corporate strategy, commercial activity, and partnership management. Compensation for these services will include a US$1 million engagement fee upon the closing of the subsequent financing and a monthly fee thereafter.
Should the subsequent financing not be completed by June 30, 2024, the advisory agreement may be terminated unless extended by mutual consent. If terminated, any accrued monthly fees will be settled in common shares of Li-Metal.
