NEO Battery enters facility lease agreement and raises $4 million CAD

NEO Battery Materials Ltd. (TSXV: NBM) (OTC: NBMFF) entered into a letter of intent to lease an operational battery components manufacturing facility from a South Korean battery company. The Toronto-based company simultaneously announced a non-brokered private placement offering to raise up to $4 million CAD.

The manufacturing facility has been operational and revenue-generating for two years, producing battery electrodes primarily for automotive original equipment manufacturers and global battery cell manufacturers. NEO plans to use the facility to produce electrodes for existing clients and develop customized battery solutions for drone, robotics, and electronics applications.

The company intends to incorporate its proprietary silicon battery materials, NBMSiDE, into the electrode production lines. Completion of the facility lease remains contingent upon negotiating a definitive lease agreement, completing due diligence, and meeting customary closing conditions.

NEO's private placement offering consists of up to 7,843,138 units priced at $0.51 CAD per unit. Each unit includes one common share and one warrant exercisable at $0.80 CAD for 36 months from the closing date. The company may pay cash commissions up to 6% of gross proceeds to eligible finders.

The net proceeds will fund battery components and cell equipment acquisition, scale-up equipment purchases for silicon battery material development, and working capital requirements. The units are being offered to purchasers outside Canada under an exemption from prospectus requirements.

The offering requires final acceptance from the TSX Venture Exchange. NEO develops silicon-enhanced lithium-ion batteries for various applications including drones, robotics, electric vehicles, and energy storage systems.

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