Operational Battery Component Facility Lease Arrangement
Under the terms of the LOI, NEO intends to enter into a long-term lease arrangement that will provide immediate access to established battery component production capabilities. The commercial facility has been operational and revenue-generating for the past two years, producing battery electrodes primarily for major automotive original equipment manufacturers (OEM) and global battery cell manufacturers. Electrodes or cathode/anode sheets are the fundamental battery components that enable the storage and release of energy, determining the overall battery energy density, charging rates, and cycle lifespan.
With the facility lease, NEO aims to produce electrodes for existing automotive and battery cell manufacturers and to adapt production to supply customized battery solutions for its drone, UAV, robotics, electronics, and energy storage clients and pipeline. The Company will further incorporate its proprietary silicon battery materials, NBMSiDE®, into the electrode production lines, establishing a manufacturing platform to fast-track the commercialization of high-performance, silicon-enhanced batteries.
Completion of the facility lease transaction is contingent upon the negotiation of the definitive lease agreement, the due diligence of the facility, equipment, and other relevant factors, and other customary closing conditions. With respect to the LOI, there are no material terms or considerations.
Non-Brokered Private Placement Offering
In connection with the electrode facility lease and the scale-up of silicon battery material production, the Company is pleased to undertake a non-brokered private placement (the "Offering") of up to approximately 7,843,138 units (each, a "Unit") at a price of $0.51 CAD per Unit for aggregate gross proceeds of up to approximately $4 million CAD.
Each Unit consists of one common share of the Company (each, a "Common Share") and one non-transferable Common Share purchase warrant (each, a "Warrant"). Each whole Warrant will be exercisable to acquire one Common Share of the Company at an exercise price of $0.80 CAD for a period of 36 months from the closing date of the Offering. The Company may compensate a cash commission of up to 6% of the gross proceeds raised from the sale of Units to subscribers directly introduced to the Company by eligible finders.
The net proceeds of the Offering are expected to be allocated towards (i) securing battery components and cell equipment and facilities to manufacture drone, unmanned aerial vehicle (UAV), and robotics batteries, (ii) purchases of scale-up equipment for silicon battery material ...
