Neo Lithium (“Neo Lithium” or the “Company”) is pleased to announce that Contemporary Amperex Technology, a Chinese battery manufacturer and technology company that specializes in the manufacturing of lithium-ion batteries for electric vehicles and energy storage systems, and battery management systems has provided notice to the Company of its intention to subscribe, through a subsidiary and pursuant to its Investor Rights Agreement (described below), on a non-brokered private placement basis, for 860,870 common shares of the Company (the “Shares”) at a price of C$3.05 per Share for aggregate gross proceeds to the Company of C$2,625,652 (the “Sidecar Placement”), to maintain its 8% equity interest in the Company.
Pursuant to the terms of an investor rights agreement between CATL and the Company (the “Investor Rights Agreement”), CATL holds a participation right to maintain its pro rata percentage holding in the Company. The right to the Sidecar Placement was triggered as a result of the “bought deal” private placement financing of special warrants of the Company (“Special Warrants”) previously announced by the Company on January 20, 2021 (the “Brokered Offering”). Pursuant to its rights under the Investor Rights Agreement, and in parallel to the terms of the Brokered Offering, CATL shall be entitled to an additional 10% of the Shares for no additional consideration should the Company not receive a final receipt by the Ontario Securities Commission for a (final) short form prospectus qualifying the distribution of the Shares underlying the Special Warrants within two months of the closing of the Brokered Offering, scheduled for February 10, 2021.
The Company intends to use the net proceeds from the Sidecar Placement to fund development work at the 3Q Lithium Project located in Catamarca, Argentina and for working capital and general corporate purposes.
The Sidecar Placement is scheduled to close within 45 days of the date hereof (the “Closing Date”) and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including customary approval from the government of the People’s Republic of China, the approval of the TSX Venture Exchange and any required securities regulatory authorities, and signing of a subscription agreement.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the 1933 Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act, as amended, and application state securities laws.