Electra Battery Materials Corp F-3, filed Jun 27, 2025
Electra Battery Materials Corp (ELBM)
As filed with the Securities and Exchange Commission on June 26, 2025
Registration No. 333-
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________
Electra Battery Materials Corporation
(Exact name of Registrant as specified in its charter)
Not applicable
(Translation of Registrant’s name into English)
_____________
| Canada | Not Applicable |
|
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification Number (if applicable)) |
133 Richmond Street W, Suite 602
Toronto, Ontario
M5H 2L3
Canada
(416) 900-3891
(Address and telephone number of Registrant’s principal executive offices)
_____________
CT Corporation System
28 Liberty Street
New York, New York 10005
(212) 894-8940
(Name, address, (including zip code) and telephone number (including area code) of agent for service)
_____________
Copies of all communications, including communications sent to agent for service, should be sent to:
| Sam Cole, Esq. Cassels, Brock & Blackwell LLP Suite 2200, RBC Place, 885 West Georgia St. Vancouver, British Columbia V6C 3E8 Canada (604) 691-6100 |
Trent Mell Electra Battery Materials Corporation 133 Richmond Street W, Suite 602 Toronto, Ontario M5H 2L3 Canada (416) 900-3891 |
Thomas M. Rose Shona Smith Troutman Pepper Locke LLP 125 High Street, 19th Floor Boston, MA 02110 United States (757) 687-7715 |
Approximate date of commencement of proposed sale of the securities to the public:
From time to time after the effective date of this Registration Statement
_____________
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
We hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until we file a further amendment which will specifically state that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement contains:
| · | a base prospectus which covers the offering, issuance and sale by us of up to a maximum aggregate offering price of US$20,000,000 of common shares, warrants and/or units from time to time in one or more offerings; and |
| · | an “at the market” offering prospectus supplement covering the offering, issuance and sale by us of up to a maximum aggregate offering price of US$5,500,000 of our common shares that may be issued and sold under an At the Market Offering Agreement with H.C. Wainwright & Co., LLC (the “Sales Agent”). |
The base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the base prospectus. The “at the market” offering prospectus supplement immediately follows the base prospectus. The US$5,500,000 of common shares that may be offered, issued and sold under the “at the market” offering prospectus supplement is included in the US$20,000,000 of securities that may be offered, issued and sold by us under the base prospectus. Upon termination of the At the Market Offering Agreement with the Sales Agent, any portion of the US$5,500,000 included in the “at the market” offering prospectus supplement that is not sold pursuant to the At the Market Offering Agreement will be available for sale in other offerings pursuant to the base prospectus and a corresponding prospectus supplement, and if no shares are sold under the At the Market Offering Agreement, the full US$20,000,000 of securities may be sold in other offerings pursuant to the base prospectus and a corresponding prospectus supplement.
SUBJECT TO COMPLETION, DATED JUNE 26, 2025
The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell the securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PROSPECTUS
Electra Battery Materials Corporation
US$20,000,000
Common Shares
Warrants
Units
_________________
Electra Battery Materials Corporation (“we”, “us”, “our”, “Electra” or the “Company”) may offer and issue from time to time common shares (“Common Shares”), common share purchase warrants (“Warrants”) and units comprised of Common Shares and Warrants (“Units”) or any combination thereof (collectively, the “Securities”) up to an aggregate initial offering price of US$20,000,000 (or the equivalent thereof if the Securities are denominated in any other currency or currency unit) during the period that this registration statement (the “Registration Statement”), including any amendments thereto, remains effective. Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth in one or more prospectus supplements (each, a “Prospectus Supplement” and together, the “Prospectus Supplements”) to the prospectus contained in the Registration Statement (the “Base Prospectus”).
The specific terms of the Securities with respect to a particular offering will be set out in the applicable Prospectus Supplement and may include, where applicable (i) in the case of Common Shares, the number of Common Shares offered, the offering price, and any other terms specific to the Common Shares being offered, (ii) in the case of Warrants, the offering price, the designation, the number and the terms of the Common Shares purchasable upon exercise of the Warrants, any procedures that will result in the adjustment of these numbers, the exercise price, the dates and periods of exercise and any other terms specific to the Warrants being offered, and (iii) in the case of Units, the number of Units offered, the offering price of the Units, the number, designation and terms of the Common Shares and Warrants comprising the Units and any procedures that will result in the adjustment of those numbers and any other specific terms applicable to the offering of Units. Where required by statute, regulation or policy, and where Securities are offered in currencies other than United States dollars, appropriate disclosure of foreign exchange rates applicable to the Securities will be included in the Prospectus Supplement describing the Securities.
All shelf information permitted under applicable law to be omitted from this Base Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with this Base Prospectus. Each Prospectus Supplement will be incorporated by reference into this Base Prospectus for the purposes of securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains.
This Base Prospectus constitutes a public offering of the Securities only in those jurisdictions where they may be lawfully offered for sale and only by persons permitted to sell the Securities in those jurisdictions. We may offer and sell Securities to, or through, underwriters or dealers and also may offer and sell certain Securities directly to other purchasers or through agents pursuant to exemptions from registration or qualification under applicable securities laws. A Prospectus Supplement relating to each issue of Securities offered thereby will set forth the names of any underwriters, dealers, or agents involved in the offering and sale of the Securities and will set forth the terms of the offering of the Securities, the method of distribution of the Securities including, to the extent applicable, the proceeds we will receive and any fees, discounts or any other compensation payable to underwriters, dealers or agents and any other material terms of the plan of distribution.
Our Common Shares are currently traded under the symbol “ELBM” on the TSX Venture Exchange (the “TSXV”) and on the Nasdaq Capital Market (“Nasdaq”). On June 25, 2025 (the last trading day prior to the date of this Base Prospectus), the closing price of the Common Shares on: (i) the TSXV was $1.48; and (ii) the Nasdaq was US$1.09. We will apply to have any Common Shares distributed under this Base Prospectus listed on the TSXV and the Nasdaq provided the Common Shares are currently listed or traded on such exchanges. Any listing and admission will be subject to Electra fulfilling all of the listing requirements of the TSXV and the Nasdaq, respectively. Unless otherwise specified in the applicable Prospectus Supplement, any offering of Warrants or Units will be a new issue of Securities with no established trading market and, accordingly, such Securities will not be listed on any securities or stock exchange or on any automated dealer quotation system.
On June 25, 2025, the aggregate market value worldwide of our outstanding common equity held by non-affiliates was approximately US$19,995,660, based on 17,695,274 Common Shares outstanding held by non-affiliates and a per share price of US$1.13 based on the closing sale price of the Common Shares on Nasdaq on June 9, 2025. Pursuant to General Instruction I.B.5. of Form F-3, in no event will we sell our securities in a public primary offering with a value exceeding one-third of our public float in any 12-month period so long as our public float remains below US$75 million. During the 12 calendar months prior to and including the date of this Base Prospectus, we have not offered or sold any securities pursuant to General Instruction I.B.5. of Form F-3.
We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and, as such, we have elected to comply with certain reduced public company reporting requirements for this Base Prospectus and future filings. However, we have elected not to take advantage of the extended transition period allowed for emerging growth companies for complying with new or revised accounting guidance as allowed by Section 107 of the JOBS Act and Section 7(a)(2)(B) of the Securities Act of 1933, as amended, (the “Securities Act”).
There is no market through which the Warrants or Units may be sold and purchasers may not be able to resell such Securities purchased under this Base Prospectus and any applicable Prospectus Supplement. This may affect the pricing of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of the Securities, and the extent of issuer regulation. See “Risk Factors”.
Our principal executive offices are located at 133 Richmond Street W, Suite 602, Toronto, Ontario, M5H 2L3, Telephone: (416) 900-3891.
We have prepared this Base Prospectus in accordance with United States disclosure requirements. Our financial statements are prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standard Board (“IASB”) and thus may not be comparable to financial statements of United States companies.
Purchasers of the Securities should be aware that the acquisition of the Securities may have tax consequences in the United States and in Canada. Such consequences for purchasers who are resident in, or citizens of, the United States, or who are resident in Canada may not be described fully herein or in any applicable Prospectus Supplement. Purchasers of the Securities should read the tax discussion contained in the applicable Prospectus Supplement with respect to a particular offering of Securities.
The enforcement by investors of civil liabilities under United States federal securities laws may be affected adversely by the fact that Electra is incorporated and governed under the laws of Canada, that some of our officers and directors are residents of countries other than the United States, that some or all of the underwriters, if any, may be residents of a foreign country, and a substantial portion of our assets and some of said persons are located outside the United States.
No underwriter has been involved in the preparation of this Base Prospectus nor has any underwriter performed any review of the contents of this Base Prospectus.
Investing in the Securities involves a high degree of risk. Prospective purchasers of the Securities should carefully consider all the information in this Base Prospectus and in the documents incorporated by reference in this Base Prospectus. See “Risk Factors” beginning on page 6 of this Base Prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Base Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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The date of this Base Prospectus is , 2025.
TABLE OF CONTENTS
| ABOUT THIS BASE PROSPECTUS | 1 |
| MARKET AND INDUSTRY DATA | 1 |
| FINANCIAL INFORMATION AND CURRENCY | 1 |
| EMERGING GROWTH COMPANY | 1 |
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 2 |
| PUBLICLY AVAILABLE INFORMATION ON ELECTRA | 3 |
| DOCUMENTS INCORPORATED BY REFERENCE | 4 |
| RISK FACTORS | 6 |
| OUR COMPANY | 8 |
| MATERIAL CHANGES | 13 |
| CAPITALIZATION AND INDEBTEDNESS | 13 |
| DESCRIPTION OF SHARE CAPITAL | 14 |
| DESCRIPTION OF THE WARRANTS | 15 |
| DESCRIPTION OF THE UNITS | 16 |
| CORPORATE GOVERNANCE | 16 |
| USE OF PROCEEDS | 19 |
| PLAN OF DISTRIBUTION | 19 |
| CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS | 20 |
| CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS | 22 |
| TRADING PRICE AND VOLUME | 27 |
| DILUTION | 27 |
| LEGAL MATTERS | 27 |
| INTERESTS OF EXPERTS | 27 |
| TRANSFER AGENT, REGISTRAR AND AUDITOR | 27 |
| MATERIAL CONTRACTS | 28 |
| EXPENSES OF ISSUANCE AND DISTRIBUTION | 28 |
| DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES | 28 |
| ENFORCEMENT OF CIVIL LIABILITIES | 28 |
| WHERE YOU CAN FIND MORE INFORMATION | 29 |
ABOUT THIS BASE PROSPECTUS
This Base Prospectus is part of a registration statement on Form F-3 that we filed with the United States Securities and Exchange Commission (the “SEC”). You should read this Base Prospectus, including the documents incorporated by reference, and the related registration statement carefully. This Base Prospectus and the registration statement contain important information you should consider when making your investment decision.
You should rely only on the information that we have provided in this Base Prospectus and any applicable Prospectus Supplement. We have not authorized anyone to provide you with different information. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this Base Prospectus, including the documents incorporated by reference, and any applicable Prospectus Supplement. You must not rely on any unauthorized information or representation. This Base Prospectus and any applicable Prospectus Supplement is an offer to sell only the securities offered hereby and thereby, but only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information in this Base Prospectus, including the documents incorporated by reference, and any applicable Prospectus Supplement is accurate only as of the date on the front of the document, regardless of the time of delivery of this Base Prospectus, any applicable Prospectus Supplement, or any sale of a Security.
Except as otherwise indicated, references in this Base Prospectus to “Electra,” “Company,” “we,” “us” and “our” refer to Electra Battery Materials Corporation and its consolidated subsidiaries.
MARKET AND INDUSTRY DATA
Unless otherwise indicated, the market and industry data contained or incorporated by reference in this Base Prospectus is based upon information from independent industry publications, market research, analyst reports and surveys and other publicly available sources. Although we believe these sources to be generally reliable, market and industry data is subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any survey. We have not independently verified any of the data from third party sources referred to or incorporated by reference herein and accordingly, the accuracy and completeness of such data is not guaranteed.
FINANCIAL INFORMATION AND CURRENCY
Financial statements included or incorporated by reference herein have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standard Board (“IASB”) and are audited or reviewed, as applicable, in accordance with the standards of the Public Company Accounting Oversight Board (United States).
All currency amounts in this Base Prospectus are expressed in Canadian dollars, unless otherwise indicated. References to “C$” are to Canadian dollars. References to “US$” are to United States dollars. On June 25, 2025, the daily exchange rate for the United States dollar, expressed in Canadian dollars, as quoted by the Bank of Canada, was US$1.00 = C$1.3737.
EMERGING GROWTH COMPANY
We are an “emerging growth company” as defined in Section 3(a) of the Exchange Act as amended by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We will continue to qualify as an “emerging growth company” until the earliest to occur of: (a) the last day of the fiscal year during which we had total annual gross revenues of US$1,235,000,000 (as such amount is indexed for inflation every 5 years by the SEC) or more; (b) the last day of our fiscal year following the fifth anniversary of the date of the first sale of equity securities pursuant to an effective registration statement under the Securities Act; (c) the date on which we have, during the previous 3-year period, issued more than US$1,000,000,000 in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer”, as defined in Exchange Act Rule 12b-2. We expect to continue to be an emerging growth company for the immediate future.
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Generally, a registrant that registers any class of its securities under Section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act a management report on internal control over financial reporting and, subject to an exemption available to registrants that are neither an “accelerated filer” or a “large accelerated filer” (as those terms are defined in Exchange Act Rule 12b-2), an auditor attestation report on management’s assessment of internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report on management’s assessment of internal controls over financial reporting in its annual reports filed under the Exchange Act, even if we were to qualify as an “accelerated filer” or a “large accelerated filer”. In addition, Section 103(a)(3) of the Sarbanes-Oxley Act of 2002 has been amended by the JOBS Act to provide that, among other things, auditors of an emerging growth company are exempt from any rules of the Public Company Accounting Oversight Board requiring a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the company.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Base Prospectus contains forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. The statements we make regarding the following matters are forward-looking by their nature and are based on certain of the assumptions noted below:
| · | our intentions, plans and future actions; |
| · | statements relating to our business and future activities; |
| · | anticipated developments in our operations; |
| · | our market position, ability to compete and future financial or operating performance; |
| · | the timing and amount of funding required to execute our business plans; |
| · | capital expenditures; |
| · | the effect on the Company of any changes to existing or new legislation or policy or government regulation; |
| · | the availability of labor; |
| · | requirements for and availability to us of additional capital; |
| · | goals, strategies and future growth; |
| · | the adequacy of financial resources; |
| · | expectations regarding revenues, expenses and anticipated cash needs; and |
| · | general market conditions and macroeconomic trends driven by geopolitical conflicts, including supply chain disruptions, market volatility, inflation, and labor challenges, among other factors. |
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, those factors identified under the “Risk Factors” in this Base Prospectus. Furthermore, unless otherwise stated, the forward-looking statements contained in this Base Prospectus are made as of the date hereof, and we have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes or otherwise, except as required by law.
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PUBLICLY AVAILABLE INFORMATION ON ELECTRA
We file reports and other information with the securities commissions and similar regulatory authorities in the provinces and territories of Canada (collectively, the “Commissions”). These reports and information are available to the public free of charge on SEDAR+ at www.sedarplus.ca.
We are subject to the information requirements of the Exchange Act relating to foreign private issuers and applicable Canadian securities legislation and, in accordance therewith, file reports and other information with the SEC and securities regulatory authorities in Canada. Investors may read and download documents we have filed with the SEC’s Electronic Data Gathering and Retrieval system at www.sec.gov.
We are subject to the informational requirements of the Exchange Act that are applicable to foreign private issuers. Accordingly, we are required to file or furnish reports and other information with the SEC, including annual reports on Form 40-F or Form 20-F, as applicable, and reports on Form 6-K. The SEC maintains an internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are available to the public through the SEC’s website at www.sec.gov.
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal and selling shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, nor be required to comply with Regulation FD, which restricts the selective disclosure of material information.
The mailing address of our corporate head office is 133 Richmond Street W, Suite 602, Toronto, Ontario, M5H 2L3, Canada and our telephone number is (416) 900-3891. Our agent for U.S. federal securities law purposes is C T Corporation System, with an address at 28 Liberty Street, New York, New York 10005. Electra also maintains a website at https://electrabmc.com. In this Base Prospectus, the website addresses of the SEC, SEDAR+ and Electra are provided solely for information and are not intended to be active links. Electra is not incorporating the contents of the websites of the SEC, SEDAR+ and Electra or any other entity into this Base Prospectus.
Readers should rely only on information contained or incorporated by reference in this Base Prospectus and any applicable Prospectus Supplement. We have not authorized anyone to provide the reader with different information. We are not making an offer of the Securities in any jurisdiction where the offer is not permitted. Readers should not assume that the information contained in this Base Prospectus is accurate as of any date other than the date on the front of this Base Prospectus, unless otherwise noted herein or as required by law. It should be assumed that the information appearing in this Base Prospectus and the documents incorporated herein by reference are accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates.
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DOCUMENTS INCORPORATED BY REFERENCE
Information has been incorporated by reference in this Base Prospectus from documents filed with the Commissions and filed with, or furnished to, the SEC. Copies of the documents incorporated herein by reference may be obtained on request without charge upon written or oral request made to Electra Battery Materials Corporation, 133 Richmond Street W, Suite 602, Toronto, Ontario, M5H 2L3, Canada, Telephone: (416) 900-3891; Attention: Marty Rendall, Chief Financial Officer. Copies of these documents are also available through the internet on the System for Electronic Document Analysis and Retrieval +, which can be accessed online at www.sedarplus.ca and on the SEC’s Electronic Data Gathering and Retrieval System, which can be accessed online at www.sec.gov and at our website at https://electrabmc.com.
The following documents, which we filed or furnished with the Commissions and the SEC, as applicable, are specifically incorporated by reference into, and form an integral part of, this Base Prospectus:
| · | our Annual Report on Form 20-F for the fiscal year ended December 31, 2024 filed with the SEC on April 24, 2025, as amended by Amendment No. 1 filed with the SEC on May 1, 2025; |
| · | Exhibit 99.2 to our Report on Form 6-K filed with the SEC on March 6, 2025; |
| · | our Report on Form 6-K filed with the SEC on March 31, 2025; |
| · | Exhibit 99.2 to our Report on Form 6-K filed with the SEC on April 14, 2025; |
| · | our Report on Form 6-K filed with the SEC on May 13, 2025; |
| · | our Report on Form 6-K filed with the SEC on May 20, 2025; and |
| · | the description of Common Shares contained in our registration statement on Form 40-F filed on April 14, 2022, pursuant to Section 12 of the Exchange Act, together with all amendments and reports filed for the purpose of updating that description. |
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, and any document of the type referred to in the preceding paragraph, subsequent to the date of this Base Prospectus and prior to the termination of the offering of the Securities offered by this Base Prospectus are incorporated by reference into this Base Prospectus and form part of this Base Prospectus from the date of filing or furnishing of these documents. If a Form 6-K has attached as an exhibit to such Form 6-K interim financial statements, interim management discussion and analysis, a material change report, and/or a management information circular, such exhibit shall be deemed to be incorporated by reference herein. We may incorporate by reference into this Base Prospectus any other Form 6-K (or exhibit thereto) that is submitted to the SEC after the date of the filing of the registration statement of which this Base Prospectus forms a part and before the date of termination of this offering. Any such other Form 6-K (or exhibit thereto) that we intend to so incorporate shall state in such form that it is being incorporated by reference into this Base Prospectus. The documents incorporated or deemed to be incorporated herein by reference contain meaningful and material information relating to us and the readers should review all information contained in this Base Prospectus and the documents incorporated or deemed to be incorporated herein by reference.
A Prospectus Supplement containing the specific terms of an offering of Securities and other information relating to the Securities will be delivered to prospective purchasers of such Securities together with this Base Prospectus and will be deemed to be incorporated into this Base Prospectus as of the date of such Prospectus Supplement only for the purpose of the offering of the Securities covered by that Prospectus Supplement.
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Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Base
Prospectus, to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not constitute
a part of this Base Prospectus, except as so modified or superseded. The modifying or superseding statement need not state that it has
modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The
making of such a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded
statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact
that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.
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RISK FACTORS
Prospective investors in a particular offering of Securities should carefully consider the risks presented in this Base Prospectus, as well as the information and risk factors contained in the Prospectus Supplement relating to that offering and any and all other information incorporated by reference in this Base Prospectus. Discussions of certain risks affecting us are generally provided and described in, among other documents, the Company’s annual and interim reports filed from time to time, which are incorporated by reference into this Base Prospectus. In particular, see the “Risk Factors” heading in the Company’s latest Annual Report on Form 20-F for the year ended December 31, 2024, filed on April 24, 2025, as amended on May 1, 2025.
An investment in the Securities offered hereunder is speculative and involves a high degree of risk. The risks and uncertainties described or incorporated by reference herein are not the only ones the Company may face. Additional risks and uncertainties, including those that the Company is unaware of or that are currently deemed immaterial, may also become important factors that affect the Company and its business. If any such risks actually occur, the Company’s business, financial condition and results of operations could be materially adversely affected.
In addition to the risks set out in the latest Annual Report on Form 20-F filed on April 24, 2025, as amended on May 1, 2025, and the other risk factors presented in a Prospectus Supplement or other reports that may, from time to time, be incorporated by reference into this Base Prospectus, prospective investors should also carefully consider the risks set out below.
You may experience future dilution as a result of future equity offerings.
In order to raise additional capital, we may in the future offer additional Common Shares or other securities convertible into or exchangeable for Common Shares at prices that may not be the same as the price per share paid by any investor in an offering in a subsequent Prospectus Supplement. We may sell Common Shares or other securities in any other offering at a price per share that is less than the price per share or other security paid by any investor in an offering in a subsequent Prospectus Supplement, and investors purchasing Common Shares or other securities in the future could have rights superior to you. The price per share at which we sell additional Common Shares or securities convertible or exchangeable into Common Shares, in future transactions may be higher or lower than the price per share paid by any investor in an offering under a subsequent Prospectus Supplement.
There can be no assurance as to the liquidity of the trading market for certain Securities or that a trading market for certain Securities will develop.
There is no public market for our Warrants, and unless otherwise specified in the applicable Prospectus Supplement, the Company does not intend to apply for listing of Warrants. If these securities are traded after their initial issue, they may trade at a discount from their initial offering prices depending on the market for similar securities, prevailing interest rates and other factors, including general economic conditions and the Company’s financial condition. There can be no assurance as to the liquidity of the trading market for any Warrants or that a trading market for these securities will develop.
If we are characterized as a passive foreign investment company, U.S. holders may be subject to adverse U.S. federal income tax consequences.
U.S. investors should be aware that they could be subject to certain adverse U.S. federal income tax consequences in the event that the Company is classified as a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes. The determination of whether the Company is a PFIC for a taxable year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and the determination will depend on the composition of the Company’s income, expenses and assets from time to time and the nature of the activities performed by the Company’s officers and employees. Based on the composition of the Company’s income and the value of its assets, the Company may have been classified as a PFIC for its taxable year ending December 31, 2024. However, it has not made a conclusive determination as the Company’s PFIC status may depend on the U.S. tax classification of certain grants that the Company has received or accrued as receivable during 2024. For similar reasons, the Company is uncertain as to whether it will be classified as a PFIC for the current taxable year. Prospective investors should carefully read the discussion under the heading “Certain U.S. Federal Income Tax Considerations for U.S. Holders” for more information and consult their own tax advisors regarding the likelihood and consequences of the Company being treated as a PFIC for U.S. federal income tax purposes, including the advisability of making certain elections that may mitigate certain possible adverse U.S. federal income tax consequences that may result in an inclusion in gross income without receipt of such income.
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Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our Common Shares.
If we fail to continue to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq will take steps to de-list our Common Shares. Any such de-listing would likely have a negative effect on the price of our Common Shares and would impair the ability to sell or purchase our Common Shares, as well as adversely affect our ability to issue additional securities and obtain additional financing in the future.
On September 21, 2023, we received a deficiency notice from Nasdaq (the “Deficiency Notice”) informing us that our Common Shares had failed to comply with the US$1.00 minimum bid price required for continued listing under Nasdaq Listing Rule 5550(a)(2) (“Minimum Bid Requirement”) based upon the closing bid price of our Common Shares for the 30 consecutive business days prior to the date of the Deficiency Notice. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were given 180 calendar days from September 21, 2023, or until March 19, 2024, to regain compliance with the Minimum Bid Requirement. On March 21, 2024, we announced that the Nasdaq Listing Qualifications Department granted our request for a 180-day extension to regain compliance with the Minimum Bid Requirement. On September 17, 2024, we received another notice of non-compliance from Nasdaq. We filed an appeal, which was heard on November 5, 2024 before an independent panel. The panel issued a written decision granting us until January 15, 2025 to regain compliance with the Minimum Bid Price Requirement. We held a special meeting of shareholders on December 20, 2024 at which we received shareholder approval to implement a reverse share split. We implemented the reverse split on a one-for-four basis and our Common Shares began trading on a post-reverse split basis on January 2, 2025, after which we regained compliance with the Minimum Bid Price Requirement.
Our Common Shares may be de-listed if we do not maintain compliance with the Minimum Bid Requirement, as well as other continued listing requirements of the Nasdaq, and our shareholders could face significant material adverse consequences, including:
| · | Limited availability or market quotations for our Common Shares; |
| · | Reduced liquidity of our Common Shares; |
| · | Determination that our Common Shares are “penny stock”, which would require brokers trading in our Common Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Shares; |
| · | Limited amount of news and analysts’ coverage of us; and |
| · | Decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future. |
We can provide no assurances that the price of our Common Shares will remain
above the Minimum Bid Price requirement or that we otherwise will remain in compliance with the Nasdaq Marketplace Rules.
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OUR COMPANY
Our Business
We are in the business of battery materials refining, including refining material from mining operations and from the recycling of battery scrap and end of life batteries. We are focused on building a diversified portfolio of assets that are highly leveraged to the battery supply chain with assets located primarily in North America, with the intent of providing a North American supply of battery materials.
We own two main assets – a hydrometallurgical refinery located in Ontario, Canada (“Refinery”), and a number of properties and option agreements within the Idaho Cobalt Belt (the “Idaho Properties”), including the Company’s flagship mineral project, Iron Creek (the “Iron Creek Project”).
We have been progressing plans to recommission and expand the Refinery with a view to becoming the first refiner of battery grade cobalt sulfate in North America. Our primary focus for 2025 is to finance and resume the construction of our Refinery (Phase 1 of our phased approach to building a North American critical minerals supply chain).
The Refinery
We are working towards restarting our hydrometallurgical Refinery in Ontario, Canada, as the first phase in a multi-phase strategy to build a North American critical minerals supply chain which could provide battery grade nickel and cobalt and recycled battery materials to the North American and global electric vehicle battery market. It is anticipated that the phased strategy will be approached in the following order:
| · | Phase 1 entails an expansion and recommissioning of our Refinery. We anticipate the Refinery will produce at an initial rate of 5,000 tonnes per annum of battery cobalt contained in cobalt sulfate from cobalt hydroxide intermediate product supplied from leading and certified mining operations. |
| · | Phase 2 entails a permit amendment and an expansion of certain circuits to increase cobalt production to 6,500 tonnes per annum of battery cobalt contained in cobalt sulfate, which aligns with the nameplate capacity of our crystallization circuit. We purchased larger equipment such that a step up in production to 6,500 tonnes per annum in the future is possible. |
| · | Phase 3 entails the recycling of black mass from spent lithium-ion batteries supplied by various black mass producers (battery shredders) in Canada and the United States, recovering lithium, nickel, cobalt and other critical metals. Aki Battery Recycling, our joint venture with Three Fires Group Inc., is also seeking to produce black mass in southern Ontario from battery manufacturing scrap, which could provide a steady source of feed material for Phase 3. |
| · | Phase 4 entails the construction of a nickel sulfate plant, thereby providing all of the necessary components (other than manganese) to attract a precursor manufacturer to establish a facility adjacent to these refining operations. |
On May 4, 2020, we announced positive results from an engineering study (the “Refinery Study”), that outlined the Refinery’s ability to reach annual production of 25,000 tonnes of battery grade cobalt sulfate from third party feed, representing approximately 5% of the total global refined cobalt market and 100% of North American cobalt supply with strong operating cash flows and a globally competitive cost structure. Subsequent to the Refinery Study, significant additional metallurgical testing, engineering work, flow-sheet optimization, costing and market analysis was completed, rendering many of the conclusions in the Refinery Study obsolete.
The Refinery Study was prepared to summarize the results of an engineering study prepared at a feasibility level related to the Refinery. The report does not constitute a feasibility study within the definition employed by the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”), as it relates to a standalone industrial project and does not concern a mineral project of Electra. As a result, disclosure standards prescribed by NI 43-101 are not applicable to the scientific and technical disclosure in the report. Any references to scoping study, prefeasibility study or feasibility study by Electra, in relation to the Refinery, are not the same as terms defined by the CIM Definition Standards and used in NI 43-101. The Refinery Study is also not based on any existing mineral reserves or mineral resources of the Company and we do not contemplate that any of our current mineral projects will provide a source of feedstock for the Refinery.
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As we entered the full development phase of the Refinery expansion project in 2022, most of the long-lead custom equipment was ordered. Almost all of the long-lead equipment is now at the Refinery, either installed or in storage awaiting installation. As the project has progressed and changed from the Refinery Study, the original economic outputs should no longer be relied upon.
In response to strong customer demand, we invested in increased capacity for our cobalt crystallizer, which will result in installed capacity of 6,500 tonnes of annual contained cobalt production, a 30% increased from the engineering study design of 5,000 tonnes. Future permit amendments will be sought to permit this increased output level. We have also studied opportunities to utilize black mass from recycled lithium-ion batteries to provide supplemental cobalt feedstock for this circuit.
We have achieved several additional key milestones on our development path for the Refinery, including:
| · | Feedstock arrangements announced with Glencore (January 2021) |
| · | Commencement of detailed engineering and pre-construction activities |
| · | Sale of Cobalt Camp properties to Kuya Silver (March 2021) |
| · | Solvent extraction design and manufacturing contract awarded to Metso-Outotec (October 2021) |
| · | Increased cobalt crystallizer capacity and formalized new project capital budget |
| · | Five-year tolling contract and amended feed purchase agreement with Glencore (December 2021) |
| · | Receipt of Industrial Sewage Works approval (February 2022) |
| · | Offtake agreement signed with LGES for 7,000 tonnes of battery grade cobalt (September 2022) |
| · | Completion of recommissioning of the analytical lab, feed material handling system (including ball mill and mixing station), leach circuit, filter presses and reagent handling systems (October 2022) |
| · | Receipt of final approval for closure plan for the Refinery (November 2022) |
| · | Completion of construction of the cobalt sulfate loadout facility (Q1 2023) |
| · | Completion of the solvent extraction building (Q1 2023) |
| · | Receipt of the majority of long lead and custom fabricated equipment from suppliers around the world, thereby reducing the schedule risk associated with final construction (May 2023). |
| · | Completion of re-baseline report (May 2023) |
| · | LGES offtake agreement amended to 19,000 tonnes over five years (July 2023) |
| · | Supply agreement with ERG for 3,000 tonnes per annum of cobalt starting from 2026 (April 2024) |
| · | Funding by U.S. Department of Defense for US$20 million in support of construction and commissioning of the Refinery (August 2024) |
| · | Receipt of LOI from Canadian Federal Government for a proposed $20 million in support of construction and commissioning of the Refinery (March 2025) |
On February 14, 2023, we announced a review of the Refinery scope, scheduling, and capital expenditures and completed the re-baseline engineering report in the second quarter of 2023. The re-baseline engineering report estimated that the total capital costs are now at $155 to $167 million. The increase in capital costs has been driven by supply chain disruptions, and inflationary pressures that negatively impacted all aspects of the Refinery, including contractor labour rate, costs for concrete, steel, piping, and freight.
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We will require additional financing in 2025 to continue operations and to complete the construction and final commissioning of the Refinery, advance our battery recycling strategy, and remain in compliance with the minimum liquidity covenant under the Notes (as defined below).
We have the necessary permits to operate the Refinery, including our Air and Noise permit and our Permit to Take Water, as well as final approvals for our Industrial Sewage Works permit amendment and our revised Refinery closure plan. We continue to make progress towards achieving our objective of providing the world’s most sustainable battery materials for the electric vehicle market. We continue to work with engineering firms, our commercial partners, process experts and financial advisers to finalize and execute on the plans for our recommissioning and expansion of the Refinery.
Refining & Recycling of Black Mass
We launched a black mass trial late in 2022 at the Refinery to recover high-value elements found in shredded lithium-ion batteries. Using a proprietary hydrometallurgical process, we successfully completed the first plant-scale recycling of black mass material in North America and confirmed the recovery of a number of critical metals, including lithium, nickel, cobalt, manganese, and graphite, needed for North America’s EV battery supply chain, surpassing initial expectations.
To date, we have produced quality nickel-cobalt mixed hydroxide, technical grade lithium carbonate, and graphite products in our black mass recycling trial.
In 2023, we completed a desktop scoping study to evaluate the potential economics of developing a standalone black mass process plant within our Refinery complex capable of processing 2,500 tonnes of black mass material per annum. The facility could be scaled over time as the market for battery recycling expands.
The desktop scoping study was based on a number of assumptions, including annual processing of 2,500 tonnes of black mass, metal prices using analysts’ long-term forecasts, recovery rates consistent with those achieved to date, and $12.6 million of committed capital comprised of $8.1 million for capital costs and $4.5 million in working capital.
In July 2023, we announced the first customer shipment of the nickel-cobalt mixed hydroxide precipitate product (“MHP”) produced at our Refinery complex north from recycled battery material. As a result of the successes achieved, we continued to process black mass material at our Refinery through the end of 2023. On February 5, 2024, we provided an update on our battery materials recycling trial, including that the plant-scale black mass recycling trial is now largely complete.
On June 10, 2024, we were awarded $5 million in contribution funding from Natural Resources Canada to support the development of our proprietary battery materials recycling technology, accelerating the next phase of our recycling project to demonstrate on a continuous basis that our hydrometallurgical black mass process is scalable, profitable, and can be implemented at other locations.
On January 28, 2025, we announced the commencement of a feasibility level engineering study to build a battery recycling refinery adjacent to our cobalt Refinery north of Toronto. The study will build on the technology and expertise accumulated during a year-long black mass recycling trial, whereby we produced technical grade lithium and a nickel and cobalt product from end of life lithium batteries.
Key highlights of the black mass trial include:
| · | 40 tonnes of black mass material have been processed in a plant scale setting, believed to be the first of its kind in North America. |
| · | Recovery rates for all targeted metals have improved since the start of the trial. |
| · | Improved lithium carbonate product quality by nearly 20% from its initial processing and product quality has achieved technical grade lithium carbonate. Discussions are ongoing with lithium companies to assess the tradeoffs between collaboration or producing a technical grade in-house. |
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| · | Refinements to the process parameters for the MHP produced from the recycling process have at times improved paymetal concentration in the final MHP product to nearly 50% nickel and cobalt, well above quoted market standards. Improved metal concentration creates the opportunity to generate a higher metal payable, thereby improving the potential economics of continuous recycling operations. |
| · | Approximately 28 tonnes of MHP product have been shipped to customers to date. |
| · | Manganese recovery rate has been further improved to approximately 95% by strategically modifying the use and sequencing of reagents. |
| · | Reagent requirements have been reduced and in some cases alternative, less costly reagents have been used for improved overall metal recovery. Further, some of the reagent additions substituted have reduced overall impurity levels within the process. The reduction in reagent use and substitution of certain reagents are expected to lower operating expenses, thereby improving the economics of continuous recycling operations. |
| · | Continued optimization studies are underway, including metal recovery from internal recycling streams such as reusing tailings water as process water to feed the plant, thus making the process entirely closed circuit with minimal environmental impacts. |
Preliminary results of laboratory work to explore the potential of isolating cobalt from nickel contained in the leach liquor using hydrometallurgical methods are positive. Isolating the cobalt could improve the overall payability of both the resultant cobalt and nickel product.
On June 5, 2025, we announced completion of a feasibility level Class 3 Engineering Study for the construction of a modular battery recycling facility adjacent to its cobalt sulfate refinery north of Toronto. The facility will be designed to recover lithium, nickel, cobalt, manganese, and graphite from lithium-ion battery manufacturing scrap and end-of-life batteries using Electra’s proprietary hydrometallurgical process. This process was developed and validated through a year-long pilot program that treated black mass sourced from an industry partner. The next phase of work, funded in part by Natural Resources Canada, will involve operating the recycling process under continuous and semi-continuous conditions to simulate commercial-scale throughput.
The Iron Creek Project
We own 100% of the Iron Creek Project which is located about 42 kilometres southwest of Salmon, Idaho, within the historic Blackbird cobalt-copper district of the Idaho cobalt belt. The project consists of seven patented Federal lode claims that straddle Iron Creek, as well as 129 unpatented mining claims held 100% by two separate subsidiaries: Idaho Cobalt Company of Boise, Idaho and by Scientific Metals (Delaware) Corp. (“SMDC”) of Midvale, Utah; both are our wholly owned subsidiaries. In addition, adjoining unpatented mining claims are subject to earn-in and joint venture agreements with third parties. In total, the Iron Creek Project encompasses a land area of over 70km2.
On March 10, 2023, we announced a new mineral resource estimate for the Iron Creek Project. The new mineral resource estimate was based on infill drilling and limited step-out drilling and provides an increase of 83% to the indicated mineral resource category coming from the conversion of 1.7Mt to the indicated mineral resource category. The indicated mineral resource is now 4.4M tonnes grading 0.19% cobalt and 0.73% copper containing 18.4M pounds of cobalt and 71.6M pounds of copper. The inferred mineral resource is now 1.2M tonnes grading 0.08% cobalt and 1.34% copper for an additional 2.1M pounds of cobalt and 36.5M pounds of copper. We subsequently filed the Technical Report with respect to the new mineral resource estimate titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA” dated March 10, 2023 with an effective date of January 27, 2023 (the “43-101 Technical Report”). The 43-101 Technical Report was prepared by Martin Perron, P.Eng. Marc R. Beauvais, P. Eng, Pierre Roy, P. Eng. and Eric Kinnan, P.Geo., each of whom is a qualified person and “independent” as such term is defined National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”). We have also prepared the 2024 Iron Creek Technical Report Summary (the “2024 Technical Report Summary”) in compliance with Regulation S-K subpart 1300. The 2024 Technical Report Summary was prepared by Martin Perron, P.Eng. of InnovExplo Inc., Marc R. Beauvais, P.Eng. of InnovExplo Inc., Eric Kinnan, P.Geo. of InnoExplo Inc., and Pierre Roy, P.Eng of Soutex Inc. All of the Qualified Persons (or “Authors”) of the 2024 Technical Report Summary are independent of us within the meaning of Regulation S-K subpart 1300. The indicated and inferrred mineral resource estimates are in compliance with both NI 43-101 and Regulation S-K subpart 1300.
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For further information regarding Electra, the Refinery and the Iron Creek Project, see our Annual Report on Form 20-F for the year ended December 31, 2024, filed on April 24, 2025, as amended on May 1, 2025, including the Technical Report Summary filed as Exhibit 15.5 thereto, and other documents incorporated by reference in this Base Prospectus available at www.sedarplus.ca and at www.sec.gov under our profile.
Corporate Information
We were incorporated under the provisions of the Business Corporations Act (British Columbia) on July 13, 2011 under the name Patrone Gold Corp. and became a reporting issuer in British Columbia and Alberta upon completion of an arrangement with Unity Energy Corp. on October 2, 2012. On October 3, 2013, we changed our name from Patrone Gold Corp. to Aurgent Gold Corp. On March 11, 2014, we changed our name from Aurgent Gold Corp. to Aurgent Resource Corp., and on September 22, 2016, we changed our name from Aurgent Resource Corp. to First Cobalt Corp. On October 26, 2017, our shareholders approved a continuation under the Canada Business Corporations Act (the “CBCA”). Our continuation under the CBCA was implemented as of September 4, 2018. On December 2, 2021, we changed our name from First Cobalt Corp. to Electra Battery Materials Corporation. On April 13, 2022, we completed a reverse split of our share capital on the basis of one (1) post-reverse split Common Share for every eighteen (18) pre-reverse split Common Shares. On December 31, 2024, we completed a reverse split of our share capital on the basis of one (1) post-reverse split Common Share for every four (4) pre-reverse split Common Shares.
Our registered office is located at 40 Temperance Street, Suite 3200, Bay Adelaide Centre, North Tower, Toronto, Ontario, Canada M5H 0B4. Our corporate head office is located at 133 Richmond Street West, Suite 602, Toronto, Ontario, M5H 2L3 Canada and our telephone number is (416) 900-3891.
Our annual and other filings with securities commissions or similar authorities in Canada and the United States are available under our profile on SEDAR+ at www.sedarplus.ca and our profile on EDGAR at www.sec.gov.
Recent Developments
On January 28, 2025, we announced the commencement of a feasibility level engineering study to build a battery recycling refinery adjacent to our Refinery. The study will build on the technology and expertise accumulated during a year-long black mass recycling trial, whereby we produced technical grade lithium and a nickel and cobalt product from end of life lithium batteries.
On February 25, 2025, we announced the appointment of Alden Greenhouse to our board of directors (the “Board”).
On March 5, 2025, we entered into an agreement with the holders of our senior secured debt to enhance our financial flexibility. Under the agreement, lenders agreed to defer all interest payments until February 15, 2027. The agreement covers all outstanding Notes. As consideration for this deferral, we will pay additional interest of 2.25% per annum on the 8.99% senior secured convertible notes in the aggregate principal amount of US$51,000,000 due February 2028 (the “2028 Notes”) and of 2.5% per annum on the 12.0% senior secured convertible notes in the aggregate principal amount of US$4,000,000 (the “2027 Notes”, and, together with the 2028 Notes, the “Notes”), calculated on the principal amounts of the 2028 Notes and 2027 Notes. All deferred interest, including deferred amounts of additional interest, will accrue interest at the applicable stated rate of interest borne by the applicable series of Notes. All deferred interest (including all interest thereon) will become payable immediately if an event of default occurs under the applicable note indenture prior to February 15, 2027.
On March 21, 2025, we announced receipt of a Letter of Intent (“LOI”) for proposed funding of $20,000,000 in support of completion of construction and commissioning of the Refinery. The LOI was provided to us by the Federal Government and is non-binding. The LOI expresses an interest and intent to work towards completing a final term sheet but does not constitute a binding agreement. While discussions between the parties are ongoing, there is no guarantee or assurance that final agreements will be reached and/or funding will be provided to the Company.
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On March 24, 2025, we announced a non-brokered private placement in Canada (the “2025 Offering”) to raise aggregate gross proceeds of up to US$3,500,000. The 2025 Offering consisted of units of the Company (each, a “2025 Unit”) to be issued at a price of US$1.12 per 2025 Unit. Each 2025 Unit consisted of one Common Share and one transferable common share purchase warrant (each, a “2025 Warrant”). Each 2025 Warrant entitles the holder to purchase one Common Share at a price of US$1.40 at any time for a period of eighteen (18) months following the issue date. Each of Trent Mell, our Chief Executive Officer (purchased 20,000 2025 Units), Marty Rendall, our Chief Financial Officer (purchased 20,000 2025 Units), John Pollesel, a director of the Company (purchased 10,000 2025 Units), Alden Greenhouse, a director of the Company (purchased 5,000 2025 Units), Heather Smiles, our Vice President, Investor Relations & Corporate Development (purchased 3,500 2025 Units), Mark Trevisiol, our Vice President, Project Development (purchased 2,500 2025 Units), and Michael Insulan, our Vice President, Commercial (purchased 5,000 2025 Units) participated in the 2025 Offering. On March 25, 2025, we announced the 2025 Offering was fully subscribed and allocated. On April 4, 2025, we announced the first tranche of the 2025 Offering had closed. On April 14, 2025, we announced the second and final tranche of the 2025 Offering had closed. In aggregate, 3,125,000 2025 Units were issued at a price of US$1.12 per Unit pursuant to the 2025 Offering, and the Company paid an aggregate of US$219,447.17 in cash finders fees and issued 183,333 non-transferrable finders warrants (each, a “2025 Finders Warrant”) to eligible finders in respect of subscriptions for 2025 Units referred by such finders, in accordance with applicable Canadian securities laws. Each 2025 Finders Warrant is exercisable to acquire one Common Share at an exercise price of US$1.12 per Common Share until October 14, 2026. The net proceeds raised from the Offering will be used to advance our Refinery project site in Temiskaming Shores, Ontario and for general corporate purposes.
MATERIAL CHANGES
Except as otherwise disclosed in this Base Prospectus, there have been no material changes to our operations that have occurred since December 31, 2024 and that have not been described in a report on Form 6-K furnished under the Exchange Act and incorporated by reference into this Base Prospectus.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization will be set forth in the applicable Prospectus Supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated by reference into this Base Prospectus.
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DESCRIPTION OF SHARE CAPITAL
The following description of our share capital summarizes certain provisions contained in our articles and by-laws. There summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of our articles and by-laws, which have been filed under our profile on SEDAR+ at www.sedarplus.ca and as Exhibits to the registration statement on Form F-3 of which this Base Prospectus forms a part.
Authorized Share Capital
We are authorized to issue an unlimited number of Common Shares. Our Common Shares have no par value. As of June 25, 2025, there were 17,962,173 Common Shares issued and outstanding.
Common Shares
The Common Shares offered under this Base Prospectus have all of the rights, privileges, restrictions and conditions of other Common Shares of the Company. Holders of Common Shares are entitled to receive notice of any meeting of our shareholders, to attend and to cast one vote per share at such meetings. Holders of our Common Shares are also entitled to receive on a pro-rata basis such dividends, if any, as and when declared by our Board at its discretion from funds legally available therefor and upon the liquidation, dissolution or winding up of the Company are entitled to receive on a pro-rata basis, our net assets after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights.
Dividends
We have never paid any cash dividends on our Common Shares. While we are not restricted from paying dividends other than pursuant to certain solvency tests prescribed under the CBCA, we do not intend to pay dividends on any of our Common Shares in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our Board and will be dependent upon our financial condition, results of operations, capital requirements, restrictions under any future indebtedness and other factors our Board deems relevant.
Transfer Agent
The transfer agent and registrar for our Common Shares is TSX Trust Company at its principal office located in Toronto, Ontario.
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DESCRIPTION OF THE WARRANTS
Warrants will typically be offered with Common Shares, with such securities often referred to collectively as a “Unit”, but may be offered separately. The Warrants either will be issued under a warrant indenture or agreement that will be entered into by the Company and a trustee at the time of issuance of the Warrants or will be represented by warrant certificates issued by the Company.
Warrants will entitle the holder thereof to receive Common Shares and/or other Securities upon the exercise thereof and payment of the applicable exercise price. A Warrant will be exercisable for a specific period of time at the end of which time it will expire and cease to be exercisable.
Holders of Warrants are not shareholders of the Company. The particular terms and provisions of Warrants offered by this Base Prospectus and any applicable Prospectus Supplement will be described in the Prospectus Supplement filed in respect of such Warrants. This description may include, without limitation and as applicable: (i) the title or designation of the Warrants; (ii) the number of Warrants offered; (iii) the number of Common Shares and/or other Securities purchasable upon exercise of the Warrants and the procedures for exercise; (iv) the exercise price of the Warrants; (v) the dates or periods during which the Warrants are exercisable and when they expire; (vi) the designation and terms of any other Securities with which the Warrants will be offered, if any, and the number of Warrants that will be offered with each such Security; and (vii) any other material terms and conditions of the Warrants including, without limitation, transferability and adjustment terms and whether the Warrants will be listed on a securities exchange.
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DESCRIPTION OF THE UNITS
Units are securities consisting of one or more of the other Securities described in this Base Prospectus offered together as a “Unit”. A Unit is typically issued such that the holder thereof is also the holder of each Security included in the Unit. Thus, the holder of a Unit will have the rights and obligations of a holder of each Security comprising the Unit. The unit agreement under which a Unit is issued may provide that the Securities comprising the Unit may not be held or transferred separately at any time or before a specified date.
The particular terms and provisions of Units offered by this Base Prospectus and any applicable Prospectus Supplement will be described in the Prospectus Supplement filed in respect of such Units. This description may include, without limitation and as applicable: (i) the designation and terms of the Units and of the Securities comprising the Units, including whether and under what circumstances those Securities may be held or transferred separately; (ii) any provisions for the issuance, payment, settlement, transfer or exchange of the Units or of the Securities comprising the Units; (iii) whether the Units will be issued in fully registered or global form; and (iv) any other material terms and conditions of the Units.
CORPORATE GOVERNANCE
Under the CBCA, we are required to hold a general meeting of our shareholders at least once every year at a time and place determined by our Board, provided that the meeting must not be held later than 15 months after the preceding annual general meeting. A notice to convene a meeting, specifying the date, time and location of the meeting must be sent to shareholders, to each director and the auditor not less than 21 days prior to the meeting or such other minimum period as required by the applicable securities laws. Under the CBCA, shareholders entitled to notice of a meeting may waive or reduce the period of notice for that meeting, provided applicable securities laws requirements are met.
Pursuant to our by-laws, all business transacted at a special meeting of shareholders (except business relating to the conduct of or voting at the meeting) and all business transacted at an annual meeting of shareholders (except business relating to the conduct of or voting at the meeting, consideration of our financial statements presented at the meeting, consideration of any director or auditor’s report, setting or changing of the number of directors, election or appointment of directors, appointment of the auditor, remuneration of the auditor, business arising out of a report of the directors not requiring the passage of a special or exceptional resolution, and any other business which, under the by-laws or CBCA, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders) is deemed to be special business. Notice of a meeting of shareholders at which special business is to be transacted shall (a) state the general nature of that business; and (b) if the special business includes considering, ratifying, adopting or authorizing any document, or the signing of any document, have attached to it the document or state that such document is available for inspection.
Under our by-laws, our Board has the power at any time to call a meeting of our shareholders where special business is to be considered.
Those entitled to vote at a meeting are entitled to attend meetings of our shareholders. Every shareholder entitled to vote may appoint one or more proxyholders to attend the meeting in the manner and to the extent authorized and with the authority conferred by the proxy. Directors, auditors, legal counsels, secretaries (if any), and any other persons invited by the directors are entitled to attend any meeting of our shareholders but will not be counted in quorum or be entitled to vote at the meeting unless he or she or it is a shareholder or proxyholder entitled to vote at the meeting.
Material Differences Between the CBCA and the DGCL
The material differences between the CBCA and the DGCL that may have the greatest such effect include, but are not limited to, the following: (i) for material corporate transactions (such as mergers and amalgamations, other extraordinary corporate transactions or amendments to our articles) the CBCA generally requires a two-thirds majority vote by shareholders (including, in some circumstances, shareholders that otherwise do not have the right to vote), whereas the DGCL generally requires only a majority vote; (ii) under the CBCA, holders of 5% or more of our shares that carry the right to vote at a meeting of shareholders can requisition a general meeting of shareholders at which special matters may be conducted, whereas such right does not exist under the DGCL; and (iii) unlike the DGCL which does not provide for any oppression remedy for shareholders of Delaware entities, the CBCA provides an oppression remedy that enables a court to make an order, whether interim or final, if an application is made to the court by a shareholder in a timely manner and it appears to the court that there are reasonable grounds for believing (A) that the affairs of the corporation are being or have been conducted, or the powers of the directors are being or have been exercised, in a manner that is oppressive to one or more shareholders, or (B) that some act of the corporation has been done or is threatened, or that some resolution of the shareholders or of the shareholders holding shares of a class or series of shares has been passed or is proposed, that is unfairly prejudicial to one or more of the shareholders including the applicant.
Certain Takeover Bid Requirements
Unless such offer constitutes an exempt transaction, an offer made by a person, an “offeror”, to acquire outstanding shares of a Canadian entity that, when aggregated with the offeror’s holdings (and those of persons or companies acting jointly with the offeror), would constitute 20% or more of the outstanding shares in a class, would be subject to the take-over provisions of Canadian securities laws. The foregoing is a limited and general summary of certain aspects of applicable securities law in the provinces and territories of Canada, all in effect as of the date hereof.
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In addition to those takeover bid requirements noted above, the acquisition of our shares may trigger the application of statutory regimes including among others, the Investment Canada Act (Canada) (the “Investment Act”) and the Competition Act (Canada) (the “Competition Act”).
Limitations on the ability to acquire and hold our shares may be imposed by the Competition Act. This legislation permits the Commissioner of Competition (the “Commissioner”), to review any acquisition of control over or of a significant interest in us. This legislation grants the Commissioner jurisdiction, for up to one year after closing, to challenge this type of acquisition before the Canadian Competition Tribunal on the basis that it would, or would be likely to, substantially prevent or lessen competition in any market in Canada.
Since we are a publicly-traded corporation, this legislation also requires any person who intends to acquire our voting shares to file a notification with the Canadian Competition Bureau if certain financial thresholds are exceeded and if that person (and their affiliates) would hold more than 20% of our voting shares as a result of such acquisition. If a person already owns more than 20% of our voting shares, a notification must be filed before the acquisition of additional voting shares that would bring that person’s holdings to over 50%. Where a notification is required, the legislation prohibits completion of the acquisition until the expiration of a statutory waiting period or, if applicable, a second statutory waiting period, unless the Commissioner provides written notice that he does not intend to challenge the acquisition. A common closing condition of acquisitions subject to notification under the Competition Act is clearance from the Commissioner, even if the applicable statutory waiting period has expired and the parties are in a legal position to close.
The Investment Act requires any person that is a “non-Canadian” (as defined in the Investment Act) who acquires control of an existing Canadian business, where the acquisition of control is not a reviewable transaction, to file a notification with Innovation, Science and Economic Development. The Investment Act generally prohibits the implementation of a reviewable transaction unless, after review, the relevant minister is satisfied that the investment is likely to be of net benefit to Canada. Under the Investment Act, the acquisition of control of us (either through the acquisition of our shares or all or substantially all our assets) by a non-Canadian would be reviewable under the “net benefit” standard only if the applicable specified financial threshold is met or exceeded and no exemption applied.
The acquisition of a majority of the voting interests of an entity is deemed to be acquisition of control of that entity. The acquisition of less than a majority but one-third or more of the voting shares of a corporation or an equivalent undivided ownership interest in the voting shares of a corporation is presumed to be an acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares. The acquisition of less than one-third of the voting shares of a corporation is deemed not to be an acquisition of control of that corporation.
Under the national security regime in the Investment Act, a national security review on a discretionary basis may also be undertaken by the federal government in respect of a much broader range of investments by a non-Canadian to “acquire, in whole or in part, or to establish an entity carrying on all or any part of its operations in Canada”, provided that the entity has a specified nexus to Canada. The relevant test is whether such an investment by a non-Canadian could be “injurious to national security.” The relevant minister has broad discretion to determine whether an investor is a non-Canadian and may be subject to national security review. Review on national security grounds is at the discretion of the federal government and, depending on the facts, may occur on a pre- or post-closing basis and includes the ability to block a transaction or, for a completed transaction, order divestiture.
There is no law, governmental decree or regulation in Canada that restricts the export or import of capital or which would affect the remittance of dividends or other payments by us to non-Canadian holders of our Common Shares or preferred shares, other than withholding tax requirements.
Neither our articles nor our by-laws contain any change of control limitations with respect to a merger, acquisition or corporate restructuring that involves us.
This summary above is not a comprehensive description of relevant or applicable considerations regarding such requirements and, accordingly, is not intended to be, and should not be interpreted as, legal advice to any prospective purchaser and no representation with respect to such requirements to any prospective purchaser is made. Prospective investors should consult their own Canadian legal advisors with respect to any questions regarding the foregoing and securities law in the provinces and territories of Canada.
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Actions Requiring a Special Majority
Under our by-laws, the number of votes required for the corporation to pass a special resolution at a meeting of shareholders is two-third of the votes cast on the resolution. Special resolutions include resolutions to: (i) create special rights or restrictions for, and attach such special rights or restrictions to, any class or series of shares; (ii) vary or delete any special rights or restrictions attached to any class or series of shares; and (iii) remove a director before the expiration of his or her term of office.
Advance Notice Procedures and Shareholder Proposals
Under the CBCA, shareholders may make proposals for matters to be considered at the annual general meeting of shareholders. Such proposals must be sent to us in advance of any proposed meeting by delivering a timely written notice in proper form to our registered office in accordance with the requirements of the CBCA. The notice must include information on the business the shareholder intends to bring before the meeting. In addition, our by-laws require that shareholders must give advance notice to nominate directors or to submit proposals for consideration at shareholders’ meetings.
These provisions could have the effect of delaying until the next shareholder meeting the nomination of certain persons for director that are favored by the holders of a majority of our outstanding voting securities.
Ownership and Exchange Controls
There is currently no law, governmental decree or regulation in Canada that restricts the export or import of capital, or which would affect the remittance of dividends, interest or other payments by us to non-resident holders of our Common Shares, other than withholding tax requirements.
There is currently no limitation, imposed by Canadian law or our by-laws that will be in effect prior to closing, on the right of non-residents to acquire, hold or vote our Common Shares, other than those imposed by applicable securities laws and the Investment Act. The Investment Act will generally not apply except in respect of national security and where control of a Canadian business, which has an enterprise value or assets at or over a certain threshold, is acquired and will not generally apply to trading of securities listed on a stock exchange.
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USE OF PROCEEDS
The net proceeds to be derived from the sale of Securities will be the issue price thereof less any commission paid in connection therewith and the expenses relating to the particular offering of Securities. The net proceeds to us from any offering of Securities, the proposed use of those proceeds and the specific business objectives that we wish to accomplish with such proceeds will be set out in the applicable Prospectus Supplement. There may be circumstances where, on the basis of results obtained or for other sound business reasons, a re-allocation of funds may be necessary or prudent. Accordingly, our management will have broad discretion in the application of the proceeds of an offering of Securities. The actual amount that we spend in connection with each intended use of proceeds may vary from the amounts specified in the applicable Prospectus Supplement and will depend on a number of factors, including those referred to under “Risk Factors” and any other factors set out in the applicable Prospectus Supplement. We may invest funds which we do not immediately use. Such investments may include short-term marketable investment grade securities.
We may, from time to time, issue securities (including debt securities) other than pursuant to this Base Prospectus. We had negative cash flow from operating activities of $17,012,000 for the year ended December 31, 2024. We cannot guarantee that positive cash flow from operating activities will be obtained. We may continue to have negative cash flow from operating activities until sufficient levels of sales are achieved.
PLAN OF DISTRIBUTION
We may sell the Securities, separately or together, to or through underwriters or dealers purchasing as principals for public offering and sale by them, and also may sell Securities to one or more other purchasers directly or through agents. Each Prospectus Supplement will set forth the terms of the offering, including the name or names of any underwriters or agents, if any, the purchase price or prices of the Securities and the proceeds we will receive from the sale of the Securities.
The Securities may be sold from time to time in one or more transactions at a fixed price or prices which may be changed or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices including sales in transactions that are deemed to be “at-the-market” distributions or “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the TSXV, Nasdaq or other existing trading markets for the securities. The prices at which the Securities may be offered may vary as between purchasers and during the period of distribution. If, in connection with the offering of Securities at a fixed price or prices, the underwriters, if any, have made a bona fide effort to sell all of the Securities at the initial offering price fixed in the applicable Prospectus Supplement, the public offering price may be decreased and thereafter further changed, from time to time, to an amount not greater than the initial public offering price fixed in such Prospectus Supplement, in which case the compensation realized by the underwriters will be decreased by the amount that the aggregate price paid by purchasers for the Securities is less than the gross proceeds paid to us by the underwriters.
Underwriters, dealers and agents who participate in the distribution of the Securities may be entitled under agreements to be entered into with us to indemnification by us against certain liabilities, including liabilities under the Securities Act and Canadian securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.
In connection with any offering of Securities, except as otherwise set out in a Prospectus Supplement relating to a particular offering of Securities, the underwriters may over-allot or effect transactions intended to maintain or stabilize the market price of the Securities offered at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.
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CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is, as of the date hereof, a summary of the principal Canadian federal income tax considerations generally applicable to a person who acquires Common Shares as beneficial owner and who, for the purposes of the Income Tax Act (Canada) (the “Tax Act”), and at all relevant times: (i) is not, and is not deemed to be, resident in Canada; (ii) does not use or hold and is not and will not be deemed to use or hold the Common Shares in connection with carrying on a business in Canada; (iii) deals at arm’s length with the Company; (iv) is not affiliated with the Company; and (v) acquires and holds the Common Shares as capital property (a “Holder”). This summary does not apply to a Holder that carries on, or is deemed to carry on, an insurance business in Canada and elsewhere or that is an “authorized foreign bank” (as defined in the Tax Act). Such Holders should consult their own tax advisors.
Common Shares will generally be considered to be capital property to a Holder unless the Holder holds or uses the Common Shares or is deemed to hold or use the Common Shares in the course of carrying on a business of trading or dealing in securities or has acquired them or is deemed to have acquired them in a transaction or transactions considered to be an adventure or concern in the nature of trade.
This summary is not applicable to a Holder: (i) that is a “financial institution” for purposes of the “mark to market property” rules; (ii) that is a “specified financial institution”; (iii) that has made a “functional currency” reporting election; (iv) an interest in which is a “tax shelter investment”; (v) that has entered into or will enter into a “derivative forward agreement” or “synthetic disposition arrangement” in respect of Common Shares; or (vi) that receives dividends on the Common Shares under or as part of a “dividend rental arrangement”, all as defined in the Tax Act. Such Holders should consult their own tax advisors with respect to an investment in Common Shares.
This summary is based upon: (i) the current provisions of the Tax Act and the regulations thereunder (the “Regulations”) in force as of the date hereof; (ii) all specific proposals (“Proposed Amendments”) to amend the Tax Act or the Regulations that have been publicly announced by, or on behalf of, the Minister of Finance (Canada) prior to the date hereof; and (iii) our understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (“CRA”). No assurance can be given that the Proposed Amendments will be enacted or otherwise implemented in their current form, if at all. If the Proposed Amendments are not enacted or otherwise implemented as presently proposed, the tax consequences may not be as described below in all cases. Other than the Proposed Amendments, this summary does not take into account or anticipate any changes in law, the CRA’s administrative policies or assessing practices, whether by legislative, regulatory, administrative, governmental or judicial decision or action, nor does it take into account any provincial, territorial or foreign income tax legislation or considerations, which considerations may differ significantly from the Canadian federal income tax considerations discussed in this summary.
This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder. Accordingly, Holders should consult their own tax advisors with respect to their particular circumstances.
Holders Not Resident in Canada
Dividends
Dividends paid or credited or deemed under the Tax Act to be paid or credited by the Company to a Holder on the Common Shares will generally be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, unless such rate is reduced by the terms of an applicable income tax treaty or convention. Under the Canada-United States Tax Convention (1980), as amended (the “US Treaty”), the rate of withholding tax on dividends paid or credited to a Holder who is resident in the U.S. for purposes of the US Treaty, is the beneficial owner of the dividends, and is fully entitled to benefits under the US Treaty (a “U.S. Holder”) is generally limited to 15% of the gross amount of the dividend. The rate of withholding tax is further reduced to 5% if the beneficial owner of such dividend is a U.S. Holder that is a company that owns, directly or indirectly, at least 10% of the voting stock of the Company. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting of which Canada is a signatory, affects many of Canada’s bilateral tax treaties (but not the US Treaty), including the ability to claim benefits thereunder. Holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.
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Dispositions of Common Shares
A Holder will not be subject to tax under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of a Common Share, nor will capital losses arising therefrom be recognized under the Tax Act, unless the Common Share is, or is deemed to be, “taxable Canadian property” of the Holder for the purposes of the Tax Act and the Holder is not entitled to relief under an applicable income tax treaty or convention between Canada and the country in which the Holder is resident.
Provided that the Common Shares are listed on a “designated stock exchange” for the purposes of the Tax Act (which currently includes the TSXV), at the time of disposition, the Common Shares generally will not constitute taxable Canadian property of a Holder at that time, unless at any time during the 60 month period immediately preceding the disposition, (i) 25% or more of the issued shares of any class or series of the capital stock of the Company were owned by, or belonged to, any combination of (a) the Holder, (b) persons with whom the Holder did not deal at arm’s length, and (c) partnerships in which the Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; and (ii) at such time, more than 50% of the fair market value of such shares was derived, directly or indirectly, from any combination of real or immovable property situated in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in the Tax Act), or options in respect of, interests in, or for civil law rights in such properties, whether or not such property exists. Notwithstanding the foregoing, a Common Share may also be deemed to be taxable Canadian property to a Holder for purposes of the Tax Act in certain other circumstances. Holders should consult their own tax advisors as to whether their Common Shares constitute “taxable Canadian property” in their own particular circumstances.
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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS
The following discussion summarizes the anticipated U.S. federal income tax considerations generally applicable to a U.S. Holder (as defined below) of the ownership and disposition of the Common Shares. This discussion addresses only holders who acquire pursuant to this offering and hold Common Shares as “capital assets” (generally, assets held for investment purposes).
This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative pronouncements and rulings of the United States Internal Revenue Service (the “IRS”), and the US Treaty, all as in effect on the date hereof, and all of which may be repealed, revoked or modified (possibly with retroactive effect) so as to result in U.S. federal income tax consequences different from those discussed below. This summary does not describe any state, local or foreign tax law considerations, or any aspect of U.S. federal tax law other than income taxation (e.g., alternative minimum tax, the 3.8% Medicare tax on certain net investment income, or estate or gift tax). Except as specifically set forth below, this summary does not discuss applicable income tax reporting requirements. U.S. Holders should consult their own tax advisers regarding such matters.
No ruling from the IRS has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the ownership or disposition of the Common Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the discussion set forth in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and U.S. courts could disagree with one or more of the positions taken in this summary.
This summary does not purport to address all U.S. federal income tax consequences that may be relevant to a U.S. Holder as a result of the ownership and disposition of the Common Shares, nor does it take into account the specific circumstances of any particular holder, some of which may be subject to special tax rules, including, but not limited to, tax exempt organizations, partnerships and other pass-through entities and their owners, banks or other financial institutions, insurance companies, regulated investment companies, real estate investment trusts, qualified retirement plans, individual retirement accounts or other tax-deferred accounts, persons that hold the Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale or other similar arrangements, persons that acquired the Common Shares in connection with the exercise of employee share options or otherwise as compensation for services, persons that are resident or ordinarily resident in or have permanent establishment in a jurisdiction outside the United States, brokers or dealers in securities or foreign currencies, traders in securities electing to mark to market, persons who hold the Common Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes), persons who are U.S. expatriates or former long-term residents of the U.S. or are subject to taxing jurisdictions other than, or in addition to, the United States, persons who are subject to special tax accounting rules U.S. persons whose functional currency (as defined in the Code) is not the U.S. dollar, U.S. expatriates, or persons that own directly, indirectly or by application of the constructive ownership rules of the Code 10% or more of the Company’s shares by voting power or by value.
As used herein, a “U.S. Holder” is a beneficial owner of the Common Shares who, for U.S. federal income tax purposes, is: (1) an individual who is a citizen or resident of the United States; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (3) an estate whose income is subject to U.S. federal income tax regardless of its source, or (4) a trust (A) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) that has validly elected to be treated as a U.S. person for U.S. federal income tax purposes.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds the Common Shares, the tax treatment of a partner in or owner of the partnership or other entity or arrangement will generally depend upon the status of the partner or owner and the activities of the entity. Prospective investors who are partners in partnerships (or other entities or arrangements treated as partnerships for U.S. federal income tax purposes) that are beneficial owners of the Common Shares are urged to consult their own tax advisors regarding the tax consequences of the ownership and disposition of the Common Shares.
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This summary is of a general nature only and is not intended to be tax advice to any prospective investor, and no representation with respect to the tax consequences to any particular investor is made. Prospective investors are urged to consult their own tax advisors regarding the application of federal income tax laws to their particular circumstances, as well as any state, provincial, local, non-U.S. and other tax consequences of investing in the Common Shares and acquiring, holding or disposing of the Common Shares.
Passive Foreign Investment Company Rules
A foreign corporation will generally be considered a passive foreign investment company (“PFIC”) for any taxable year in which (1) 75% or more of its gross income is “passive income” under the PFIC rules or (2) 50% or more of the average quarterly value of its assets produce (or are held for the production of) “passive income.” In general, “passive income” includes dividends, interest, certain rents and royalties and certain gains, including the excess of gains over losses from certain commodities transactions. Net gains from commodities transactions are generally treated as passive income unless such gains are active business gains from the sale of commodities and “substantially all” of the corporation’s commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed in a trade or business. Moreover, for purposes of determining if the foreign corporation is a PFIC, if the foreign corporation owns, directly or indirectly, at least 25%, by value, of the shares of another corporation, it will be treated as if it directly holds its proportionate share of the assets and receives directly its proportionate share of the income of such other corporation. If a corporation is treated as a PFIC with respect to a U.S. Holder for any taxable year, the corporation will continue to be treated as a PFIC with respect to that U.S. Holder in all succeeding taxable years, regardless of whether the corporation continues to meet the PFIC requirements in such years, unless certain elections are made.
The determination as to whether a foreign corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and the determination will depend on the composition of the income, expenses and assets of the foreign corporation from time to time and the nature of the activities performed by its officers and employees. The Company may have been classified as a PFIC for its taxable year ending December 31, 2024. However, it has not made a conclusive determination as the Company’s PFIC status may depend on the U.S. tax classification of certain grants that the Company has received or accrued as receivable during 2024. For similar reasons, the Company is uncertain as to whether it will be classified as a PFIC for the current taxable year. The Company’s status as a PFIC in any taxable year, however, requires a factual determination that can only be made annually after the close of each taxable year. Therefore, there can be no assurance as to whether the Company will be classified as a PFIC for the current taxable year or for any future taxable year.
If the Company is classified as a PFIC, a U.S. Holder that does not make any of the elections described below would be required to report any gain on the disposition of the Common Shares as ordinary income, rather than as capital gain, and to compute the tax liability on the gain and any “Excess Distribution” (as defined below) received in respect of Common Shares as if such items had been earned ratably over each day in the U.S. Holder’s holding period (or a portion thereof) for Common Shares. The amounts allocated to the taxable year during which the gain is realized or distribution is made, and to any taxable years in such U.S. Holder’s holding period that are before the first taxable year in which the Company is treated as a PFIC with respect to the U.S. Holder, would be included in the U.S. Holder’s gross income as ordinary income for the taxable year of the gain or distribution. The amount allocated to each other taxable year would be taxed as ordinary income in the taxable year during which the gain is realized or distribution is made at the highest tax rate in effect for the U.S. Holder in that other taxable year and would be subject to an interest charge as if the income tax liabilities had been due with respect to each such prior year. For purposes of these rules, gifts, exchanges pursuant to corporate reorganizations and use of Common Shares as security for a loan may be treated as a taxable disposition of Common Shares. An “Excess Distribution” is the amount by which distributions during a taxable year in respect of a Common Share exceed 125% of the average amount of distributions in respect thereof during the three preceding taxable years (or, if shorter, the U.S. Holder’s holding period for Common Shares).
Certain additional adverse tax rules will apply to a U.S. Holder for any taxable year in which the Company is treated as a PFIC with respect to such U.S. Holder and any of the Company’s subsidiaries is also treated as a PFIC (a “Subsidiary PFIC”). In such a case, the U.S. Holder will generally be deemed to own its proportionate interest (by value) in any Subsidiary PFIC and be subject to the PFIC rules described above with respect to the Subsidiary PFIC regardless of such U.S. Holder’s percentage ownership in us.
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The adverse tax consequences described above may be mitigated if a U.S. Holder makes a timely “qualified electing fund” election (“QEF Election”), with respect to its interest in the PFIC. Consequently, if the Company is classified as a PFIC, it may be advantageous for a U.S. Holder to elect to treat us as a “qualified electing fund” with respect to such U.S. Holder in the first year in which it holds Common Shares. If a U.S. Holder makes a timely QEF Election with respect to the Company, provided that the necessary information is provided by the Company, the electing U.S. Holder would be required in each taxable year that the Company is considered a PFIC to include in gross income (i) as ordinary income, the U.S. Holder’s pro rata share of the ordinary earnings of the Company and (ii) as capital gain, the U.S. Holder’s pro rata share of the net capital gain (if any) of the Company, whether or not the ordinary earnings or net capital gain are distributed. An electing U.S. Holder’s basis in Common Shares will be increased to reflect the amount of any taxed but undistributed income. Distributions of income that had previously been taxed will result in a corresponding reduction of basis in Common Shares and will not be taxed again as distributions to the U.S. Holder.
A QEF Election made with respect to the Company will not apply to any Subsidiary PFIC; a QEF Election must be made separately for each Subsidiary PFIC (in which case the treatment described above would apply to such Subsidiary PFIC). If a U.S. Holder makes a timely QEF Election with respect to a Subsidiary PFIC, it would be required in each taxable year to include in gross income its pro rata share of the ordinary earnings and net capital gain of such Subsidiary PFIC, but may not receive a distribution of such income. Such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge (which would not be deductible for U.S. federal income tax purposes if the U.S. Holder were an individual).
The U.S. federal income tax on any gain from the disposition of Common Shares or from the receipt of Excess Distributions may be greater than the tax if a timely QEF Election is made. For any taxable year in which the Company determines that it was likely a PFIC, the Company intends to make available to U.S. Holders, upon request and in accordance with applicable procedures, a “PFIC Annual Information Statement” for such taxable year with respect to the Company and, if applicable, any Subsidiary PFIC in which it owns more than 50% of such subsidiary’s total aggregate voting power. The “PFIC Annual Information Statement” may be used by U.S. Holders for purposes of complying with the reporting requirements applicable to a QEF election with respect to the Company and, if applicable, any Subsidiary PFIC.
Alternatively, if the Company was to be classified as a PFIC, a U.S. Holder could also avoid certain of the rules described above by making a mark-to-market election (a “Mark-to-Market Election”), instead of a QEF Election, provided Common Shares are treated as regularly traded on a qualified exchange or other market within the meaning of the applicable U.S. Treasury Regulations. However, a U.S. Holder will not be permitted to make a Mark-to-Market Election with respect to a Subsidiary PFIC. U.S. Holders should consult their own tax advisers regarding the potential availability and consequences of a Mark-to-Market Election, as well as the advisability of making a protective QEF Election in case the Company is classified as a PFIC in any taxable year.
During any taxable year in which the Company or any Subsidiary PFIC is treated as a PFIC with respect to a U.S. Holder, that U.S. Holder generally must file IRS Form 8621. U.S. Holders should consult their own tax advisers concerning annual filing requirements.
Distributions on Common Shares
In general, subject to the PFIC rules discussed above, the gross amount of any distribution received by a U.S. Holder with respect to the Common Shares (including amounts withheld to pay Canadian withholding taxes) will be included in the gross income of the U.S. Holder as a dividend to the extent attributable to the Company’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Because the Company does not expect to maintain calculations of the Company’s earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should expect that a distribution will generally be treated as a dividend for U.S. federal income tax purposes.
The amount of any distributions paid in Canadian dollars will equal the U.S. dollar value of such distributions determined by reference to the exchange rate on the day they are received by the U.S. Holder (with the value of such distributions computed before any reduction for any Canadian withholding tax), regardless of whether the payment is in fact converted into U.S. dollars at that time. A U.S. Holder will have a tax basis in Canadian dollars equal to their U.S. dollar value on the date of receipt. If the Canadian dollars received are converted into U.S. dollars on the date of receipt, the U.S. Holder will generally not be required to recognize foreign currency gain or loss in respect of the distribution. If the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder may recognize foreign currency gain or loss on a subsequent conversion or other disposition of the Canadian dollars. Such gain or loss generally will be treated as U.S. source ordinary income or loss.
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Subject to applicable limitations and provided the Company is eligible for the benefits of the US Treaty or the Common Shares are readily tradable on a United States securities market, dividends paid by the Company to non-corporate US Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Company is not classified as a PFIC in the tax year of distribution or in the preceding tax year. Any amount of distributions treated as dividends generally will not be eligible for the dividends received deduction available to certain corporate U.S. Holders in respect of dividends received from U.S. corporations.
Distributions to a U.S. Holder with respect to the Common Shares may be subject to Canadian non-resident withholding tax. Any Canadian withholding tax paid will not reduce the amount treated as received by the U.S. Holder for U.S. federal income tax purposes. However, subject to limitations imposed by U.S. law, a U.S. Holder may be eligible to receive a foreign tax credit for the Canadian withholding tax. The rules governing the foreign tax credit are complex. U.S. Holders are urged to consult their own tax advisors regarding the availability of the foreign tax credit under their particular circumstances, including the impact of, and any exception available to, the special income sourcing rule described in this paragraph. U.S. Holders who do not elect to claim a foreign tax credit may be able to claim an ordinary income tax deduction for Canadian income tax withheld, but only for a taxable year in which the U.S. Holder elects to do so with respect to all non-U.S. income taxes paid or accrued in such taxable year.
Sale, Exchange or Other Taxable Disposition of Common Shares
Subject to the PFIC rules discussed above, upon a sale, exchange or other taxable disposition of the Common Shares, a U.S. Holder will generally recognize a capital gain or loss equal to the difference between the amount realized on such sale, exchange or other taxable disposition and the adjusted tax basis of such Common Shares. If any foreign tax is imposed on the sale, exchange or other disposition of the Common Shares, a U.S. Holder’s amount realized will include the gross amount of the proceeds of the disposition before deduction of the tax. A U.S. Holder’s initial tax basis in the Common Shares generally will equal the cost of such Common Shares. Such gain or loss will be a long-term capital gain or loss if the Common Shares have been held for more than one year and will be short-term gain or loss if the holding period is equal to or less than one year. Such gain or loss generally will be considered U.S. source gain or loss for U.S. foreign tax credit purposes. Long-term capital gains of certain non-corporate U.S. Holders are eligible for reduced rates of taxation. For both corporate and non-corporate U.S. Holders, limitations apply to the deductibility of capital losses.
Information Reporting and Backup Withholding
Under U.S. federal income tax laws certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person, and any interest in a non-U.S. entity. U. S. Holders may be subject to these reporting requirements unless the Common Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult their own tax advisors regarding the requirements of filing information returns, including the requirement to file IRS Form 8938. In addition, U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, and, if applicable, filing obligations relating to the PFIC rules, including possible reporting on an IRS Form 8621.
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Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of the Common Shares generally may be subject to information reporting and backup withholding tax, currently at the rate of 24%, if a U.S. Holder (a) fails to furnish its correct U.S. taxpayer identification number (generally on Form W 9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that it has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons, such as U.S. Holders that are corporations, generally are excluded from these information reporting and backup withholding tax rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. The information reporting and backup withholding rules may apply even if, under the Canada-U.S. Tax Convention, payments may be exempt from the dividend withholding tax rules or otherwise eligible for a reduced withholding rate. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.
The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE COMMON SHARES. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN COMMON SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
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TRADING PRICE AND VOLUME
Our Common Shares are listed on Nasdaq and the TSXV under the symbol “ELBM”. Trading price and volume of the Common Shares will be provided in each Prospectus Supplement.
DILUTION
Purchasers of Securities in an offering may suffer immediate and substantial dilution in the net tangible book value per share of Common Shares. Dilution in net tangible book value per share represents the difference between the amount per Share paid by purchasers in an offering and the net tangible book value per share of Common Shares immediately after an offering.
LEGAL MATTERS
Unless otherwise specified in the Prospectus Supplement relating to an offering of Securities, certain Canadian and United States legal matters relating to the offering of such Securities will be passed upon for us by Cassels Brock & Blackwell LLP as to matters relating to Canadian law and by Troutman Pepper Locke LLP as to matters relating to United States federal securities law. In addition, certain legal matters in connection with any offering of Securities may be passed upon for any underwriters, dealers or agents by counsel to be designated at the time of the offering by such underwriters, dealers or agents with respect to matters of Canadian and United States law.
INTERESTS OF EXPERTS
Information relating to the Iron Creek Project in this Base Prospectus and the documents incorporated by reference herein and therein has been derived from the 2024 Technical Report Summary prepared by Martin Perron, P.Eng. of InnovExplo Inc., Marc R. Beauvais, P.Eng. of InnovExplo Inc., Eric Kinnan, P.Geo. of InnoExplo Inc., and Pierre Roy, P.Eng of Soutex Inc, and this information has been included in reliance on such persons’ expertise. Messrs. Perron, Beauvais, Kinnan and Roy are each a qualified persons and are independent of the Company, as such terms are defined in Regulation S-K subpart 1300.
Our auditors are MNP LLP (“MNP”), Chartered Professional Accountants and Licensed Public Accountants, located in Toronto, Ontario. MNP has advised us that they are independent of the Company in compliance with PCAOB Rule 3520 and within the meaning of the federal securities laws administered by the SEC.
The financial statements of Electra as at and for the year ended December 31, 2024 and 2023, and for each of the two years in the period ended December 31, 2024 and the effects of the adjustments to retrospectively apply the change in segment composition as described in Note 22 and the effect of the share consolidation as described in Note 17 to the 2022 consolidated financial statements, included in this Base Prospectus, have been audited by MNP. Such financial statements are included in this Base Prospectus in reliance upon the report of such firm given their authority as experts in accounting and auditing.
The financial statements, which comprise the consolidated statements of income (loss) and other comprehensive income (loss), cash flows and shareholders’ equity of Electra before the effects of the adjustments to retrospectively apply the change in segment composition as described in Note 22 and the effects of the share consolidation as described in Note 17 for the year ended December 31, 2022, and the related notes, have been audited by KPMG LLP (“KPMG”), our predecessor independent registered public accounting firm. Such financial statements are included in this Base Prospectus in reliance upon the report of such firm given their authority as experts in accounting and auditing.
TRANSFER AGENT, REGISTRAR AND AUDITOR
The transfer agent and registrar for our Common Shares is TSX Trust Company at its principal office in Toronto, Canada.
MNP LLP, Chartered Professional Accountants and Licensed Public Accountants, located in Toronto, Ontario is our independent registered public accounting firm and has been appointed as our independent auditor.
| 27 |
MATERIAL CONTRACTS
Our material contracts are described in the documents incorporated by reference into this Base Prospectus. See “Publicly Available Information on Electra”, “Documents Incorporated by Reference” and “Where You Can Find More Information”.
EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a statement of the expenses (all of which are estimated), other than any underwriting discounts and commissions and expenses reimbursed by us, if any, to be incurred in connection with a distribution of an assumed amount of US$20,000,000 of Securities under the offering.
| SEC registration fees | US$3,062 |
| FINRA filing fee | US$4,819 |
| Nasdaq Listing fees | (1) |
| TSXV Listing fees | (1) |
| Printing Expenses | (1) |
| Legal fees and expenses | (1) |
| Accountants’ fees and expenses | (1) |
| Transfer agent fees and expenses | (1) |
| Miscellaneous | (1) |
| Total | US$7,881 |
Notes:
| (1) | To be provided by a Prospectus Supplement, or as an exhibit to a Report on Form 6-K that is incorporated by reference into this Base Prospectus. |
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or person controlling the registrant in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
ENFORCEMENT OF CIVIL LIABILITIES
Electra is a corporation governed by the CBCA, and a substantial portion of our assets are outside of the United States. Most of our directors and senior management and independent auditors are resident outside the United States, and all or a substantial portion of their respective assets may be located outside the United States. As a result, it may be difficult for U.S. investors to effect service of process within the United States upon these persons. It may also be difficult for U.S. investors to enforce within the United States judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts outside the United States would recognize or enforce judgments of U.S. courts obtained against us or our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Therefore, it may be difficult to enforce U.S. judgments against us, our directors and officers and independent auditors.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities described in this Base Prospectus and any accompanying Prospectus Supplement, as applicable. This Base Prospectus and any accompanying Prospectus Supplement, which constitute a part of that registration statement, do not contain all of the information set forth in that registration statement and its exhibits. For further information with respect to us and our securities, you should consult the registration statement and its exhibits.
We are required to file with the Commissions annual and quarterly reports, material change reports and other information. In addition, we are subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, we also must file reports with, and furnish other information to, the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as United States companies. However, we file with the SEC an annual report on Form 40-F or Form 20-F, as applicable, containing financial statements audited by an independent registered public accounting firm, and we submit to the SEC, on Form 6-K, unaudited quarterly financial information.
The SEC maintains an internet site (www.sec.gov) that makes available reports and other information that we file or furnish electronically with it.
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Electra Battery Materials Corporation
US$20,000,000
Common Shares
Warrants
Units
BASE PROSPECTUS
, 2025
The information in this prospectus supplement is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus supplement is not an offer to sell, nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion dated June 26, 2025
PROSPECTUS SUPPLEMENT
(To prospectus dated , 2025)
Electra Battery Materials Corporation
Up to US$5,500,000
Common Shares
We have entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Sales Agent”), dated June 26, 2025, relating to the sale of our common shares (the “Common Shares”) from time to time offered by this prospectus supplement (the “Prospectus Supplement”) and the accompanying base prospectus (the “Base Prospectus”, and, together, with the Prospectus Supplement, the “Prospectus”). In accordance with the terms of the ATM Agreement, we may offer and sell our Common Shares having an aggregate offering price of up to US$5,500,000 million from time to time through the Sales Agent, acting as our sales agent, pursuant to the Prospectus.
Our Common Shares are listed on the Nasdaq Capital Market (“Nasdaq”) and on the TSX Venture Exchange (the “TSXV”) under the symbol “ELBM”. On June 25, 2025, the last trading day before the date of this Prospectus Supplement, the closing price of the Common Shares on the TSXV was C$1.48 per Common Share, and the closing price of the Common Shares on Nasdaq was US$1.09 per Common Share. The TSXV has conditionally approved the listing of the Common Shares issuable pursuant to the ATM Agreement, subject to the Company fulfilling all of the listing requirements of the TSXV. Notification of the offering pursuant to the ATM Agreement has been provided to Nasdaq.
Sales of our Common Shares, if any, under this Prospectus may be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through Nasdaq, the existing trading market for our Common Shares in the United States, sales made to or through a market maker other than on an exchange or otherwise, directly to the Sales Agent as principal, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or in any other method permitted by law. The Sales Agent is not required to sell any specific number or amount of our Common Shares, but will act as our sales agent using commercially reasonable efforts, consistent with its normal trading and sales practices on mutually agreed terms between the Sales Agent and us. There is no arrangement for funds to be received in an escrow, trust, or similar arrangement.
No sales of our Common Shares under this Prospectus will be made in Canada or over or through the facilities of the TSXV or any other exchange or market in Canada.
The Sales Agent will receive from us a commission equal to up to 3.0% of the gross sales price of all shares sold through it under the ATM Agreement. In connection with the sale of Common Shares on our behalf, the Sales Agent may be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the Sales Agent may be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to the Sales Agent with respect to certain liabilities, including liabilities under the Securities Act. See “Plan of Distribution” beginning on page S-17 of this Prospectus Supplement for additional information regarding the Sales Agent’s compensation.
We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 and, as such, we have elected to comply with certain reduced public company reporting requirements for this Prospectus and future filings. However, we have elected not to take advantage of the extended transition period allowed for emerging growth companies for complying with new or revised accounting guidance as allowed by Section 107 of the JOBS Act and Section 7(a)(2)(B) of the Securities Act.
Pursuant to General Instruction I.B.5 of Form F-3, in no event will we sell securities in a public primary offering with a value exceeding more than one-third of the aggregate market value of our Common Shares held by non-affiliates in any 12-month period as long as the aggregate market value of our outstanding Common Shares held by non-affiliates is less than US$75 million. The aggregate market value of our outstanding Common Shares held by non-affiliates pursuant to General Instruction I.B.5 of Form F-3 was US$19,995,660, which is based on 17,695,274 Common Shares held by non-affiliates on June 25, 2025 and a price of US$1.13 per share, the closing price of our Common Shares on June 9, 2025 on Nasdaq. During the 12 calendar months prior to and including the date of this Prospectus Supplement, we have not offered or sold any securities pursuant to General Instruction I.B.5 of Form F-3.
An investment in our securities involves a high degree of risk. Please read “Risk Factors” on page S-6 of this Prospectus Supplement and the documents incorporated by reference into this Prospectus before investing in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
H.C. Wainwright & Co.
The date of this Prospectus Supplement is , 2025.
TABLE OF CONTENTS
Page
PROSPECTUS SUPPLEMENT
| ABOUT THIS PROSPECTUS SUPPLEMENT | S-1 |
| FINANCIAL INFORMATION AND CURRENCY | S-2 |
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | S-2 |
| SUMMARY | S-3 |
| THE OFFERING | S-4 |
| RISK FACTORS | S-6 |
| USE OF PROCEEDS | S-10 |
| CAPITALIZATION AND INDEBTEDNESS | S-11 |
| DESCRIPTION OF SECURITIES | S-12 |
| DIVIDEND POLICY | S-12 |
| PRICE RANGE AND TRADING VOLUME | S-13 |
| PLAN OF DISTRIBUTION | S-14 |
| CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS | S-15 |
| CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR UNITED STATES RESIDENTS | S-20 |
| EXPENSES | S-22 |
| LEGAL MATTERS | S-22 |
| EXPERTS | S-22 |
| ENFORCEMENT OF CIVIL LIABILITIES | S-23 |
| INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE | S-23 |
| WHERE YOU CAN FIND MORE INFORMATION | S-24 |
ABOUT THIS PROSPECTUS SUPPLEMENT
This Prospectus Supplement is part of a registration statement on Form F-3 (File No. 333- ) that we filed with the Securities and Exchange Commission (“SEC”), utilizing a “shelf” registration process. Under the shelf registration process, we may offer and sell from time to time our Common Shares having an aggregate offering price of up to US$5,500,000 under this Prospectus at prices and on terms to be determined by market conditions at the time of the offering.
Before buying any of the Common Shares that we are offering, we urge you to carefully read this Prospectus and all of the information incorporated by reference herein, as well as the additional information described under the headings “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference.” These documents contain important information that you should consider when making your investment decision.
We provide information to you about this offering of our Common Shares in two separate documents that are bound together: (1) this Prospectus Supplement, which describes the specific details regarding this offering; and (2) the accompanying base prospectus, which provides general information, some of which may not apply to this offering. Generally, when we refer to this “Prospectus,” we are referring to both documents combined. If information in this Prospectus Supplement is inconsistent with the accompanying Base Prospectus, you should rely on this Prospectus Supplement. To the extent there is a conflict between the information contained in this Prospectus Supplement, on the one hand, and the information contained in any document incorporated by reference in this Prospectus Supplement, on the other hand, you should rely on the information in this Prospectus Supplement. If any statement in one of these documents is inconsistent with a statement in another document having a later date — for example, a document incorporated by reference in this Prospectus Supplement — the statement in the document having the later date modifies or supersedes the earlier statement.
You should rely only on the information contained or incorporated by reference in this Prospectus. Neither we nor the Sales Agent have authorized anyone to provide any information or to make any representations other than those contained in this Prospectus, the documents incorporated by reference herein or therein or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We are not, and the Sales Agent is not, making an offer to sell these securities in any jurisdiction where the offer or sale thereof is not permitted.
We are not offering to sell, or seeking offers to buy, Common Shares in Canada or over or through the facilities of the TSXV or any other exchange or market in Canada.
The distribution of this Prospectus and the offering of Common Shares in certain jurisdictions may be restricted by law. You should assume that the information appearing in this Prospectus and the documents incorporated by reference is accurate only as of the respective dates of the applicable documents. Our business, financial condition, results of operations and prospects may have changed since those dates.
Market data and certain industry forecasts used in this Prospectus and the documents incorporated by reference were obtained from market research, publicly available information and industry publications. We believe that these sources are generally reliable, but the accuracy and completeness of this information is not guaranteed. We have not independently verified such information, and we do not make any representation as to the accuracy of such information.
In this Prospectus, unless the context otherwise requires, references to “we,” “us,” “our” or similar terms, as well as references to “Electra” or the “Company” refer to Electra Battery Materials Corporation, either alone or together with our subsidiaries.
This Prospectus and the documents incorporated by reference may include references to trade names and trademarks of other companies, which trade names and trademarks are the property of their respective owners.
| S-1 |
FINANCIAL INFORMATION AND CURRENCY
Financial statements included or incorporated by reference in this Prospectus have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standard Board (“IASB”) and are audited in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Unless otherwise indicated in this Prospectus all dollar amounts and references to “US$” are to U.S. dollars and references to “$” or “C$” are to Canadian dollars. This Prospectus and the documents incorporated by reference may contain translations of some Canadian dollar amounts into U.S. dollars solely for your convenience. On June 25, 2025, the Bank of Canada daily rate of exchange was US$1.00 = C$1.3737.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this Prospectus Supplement, the accompanying Base Prospectus and the documents incorporated by reference herein and therein, contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are intended to qualify for the “safe harbor” created by those sections. The words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward- looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical facts contained in this Prospectus, including among others, statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements.
These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We discuss many of these risks in greater detail in the accompanying Base Prospectus under the heading “Cautionary Note Regarding Forward-Looking Statements”, as well as in our reports filed from time to time under the Securities Act and the Exchange Act, including the risks identified in the Annual Report on Form 20-F for the year ended December 31, 2024 filed with the SEC on April 24, 2025, as amended on May 1, 2025, under the headings “Cautionary Note Regarding Forward-Looking Statements”, which is incorporated by referenced into this Prospectus Supplement. We encourage you to read these filings as they are made. Also, these forward-looking statements represent our estimates and assumptions only as of the date of the document containing the applicable statement.
You should read this Prospectus Supplement, the accompanying Base Prospectus
and the documents incorporated by reference herein and therein, and any free writing prospectus that we have authorized for use in connection
with this offering completely and with the understanding that our actual future results may be materially different from what we expect.
We qualify all of the forward-looking statements in the foregoing documents by these cautionary statements.
| S-2 |
SUMMARY
This summary highlights information contained elsewhere or incorporated by reference in this Prospectus Supplement. This summary does not contain all of the information that you should consider before deciding to invest in our Common Shares. You should read this entire Prospectus Supplement and accompanying Base Prospectus carefully, including the “Risk Factors” section contained in this Prospectus, the accompanying Base Prospectus and under the section “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2024, and any amendment or update thereto reflected in subsequent filings with the SEC, along with our consolidated financial statements and the related notes thereto and the other documents incorporated by reference in this Prospectus Supplement and accompanying Base Prospectus.
Overview
We are in the business of battery materials refining, including refining material from mining operations and from the recycling of battery scrap and end of life batteries. We are focused on building a diversified portfolio of assets that are highly leveraged to the battery supply chain with assets located primarily in North America, with the intent of providing a North American supply of battery materials.
We own two main assets – a hydrometallurgical refinery located in Ontario, Canada (“Refinery”), and a number of properties and option agreements within the Idaho Cobalt Belt, including the Company’s flagship mineral project, Iron Creek (the “Iron Creek Project”).
We have been progressing plans to recommission and expand the Refinery with a view to becoming the first refiner of battery grade cobalt sulfate in North America. Our primary focus for 2025 is to finance and resume the construction of our Refinery (Phase 1 of our phased approach to building a North American critical minerals supply chain).
Corporate Information
We were incorporated under the provisions of the Business Corporations Act (British Columbia) on July 13, 2011 under the name Patrone Gold Corp. and became a reporting issuer in British Columbia and Alberta upon completion of an arrangement with Unity Energy Corp. on October 2, 2012. On October 3, 2013, we changed our name from Patrone Gold Corp. to Aurgent Gold Corp. On March 11, 2014, we changed our name from Aurgent Gold Corp. to Aurgent Resource Corp., and on September 22, 2016, we changed our name from Aurgent Resource Corp. to First Cobalt Corp. On October 26, 2017, our shareholders approved a continuation under the Canada Business Corporations Act (the “CBCA”). Our continuation under the CBCA was implemented as of September 4, 2018. On December 2, 2021, we changed our name from First Cobalt Corp. to Electra Battery Materials Corporation. On April 13, 2022, we completed a reverse split of our share capital on the basis of one (1) post-reverse split Common Share for every eighteen (18) pre-reverse split Common Shares. On December 31, 2024, we completed a reverse split of our share capital on the basis of one (1) post-reverse split Common Share for every four (4) pre-reverse split Common Shares.
Our registered office is located at 40 Temperance Street, Suite 3200, Bay Adelaide Centre, North Tower, Toronto, Ontario, Canada M5H 0B4. Our corporate head office is located at 133 Richmond Street West, Suite 602, Toronto, Ontario, M5H 2L3 Canada and our telephone number is (416) 900-3891.
Our annual and other filings with securities commissions or similar authorities in Canada and the United States are available under our profile on SEDAR+ at www.sedarplus.ca and our profile on EDGAR at www.sec.gov.
| S-3 |
| THE OFFERING | |
| The following summary contains basic information about the offering and is not intended to be complete. It does not contain all the information that is important to you. You should carefully read the entire Prospectus and the documents incorporated by reference before making an investment decision. | |
| Issuer | Electra Battery Materials Corporation |
| Common Shares offered by us | Common Shares having an aggregate offering price of up to US$5,500,000. |
| Common Shares to be outstanding following the offering | Up to 23,008,044 Common Shares, based on 17,962,173 Common Shares outstanding as of June 25, 2025 and assuming sales of 5,045,871 of our Common Shares in this offering at an offering price of US$1.09 per share, which was the last reported sale price of our Common Shares on the Nasdaq Capital Market on June 25, 2025. The actual number of Common Shares issued will vary depending on the sale price under this offering. |
| Plan of distribution | An “at the market offering” within the meaning of Rule 415(a)(4) under the Securities Act that may be made from time to time, through the Sales Agent, H.C. Wainwright & Co., LLC. See “Plan of Distribution.” |
| Use of proceeds | We intend to use the net proceeds from the sale of our Common Shares pursuant to this offering, if any, together with our existing cash and cash equivalents, towards completion of the Ontario, Canada sulfate refinery and for working capital and general corporate purposes. See “Use of Proceeds” on page S-10. |
| Risk factors | Investing in our Common Shares involves risks. See “Risk Factors” beginning on page S-6 of this Prospectus Supplement, as well as those risks and uncertainties identified in the documents incorporated by reference herein or therein, including our most recent Annual Report on Form 20-F for the year ended December 31, 2024, filed on April 24, 2025, as amended on May 1, 2025. |
| Nasdaq symbol | ELBM |
| TSXV symbol | ELBM |
| Income tax considerations | The Common Shares will be subject to special and complex tax rules for U.S. taxpayers. Holders are urged to consult their tax advisors with respect to the U.S. federal, state, local and foreign (including Canadian federal) tax consequences of purchasing, owning and disposing of the common shares. See “Certain U.S. Federal Income Tax Considerations for U.S. Holders” on page S-19 of this Prospectus Supplement and “Certain Canadian Federal Income Tax Considerations for United States Residents” on page S-24 of this Prospectus Supplement. |
The number of Common Shares to be outstanding immediately after this offering is 23,008,044, which is based on 17,962,173 Common Shares outstanding as of June 25, 2025, assuming the maximum number of Common Shares offered under this Prospectus Supplement are sold pursuant to this offering, and no other issuances during this offering, and excluding:
| S-4 |
| · | 1,170,363 stock options outstanding with a weighted average exercise price per Common Share of C$4.61 expiring between July 10, 2025 and February 12, 2028 under the Company’s long-term incentive plan adopted December 20, 2024 (the “Plan”); |
| · | 157,085 deferred share units outstanding with a weighted average issue price per Common Share of C$5.25 with no expiry date under the Plan; |
| · | 620,788 warrants at an exercise price of US$12.40 expiring November 15, 2025; |
| · | 3,975,000 warrants at an exercise price of C$6.84 expiring August 11, 2025; |
| · | 1,136,364 warrants at an exercise price of C$4.00 expiring November 12, 2026; |
| · | 3,124,000 warrants at an exercise price of US$1.40 expiring October 14, 2026; and |
| · | 183,333 warrants at an exercise price of US$1.12 expiring October 14, 2026. |
On December 31, 2024, we completed a reverse share split of our outstanding Common Shares on the basis of four (4) pre-reverse split Common Shares for every one (1) post-reverse split Common Share. At the opening of markets on January 2, 2025, our Common Shares commenced trading on a post-reverse split basis under the existing ticker symbol “ELBM”. The exercise price and the number of Common Shares issuable upon exercise of outstanding stock options, warrants and other outstanding securities have been adjusted to reflect the reverse share split under the terms of such securities for the holders of such instruments. The list above is presented on a post-reverse split basis.
No sales of our Common Shares under this Prospectus will be made in Canada
or over or through the facilities of the TSXV or any other exchange or market in Canada.
| S-5 |
RISK FACTORS
Investing in our Common Shares is speculative and involves a high degree of risk. The following risk factors, as well as risks currently unknown to us, could materially adversely affect our future business, operations and financial condition and could cause them to differ materially from the estimates described in forward-looking information relating to us, or our business, property or financial results, each of which could cause purchasers of our Common Shares to lose part or all of their investment. In addition to the other information contained in this Prospectus and the documents incorporated by reference, prospective investors should carefully consider the factors set out under “Risk Factors” below and in our Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on April 24, 2025, as amended on May 1, 2025, and the factors set out below in evaluating our company and its business before making an investment in our Common Shares.
Risks Relating to This Offering
The Company has a history of operating losses, which may continue for the foreseeable future and our auditors have indicated that recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern.
We have suffered recurring losses from operations, have a net working capital deficiency and will require additional financing to continue operations, complete the construction of the Refinery, advance our battery recycling strategy, purchase required feedstock before the Refinery enters its operating phase and remain in compliance with minimum liquidity covenant under the Notes. There can be no assurances that we will be able to obtain adequate financing in the future. This represents a material uncertainty that casts substantial doubt on our ability to continue as a going concern. Our financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.
Changes in U.S. legislative and regulatory policies under the current administration may negatively impact our business, our industry, markets and global economic conditions.
The election of President Trump may result in legislative and regulatory changes that could have an adverse effect on the Company and our financial condition. In particular, there is uncertainty regarding U.S. tariffs and support for existing treaty and trade relationships, including with Canada. Implementation by the U.S. government of new legislative or regulatory policies could impose additional costs on us, decrease U.S. demand for our products, or otherwise negatively impact us, which may have a material adverse effect on our business, financial condition and operations. In addition, this uncertainty may adversely impact: (i) the ability of companies to transact business with companies such as us; (ii) our profitability; (iii) regulation affecting the Canadian natural resources and mineral industry; (iv) global stock markets (including the TSXV and Nasdaq); and (v) general global economic conditions. All of these factors are outside of our control, but may nonetheless lead us to adjust our strategy in order to compete effectively in global markets.
Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our Common Shares.
If we fail to continue to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq will take steps to de-list our Common Shares. Any such de-listing would likely have a negative effect on the price of our Common Shares and would impair the ability to sell or purchase our Common Shares, as well as adversely affect our ability to issue additional securities and obtain additional financing in the future.
On September 21, 2023, we received a deficiency notice from Nasdaq (the “Deficiency Notice”) informing us that our Common Shares had failed to comply with the US$1.00 minimum bid price required for continued listing under Nasdaq Listing Rule 5550(a)(2) (“Minimum Bid Requirement”) based upon the closing bid price of our Common Shares for the 30 consecutive business days prior to the date of the Deficiency Notice. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were given 180 calendar days from September 21, 2023, or until March 19, 2024, to regain compliance with the Minimum Bid Requirement. On March 21, 2024, we announced that the Nasdaq Listing Qualifications Department granted our request for a 180-day extension to regain compliance with the Minimum Bid Requirement. On September 17, 2024, we received another notice of non-compliance from Nasdaq. We filed an appeal, which was heard on November 5, 2024 before an independent panel. The panel issued a written decision granting us until January 15, 2025 to regain compliance with the Minimum Bid Price Requirement. We held a special meeting of shareholders on December 20, 2024 at which we received shareholder approval to implement a reverse share split. We implemented the reverse split on a one-for-four basis and our Common Shares began trading on a post-reverse split basis on January 2, 2025, after which we regained compliance with the Minimum Bid Price Requirement.
| S-6 |
Our Common Shares may be de-listed if we do not maintain compliance with the Minimum Bid Requirement, as well as other continued listing requirements of the Nasdaq, and our shareholders could face significant material adverse consequences, including:
| · | Limited availability or market quotations for our Common Shares; |
| · | Reduced liquidity of our Common Shares; |
| · | Determination that our Common Shares are “penny stock”, which would require brokers trading in our Common Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Shares; |
| · | Limited amount of news and analysts’ coverage of us; and |
| · | Decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future. |
We can provide no assurances that the price of our Common Shares will remain above the Minimum Bid Price Requirement or that we otherwise will remain in compliance with the Nasdaq Marketplace Rules.
We will have broad discretion to use the net proceeds from this offering and the investment of these proceeds may not yield a favorable return. We may invest the proceeds of this offering in ways with which investors disagree.
Our management team will have broad discretion in the application of the net proceeds from this offering and could spend or invest the proceeds in ways with which our shareholders disagree. Accordingly, investors will need to rely on our management team’s judgment with respect to the use of these proceeds. We intend to use the proceeds from this offering in the manner described under “Use of Proceeds.” However, the failure by management to apply these funds effectively could negatively affect our ability to operate and grow our business.
We cannot specify with certainty all of the particular uses for the net proceeds to be received from this offering. Until the net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.
You may experience future dilution as a result of future equity offerings.
In order to raise additional capital, we may in the future offer additional Common Shares or other securities convertible into or exchangeable for our Common Shares. We cannot assure you that we will be able to sell Common Shares or other securities in any other offering at a price per Common Share that is equal to or greater than the price per Common Share paid by investors in this offering, and investors purchasing Common Shares or other securities in the future could have rights superior to existing shareholders. The price per Common Share at which we sell additional Common Shares or other securities convertible into or exchangeable for our Common Shares in future transactions may be higher or lower than the price per Common Share in this offering.
| S-7 |
Sales of a substantial number of our Common Shares in the public market could cause the trading price of our Common Shares to fall.
Sales of a substantial number of our Common Shares in the public market could occur at any time. If our shareholders sell, or the market perceives that our shareholders intend to sell, substantial amounts of our Common Shares in the public market, the market price of our Common Shares could decline significantly.
Shares issued upon the exercise of stock options outstanding under our Plan or pursuant to future awards granted under the Plan will become available for sale in the public market to the extent permitted by the provisions of applicable vesting schedules and Rule 144 under the Securities Act.
The actual number of shares we will issue under the ATM Agreement, at any one time or in total, is uncertain.
Subject to certain limitations in the ATM Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to the Sales Agent at any time throughout the term of the ATM Agreement. The number of shares that are sold by the Sales Agent after delivering a placement notice will fluctuate based on the market price of our Common Shares during the sales period and limits we set with the Sales Agent. Because the price per share of each Common Share sold will fluctuate based on the market price of our Common Shares during the sales period, it is not possible at this stage to predict the number of Common Shares that will be ultimately issued.
The Common Shares offered hereby will be sold in “at the market offerings,” and investors who buy shares at different times will likely pay different prices.
Investors who purchase Common Shares in this offering at different times will likely pay different prices, and accordingly may experience different levels of dilution and different outcomes in their investment results. We will have discretion, subject to market demand and the terms of the ATM Agreement, to vary the timing, prices and number of Common Shares sold in this offering. In addition, subject to the final determination by our Board or any restrictions we may place in any applicable placement notice, there is no minimum or maximum sales price for Common Shares to be sold in this offering. Investors may experience a decline in the value of the Common Shares they purchase in this offering as a result of sales made at prices lower than the prices they paid.
As a foreign private issuer, we are subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to its U.S. shareholders.
We are a foreign private issuer under applicable U.S. federal securities laws and, therefore, are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. As a result, we do not file the same reports that a U.S. domestic issuer would file with the SEC, although we will be required to file with or furnish to the SEC the continuous disclosure documents that we are required to file in Canada under Canadian securities laws. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short swing” profit recovery provisions of Section 16 of the Exchange Act. Therefore, our shareholders may not know on as timely a basis when our officers, directors and principal shareholders purchase or sell our securities as the reporting periods under the corresponding Canadian insider reporting requirements are longer. In addition, as a foreign private issuer, we are exempt from the proxy rules under the Exchange Act.
We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to us.
In order to maintain our current status as a foreign private issuer, a majority of our Common Shares must be either directly or indirectly owned of record by non-residents of the United States unless we also satisfy one of the additional requirements necessary to preserve this status. We may in the future lose our foreign private issuer status if a majority of our Common Shares are owned of record in the United States and we fail to meet the additional requirements necessary to avoid loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. federal securities laws as a U.S. domestic issuer may be significantly more than the costs we incur as a Canadian foreign private issuer. If we are not a foreign private issuer, we would not be eligible to use foreign issuer forms and would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer.
| S-8 |
If we are characterized as a passive foreign investment company, U.S. holders may be subject to adverse U.S. federal income tax consequences.
U.S. investors should be aware that they could be subject to certain adverse U.S. federal income tax consequences in the event that the Company is classified as a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes. The determination of whether the Company is a PFIC for a taxable year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and the determination will depend on the composition of the Company’s income, expenses and assets from time to time and the nature of the activities performed by the Company’s officers and employees. Based on the composition of the Company’s income and the value of its assets, the Company may have been classified as a PFIC for its taxable year ending December 31, 2024. However, it has not made a conclusive determination as the Company’s PFIC status may depend on the U.S. tax classification of certain grants that the Company has received or accrued as receivable during 2024. For similar reasons, the Company is uncertain as to whether it will be classified as a PFIC for the current taxable year. Prospective investors should carefully read the discussion under the heading “Certain U.S. Federal Income Tax Considerations for U.S. Holders” for more information and consult their own tax advisors regarding the likelihood and consequences of the Company being treated as a PFIC for U.S. federal income tax purposes, including the advisability of making certain elections that may mitigate certain possible adverse U.S. federal income tax consequences that may result in an inclusion in gross income without receipt of such income.
As we are a Canadian company, it may be difficult for U.S. shareholders to effect service on us or to realize on judgments obtained in the United States.
We are incorporated under the laws of Canada, most of our directors and officers are residents of Canada, and most or all of our assets and the assets of such persons are located outside the United States. Consequently, it may be difficult for U.S. investors to effect service of process within the U.S. upon us or upon such persons who are not residents of the U.S., or to realize in the U.S. upon judgments of U.S. courts predicated upon civil liabilities under U.S. securities laws. A judgment of a U.S. court predicated solely upon such civil liabilities may be enforceable in Canada by a Canadian court if the U.S. court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or us predicated solely upon such civil liabilities.
We can give no assurances that we will ever pay any dividends on our Common Shares, and any return to investors is expected to come, if at all, only from potential increases in the price of our Common Shares.
We have never paid dividends on our Common Shares and have no intention of paying any dividends in the near future. Whether we pay any dividends in the future will depend on our financial condition, results of operations, and other factors that we will consider. Any return to investors is expected to come, if at all, only from potential increases in the price of our Common Shares. There is no guarantee that our Common Shares will appreciate in value or even maintain the price at which shareholders have purchased them.
| S-9 |
USE OF PROCEEDS
The amount of net proceeds from this offering will depend upon the number of our Common Shares sold and the market prices at which they are sold. If the full amount of US$5,500,000 covered by this Prospectus is sold, the net proceeds to us will be US$5,035,000. Because there is no minimum offering amount required as a condition of this offering, the actual total public offering amount, commissions and net proceeds to us, if any, are not determinable at this time. There can be no assurance that we will be able to sell any Common Shares under or fully utilize the ATM Agreement as a source of financing.
We intend to use the net proceeds from the sale of our Common Shares pursuant to this offering, if any, together with our existing cash and cash equivalents, towards completion of construction of the Ontario, Canada sulfate refinery and for working capital and general corporate purposes.
Our management will have broad discretion in the application of the net proceeds, if any, from this offering, and the amounts and timing of our actual expenditures will depend on numerous factors, including those listed under the headings “Risk Factors” in this Prospectus and the documents incorporated by reference. We therefore cannot estimate with certainty the amount of net proceeds to be used for the purposes described above. While we intend to spend the net proceeds of the offering as stated above, there may be circumstances where, for sound business reasons, a re-allocation of funds may be necessary or advisable.
| S-10 |
CAPITALIZATION AND INDEBTEDNESS
The following table presents the number of our issued and outstanding Common Shares and our consolidated cash and cash equivalents and capitalization as at March 31, 2025 on an actual basis and on an as adjusted basis assuming that an aggregate of 5,045,871 Common Shares are sold at a price of US$1.09 (C$1.4973), being the last reported sale price of our Common Shares on Nasdaq on June 25, 2025, for aggregate gross proceeds of US$5,500,000 (C$7,555,350). The adjustments present the expected impact on the number of our issued and outstanding Common Shares, our consolidated cash and cash equivalents and our capitalization as at March 31, 2025 of the issuances described above and after the payment by us of the Sales Agent’s compensation and our estimated transaction expenses. Except for the issuance by us of an aggregate of 3,125,000 Common Shares pursuant to a private placement between March 31, 2025 and the date of this Prospectus Supplement, there has been no material change to our share and loan capital since March 31, 2025.
The information below has been derived from and should be read in conjunction with, and is qualified in its entirety by, our interim consolidated financial statements as at and for the year ended March 31, 2025 and management’s discussion and analysis thereon, incorporated by reference into this Prospectus. Figures are in thousands of US dollars except share data (using the daily average exchange rate from the Bank of Canada on March 31, 2025 of US$1.00 = C$1.4376).
| As at March 31, 2025 | ||||||||
| Actual | As Adjusted(1) | |||||||
| Number of Common Shares issued and outstanding | 14,836,172 | (2) | 19,882,043 | (2) | ||||
| Cash and cash equivalents | $ | 2,238 | $ | 7,591 | ||||
| Shareholders’ equity: | ||||||||
| Share capital | $ | 214,113 | $ | 219,466 | ||||
| Other capital | $ | 18,860 | $ | 18,860 | ||||
| Deficit | $ | (200,036 | ) | $ | (200,036 | ) | ||
| Accumulated other comprehensive income | $ | 4,489 | $ | 4,879 | ||||
| Total shareholders’ equity and total capitalization | $ | 37,426 | $ | 42,778 | ||||
| (1) | As adjusted assumes and gives effect to the issuance of 5,045,871 Common Shares to be offered from time to time under this Prospectus at an assumed price of US$1.09 per Common Share (being the last reported sale price of our Common Shares on Nasdaq on June 25, 2025) and the payment by us of the Sales Agent’s compensation and our estimated transaction expenses. In light of the continuous distribution nature of this at-the-market offering, there can be no assurance that we will in fact issue all or any number of the Common Shares offered under this Prospectus or, if we do issue any Common Shares under this Prospectus, that they will be issued at US$1.09 per share. The figures provided in the “as adjusted” column are thus solely for illustrative purposes. |
The above table is based on 14,836,172 Common Shares issued and outstanding as at March 31, 2025, and excludes as of such date the following:
| · | 1,293,974 stock options outstanding with a weighted average exercise price per Common Share of C$4.46 expiring between July 10, 2025 and February 12, 2028 under the Plan; |
| · | 157,085 deferred share units outstanding with a weighted average issue price per Common Share of C$5.25 with no expiry date under the Plan; |
| · | 620,788 warrants at an exercise price of US$12.40 expiring November 15, 2025; |
| · | 3,975,000 warrants at an exercise price of C$6.84 expiring August 11, 2025; and |
| · | 1,136,364 warrants at an exercise price of C$4.00 expiring November 12, 2026. |
On December 31, 2024, we completed a reverse share split of our outstanding Common Shares on the basis of four (4) pre-reverse split Common Shares for every one (1) post-reverse split Common Share. At the opening of markets on January 2, 2025, our Common Shares commenced trading on a post-reverse split basis under the existing ticker symbol “ELBM”. The exercise price and the number of Common Shares issuable upon exercise of outstanding stock options, warrants and other outstanding securities have been adjusted to reflect the reverse share split under the terms of such securities for the holders of such instruments. The list above is presented on a post-reverse split basis.
| S-11 |
DESCRIPTION OF SECURITIES
Common Shares
We are authorized to issue an unlimited number of Common Shares. Our Common Shares have no par value. As of June 25, 2025, there were 17,962,173 Common Shares issued and outstanding.
The Common Shares offered under this Prospectus have all of the rights, privileges, restrictions and conditions of other Common Shares of the Company. Holders of Common Shares are entitled to receive notice of any meeting of our shareholders, to attend and to cast one vote per share at such meetings. Holders of our Common Shares are also entitled to receive on a pro-rata basis such dividends, if any, as and when declared by our Board at its discretion from funds legally available therefor and upon the liquidation, dissolution or winding up of the Company are entitled to receive on a pro-rata basis, our net assets after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights.
Transfer Agent
The transfer agent and registrar for our Common Shares is TSX Trust Company at its principal office located in Toronto, Ontario.
A description of the Common Shares we are offering pursuant to this Prospectus is set forth under the heading “Description of Share Capital” starting on page 14 of the accompanying Base Prospectus. The description of our capital shares is a summary and is qualified in its entirety by reference to our articles. For a complete description, you should refer to our articles and amendments thereto, copies of which are on file with the SEC as Exhibits to our Annual Report on Form 20-F for the year ended December 31, 2024, filed on April 24, 2025, as amended May 1, 2025.
Dividend POLICY
We have never paid any cash dividends on our Common Shares. While we are not restricted from paying dividends other than pursuant to certain solvency tests prescribed under the CBCA, we do not intend to pay dividends on any of our Common Shares in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our Board and will be dependent upon our financial condition, results of operations, capital requirements, restrictions under any future indebtedness and other factors our Board deems relevant.
| S-12 |
PRICE RANGE AND TRADING VOLUME
Our Common Shares are listed on Nasdaq and on TSXV under the symbol “ELBM”. The following table indicates the monthly range of high and low closing prices of a Common Share and the average daily volumes traded on Nasdaq and on the TSXV during the period beginning on June 1, 2024 and ending on June 25, 2025:
| NASDAQ (US$) | TSXV (C$) | |||||||||||
| High | Low | Volume | High | Low | Volume | |||||||
| 2024 | ||||||||||||
| June | $2.00 | $1.48 | 18,273 | $2.72 | $2.28 | 6,184 | ||||||
| July | $1.82 | $1.44 | 15,656 | $2.48 | $1.94 | 5,903 | ||||||
| August | $2.83 | $1.04 | 215,460 | $3.80 | $1.66 | 35,228 | ||||||
| September | $2.78 | $1.90 | 37,254 | $3.76 | $2.64 | 23,624 | ||||||
| October | $2.60 | $2.01 | 10,943 | $3.56 | $2.80 | 6,920 | ||||||
| November | $2.32 | $1.85 | 15,287 | $3.20 | $2.64 | 7,203 | ||||||
| December | $2.59 | $1.46 | 77,935 | $3.72 | $2.12 | 15,685 | ||||||
| 2025 | ||||||||||||
| January | $2.15 | $1.35 | 44,097 | $3.28 | $1.93 | 14,403 | ||||||
| February | $1.82 | $1.37 | 32,971 | $2.60 | $2.00 | 20,977 | ||||||
| March | $1.72 | $1.03 | 290,308 | $2.52 | $1.49 | 49,371 | ||||||
| April | $1.17 | $0.91 | 145,829 | $1.67 | $1.26 | 35,968 | ||||||
| May | $1.14 | $0.96 | 38,349 | $1.56 | $1.34 | 13,304 | ||||||
| June (June 1 to June 25) | $1.28 | $0.98 | 819,559 | $1.76 | $1.33 | 34,780 | ||||||
| (1) | Reflects the reverse split of our outstanding Common Shares on the basis of four (4) pre-reverse split Common Shares for every one (1) post-reverse split Common Shares effective December 31, 2024. |
| S-13 |
PLAN OF DISTRIBUTION
We entered into the ATM Agreement with the Sales Agent on June 26, 2025. Under the terms of the ATM Agreement, we may offer and sell up to $5,500,000 of our Common Shares from time to time through the Sales Agent. Sales of our Common Shares, if any, under this Prospectus may be made in sales deemed to be “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on or through Nasdaq, the existing trading market for our Common Shares in the United States, sales made to or through a market maker other than on an exchange or otherwise, directly to the Sales Agent as principal, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or in any other method permitted by law.
We may designate the maximum amount of Common Shares to be sold through the Sales Agent on a daily basis or otherwise as we and the Sales Agent agree and the minimum price per Common Share at which such Common Shares may be sold. We may instruct the Sales Agent not to sell Common Shares if the sales cannot be effected at or above the price designated by us from time to time. We or the Sales Agent may suspend the offering of Common Shares upon notice and subject to other conditions. We are not offering to sell, or seeking offers to buy, Common Shares in Canada or through the facilities of the TSXV or any other exchange or market in Canada.
We will pay the Sales Agent a commission, in cash, at a fixed rate of up to 3.0% of the gross sales price per share sold. Because there is no minimum offering amount required as a condition of this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. We have also agreed to reimburse the Sales Agent for certain specified expenses, including the fees and disbursements of the Sales Agent’s legal counsel in an amount not to exceed $50,000, in addition to the reimbursement of up to $3,500 per due diligence update session for the fees of counsel to the Sales Agent. We estimate that the total expenses for the offering, excluding compensation payable to the Sales Agent under the terms of the ATM Agreement, will be approximately $300,000.
Settlement for sales of Common Shares will occur on the first business day following the date on which any sales are made (or such other settlement cycle as may be in effect pursuant to Rule 15c6-1 under the Exchange Act from time to time), or on such other date that is agreed upon by us and the Sales Agent in connection with a particular transaction, in return for payment of the net proceeds to us. Sales of our Common Shares as contemplated in this Prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and the Sales Agent may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
The Sales Agent will use its commercially reasonable efforts, consistent with its sales and trading practices, to solicit offers to purchase the Common Shares under the terms and subject to the conditions set forth in the ATM Agreement. In connection with the sale of the Common Shares on our behalf, the Sales Agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the Sales Agent will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to the Sales Agent against certain civil liabilities, including liabilities under the Securities Act.
The offering of our Common Shares pursuant to the ATM Agreement will terminate as permitted therein. We may terminate the ATM Agreement at any time upon ten (10) business days prior notice.
To the extent required by Regulation M, the Sales Agent will not engage in any market making activities involving our Common Shares while the offering is ongoing under this Prospectus. The Sales Agent and its affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees. In addition, in the ordinary course of its various business activities, the Sales Agent and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The Sales Agent or its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. This summary of the material provisions of the ATM Agreement does not purport to be a complete statement of its terms and conditions. A copy of the ATM Agreement is or will be filed as an exhibit to our Form 6-K and is incorporated by reference in this Prospectus.
The Prospectus in electronic format may be made available on a website maintained by the Sales Agent and the Sales Agent may distribute the Prospectus electronically.
| S-14 |
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS
The following discussion summarizes the anticipated U.S. federal income tax considerations generally applicable to a U.S. Holder (as defined below) of the ownership and disposition of the Common Shares. This discussion addresses only holders who acquire pursuant to this offering and hold Common Shares as “capital assets” (generally, assets held for investment purposes).
This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative pronouncements and rulings of the United States Internal Revenue Service (the “IRS”), and the US Treaty, all as in effect on the date hereof, and all of which may be repealed, revoked or modified (possibly with retroactive effect) so as to result in U.S. federal income tax consequences different from those discussed below. This summary does not describe any state, local or foreign tax law considerations, or any aspect of U.S. federal tax law other than income taxation (e.g., alternative minimum tax, the 3.8% Medicare tax on certain net investment income, or estate or gift tax). Except as specifically set forth below, this summary does not discuss applicable income tax reporting requirements. U.S. Holders should consult their own tax advisers regarding such matters.
No ruling from the IRS has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the ownership or disposition of the Common Shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the discussion set forth in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and U.S. courts could disagree with one or more of the positions taken in this summary.
This summary does not purport to address all U.S. federal income tax consequences that may be relevant to a U.S. Holder as a result of the ownership and disposition of the Common Shares, nor does it take into account the specific circumstances of any particular holder, some of which may be subject to special tax rules, including, but not limited to, tax exempt organizations, partnerships and other pass-through entities and their owners, banks or other financial institutions, insurance companies, regulated investment companies, real estate investment trusts, qualified retirement plans, individual retirement accounts or other tax-deferred accounts, persons that hold the Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale or other similar arrangements, persons that acquired the Common Shares in connection with the exercise of employee share options or otherwise as compensation for services, persons that are resident or ordinarily resident in or have permanent establishment in a jurisdiction outside the United States, brokers or dealers in securities or foreign currencies, traders in securities electing to mark to market, persons who hold the Common Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes), persons who are U.S. expatriates or former long-term residents of the U.S. or are subject to taxing jurisdictions other than, or in addition to, the United States, persons who are subject to special tax accounting rules U.S. persons whose functional currency (as defined in the Code) is not the U.S. dollar, U.S. expatriates, or persons that own directly, indirectly or by application of the constructive ownership rules of the Code 10% or more of the Company’s shares by voting power or by value.
As used herein, a “U.S. Holder” is a beneficial owner of the Common Shares who, for U.S. federal income tax purposes, is: (1) an individual who is a citizen or resident of the United States; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (3) an estate whose income is subject to U.S. federal income tax regardless of its source, or (4) a trust (A) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) that has validly elected to be treated as a U.S. person for U.S. federal income tax purposes.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds the Common Shares, the tax treatment of a partner in or owner of the partnership or other entity or arrangement will generally depend upon the status of the partner or owner and the activities of the entity. Prospective investors who are partners in partnerships (or other entities or arrangements treated as partnerships for U.S. federal income tax purposes) that are beneficial owners of the Common Shares are urged to consult their own tax advisors regarding the tax consequences of the ownership and disposition of the Common Shares.
| S-15 |
This summary is of a general nature only and is not intended to be tax advice to any prospective investor, and no representation with respect to the tax consequences to any particular investor is made. Prospective investors are urged to consult their own tax advisors regarding the application of federal income tax laws to their particular circumstances, as well as any state, provincial, local, non-U.S. and other tax consequences of investing in the Common Shares and acquiring, holding or disposing of the Common Shares.
Passive Foreign Investment Company Rules
A foreign corporation will generally be considered a passive foreign investment company (“PFIC”) for any taxable year in which (1) 75% or more of its gross income is “passive income” under the PFIC rules or (2) 50% or more of the average quarterly value of its assets produce (or are held for the production of) “passive income.” In general, “passive income” includes dividends, interest, certain rents and royalties and certain gains, including the excess of gains over losses from certain commodities transactions. Net gains from commodities transactions are generally treated as passive income unless such gains are active business gains from the sale of commodities and “substantially all” of the corporation’s commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed in a trade or business. Moreover, for purposes of determining if the foreign corporation is a PFIC, if the foreign corporation owns, directly or indirectly, at least 25%, by value, of the shares of another corporation, it will be treated as if it directly holds its proportionate share of the assets and receives directly its proportionate share of the income of such other corporation. If a corporation is treated as a PFIC with respect to a U.S. Holder for any taxable year, the corporation will continue to be treated as a PFIC with respect to that U.S. Holder in all succeeding taxable years, regardless of whether the corporation continues to meet the PFIC requirements in such years, unless certain elections are made.
The determination as to whether a foreign corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and the determination will depend on the composition of the income, expenses and assets of the foreign corporation from time to time and the nature of the activities performed by its officers and employees. The Company may have been classified as a PFIC for its taxable year ending December 31, 2024. However, it has not made a conclusive determination as the Company’s PFIC status may depend on the U.S. tax classification of certain grants that the Company has received or accrued as receivable during 2024. For similar reasons, the Company is uncertain as to whether it will be classified as a PFIC for the current taxable year. The Company’s status as a PFIC in any taxable year, however, requires a factual determination that can only be made annually after the close of each taxable year. Therefore, there can be no assurance as to whether the Company will be classified as a PFIC for the current taxable year or for any future taxable year.
If the Company is classified as a PFIC, a U.S. Holder that does not make any of the elections described below would be required to report any gain on the disposition of the Common Shares as ordinary income, rather than as capital gain, and to compute the tax liability on the gain and any “Excess Distribution” (as defined below) received in respect of Common Shares as if such items had been earned ratably over each day in the U.S. Holder’s holding period (or a portion thereof) for Common Shares. The amounts allocated to the taxable year during which the gain is realized or distribution is made, and to any taxable years in such U.S. Holder’s holding period that are before the first taxable year in which the Company is treated as a PFIC with respect to the U.S. Holder, would be included in the U.S. Holder’s gross income as ordinary income for the taxable year of the gain or distribution. The amount allocated to each other taxable year would be taxed as ordinary income in the taxable year during which the gain is realized or distribution is made at the highest tax rate in effect for the U.S. Holder in that other taxable year and would be subject to an interest charge as if the income tax liabilities had been due with respect to each such prior year. For purposes of these rules, gifts, exchanges pursuant to corporate reorganizations and use of Common Shares as security for a loan may be treated as a taxable disposition of Common Shares. An “Excess Distribution” is the amount by which distributions during a taxable year in respect of a Common Share exceed 125% of the average amount of distributions in respect thereof during the three preceding taxable years (or, if shorter, the U.S. Holder’s holding period for Common Shares).
Certain additional adverse tax rules will apply to a U.S. Holder for any taxable year in which the Company is treated as a PFIC with respect to such U.S. Holder and any of the Company’s subsidiaries is also treated as a PFIC (a “Subsidiary PFIC”). In such a case, the U.S. Holder will generally be deemed to own its proportionate interest (by value) in any Subsidiary PFIC and be subject to the PFIC rules described above with respect to the Subsidiary PFIC regardless of such U.S. Holder’s percentage ownership in us.
| S-16 |
The adverse tax consequences described above may be mitigated if a U.S. Holder makes a timely “qualified electing fund” election (“QEF Election”), with respect to its interest in the PFIC. Consequently, if the Company is classified as a PFIC, it may be advantageous for a U.S. Holder to elect to treat us as a “qualified electing fund” with respect to such U.S. Holder in the first year in which it holds Common Shares. If a U.S. Holder makes a timely QEF Election with respect to the Company, provided that the necessary information is provided by the Company, the electing U.S. Holder would be required in each taxable year that the Company is considered a PFIC to include in gross income (i) as ordinary income, the U.S. Holder’s pro rata share of the ordinary earnings of the Company and (ii) as capital gain, the U.S. Holder’s pro rata share of the net capital gain (if any) of the Company, whether or not the ordinary earnings or net capital gain are distributed. An electing U.S. Holder’s basis in Common Shares will be increased to reflect the amount of any taxed but undistributed income. Distributions of income that had previously been taxed will result in a corresponding reduction of basis in Common Shares and will not be taxed again as distributions to the U.S. Holder.
A QEF Election made with respect to the Company will not apply to any Subsidiary PFIC; a QEF Election must be made separately for each Subsidiary PFIC (in which case the treatment described above would apply to such Subsidiary PFIC). If a U.S. Holder makes a timely QEF Election with respect to a Subsidiary PFIC, it would be required in each taxable year to include in gross income its pro rata share of the ordinary earnings and net capital gain of such Subsidiary PFIC, but may not receive a distribution of such income. Such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge (which would not be deductible for U.S. federal income tax purposes if the U.S. Holder were an individual).
The U.S. federal income tax on any gain from the disposition of Common Shares or from the receipt of Excess Distributions may be greater than the tax if a timely QEF Election is made. For any taxable year in which the Company determines that it was likely a PFIC, the Company intends to make available to U.S. Holders, upon request and in accordance with applicable procedures, a “PFIC Annual Information Statement” for such taxable year with respect to the Company and, if applicable, any Subsidiary PFIC in which it owns more than 50% of such subsidiary’s total aggregate voting power. The “PFIC Annual Information Statement” may be used by U.S. Holders for purposes of complying with the reporting requirements applicable to a QEF election with respect to the Company and, if applicable, any Subsidiary PFIC.
Alternatively, if the Company was to be classified as a PFIC, a U.S. Holder could also avoid certain of the rules described above by making a mark-to-market election (a “Mark-to-Market Election”), instead of a QEF Election, provided Common Shares are treated as regularly traded on a qualified exchange or other market within the meaning of the applicable U.S. Treasury Regulations. However, a U.S. Holder will not be permitted to make a Mark-to-Market Election with respect to a Subsidiary PFIC. U.S. Holders should consult their own tax advisers regarding the potential availability and consequences of a Mark-to-Market Election, as well as the advisability of making a protective QEF Election in case the Company is classified as a PFIC in any taxable year.
During any taxable year in which the Company or any Subsidiary PFIC is treated as a PFIC with respect to a U.S. Holder, that U.S. Holder generally must file IRS Form 8621. U.S. Holders should consult their own tax advisers concerning annual filing requirements.
Distributions on Common Shares
In general, subject to the PFIC rules discussed above, the gross amount of any distribution received by a U.S. Holder with respect to the Common Shares (including amounts withheld to pay Canadian withholding taxes) will be included in the gross income of the U.S. Holder as a dividend to the extent attributable to the Company’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Because the Company does not expect to maintain calculations of the Company’s earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should expect that a distribution will generally be treated as a dividend for U.S. federal income tax purposes.
The amount of any distributions paid in Canadian dollars will equal the U.S. dollar value of such distributions determined by reference to the exchange rate on the day they are received by the U.S. Holder (with the value of such distributions computed before any reduction for any Canadian withholding tax), regardless of whether the payment is in fact converted into U.S. dollars at that time. A U.S. Holder will have a tax basis in Canadian dollars equal to their U.S. dollar value on the date of receipt. If the Canadian dollars received are converted into U.S. dollars on the date of receipt, the U.S. Holder will generally not be required to recognize foreign currency gain or loss in respect of the distribution. If the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder may recognize foreign currency gain or loss on a subsequent conversion or other disposition of the Canadian dollars. Such gain or loss generally will be treated as U.S. source ordinary income or loss.
| S-17 |
Subject to applicable limitations and provided the Company is eligible for the benefits of the US Treaty or the Common Shares are readily tradable on a United States securities market, dividends paid by the Company to non-corporate US Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Company is not classified as a PFIC in the tax year of distribution or in the preceding tax year. Any amount of distributions treated as dividends generally will not be eligible for the dividends received deduction available to certain corporate U.S. Holders in respect of dividends received from U.S. corporations.
Distributions to a U.S. Holder with respect to the Common Shares may be subject to Canadian non-resident withholding tax. Any Canadian withholding tax paid will not reduce the amount treated as received by the U.S. Holder for U.S. federal income tax purposes. However, subject to limitations imposed by U.S. law, a U.S. Holder may be eligible to receive a foreign tax credit for the Canadian withholding tax. The rules governing the foreign tax credit are complex. U.S. Holders are urged to consult their own tax advisors regarding the availability of the foreign tax credit under their particular circumstances, including the impact of, and any exception available to, the special income sourcing rule described in this paragraph. U.S. Holders who do not elect to claim a foreign tax credit may be able to claim an ordinary income tax deduction for Canadian income tax withheld, but only for a taxable year in which the U.S. Holder elects to do so with respect to all non-U.S. income taxes paid or accrued in such taxable year.
Sale, Exchange or Other Taxable Disposition of Common Shares
Subject to the PFIC rules discussed above, upon a sale, exchange or other taxable disposition of the Common Shares, a U.S. Holder will generally recognize a capital gain or loss equal to the difference between the amount realized on such sale, exchange or other taxable disposition and the adjusted tax basis of such Common Shares. If any foreign tax is imposed on the sale, exchange or other disposition of the Common Shares, a U.S. Holder’s amount realized will include the gross amount of the proceeds of the disposition before deduction of the tax. A U.S. Holder’s initial tax basis in the Common Shares generally will equal the cost of such Common Shares. Such gain or loss will be a long-term capital gain or loss if the Common Shares have been held for more than one year and will be short-term gain or loss if the holding period is equal to or less than one year. Such gain or loss generally will be considered U.S. source gain or loss for U.S. foreign tax credit purposes. Long-term capital gains of certain non-corporate U.S. Holders are eligible for reduced rates of taxation. For both corporate and non-corporate U.S. Holders, limitations apply to the deductibility of capital losses.
Information Reporting and Backup Withholding
Under U.S. federal income tax laws certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person, and any interest in a non-U.S. entity. U. S. Holders may be subject to these reporting requirements unless the Common Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult their own tax advisors regarding the requirements of filing information returns, including the requirement to file IRS Form 8938. In addition, U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, and, if applicable, filing obligations relating to the PFIC rules, including possible reporting on an IRS Form 8621
| S-18 |
Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of the Common Shares generally may be subject to information reporting and backup withholding tax, currently at the rate of 24%, if a U.S. Holder (a) fails to furnish its correct U.S. taxpayer identification number (generally on Form W 9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that it has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons, such as U.S. Holders that are corporations, generally are excluded from these information reporting and backup withholding tax rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. The information reporting and backup withholding rules may apply even if, under the Canada-U.S. Tax Convention, payments may be exempt from the dividend withholding tax rules or otherwise eligible for a reduced withholding rate. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.
The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE COMMON SHARES. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN COMMON SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
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CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR UNITED STATES RESIDENTS
The following is, as of the date hereof, a summary of the principal Canadian federal income tax considerations generally applicable to a person who acquires Common Shares as beneficial owner and who, for the purposes of the Income Tax Act (Canada) (the “Tax Act”), and at all relevant times: (i) is not, and is not deemed to be, resident in Canada; (ii) does not use or hold and is not and will not be deemed to use or hold the Common Shares in connection with carrying on a business in Canada; (iii) deals at arm’s length with the Company; (iv) is not affiliated with the Company; and (v) acquires and holds the Common Shares as capital property (a “Holder”). This summary does not apply to a Holder that carries on, or is deemed to carry on, an insurance business in Canada and elsewhere or that is an “authorized foreign bank” (as defined in the Tax Act). Such Holders should consult their own tax advisors.
Common Shares will generally be considered to be capital property to a Holder unless the Holder holds or uses the Common Shares or is deemed to hold or use the Common Shares in the course of carrying on a business of trading or dealing in securities or has acquired them or is deemed to have acquired them in a transaction or transactions considered to be an adventure or concern in the nature of trade.
This summary is not applicable to a Holder: (i) that is a “financial institution” for purposes of the “mark to market property” rules; (ii) that is a “specified financial institution”; (iii) that has made a “functional currency” reporting election; (iv) an interest in which is a “tax shelter investment”; (v) that has entered into or will enter into a “derivative forward agreement” or “synthetic disposition arrangement” in respect of Common Shares; or (vi) that receives dividends on the Common Shares under or as part of a “dividend rental arrangement”, all as defined in the Tax Act. Such Holders should consult their own tax advisors with respect to an investment in Common Shares.
This summary is based upon: (i) the current provisions of the Tax Act and the regulations thereunder (the “Regulations”) in force as of the date hereof; (ii) all specific proposals (“Proposed Amendments”) to amend the Tax Act or the Regulations that have been publicly announced by, or on behalf of, the Minister of Finance (Canada) prior to the date hereof; and (iii) our understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (“CRA”). No assurance can be given that the Proposed Amendments will be enacted or otherwise implemented in their current form, if at all. If the Proposed Amendments are not enacted or otherwise implemented as presently proposed, the tax consequences may not be as described below in all cases. Other than the Proposed Amendments, this summary does not take into account or anticipate any changes in law, the CRA’s administrative policies or assessing practices, whether by legislative, regulatory, administrative, governmental or judicial decision or action, nor does it take into account any provincial, territorial or foreign income tax legislation or considerations, which considerations may differ significantly from the Canadian federal income tax considerations discussed in this summary.
This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder. Accordingly, Holders should consult their own tax advisors with respect to their particular circumstances.
Holders Not Resident in Canada
Dividends
Dividends paid or credited or deemed under the Tax Act to be paid or credited by the Company to a Holder on the Common Shares will generally be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, unless such rate is reduced by the terms of an applicable income tax treaty or convention. Under the Canada-United States Tax Convention (1980), as amended (the “US Treaty”), the rate of withholding tax on dividends paid or credited to a Holder who is resident in the U.S. for purposes of the US Treaty, is the beneficial owner of the dividends, and is fully entitled to benefits under the US Treaty (a “U.S. Holder”) is generally limited to 15% of the gross amount of the dividend. The rate of withholding tax is further reduced to 5% if the beneficial owner of such dividend is a U.S. Holder that is a company that owns, directly or indirectly, at least 10% of the voting stock of the Company. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting of which Canada is a signatory, affects many of Canada’s bilateral tax treaties (but not the US Treaty), including the ability to claim benefits thereunder. Holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.
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Dispositions of Common Shares
A Holder will not be subject to tax under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of a Common Share, nor will capital losses arising therefrom be recognized under the Tax Act, unless the Common Share is, or is deemed to be, “taxable Canadian property” of the Holder for the purposes of the Tax Act and the Holder is not entitled to relief under an applicable income tax treaty or convention between Canada and the country in which the Holder is resident.
Provided that the Common Shares are listed on a “designated stock exchange” for the purposes of the Tax Act (which currently includes the TSXV), at the time of disposition, the Common Shares generally will not constitute taxable Canadian property of a Holder at that time, unless at any time during the 60 month period immediately preceding the disposition, (i) 25% or more of the issued shares of any class or series of the capital stock of the Company were owned by, or belonged to, any combination of (a) the Holder, (b) persons with whom the Holder did not deal at arm’s length, and (c) partnerships in which the Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; and (ii) at such time, more than 50% of the fair market value of such shares was derived, directly or indirectly, from any combination of real or immovable property situated in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in the Tax Act), or options in respect of, interests in, or for civil law rights in such properties, whether or not such property exists. Notwithstanding the foregoing, a Common Share may also be deemed to be taxable Canadian property to a Holder for purposes of the Tax Act in certain other circumstances. Holders should consult their own tax advisors as to whether their Common Shares constitute “taxable Canadian property” in their own particular circumstances.
| S-21 |
EXPENSES
We estimate that the total expenses of this offering payable by us, excluding the Sales Agent’s commissions will be approximately US$312,168 as follows:
| SEC registration fee | US | $ | 843 | (1) | |
| FINRA filing fee | US | $ | 1,325 | (1) | |
| Transfer agent fees and expenses | US | $ | 50,000 | ||
| Printer fees and expenses | US | $ | 10,000 | ||
| Legal fees and expenses | US | $ | 150,000 | ||
| Accounting fees and expenses | US | $ | 80,000 | ||
| Miscellaneous | US | $ | 20,000 | ||
| Total | US | $ | 312,168 |
| (1) | Represents 27.5% of the initial SEC registration fee of US$3,062 and FINRA filing fee of US$1,325 based on the US$5,500,000 offering of Common Shares hereby and a shelf offering registration statement of $20,000,000. |
LEGAL MATTERS
Certain legal matters in connection with the securities offered hereby will be passed upon on behalf of the Company by Troutman Pepper Locke LLP, with respect to U.S. legal matters and by Cassels Brock & Blackwell LLP, with respect to Canadian legal matters. The Sales Agent is being represented in connection with this offering by Ellenoff Grossman & Schole LLP with respect to U.S. legal matters.
EXPERTS
Information relating to the Iron Creek Project in this Prospectus and the documents incorporated by reference herein and therein has been derived from the 2024 Technical Report Summary prepared by Martin Perron, P.Eng. of InnovExplo Inc., Marc R. Beauvais, P.Eng. of InnovExplo Inc., Eric Kinnan, P.Geo. of InnoExplo Inc., and Pierre Roy, P.Eng of Soutex Inc, and this information has been included in reliance on such persons’ expertise. Messrs. Perron, Beauvais, Kinnan and Roy are each a qualified persons and are independent of the Company, as such terms are defined in Regulation S-K subpart 1300.
Our auditors are MNP LLP (“MNP”), Chartered Professional Accountants and Licensed Public Accountants, located in Toronto, Ontario. MNP has advised us that they are independent of the Company in compliance with PCAOB Rule 3520 and within the meaning of the federal securities laws administered by the SEC.
The financial statements of Electra as at and for the year ended December 31, 2024 and 2023, and for each of the two years in the period ended December 31, 2024 and the effects of the adjustments to retrospectively apply the change in segment composition as described in Note 22 and the effect of the share consolidation as described in Note 17 to the 2022 consolidated financial statements, included in this Prospectus, have been audited by MNP. Such financial statements are included in this Prospectus in reliance upon the report of such firm given their authority as experts in accounting and auditing.
The financial statements, which comprise the consolidated statements of income (loss) and other comprehensive income (loss), cash flows and shareholders’ equity of Electra before the effects of the adjustments to retrospectively apply the change in segment composition as described in Note 22 and the effects of the share consolidation as described in Note 17 for the year ended December 31, 2022, and the related notes, included in this Prospectus, have been audited by KPMG LLP (“KPMG”), our predecessor independent registered public accounting firm. Such financial statements are included in this Base Prospectus in reliance upon the report of such firm given their authority as experts in accounting and auditing.
| S-22 |
ENFORCEMENT OF CIVIL LIABILITIES
Electra is a corporation governed by the CBCA, and a substantial portion of our assets are outside of the United States. Most of our directors and senior management and independent auditors are resident outside the United States, and all or a substantial portion of their respective assets may be located outside the United States. As a result, it may be difficult for U.S. investors to effect service of process within the United States upon these persons. It may also be difficult for U.S. investors to enforce within the United States judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts outside the United States would recognize or enforce judgments of U.S. courts obtained against us or our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Therefore, it may be difficult to enforce U.S. judgments against us, our directors and officers and independent auditors.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference certain information that we file with them, which means that we can disclose important information to you by referring you to those documents. Information that is incorporated by reference is an important part of this Prospectus. We incorporate by reference the documents listed below, which were filed with the SEC:
| · | our Annual Report on Form 20-F for the fiscal year ended December 31, 2024 filed with the SEC on April 24, 2025, as amended by Amendment No. 1 filed with the SEC on May 1, 2025; |
| · | Exhibit 99.2 to our Report on Form 6-K filed with the SEC on March 6, 2025; |
| · | our Report on Form 6-K filed with the SEC on March 31, 2025; |
| · | Exhibit 99.2 to our Report on Form 6-K filed with the SEC on April 14, 2025; |
| · | our Report on Form 6-K filed with the SEC on May 13, 2025; |
| · | our Report on Form 6-K filed with the SEC on May 20, 2025; and |
| · | the description of Common Shares contained in our registration statement on Form 40-F filed on April 14, 2022, pursuant to Section 12 of the Exchange Act, together with all amendments and reports filed for the purpose of updating that description. |
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, and any document of the type referred to in the preceding paragraph, subsequent to the date of this Prospectus Supplement and prior to the termination of the offering of the securities offered by this Prospectus are incorporated by reference into this Prospectus and form part of this Prospectus from the date of filing or furnishing of these documents. If a Form 6-K has attached as an exhibit to such Form 6-K interim financial statements, interim management discussion and analysis, a material change report, and/or a management information circular, such exhibit shall be deemed to be incorporated by reference herein. We may incorporate by reference into this Prospectus Supplement any other Form 6-K (or Exhibit thereto) that is submitted to the SEC after the date of the filing of the registration statement of which this Prospectus forms a part and before the date of termination of this offering. Any such other Form 6-K (or Exhibit thereto) that we intend to so incorporate shall state in such form that it is being incorporated by reference into this Prospectus. The documents incorporated or deemed to be incorporated herein by reference contain meaningful and material information relating to us, and the readers should review all information contained in this Prospectus and the documents incorporated or deemed to be incorporated herein and therein by reference.
Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus Supplement, to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not constitute a part of this Prospectus, except as so modified or superseded. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes.
| S-23 |
You may request a copy of any and all of the information that has been incorporated by reference in this Prospectus, at no cost, upon written or oral request made to Electra Battery Materials Corporation, 133 Richmond Street W, Suite 602, Toronto, Ontario, M5H 2L3, Canada, Telephone: (416) 900-3891; Attention: Heather Smiles, Vice President, Investor Relations.
We file reports, including annual reports on Form 40-F or Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. You can read our SEC filings, including the registration statement of which this Prospectus forms a part, over the internet at the SEC’s website at www.sec.gov and at our website at https://electrabmc.com.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities described in this Prospectus. This Prospectus, which constitutes a part of that registration statement, does not contain all of the information set forth in that registration statement and its exhibits. For further information with respect to us and our securities, you should consult the registration statement and its exhibits.
We are required to file with the Canadian securities commissions annual and quarterly reports, material change reports and other information. In addition, we are subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, we also must file reports with, and furnish other information to, the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as United States companies. However, we file with the SEC an annual report on Form 40-F or Form 20-F, as applicable, containing financial statements audited by an independent registered public accounting firm, and we submit to the SEC, on Form 6-K, unaudited quarterly financial information.
The SEC maintains an internet site (www.sec.gov) that makes available reports and other information that we file or furnish electronically with it.
| S-24 |
Electra Battery Materials Corporation
Up to US$5,500,000
Common Shares
PROSPECTUS SUPPLEMENT
H.C. Wainwright & Co.
, 2025
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Indemnification of Directors and Officers
Under the Canada Business Corporations Act (the “CBCA”), we may indemnify our current or former directors or officers or another individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity. The CBCA also provides that we may advance moneys to a director, officer or other individual for costs, charges and expenses reasonably incurred in connection with such a proceeding; provided that such individual shall repay the moneys if the individual does not fulfill the conditions described below.
However, indemnification is prohibited under the CBCA unless the individual:
| · | acted honestly and in good faith with a view to our best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at our request; and |
| · | in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful. |
Our by-laws require us to indemnify to the fullest extent permitted by the CBCA each of our current or former directors or officers and each individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including, without limitation, an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity.
Our by-laws authorize us to purchase and maintain insurance for the benefit of each of our current or former directors or officers and each person who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity provided the individual acted in that capacity at our request.
Insofar as indemnification for liabilities arising under the U.S. Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the U.S. Securities Act of 1933, as amended, and is therefore unenforceable.
| II-1 |
EXHIBITS
The following exhibits have been filed as part of this Registration Statement.
| * | To be filed by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, including any Form 6-K, and incorporated herein by reference if necessary or required by the transaction. |
| II-2 |
UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
Provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933 need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933 or Rule 3-19 of Regulation S-X if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
| II-3 |
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| II-4 |
| (c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
| II-5 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Country of Canada, on June 26, 2025.
| ELECTRA BATTERY MATERIALS CORPORATION | ||
| By: | /s/ Trent Mell | |
| Name: | Trent Mell | |
| Title: | President, Chief Executive Officer and Director | |
Each person whose signature appears below constitutes and appoints Trent Mell and Marty Rendall, or either of them, his or her true and lawful attorneys-in-fact and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to sign any and all additional registration statements relating to the same offering of securities of the Registration Statement that are filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents and in connection therewith, with the U.S. Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said attorneys-in-fact and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall constitute one instrument.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated, on June 26, 2025.
|
/s/ Trent Mell Trent Mell |
President, Chief Executive Officer and Director (Principal Executive Officer) |
|
/s/ Marty Rendall Marty Rendall |
Chief Financial Officer (Principal Financial and Accounting Officer) |
|
/s/ John Pollesel John Pollesel |
Director |
|
/s/ Greenhouse Alden Greenhouse |
Director |
|
C.L. “Butch” Otter |
Director |
|
/s/ Susan Uthayakumar Susan Uthayakumar |
Director |
| II-6 |
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, as amended, the undersigned has signed this Registration Statement, in the capacity of the duly authorized representative of Electra Battery Materials Corporation in the United States, on June 26, 2025.
| PUGLISI & ASSOCIATES | ||
| By: | /s/ Donald J. Puglisi | |
| Name: | Donald J. Puglisi | |
| Title: | Managing Director | |
Exhibit 1.2
AT THE MARKET OFFERING AGREEMENT
| June 26, 2025 |
H.C. Wainwright & Co., LLC
430 Park Avenue
New York, New York 10022
Ladies and Gentlemen:
Electra Battery Materials Corporation, a company organized under the laws of Canada (the “Company”), confirms its agreement (this “Agreement”) with H.C. Wainwright & Co., LLC (the “Manager”) as follows:
1. Definitions. The terms that follow, when used in this Agreement and any Terms Agreement, shall have the meanings indicated.
“Accountants” shall have the meaning ascribed to such term in Section 4(m).
“Action” shall have the meaning ascribed to such term in Section 3(p).
“Affiliate” shall have the meaning ascribed to such term in Section 3(o).
“Applicable Time” shall mean, with respect to any Shares, the time of sale of such Shares pursuant to this Agreement or any relevant Terms Agreement.
“Base Prospectus” shall mean the base prospectus contained in the Registration Statement at the Effective Time, together with the documents incorporated by reference therein, as may be amended or supplemented from time to time.
“BHCA” shall have the meaning ascribed to such term in Section 3(pp).
“Board” shall have the meaning ascribed to such term in Section 2(b)(iii).
“Broker Fee” shall have the meaning ascribed to such term in Section 2(b)(v).
“Business Day” shall mean any day other than Saturday, Sunday or other day on which commercial banks in The City of New York or the City of Toronto are authorized or required by law to remain closed; provided, however, that, for purposes of clarity, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York and the City of Toronto generally are open for use by customers on such day.
“Commission” shall mean the United States Securities and Exchange Commission.
“Common Shares” means the common shares of the Company, no par value per share.
“Common Share Equivalents” shall have the meaning ascribed to such term in Section 3(g).
“Company Counsel” shall have the meaning ascribed to such term in Section 4(l).
“Distribution” shall have the meaning ascribed to such term in Section 2(b)(ix).
“DTC” shall have the meaning ascribed to such term in Section 2(b)(vii).
“EDGAR” means the Electronic Data Gathering Analysis and Retrieval System of the Commission.
“Effective Date” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective.
“Effective Time” shall mean the first date and time that the Registration Statement becomes effective.
“Environmental Laws” shall have the meaning ascribed to such term in Section 3(s).
“Evaluation Date” shall have the meaning ascribed to such term in Section 3(y).
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.
“Federal Reserve” shall have the meaning ascribed to such term in Section 3(pp).
“FINRA” shall have the meaning ascribed to such term in Section 3(e).
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Hazardous Materials” shall have the meaning ascribed to such term in Section 3(s).
“IFRS” shall have the meaning ascribed to such term in Section 3(m).
“Incorporated Documents” shall mean the documents or portions thereof filed with or furnished to the Commission on or prior to the Effective Date that are incorporated by reference in the Registration Statement or the Prospectus and any documents or portions thereof filed with or furnished to the Commission after the Effective Date that are deemed to be incorporated by reference in the Registration Statement or the Prospectus.
“Indebtedness” shall have the meaning ascribed to such term in Section 3(ee).
“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3(v).
“IT Systems and Data” shall have the meaning ascribed to such term in Section 3(ll).
“Liens” shall have the meaning ascribed to such term in Section 3(a).
“Losses” shall have the meaning ascribed to such term in Section 7(d).
“Material Adverse Effect” shall have the meaning ascribed to such term in Section 3(b).
“Material Permits” shall have the meaning ascribed to such term in Section 3(t).
“Material Project” shall have the meaning ascribed to such term in Section 3(jj)(i).
“Maximum Amount” shall have the meaning ascribed to such term in Section 2.
“Money Laundering Laws” shall have the meaning ascribed to such term in Section 3(pp).
“Net Proceeds” shall have the meaning ascribed to such term in Section 2(b)(v).
“Person” shall have the meaning ascribed to such term in Section 3(e).
“Personal Data” shall have the meaning ascribed to such term in Section 3(mm).
“Placement” shall have the meaning ascribed to such term in Section 2(c).
“Policies” shall have the meaning ascribed to such term in Section 3(mm).
“Privacy Laws” shall have the meaning ascribed to such term in Section 3(mm).
“Proceeding” shall have the meaning ascribed to such term in Section 3(b).
“Prospectus” shall mean the Base Prospectus, as supplemented by the Prospectus Supplement included in the Registration Statement at the Effective Time and any subsequently filed Prospectus Supplement.
“Prospectus Supplement” shall mean the prospectus supplement relating to the Shares included in the Registration Statement at the Effective Time and any other prospectus supplement relating to the Shares prepared and filed pursuant to Rule 424(b) from time to time.
“Record Date” shall have the meaning ascribed to such term in Section 2(b)(ix).
“Registration Statement” shall mean the shelf registration statement on Form F-3 registering $____ of securities of the Company, including the Shares, to be filed on or about the Execution Time, including exhibits and financial statements filed with or incorporated by reference into such registration statement, the Prospectus Supplement relating to the Shares, and any prospectus supplement relating to the Shares that is subsequently filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective, shall also mean such registration statement as so amended.
“Reliance Letter” shall have the meaning ascribed to such term in Section 4(l).
“Representation Date” shall have the meaning ascribed to such term in Section 4(k).
“Required Approvals” shall have the meaning ascribed to such term in Section 3(e).
“Rule 158”, “Rule 164”, “Rule 172”, “Rule 173”, “Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B” and “Rule 433” refer to such rules under the Securities Act.
“Sales Notice” shall have the meaning ascribed to such term in Section 2(b)(i).
“Sanctions” shall have the meaning ascribed to such term in Section 3(nn).
“SEC Reports” shall have the meaning ascribed to such term in Section 3(m).
“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Settlement Date” shall have the meaning ascribed to such term in Section 2(b)(vii).
“Shares” shall have the meaning ascribed to such term in Section 2.
“Subsidiary” shall have the meaning ascribed to such term in Section 3(a).
“Technical Report Summary” shall have the meaning ascribed to such term in Section 3(jj)(v).
“Terms Agreement” shall have the meaning ascribed to such term in Section 2(a).
“Time of Delivery” shall have the meaning ascribed to such term in Section 2(c).
“Trading Day” means a day on which the Trading Market is open for trading.
“Trading Market” means the Nasdaq Capital Market.
“TSXV” means the TSX Venture Exchange.
2. Sale and Delivery of Shares. The Company proposes to issue and sell through or to the Manager, as sales agent and/or principal, from time to time during the term of this Agreement and on the terms set forth herein, up to the lesser of such number of Common Shares (the “Shares”) that does not exceed (a) the number or dollar amount of Common Shares registered on the Registration Statement and as reflected on the Prospectus Supplement, pursuant to which the offering is being made, (b) the number of authorized but unissued Common Shares (less the number of Common Shares issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized share capital), or (c) the number or dollar amount of Common Shares that would cause the Company or the offering of the Shares to not satisfy the eligibility and transaction requirements for use of Form F-3, including, if applicable, General Instruction I.B.5 of Registration Statement on Form F-3 (the lesser of (a), (b) and (c), the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 2 on the number and aggregate sales price of Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that the Manager shall have no obligation in connection with such compliance. Nothing in this Agreement shall be construed as requiring the Company to issue, deliver and sell the Shares pursuant to the Registration Statement. The Company and the Manager hereby agree and acknowledge that sales and solicitations of sales of Shares by the Manager as agent of the Company shall be made solely in the United States and not on or through the facilities of the TSXV or any other trading market in Canada.
(a) Appointment of Manager as Selling Agent; Terms Agreement. For purposes of selling the Shares through the Manager, the Company hereby appoints the Manager as exclusive agent of the Company for the purpose of selling the Shares of the Company pursuant to this Agreement and the Manager agrees to use its commercially reasonable efforts to sell the Shares on the terms and subject to the conditions stated herein. In using commercially reasonable efforts to sell Shares, as sales agent for the Company, the Manager will undertake such sales in a manner that is consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the Trading Market. The Company agrees that, whenever it determines to sell the Shares directly to the Manager as principal, it will enter into a separate agreement (each, a “Terms Agreement”) in substantially the form of Annex I hereto, relating to such sale in accordance with Section 2 of this Agreement.
(b) Agent Sales. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, following the effectiveness of the Registration Statement, the Company will issue and agrees to sell Shares from time to time through the Manager, acting as sales agent, and the Manager agrees to use its commercially reasonable efforts to sell, as sales agent for the Company, on the following terms:
(i) The Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Manager on any day that (A) is a Trading Day, (B) the Company has instructed the Manager by telephone (confirmed promptly by electronic mail) to make such sales (“Sales Notice”) and (C) the Company has satisfied its obligations under Section 6 of this Agreement. The Company will designate the maximum amount of the Shares to be sold by the Manager daily (subject to the limitations set forth in Section 2(d)) and the minimum price per Share at which such Shares may be sold. Subject to the terms and conditions hereof, the Manager shall use its commercially reasonable efforts to sell on a particular day all of the Shares designated for the sale by the Company on such day. The gross sales price of the Shares sold under this Section 2(b) shall be the market price for the Common Shares sold by the Manager under this Section 2(b) on the Trading Market at the time of sale of such Shares.
(ii) The Company acknowledges and agrees that (A) there can be no assurance that the Manager will be successful in selling the Shares, (B) the Manager will incur no liability or obligation to the Company or any other person or entity if it does not sell the Shares for any reason other than a failure by the Manager to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Shares as required under this Agreement, and (C) the Manager shall be under no obligation to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise specifically agreed by the Manager and the Company pursuant to a Terms Agreement.
(iii) The Company shall not authorize the issuance and sale of, and the Manager shall not be obligated to use its commercially reasonable efforts to sell, any Share at a price lower than the minimum price therefor designated from time to time by the Company’s Board of Directors (the “Board”), or a duly authorized committee thereof, or such duly authorized officers of the Company, and notified to the Manager in writing. The Company or the Manager may, upon notice to the other party hereto by telephone (confirmed promptly by electronic mail), suspend (or, subject to Section 8 herein, terminate) the offering of the Shares for any reason and at any time; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of such notice.
(iv) The Manager may sell Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act, including without limitation sales made directly on the Trading Market, on any other existing trading market for the Common Shares in the United States or to or through a market maker. The Manager may also sell Shares in privately negotiated transactions, subject to approval of such transactions by the TSXV, if applicable, provided that the Manager receives the Company’s prior written approval for any sales in privately negotiated transactions and if so provided in the “Plan of Distribution” section of the Prospectus Supplement or a supplement to the Prospectus Supplement or a new Prospectus Supplement disclosing the terms of such privately negotiated transaction.
(v) The compensation to the Manager for sales of the Shares under this Section 2(b) shall be a placement fee of up to 3.0% of the gross sales price of the Shares sold pursuant to this Section 2(b) (“Broker Fee”). The foregoing rate of compensation shall not apply when the Manager acts as principal, in which case the Company may sell Shares to the Manager as principal at a price agreed upon at the relevant Applicable Time pursuant to a Terms Agreement. The remaining proceeds, after deduction of the Broker Fee and deduction of any transaction fees imposed by any clearing firm, execution broker, or governmental or self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).
(vi) The Manager shall provide written confirmation (which may be by electronic mail) to the Company following the close of trading on the Trading Market each day in which the Shares are sold under this Section 2(b) setting forth the number of the Shares sold on such day, the aggregate gross sales proceeds and the Net Proceeds to the Company, and the compensation payable by the Company to the Manager with respect to such sales.
(vii) Unless otherwise agreed between the Company and the Manager, settlement for sales of the Shares will occur at 10:00 a.m. (New York City time) on the first (1st) Trading Day, or any other settlement cycle as may be in effect pursuant to Rule 15c6-1 under the Exchange Act from time to time) following the date on which such sales are made (each, a “Settlement Date”). On or before the Trading Day prior to each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Shares being sold by crediting the Manager’s or its designee’s account (provided that the Manager shall have given the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company (“DTC”) through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which Shares in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, the Manager will deliver the related Net Proceeds in same day funds to an account designated by the Company. The Company agrees that, if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver duly authorized Shares on a Settlement Date, in addition to and in no way limiting the rights and obligations set forth in Section 7 hereto, the Company will (i) hold the Manager harmless against any loss, claim, damage, or reasonable, documented expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company, and (ii) pay to the Manager any commission, discount or other compensation to which the Manager would otherwise have been entitled absent such default.
(viii) At each Applicable Time, Settlement Date, and Representation Date, the Company shall be deemed to have affirmed each representation and warranty contained in this Agreement as if such representation and warranty were made as of such date (except for any such representations and warranties that speak as of a specific date), modified as necessary to relate to the Registration Statement and the Prospectus as amended as of such date. Any obligation of the Manager to use its commercially reasonable efforts to sell the Shares on behalf of the Company shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified in Section 6 of this Agreement.
(ix) If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution” and the record date for the determination of shareholders entitled to receive the Distribution, the “Record Date”), the Company hereby covenants that, in connection with any sales of Shares pursuant to a Sales Notice on the Record Date, the Company shall issue and deliver such Shares to the Manager on the Record Date and the Record Date shall be the Settlement Date and the Company shall cover any additional documented costs of the Manager in connection with the delivery of Shares on the Record Date.
(c) Term Sales. If the Company wishes to sell the Shares pursuant to this Agreement in a manner other than as set forth in Section 2(b) of this Agreement (each, a “Placement”), the Company will notify the Manager of the proposed terms of such Placement. If the Manager, acting as principal, wishes to accept such proposed terms (which it may decline to do for any reason in its sole discretion) or, following discussions with the Company wishes to accept amended terms, the Manager and the Company will enter into a Terms Agreement setting forth the terms of such Placement. The terms set forth in a Terms Agreement will not be binding on the Company or the Manager unless and until the Company and the Manager have each executed such Terms Agreement accepting all of the terms of such Terms Agreement. In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement will control. A Terms Agreement may also specify certain provisions relating to the reoffering of such Shares by the Manager. The commitment of the Manager to purchase the Shares pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall specify the number of the Shares to be purchased by the Manager pursuant thereto, the price to be paid to the Company for such Shares, any provisions relating to rights of, and default by, underwriters acting together with the Manager in the reoffering of the Shares, and the time and date (each such time and date being referred to herein as a “Time of Delivery”) and place of delivery of and payment for such Shares. Such Terms Agreement shall also specify any requirements for opinions of counsel, accountants’ letters and officers’ certificates pursuant to Section 6 of this Agreement and any other information or documents required by the Manager.
(d) Maximum Number of Shares. Under no circumstances shall the Company cause or request the offer or sale of any Shares if, after giving effect to the sale of such Shares, the aggregate amount of Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Shares under this Agreement, the Maximum Amount, and (B) the amount authorized from time to time to be issued and sold under this Agreement by the Board, a duly authorized committee thereof or a duly authorized executive officer, and notified to the Manager in writing. Under no circumstances shall the Company cause or request the offer or sale of any Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Board, a duly authorized committee thereof or a duly authorized executive officer, and notified to the Manager in writing. Further, under no circumstances shall the Company cause or permit the aggregate offering amount of Shares sold pursuant to this Agreement to exceed the Maximum Amount.
(e) Regulation M Notice. Unless the exceptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are satisfied with respect to the Shares, the Company shall give the Manager at least one (1) Business Day’s prior notice of its intent to sell any Shares in order to allow the Manager time to comply with Regulation M.
(f) Representations and Covenants of the Manager. The Manager represents, warrants and covenants to the Company that it is duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Shares will be offered and sold, except such states in which the Manager is exempt from registration or such registration is not otherwise required. The Manager shall continue, for the term of this Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Shares will be offered and sold, except such states in which the Manager is exempt from registration or such registration is not otherwise required, during the term of this Agreement.
(g) Restrictions on Short Sales and Stabilization Activities. During the term of this Agreement, the Manager and its affiliates or subsidiaries shall not engage in (i) any short sale of any security of the Company for the account of the Manager, (ii) except to the extent permitted by Regulation M, any transactions that are intended to stabilize or maintain the market price of the Common Shares, or (iii) any sale of any security of the Company for the account of the Manager that the Manager does not own or any sale which is consummated by the delivery of a security of the Company borrowed by, or for the account of, the Manager. For the purposes of this Section 2(g), sales made by the Manager in connection with a Sales Notice will not be considered to be subject to the prohibitions set forth in this Section 2(g).
(h) Material Non-Public Information. Notwithstanding any other provision of this Agreement, during any period in which the Company is in possession of material non-public information, the Company and the Manager agree that (i) no sale of Shares will take place, (ii) the Company shall not request the sale of any Shares and (iii) the Manager shall not be obligated to sell or offer to sell any Shares.
3. Representations and Warranties. The Company represents and warrants to, and agrees with, the Manager at the Execution Time and the Effective Time and on each such time that the following representations and warranties are repeated or deemed to be made pursuant to this Agreement, as set forth below, except as set forth in the Registration Statement, the Prospectus or the Incorporated Documents.
(a) Subsidiaries. All of the direct and indirect material subsidiaries (individually, a “Subsidiary”) of the Company are set forth on Exhibit 8.1 to the Company’s most recent Annual Report on Form 20-F filed with the Commission. The Company owns, directly or indirectly, all of the share capital or other equity interests of each Subsidiary free and clear of any “Liens” (which for purposes of this Agreement shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction), and the issued and outstanding share capital or other equity interests of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing (or its foreign equivalent) under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or in default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, from that set forth in the Registration Statement, the Base Prospectus, any Prospectus Supplement, the Prospectus or the Incorporated Documents, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”), provided that a change in the market price or trading volume of the Common Shares alone shall not be deemed, in and of itself, to constitute a Material Adverse Effect, and no “Proceeding” (which for purposes of this Agreement shall mean any action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization and Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board or the Company’s shareholders in connection herewith other than in connection with the Required Approvals. This Agreement has been duly executed and delivered by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other “Person” (defined as an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind, including the Trading Market) in connection with the execution, delivery and performance by the Company of this Agreement, other than (i) the filings required by this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) the filing of notifications or application(s) to and approval by the Trading Market and the TSXV, as applicable, for the listing of the Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to be made under applicable state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) (collectively, the “Required Approvals”); provided that any filings required to be made with FINRA shall be the responsibility of the Manager.
(f) Issuance of Shares. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized share capital the maximum number of Common Shares issuable pursuant to this Agreement. On and after the Effective Time, the issuance by the Company of the Shares will have been registered under the Securities Act and all of the Shares will be freely transferable and tradable by the purchasers thereof without restriction (other than any restrictions arising solely from an act or omission of such a purchaser). On and after the Effective Time, the Shares will be issued pursuant to the Registration Statement and the issuance of the Shares will have been registered by the Company under the Securities Act. The “Plan of Distribution” section within the Registration Statement permits the issuance and sale of the Shares as contemplated by this Agreement. Upon receipt of the Shares against payment therefor in accordance with this Agreement, the purchasers of such Shares will have good and marketable title to such Shares and the Shares will be freely tradable on the Trading Market.
(g) Capitalization. The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any share capital since its most recently filed or furnished periodic report under the Exchange Act, other than pursuant to the exercise of employee equity awards under the Company’s equity incentive plans, the issuance of Common Shares pursuant to the conversion and/or exercise of securities exercisable, exchangeable or convertible into Common Shares (“Common Share Equivalents”) outstanding as of the date of the most recently filed or furnished periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares or share capital of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Common Shares or Common Share Equivalents or share capital of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any Subsidiary to issue Common Shares or other securities to any Person. There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any share appreciation rights or “phantom share” plans or agreements or any similar plan or agreement. All of the outstanding share capital of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Other than the Required Approvals, no further approval or authorization of any shareholder, the Board or others is required for the issuance and sale of the Shares. There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s share capital to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
(h) Registration Statement. The Company meets the requirements for use of Form F-3 under the Securities Act and has prepared and filed (or will prepare and file concurrently with the execution of this Agreement) with the Commission the Registration Statement, including the Base Prospectus and Prospectus Supplement, for registration under the Securities Act of the offering and sale of the Shares. At the Effective Time, such Registration Statement shall be effective and available for the offer and sale of the Shares. As filed, the Base Prospectus conformed in all material respects with the requirements of the Securities Act and the rules thereunder, and, except to the extent the Manager shall agree in writing to a modification, shall be in all substantive respects in the form furnished or made available to the Manager prior to the Execution Time or prior to any such time this representation is repeated or deemed to be made. The Registration Statement, at the Execution Time, each such time this representation is repeated or deemed to be made, and at all times during which a prospectus is required by the Securities Act to be delivered (whether physically or through compliance with Rule 172, 173 or any similar rule) in connection with any offer or sale of the Shares, meets the requirements set forth in Rule 415(a)(1)(x). The Company meets the transaction requirements as set forth in General Instruction I.B.1 of Form F-3 or, if applicable, as set forth in General Instruction I.B.5 of Form F-3 with respect to the aggregate market value of securities being sold pursuant to this offering and during the twelve (12) calendar months prior to this offering.
(i) Accuracy of Incorporated Documents. The Incorporated Documents, when they were filed with or furnished to the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules thereunder, and none of the Incorporated Documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made not misleading; and any further documents so filed or furnished and incorporated by reference in the Registration Statement, the Base Prospectus, the Prospectus Supplement or the Prospectus, when such documents are filed with or furnished to the Commission, will conform in all material respects to the requirements of the Exchange Act and the rules thereunder, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(j) Ineligible Issuer. The Company is an “ineligible issuer” as defined in Rule 405 under the Securities Act. The Company has not, directly or indirectly, prepared, used or referred to, and will not prepare, use or refer to, any Free Writing Prospectus in connection with the offer and sale of Shares under this Agreement.
(k) [RESERVED]
(l) Proceedings Related to Registration Statement. The Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Securities Act, and the Company is not the subject of a pending proceeding under Section 8A of the Securities Act in connection with the offering of the Shares. The Company has not received any notice that the Commission has issued or intends to issue a stop-order with respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so.
(m) SEC Reports. The Company has filed or furnished all reports, schedules, forms, statements and other documents required to be filed or furnished by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file or furnish such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed or furnished any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by IFRS, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(n) [RESERVED]
(o) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed or furnished prior to the date on which this representation is being made, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to IFRS or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any of its share capital, (v) the Company has not issued any equity securities to any officer, director or “Affiliate” (defined as any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act), except pursuant to existing Company equity incentive plans, and (vi) no executive officer of the Company or member of the Board has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
(p) Litigation. Except as set forth in the SEC Reports, there is no material action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”). None of the Actions set forth in the SEC Reports, (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the Shares or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or, to the knowledge of the Company, any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(q) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and, to the knowledge of the Company, the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not reasonably be expected to result in a Material Adverse Effect.
(s) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all applicable federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except in each of clause (i), (ii) and (iii), as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(t) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
(u) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with IFRS and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance, except where such noncompliance would not reasonably be expected to have a Material Adverse Effect.
(v) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports, except where the failure to so have would reasonably be expected to have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except as would not have or would not reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(w) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary for companies of similar size as the Company in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(x) Affiliate Transactions. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including equity award agreements under any equity incentive plan of the Company.
(y) Sarbanes Oxley Compliance. The Company and the Subsidiaries are in compliance, in all material respects, with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and the applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or furnishes under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(z) Certain Fees. Other than payments to be made to the Manager, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Manager shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.
(aa) No Other Sales Agency Agreement. The Company has not entered into any other sales agency agreements or other similar arrangements with any agent or any other representative in respect of at the market offerings of the Shares.
(bb) Investment Company. The Company is not, and immediately after receipt of payment for the Shares from the Manager pursuant to this Agreement, will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it or its Subsidiaries will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.
(cc) Listing and Maintenance Requirements. The Common Shares are listed on the Trading Market and the issuance of the Shares as contemplated by this Agreement does not contravene the rules and regulations of the Trading Market. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as disclosed in the SEC Reports and the Prospectus, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as disclosed in the SEC Reports and the Prospectus, the Company is in compliance with all such listing and maintenance requirements. The Common Shares are currently eligible for electronic transfer through DTC or another established clearing corporation and the Company is current in payment of the fees to DTC (or such other established clearing corporation) in connection with such electronic transfer.
(dd) Application of Takeover Protections. The Company and the Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its jurisdiction of incorporation that is or could become applicable to the Shares.
(ee) Solvency. Based on the consolidated financial condition of the Company as of the date hereof, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt) within one year from the date hereof. The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the date hereof. The SEC Reports and the Prospectus set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with IFRS. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(ff) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and neither the Company nor any Subsidiary know of any basis for any such claim.
(gg) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.
(hh) Accountants. The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) has expressed its opinion with respect to the financial statements included in the Company’s Annual Report on Form 20-F for the fiscal year ending December 31, 2024.
(ii) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Manager in connection with the Shares.
(jj) Mining.
| (i) | Material Projects. The Material Project is the only material mineral property in which the Company has an interest. For purposes herein, “Material Project” means the Iron Creek Project in Lemhi County, Idaho, U.S.A. |
| (ii) | Title to Property. (a) Each of the Company or its Subsidiaries, as applicable, is the absolute legal and beneficial owner of, and has good and marketable title to or a valid leasehold interest in the Material Project as described in the Incorporated Documents, free of all liens or encumbrances, other than those described in the Incorporated Documents; (b) no other material property rights are necessary for the conduct of the business of the Company or any Subsidiary, as currently conducted; neither the Company nor any Subsidiary knows of any material claim or the basis for any material claim that could reasonably be expected to adversely affect the right thereof to use, transfer or otherwise exploit such property rights, except as disclosed in the Incorporated Documents; and (c) neither the Company nor any Subsidiary has any current responsibility or obligation to pay any outstanding material commission, royalty, licence fee or similar payment to any Person with respect to the property rights thereof except pursuant to applicable legislation or has been disclosed in the Incorporated Documents. |
| (iii) | Mineral Rights. The Company and any applicable Subsidiaries hold freehold title, leases, licences, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which the Material Project is located, under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit the Company or any Subsidiary to explore or exploit (as the case may be) the minerals relating thereto. All property, leases or claims relating to the Material Project in which the Company or any Subsidiary has any interest or right have been validly applied for and, if issued, to the knowledge of the Company, issued in accordance with all applicable laws and are valid and subsisting. The Company and any applicable Subsidiaries have all necessary surface rights, access rights and other necessary rights and interests relating to the Material Project, granting the Company and any applicable Subsidiaries the right and ability to explore, exploit and mine the mineral resources as are appropriate in view of the rights and interest therein of the Company or any Subsidiary and the current state of exploration, with only such exceptions as do not materially interfere with the use made by the Company or any Subsidiary of the rights or interests so held and each of the proprietary interests or rights and each of the documents, agreements, leases, instruments and obligations relating thereto referred to above is currently in good standing in the name of the Company or any Subsidiary. |
| (iv) | Property Agreements. Any and all of the agreements and other documents and instruments pursuant to which the Company or any Subsidiary holds the Material Project (including any interest in, or right to earn an interest therein), are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with the terms thereof (subject to customary qualifications and exceptions), neither the Company nor any Subsidiary is in default of any of the material provisions of any such agreements, documents or instruments nor, to the knowledge of the Company, is any such default currently being alleged, and such properties and assets are in good standing in all material respects under the applicable statutes and regulations of the jurisdictions in which they are situated, all leases, licences and claims pursuant to which the Company or any Subsidiary derives the interests thereof in such property and assets are in good standing and, to the knowledge of the Company, there has been no material default under any such lease, licence or claim and all taxes required to be paid with respect to such properties and assets to the date hereof have been paid. The Material Project (or any interest therein, or right to earn an interest therein) is not subject to any right of first refusal or purchase or acquisition right which is not disclosed in the Incorporated Documents. |
| (v) | Technical Report. To the knowledge of the Company, (A) the Technical Report Summary (as defined herein) complies in all material respects with the requirements of Subpart 1300 of Regulation S-K at the time of filing thereof and (B) the Company made available to the authors of the Technical Reports, prior to the issuance thereof, for the purpose of preparing such report, all material information requested by them, and none of such information contained any material misrepresentation at the time such information was so provided. “Technical Report Summary” means the 2024 Iron Creek Technical Report Summary, with an effective date of January 27, 2023, and which was prepared and signed on April 30, 2024. |
(kk) Equity Incentive Plans. Each equity award granted by the Company under the Company’s equity incentive plan was granted (i) in accordance with the terms of the Company’s equity incentive plan and (ii) with an exercise price at least equal to the fair market value of the Common Shares on the date such equity award would be considered granted under IFRS and applicable law. No equity award granted under the Company’s equity incentive plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, equity awards prior to, or otherwise knowingly coordinate the grant of equity awards with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results.
(ll) Cybersecurity. (i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices for companies comparable in size to the Company.
(mm) Compliance with Data Privacy Laws. The Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance with their policies and procedures relating to all applicable data privacy and security laws and regulations (collectively, “Privacy Laws”) and the collection, storage, use, disclosure, handling and analysis of Personal Data (the “Policies”); (ii) the Company provides accurate notice of its applicable Policies to its customers, employees, third party vendors and representatives as required by Privacy Laws; and (iii) applicable Policies provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its subject matter, and do not contain any material omissions of the Company’s then-current privacy practices, as required by Privacy Laws. “Personal Data” means (i) a natural person’s name, street address, telephone number, email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; and (iii) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any identifiable data related to an identified person’s health or sexual orientation, and that is not permitted under Privacy Laws. (i) None of such disclosures made or contained in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery and performance of this Agreement will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the Subsidiaries, (i) has, to the knowledge of the Company, received written notice of any actual or potential material liability of the Company or the Subsidiaries under, or actual or potential material violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental or regulatory authority that imposed any obligation or liability under any Privacy Law.
(nn) Office of Foreign Assets Control. Neither the Company nor any of its Subsidiaries, nor to the knowledge of the Company, any of the directors, officers or employees of the Company or its Subsidiaries, is an individual or entity that is, or is owned or controlled by an individual or entity that is: (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor (ii) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds of the transactions contemplated hereby, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity: (i) to fund or facilitate any activities or business of or with any individual or entity or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions or (ii) in any other manner that will knowingly result in a violation of Sanctions by any individual or entity (including any individual or entity participating in the transactions contemplated hereby, whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries has knowingly engaged in, and is not now knowingly engaged in, any dealings or transactions with any individual or entity, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(oo) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended.
(pp) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”), and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(qq) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(rr) FINRA Member Shareholders. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or greater shareholder of the Company, except as set forth in the Registration Statement, the Base Prospectus, any Prospectus Supplement or the Prospectus.
4. Agreements. The Company agrees with the Manager that:
(a) Right to Review Amendments and Supplements to Registration Statement and Prospectus. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Securities Act in connection with the offering or the sale of Shares, the Company will not file any amendment to the Registration Statement or supplement (including any Prospectus Supplement) to the Base Prospectus unless the Company has furnished to the Manager a copy for its review prior to filing and will not file any such proposed amendment or supplement to which the Manager reasonably objects, unless and to the extent required by law (provided, however, that the Company will have no obligation to provide the Manager any advance copy of such filing or to provide the Manager with an opportunity to object to such filing if the filing does not name the Manager and does not relate to the transaction herein provided). The Company will cause any supplement to the Prospectus relating to the Shares filed after the Effective Time to be properly completed, in a form approved by the Manager, and will file such supplement with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed thereby and will provide evidence reasonably satisfactory to the Manager of such timely filing. The Company will promptly advise the Manager (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, during any period when the delivery of a prospectus (whether physically or through compliance with Rule 172, 173 or any similar rule) is required under the Securities Act in connection with the offering or sale of the Shares, any amendment to the Registration Statement shall have been filed or become effective (other than any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act), (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, or for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its commercially reasonable efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its commercially reasonable efforts to have such amendment or new registration statement declared effective as soon as practicable.
(b) Subsequent Events. If, at any time on or after an Applicable Time but prior to the related Settlement Date, any event occurs as a result of which the Registration Statement or Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, the Company (i) will notify promptly the Manager so that any use of the Registration Statement or Prospectus may cease until such are amended or supplemented; (ii) if, in the Company’s determination and sole discretion (after prompt consultation in good faith with the Manager), it is necessary to file an amendment or supplement to the Registration Statements or the Prospectus to comply with the Securities Act, will amend or supplement the Registration Statement or Prospectus to correct such statement or omission; and (iii) will supply any such amendment or supplement to the Manager in such quantities as the Manager may reasonably request.
(c) Notification of Subsequent Filings. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Securities Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Prospectus to comply with the Securities Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Prospectus, the Company promptly will (i) notify the Manager of any such event, (ii) subject to Section 4(a), prepare and file with the Commission an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its reasonable best efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in use of the Prospectus and (iv) supply any supplemented Prospectus to the Manager in such quantities as the Manager may reasonably request.
(d) Earnings Statements. As soon as practicable, the Company will make generally available to its security holders and to the Manager an earnings statement or statements of the Company and its Subsidiaries which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158. For the avoidance of doubt, the Company’s compliance with the reporting requirements of the Exchange Act shall be deemed to satisfy the requirements of this Section 4(d).
(e) Delivery of Registration Statement. Upon the request of the Manager, the Company will furnish to the Manager and counsel for the Manager, without charge, signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by the Manager or dealer may be required by the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule), as many copies of the Prospectus and any supplement thereto as the Manager may reasonably request; provided, however, that the Company shall not be required to furnish any documents (other than the Prospectus) to the Manager to the extent such document is available on EDGAR. The Company will pay the expenses of printing or other production of all documents relating to the offering as set forth in Section 5 hereof.
(f) Qualification of Shares. The Company will arrange, if necessary, for the qualification of the Shares for sale under the laws of such jurisdictions as the Manager may designate and will maintain such qualifications in effect so long as required for the distribution of the Shares; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits or to filing of ongoing reports in any jurisdiction where it is not now so subject.
(g) [RESERVED]
(h) Subsequent Equity Issuances. The Company shall not deliver any Sales Notice hereunder (and any Sales Notice previously delivered shall not apply during such two (2) Trading Days) for at least two (2) Trading Days prior to any date on which the Company or any Subsidiary offers, sells, issues, contracts to sell, contracts to issue or otherwise disposes of, directly or indirectly, any other Common Shares or any Common Share Equivalents (other than the Shares), subject to Manager’s right to waive this obligation; provided that, without compliance with the foregoing obligation, the Company may issue and sell Common Shares pursuant to any employee equity plan, share ownership plan or dividend reinvestment plan of the Company in effect from time to time and set forth in the SEC Reports and the Company may issue Common Shares issuable upon the conversion or exercise of Common Share Equivalents outstanding from time to time and set forth in the SEC Reports. Subject to this Section 4(h), nothing in this Agreement shall prevent the Company or any Subsidiary from offering, selling, issuing, contracting to sell, contracting to issue or otherwise disposing of, directly or indirectly, any other Common Shares or Common Share Equivalents.
(i) Market Manipulation. Until the termination of this Agreement, the Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation in violation of the Securities Act, Exchange Act or the rules and regulations thereunder of the price of any security of the Company to facilitate the sale or resale of the Shares or otherwise violate any provision of Regulation M under the Exchange Act.
(j) Notification of Incorrect Certificate. The Company will, at any time during the term of this Agreement, as supplemented from time to time, advise the Manager immediately after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect any opinion, certificate, letter and other document provided to the Manager pursuant to Section 6 herein.
(k) Certification of Accuracy of Disclosure. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than 30 Trading Days), and each time that (i) a new Registration Statement is filed and declared effective by the Commission, (ii) the Registration Statement or Prospectus shall be amended or supplemented, other than by means of Incorporated Documents, (iii) the Company files its Annual Report on Form 20-F or Form 40-F under the Exchange Act, (iv) the Company files or furnishes its unaudited interim financial statements and related management’s discussion and analysis on Form 6-K under the Exchange Act, (v) the Company files a report on Form 6-K containing amended financial information (other than information that is furnished and not filed), if the Manager reasonably determines that the information in such Form 6-K is material, or (vi) the Shares are delivered to the Manager as principal at the Time of Delivery pursuant to a Terms Agreement (such commencement or recommencement date and each such date referred to in (i), (ii), (iii), (iv), (v) and (vi) above, a “Representation Date”), unless waived by the Manager, the Company shall furnish or cause to be furnished to the Manager forthwith a certificate dated and delivered on the Representation Date, in form reasonably satisfactory to the Manager to the effect that the statements contained in the certificate referred to in Section 6 of this Agreement which were last furnished to the Manager are true and correct at the Representation Date, as though made at and as of such date (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 6, modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the date of delivery of such certificate. The requirement to provide a certificate under this Section 4(k) shall be deemed to be waived (without any act or formality) for any Representation Date occurring at a time at which no Sales Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Sales Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date; provided, however, that such waiver shall not apply for any Representation Date on which a new Registration Statement is filed and declared effective by the Commission or the Company files its Annual Report on Form 20-F or Form 40-F under the Exchange Act. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Representation Date when the Company relied on such waiver and did not provide the Manager with a certificate under this Section 4(k), then before the Company delivers the Sales Notice, the Company shall provide the Manager with the certificate contemplated under this Section 4(k) dated on or prior to the date of the Sales Notice.
(l) Bring Down Opinions; Negative Assurance. Within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 4(k) for which no waiver is applicable or unless otherwise waived by the Manager, the Company shall furnish or cause to be furnished forthwith to the Manager and to counsel to the Manager (i) the written opinion and a negative assurance letter of U.S. counsel for the Company and (ii) the written opinion of Canadian counsel for the Company (collectively, “Company Counsel”), in each case addressed to the Manager and dated and delivered the date that the opinions are required to be delivered, in form and substance reasonably satisfactory to the Manager, including a negative assurance letter of U.S. counsel for the Company, provided that, in lieu of such opinions and negative assurance letter for subsequent Representation Dates after the initial delivery of the opinions of Company Counsel hereunder, Company Counsel may furnish the Manager with a letter (a “Reliance Letter”) to the effect that the Manager may rely on a prior opinion or negative assurance letter delivered under this Section 4(l) to the same extent as if it were dated on the date of such letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement, and the Prospectus, as amended or supplemented as of the date of the Reliance Letter). In addition to any waiver contemplated by Section 4(k), the requirement to furnish or cause to be furnished an opinion (but not with respect to a negative assurance letter of United States counsel) under this Section 4(l) shall be waived for any Representation Date other than a Representation Date on which a new Registration Statement is filed and declared effective by the Commission or a material amendment to the Registration Statement or Prospectus is made or the Company files its Annual Report on Form 20-F or Form 40-F or a material amendment thereto under the Exchange Act, unless the Manager reasonably requests such deliverable required by this Section 4(l) in connection with a Representation Date, upon which request such deliverable shall be deliverable hereunder. The requirement to furnish or cause to be furnished an opinion of the Company Counsel and/or a negative assurance letter under this Section 4(l) shall be waived for any Representation Date occurring at a time at which no instruction to the Manager to sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver and did not provide the Manager such opinion and negative assurance letter pursuant to this Section 4(l), then before the Company delivers any Sales Notice to the Manager to sell Shares pursuant to this Agreement, the Company shall provide the Manager such opinion dated prior to the date of the Sales Notice.
(m) Auditor Bring Down “Comfort” Letter and CFO Certificate. Within five (5) Trading Days of each Representation Date, with respect to which the Company is obligated to deliver a certificate pursuant to Section 4(k) for which no waiver is applicable or unless otherwise waived by the Manager, the Company shall cause (1) the Company’s auditors (the “Accountants”), or other independent accountants satisfactory to the Manager forthwith to furnish the Manager a letter, and (2) the Chief Financial Officer of the Company forthwith to furnish the Manager a certificate, in each case dated within five (5) Trading Days of such Representation Date, in form satisfactory to the Manager, of the same tenor as the letters and certificate referred to in Section 6 of this Agreement but modified to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letters and certificate. In addition to any waiver contemplated by Section 4(k), the requirement to furnish or cause to be furnished a “comfort” letter under this Section 4(m) shall be waived for any Representation Date other than a Representation Date on which a new Registration Statement is filed and declared effective by the Commission or a material amendment to the Registration Statement or Prospectus is made or the Company files its Annual Report on Form 20-F or Form 40-F or a material amendment thereto under the Exchange Act, unless the Manager reasonably requests the deliverables required by this Section 4(m) in connection with a Representation Date, upon which request such deliverable shall be deliverable hereunder. Notwithstanding the foregoing, the requirement to furnish or cause to be furnished one or more letters or certificates under this Section 4(m) shall be waived for any Representation Date occurring at a time at which no instruction to the Manager to sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver and did not provide the Manager with a letter or certificate pursuant to this Section 4(m), then before the Company delivers any Sales Notice to the Manager to sell Shares pursuant to this Agreement, the Company shall provide the Manager such letter or certificate to the extent required under this Section 4(m) and not previously delivered, dated prior to the date of the Sales Notice.
(n) Due Diligence Session. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than 30 Trading Days), and at each Representation Date, subject to a limit of one due diligence session per quarter (unless the Manager shall otherwise reasonably requests), the Company will conduct a due diligence session, in form and substance, reasonably satisfactory to the Manager, which shall include representatives of management, Company Counsel and Accountants. The Company shall cooperate timely with any reasonable due diligence request from or review conducted by the Manager or its agents from time to time in connection with the transactions contemplated by this Agreement, including, without limitation, providing information and available documents and reasonable access to appropriate corporate officers and the Company’s agents during regular business hours, and timely furnishing or causing to be furnished such certificates, letters and opinions from the Company, its officers and its agents, as the Manager may reasonably request. The Company shall reimburse the Manager for Manager’s counsel’s fees in each such Representation Date, up to a maximum of $3,500 per Representation Date, plus any documented incidental expense incurred by the Manager in connection therewith.
(o) Acknowledgment of Trading. Subject to the agreements of the Manager set forth in Section 2(g) hereof, the Company consents, to the extent permitted under the Securities Act, the Exchange Act, and the rules of the Trading Market, to the Manager trading in the Common Shares for the Manager’s own account and for the account of its clients at the same time as sales of the Shares occur pursuant to this Agreement or pursuant to a Terms Agreement, provided that the Manager will ensure appropriate and customary information barriers are in place with respect confidential information relating to the Company in order to ensure compliance with applicable securities laws in connection with such sales.
(p) Disclosure of Shares Sold. The Company will disclose in its Annual Reports on Form 20-F or Form 40-F and quarterly reports on Form 6-K, as applicable, the number of Shares sold through the Manager under this Agreement, the Net Proceeds to the Company and the compensation paid by the Company with respect to sales of Shares pursuant to this Agreement during the relevant quarter; and, if required by any subsequent change in Commission policy or request, more frequently by means of a Report on Form 6-K or other applicable form or a Prospectus Supplement.
(q) Rescission Right. If to the knowledge of the Company, the conditions set forth in Section 6 shall not have been satisfied as of the applicable Settlement Date, the Company will offer to any person who has agreed to purchase Shares from the Company as the result of an offer to purchase solicited by the Manager the right to refuse to purchase and pay for such Shares.
(r) Bring Down of Representations and Warranties. Each acceptance by the Company of an offer to purchase the Shares hereunder, and each execution and delivery by the Company of a Terms Agreement, shall be deemed to be an affirmation to the Manager that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance or of such Terms Agreement as though made at and as of such date (except representations and warranties made as of a specific date, which representations and warranties will be true and correct as of such date), and an undertaking that such representations and warranties will be true and correct as of the Settlement Date for the Shares relating to such acceptance or as of the Time of Delivery relating to such sale, as the case may be, as though made at and as of such date (except for representations and warranties made as of a specific date, which representations and warranties will be true and correct as of such date, and except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).
(s) Reservation of Shares. The Company shall ensure that there are at all times sufficient Common Shares to provide for the issuance, free of any preemptive rights, out of its authorized but unissued Common Shares or Common Shares held in treasury, of the maximum aggregate number of Shares authorized for issuance by the Board pursuant to the terms of this Agreement. The Company will use its commercially reasonable efforts to cause the Shares to be listed for trading on the Trading Market and to maintain such listing.
(t) Obligation Under Exchange Act. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Securities Act, the Company will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the regulations thereunder (as applicable, giving effect to any extension under the Exchange Act).
(u) DTC Facility. The Company shall cooperate with the Manager and use its reasonable efforts to permit the Shares to be eligible for clearance and settlement through the facilities of DTC.
(v) Use of Proceeds. The Company will apply the Net Proceeds from the sale of the Shares in the manner set forth in the Prospectus.
(w) Filing of Prospectus Supplement. If any sales are made pursuant to this Agreement which are not made in “at the market” offerings as defined in Rule 415, including, without limitation, any Placement pursuant to a Terms Agreement, and the Company believes, in its sole discretion, upon consultation with counsel and upon consultation with the Manager in good faith, that the filing of a Prospectus Supplement is required under the applicable United States securities laws, the Company shall file a Prospectus Supplement describing the terms of such transaction, the amount of Shares sold, the price thereof, the Manager’s compensation, and such other information as may be required pursuant to Rule 424 and Rule 430B, as applicable, within the time required by Rule 424.
(x) Additional Registration Statement. To the extent that the Registration Statement is not available for the sales of the Shares as contemplated by this Agreement, the Company shall file a new registration statement with respect to any additional Common Shares necessary to complete such sales of the Shares and shall cause such registration statement to become effective as promptly as practicable. After the effectiveness of any such registration statement, all references to “Registration Statement” included in this Agreement shall be deemed to include such new registration statement, including all documents incorporated by reference therein pursuant to Item 6 of Form F-3, and all references to “Base Prospectus” included in this Agreement shall be deemed to include the final form of base prospectus included in any such registration statement at the time such registration statement became effective, together with the documents incorporated by reference therein, as may be amended or supplemented from time to time.
5. Payment of Expenses. The Company agrees to pay the costs and expenses incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated hereby are consummated, including without limitation: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), the Prospectus, and each amendment or supplement thereto; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, the Prospectus, and all amendments or supplements thereto, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp or transfer taxes in connection with the original issuance and sale of the Shares; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum (a copy of which shall be provided to the Company) and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Shares; (v) the registration of the Shares under the Exchange Act, if applicable, and the listing of the Shares on the Trading Market and the TSXV; (vi) any registration or qualification of the Shares for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Manager relating to such registration and qualification); (vii) the reasonable and documented transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Shares; (viii) the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company; (ix) the filing fee under FINRA Rule 5110; (x) the reasonable fees and expenses of the Manager’s counsel, not to exceed $50,000 (excluding any periodic due diligence fees provided for under Section 4(n)), which shall be paid at the Effective Time; and (xi) all other costs and expenses incident to the performance by the Company of its obligations hereunder.
6. Conditions to the Obligations of the Manager. The obligations of the Manager under this Agreement and any Terms Agreement shall be subject to (i) the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, the Effective Time, each Representation Date, and as of each Applicable Time, Settlement Date and Time of Delivery, (ii) the performance by the Company of its obligations hereunder and (iii) the following additional conditions:
(a) Effectiveness of the Registration Statement; Filing of Prospectus Supplement. The Registration Statement shall have been declared effective by the Commission and the Prospectus, and any supplement thereto, required by Rule 424 to be filed with the Commission shall have been filed in the manner and within the time period required by Rule 424(b) with respect to any sale of Shares; each Prospectus Supplement shall have been filed in the manner and within the time period required by Rule 424(b) with respect to any sale of Shares; any other material required to be filed by the Company pursuant to Rule 433(d) under the Securities Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) Delivery of Opinion. The Company shall have caused Company Counsel to furnish to the Manager at the Effective Time and in accordance with Section 4(l) its opinion and, in the case of U.S. counsel for the Company, negative assurance letter, as applicable, dated as of such required delivery date and addressed to the Manager in form and substance reasonably acceptable to the Manager; provided, however, that, in lieu of such opinions and, in the case of U.S. counsel for the Company, negative assurance letter for subsequent Representation Dates, such counsel may furnish the Manager with a Reliance Letter.
(c) Delivery of Officer’s Certificate. The Company shall have furnished or caused to be furnished to the Manager in accordance with Section 4(k) a certificate of the Company signed by the Chief Executive Officer or the President and the principal financial or accounting officer of the Company, dated as of such required delivery date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus, any Prospectus Supplement and any documents incorporated by reference therein and any supplements or amendments thereto and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of such date with the same effect as if made on such date (except for any of such representations and warranties that speak as of a specific date) and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such date;
(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most recent financial statements included in the Registration Statement, the Prospectus and the Incorporated Documents, there has been no Material Adverse Effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Registration Statement and the Prospectus.
(d) Delivery of Accountants’ “Comfort” Letter and CFO Certificate. The Company shall have requested and caused the Accountants to have furnished to the Manager letters (which may refer to letters previously delivered to the Manager), at the Effective Time and in accordance with Section 4(m), dated as of such required delivery date, in form and substance satisfactory to the Manager, confirming that they are independent accountants within the meaning of the Securities Act and the Exchange Act and the respective applicable rules and regulations adopted by the Commission thereunder and provide customary “comfort” in form and substance reasonably satisfactory to the Manager. The Company shall have requested and caused the Chief Financial Officer of the Company to have furnished to the Manager a certificate, at the Effective Time and in accordance with Section 4(m) certifying as to certain items included in the Registration Statement and the Prospectus.
(e) No Material Adverse Event. Since the respective dates as of which information is disclosed in the Registration Statement, the Prospectus and the Incorporated Documents, except as otherwise stated therein, there shall not have been any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Registration Statement, the Prospectus and the Incorporated Documents (exclusive of any amendment or supplement thereto) the effect of which, in any case referred to above, is, in the sole judgment of the Manager, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Registration Statement (exclusive of any subsequent amendment thereof), the Incorporated Documents and the Prospectus (exclusive of any subsequent amendment or supplement thereto).
(f) Payment of All Fees. The Company shall have paid the required Commission filing fees relating to the Shares within the time period required by Rule 456 under the Securities Act and otherwise in accordance with Rules 456 and 457 under the Securities Act.
(g) No FINRA Objections. FINRA shall not have raised any objection with respect to the fairness and reasonableness of the terms and arrangements under this Agreement.
(h) Shares Listed on Trading Market. The Trading Market shall have been notified of the offering of the Shares and the TSXV shall have provided its approval for the listing of the Shares, and satisfactory evidence of such actions shall have been provided to the Manager.
(i) Other Assurances. Prior to each Settlement Date and Time of Delivery, as applicable, the Company shall have furnished to the Manager such further information, certificates and documents as the Manager may reasonably request.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Manager and counsel for the Manager, this Agreement and all obligations of the Manager hereunder may be canceled at, or at any time prior to, any Settlement Date or Time of Delivery, as applicable, by the Manager. Notice of such cancellation shall be given to the Company in writing or by telephone and confirmed in writing by email.
The documents required to be delivered by this Section 6 shall be delivered by electronic means to the office of Ellenoff Grossman & Schole LLP, counsel for the Manager, at 1345 Avenue of the Americas, New York, New York 10105, email: capmkts@egsllp.com, on each such date as provided in this Agreement.
7. Indemnification and Contribution.
(a) Indemnification by Company. The Company agrees to indemnify and hold harmless the Manager, the directors, officers, employees and agents of the Manager and each person who controls the Manager within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in the Base Prospectus, any Prospectus Supplement, the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or arise out of or are based upon any Proceeding, commenced or threatened (whether or not the Manager is a target of or party to such Proceeding), and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by the Manager specifically for inclusion therein. This indemnity agreement will be in addition to any liability that the Company may otherwise have. The indemnification obligations of the Company under this Agreement will cease to apply to the extent that a court of competent jurisdiction in a final judgment that has become non-appealable shall determine that such losses, claims, damages or liabilities (or actions in respect thereof) were solely caused by the gross negligence or willful misconduct or fraud of the Manager.
(b) Indemnification by Manager. The Manager agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to the Manager, but only with reference to written information relating to the Manager furnished to the Company by the Manager specifically for inclusion in the documents referred to in the foregoing indemnity; provided, however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable to the Shares and paid hereunder. This indemnity agreement will be in addition to any liability which the Manager may otherwise have. The indemnification obligations of the Manager under this Agreement will cease to apply to the extent that a court of competent jurisdiction in a final judgment that has become non-appealable shall determine that such losses, claims, damages or liabilities (or actions in respect thereof) were solely caused by the gross negligence, willful misconduct or fraud of the Company.
(c) Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. An indemnified party will not, without the prior written consent of the indemnifying party, which shall not be unreasonably withheld, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder.
(d) Contribution. In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Manager agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively “Losses”) to which the Company and the Manager may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Manager on the other from the offering of the Shares; provided, however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable to the Shares and paid hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Manager severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Manager on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Manager shall be deemed to be equal to the Broker Fee applicable to the Shares and paid hereunder as determined by this Agreement. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Manager on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Manager agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls the Manager within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of the Manager shall have the same rights to contribution as the Manager, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
8. Termination.
(a) The Company shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time upon ten (10) Business Days’ prior written notice of such termination. Any such termination shall be without liability of any party to any other party except that (i) with respect to any pending sale, through the Manager for the Company, the obligations of the Company, including in respect of compensation of the Manager, shall remain in full force and effect notwithstanding the termination and (ii) the provisions of Sections 5, 7, 8, 9, 10, 12, 14, 15 and 16 of this Agreement shall remain in full force and effect notwithstanding such termination.
(b) The Manager shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the provisions of Sections 5, 7, 8, 9, 10, 12, 14, 15 and 16 of this Agreement shall remain in full force and effect notwithstanding such termination.
(c) This Agreement shall remain in full force and effect until such date that this Agreement is terminated pursuant to Sections 8(a) or (b) above or otherwise by mutual agreement of the parties, provided that any such termination by mutual agreement shall in all cases be deemed to provide that Sections 5, 7, 8, 9, 10, 12, 14, 15 and 16 of this Agreement shall remain in full force and effect.
(d) Any termination of this Agreement shall be effective on the date specified in such notice of termination, provided that such termination shall not be effective until the close of business on the date of receipt of such notice by the Manager or the Company, as the case may be. If such termination shall occur prior to the Settlement Date or Time of Delivery for any sale of the Shares, such sale of the Shares shall settle in accordance with the provisions of Section 2(b) of this Agreement.
(e) In the case of any purchase of Shares by the Manager pursuant to a Terms Agreement, the obligations of the Manager pursuant to such Terms Agreement shall be subject to termination, in the absolute discretion of the Manager, by prompt oral notice given to the Company prior to the Time of Delivery relating to such Shares, if any, and confirmed promptly by electronic mail, if since the time of execution of the Terms Agreement and prior to such delivery and payment, (i) trading in the Common Shares shall have been suspended by the Commission or the Trading Market or trading in securities generally on the Trading Market shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Manager, impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Prospectus (exclusive of any amendment or supplement thereto).
9. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Manager set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by the Manager or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 7, and will survive delivery of and payment for the Shares.
10. Notices. Except as otherwise specifically provided in this Agreement (or as may be updated by a party hereto), all communications hereunder will be in writing and effective only on receipt, and will be mailed, delivered, or e-mailed to the addresses of the Company and the Manager, respectively, set forth on the signature page hereto.
11. Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder. Neither party may assign this Agreement or any rights or obligations it has hereunder without the prior written consent of the other party.
12. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Manager and any affiliate through which the Manager may be acting, on the other, (b) the Manager is acting solely as sales agent and/or principal in connection with the purchase and sale of the Company’s securities and not as a fiduciary of the Company and (c) the Company’s engagement of the Manager in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether the Manager has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Manager has rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
13. Integration. This Agreement and any Terms Agreement supersede all prior agreements and understandings (whether written or oral) between the Company and the Manager with respect to the subject matter hereof.
14. Amendments; Waivers. No provision of this Agreement may be waived (other than the deemed waivers in Sections 4(k), 4(l), and 4(m)), modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Manager. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
15. Applicable Law. This Agreement and any Terms Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York. Each of the Company and the Manager: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the exclusive jurisdiction of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Company and the Manager further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Manager mailed by certified mail to the Manager’s address shall be deemed in every respect effective service process upon the Manager, in any such suit, action or proceeding. If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
16. Waiver of Jury Trial. EACH OF The Company AND THE MANAGER hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement, any Terms Agreement or the transactions contemplated hereby or thereby.
17. Counterparts. This Agreement and any Terms Agreement may be executed in one or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon one and the same agreement. Counterparts may be delivered via electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
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18. Headings. The section headings used in this Agreement and any Terms Agreement are for convenience only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the Manager.
Very truly yours,
ELECTRA BATTERY MATERIALS CORPORATION
By: /s/ Trent Mell_____________________
Name: Trent Mell
Title: President and Chief Executive Officer
Address for Notice:
133 Richmond St W, Suite 602
Toronto, Ontario, Canada M5H 2L3
Attention: Chief Financial Officer
E-mail: mrendall@electrabmc.com
The foregoing Agreement is hereby confirmed and accepted as of the date first written above.
H.C. WAINWRIGHT & CO., LLC
By: /s/ Edward D. Silvera Name: Edward D. Silvera Title: Chief Operating Officer |
Address for Notice:
430
Park Avenue
New York, New York 10022
Attention: Chief Executive Officer
E-mail: notices@hcwco.com
Form of Terms Agreement
ANNEX I
ELECTRA BATTERY MATERIALS CORPORATION
TERMS AGREEMENT
Dear Sirs:
Electra Battery Materials Corporation (the “Company”) proposes, subject to the terms and conditions stated herein and in the At The Market Offering Agreement, dated June 26, 2025 (the “At The Market Offering Agreement”), between the Company and H.C. Wainwright & Co., LLC (“Manager”), to issue and sell to Manager the securities specified in Schedule I hereto (the “Purchased Shares”).
Each of the provisions of the At The Market Offering Agreement not specifically related to the solicitation by the Manager, as agent of the Company, of offers to purchase securities is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement and the Time of Delivery, except that each representation and warranty in Section 3 of the At The Market Offering Agreement which makes reference to the Prospectus (as therein defined) shall be deemed to be a representation and warranty as of the date of the At The Market Offering Agreement in relation to the Prospectus, and also a representation and warranty as of the date of this Terms Agreement and the Time of Delivery in relation to the Prospectus as amended and supplemented to relate to the Purchased Shares.
An amendment to the Registration Statement (as defined in the At The Market Offering Agreement), or a supplement to the Prospectus, as the case may be, relating to the Purchased Shares, in the form heretofore delivered to the Manager is now proposed to be filed with the Securities and Exchange Commission.
Subject to the terms and conditions set forth herein and in the At The Market Offering Agreement which are incorporated herein by reference, the Company agrees to issue and sell to the Manager and the latter agrees to purchase from the Company the number of shares of the Purchased Shares at the time and place and at the purchase price set forth in the Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and return to us a counterpart hereof, whereupon this Terms Agreement, including those provisions of the At The Market Offering Agreement incorporated herein by reference, shall constitute a binding agreement between the Manager and the Company.
ELECTRA BATTERY MATERIALS CORPORATION
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By:__________________________________________ Name: Title:
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ACCEPTED as of the date first written above.
H.C. WAINWRIGHT & CO., LLC
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By:__________________________________________
Name:
Title:
Exhibit 4.1
NUMBER GC5883992 Y MATERIALS Y PAID AND NON - ASSESSABLE CONSOLID ATION • SPECIMEN • GC5883992 • CA2 � JS 'ROilf'ORATION • ELECTRA BATTERY � i!ll CONSOLI DATED COMMON SHARES ELEC 83992 • CA28474P7O65 • OFULLY PAID TRA BATTERY MATERIALS CORPORATION• SHARES ELECTRA BATTERY MATERIALS C OFULLY PAID AND NON - ASSESSABLE CON ORPORATION • SPECIMEN• GC5883992 • ISIN:CA28474P7065 CUSIP: 28474P706 SHARES Printed by DATA BUSINESS FORMS • SPECIMEN • GC5883992 • CA28474P7O65 • OFULLY PAID AND NON - ASSESSABLE CONS OLIDATED COMMON SHA_BE � E �� JWTEJi.Y .11ATERIALS CORPORATION • E L ECTRA BATT ERV MATERIALS CORPall:A � Ol(.'CftWEN"' - 'tcsaa3992 • CA28474P7O65 • OFULLY PA ID AND NON - ASSESSABLE CONSOLIDATED COMMON SHARES ELECTRA BATTERY MATERIALS CORPORATIDN • ELECTRA BATTERY MATERIALS CORPORATION • SP E CIMEN • GC5883992 FULLY PAID AND NON - ASSESSABLE CONSOLIDATED COMMON SHARES IN THE CAPITAL OF ELECTRA BATTERY MATERIALS CORPORATION transferable only on the books of the Corporation by the registered holder hereof in person or by duly Attorney authorized on surrender of this certificate properly endorsed. This certificate is not valid until countersigned and registered by the Transfer Agent and Registrar of the Corporation. IN WITNESS WHEREOF the Corporation has caused this Certificate to be signed by its duly authorized officers. DATED: Countersigned and Re TSX Trust Company Transfer Agent and Re Equiniti Trust Com pa Co - Transfer Agent and BY + - - + - - + - - t - - ; - --- ;;_ --- .,...... 1 • AU1HOR1 eat the offices ofTSX Trust Company, Vane SECURITY INSTRUCTIONS ON REVERSE VOIR LES INSTRUCTIONS DE SECURITE AU VERSO 5883992
0 � : ) : > 1 I : - I m (I) c - u - 1ui o � :!] � :!i: :!lm rn_ C: ,... :rJ :rJ (/) Jl - � )> C: :rJ � zG'l ;>;rn - rn :rJ ::c :rJ z �� 0 � � � - rn - 5 � ::i:, ::Dffi - lrn � 0 Oo - I rn � , - u - "11(/) Gi � oz )>)>Im :iio - 1::rJ en mo - 1· • rn Oo - "U!j;: - u <0 Z - 1 rnz en ogi :Do - 1 rn 'Ti - I ::i:, :DU, - <)> C: )> - � ::1: C) 0 !j;:(/) � f;1 ::::l :rJ - 1 E < rn - rn - u z 0 ��� ;; (I) rn•m :rJ - I C � :rJ ;,;6 m • !j;: � � - jJ z 0 rn - O C: � g � G') � - R rn r;} For value received, the undersigned hereby sell(s), assign(s) and transfer(s) unto (Print name(s) ofperson(s) to whom the securities are being transferred and the address for the r egister) ----------------------------- shares (number of shares if blank, deemed to be all) of the Corporation represented by this certificate, and hereby irrevocably constitutes and appoints the attorney of the undersigned to transfer the said securities with full power of substitution in this matter : Dated Signature Guarantee( s) * (the transfer cannot be processed without acceptable guarantees of all signatures) Transferor( s) Signature( s) * * For transfers signed by the registered holder(s), their signatures( s) must correspond with the name(s) on the certificate in every particular, without changes . In Canada and the US : a Medallion Guarantee obtained from a member of an acceptable Medallion Guarantee Program (STAMP, SEMP or MSP) . Many banks, credit unions and broker dealers are members of a Medallion Guarantee Program . The guarantor must affix a stamp in the space above bearing the actual words "Medallion Guaranteed" . In Canada : a Signature Guarantee obtained from a major Canadian Schedule I bank that is not a member of a Medallion Guarantee Program . The guarantor must affix a stamp in the space above bearing the actual words "Signature Guaranteed" . Outside Canada and the US : holders must obtain a guarantee from a local financial institution that has a corresponding affiliate in Canada or the US that is a member of an acceptable Medallion Guarantee Program . The corresponding affiliate must over - guarantee the guarantee provided by the local financial institution .
Exhibit 5.1
June 26, 2025
Electra Battery Materials Corporation
133 Richmond Street W, Suite 602
Toronto, Ontario
MSH 2L3
Canada
Dear Sirs/Mesdames:
| Re: | Electra Battery Materials Corporation - Registration Statement on Form F-3 |
We have acted as Canadian counsel to Electra Battery Materials Corporation, a corporation existing under the laws of Canada (the “Company”), in connection with the preparation of a Shelf Registration Statement on Form F-3 (the “Registration Statement”) under the United States Securities Act of 1933, as amended (the “Securities Act”), relating to the Company’s offering of an aggregate of $20,000,000 of any combination of: (i) common shares in the capital of the Company (“Common Shares”); (ii) warrants to purchase Common Shares (“Warrants”); (iii) units consisting of Common Shares and Warrants, in any combination (“Units”); and (iv) the Common Shares that may be issued upon the exercise of the Warrants (“Warrant Shares”) or in connection with the Units, as applicable. The Common Shares, Warrants and Units are referred to herein collectively as the “Securities.” The Securities may be issued and sold or delivered from time to time as set forth in the Registration Statement, any amendment thereto, the prospectus contained therein (the “Prospectus”) and supplements to the prospectus (the “Prospectus Supplements”) and pursuant to Rule 415 under the Securities Act.
In so acting, we have examined copies of the Registration Statement, including the Prospectus contained therein, as well as the following documents (collectively, the “Corporate Documents”): (i) the Company’s Articles of Incorporation and Bylaws and (ii) records of the Company’s corporate proceedings in connection with the Registration Statement. We have also examined copies, certified or otherwise identified to our satisfaction, of such public and corporate records, certificates, instruments and other documents and have considered such questions of law as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. With respect to the accuracy of factual matters material to this opinion, we have relied upon certificates or comparable documents and representations of public officials and the Corporate Documents, without independent investigation of the matters provided for therein for the purpose of providing this opinion.
In examining all documents and in providing our opinion, we have assumed:
| (a) | all information contained in all documents reviewed by us is true and correct; |
| | Page 2 |
| (b) | the genuineness of all signatures on all documents examined by us and the legal capacity of all natural persons; |
| (c) | the authenticity of all documents submitted to us as originals; |
| (d) | the conformity to original documents of all documents submitted to us as copies, whether facsimile, electronic, photostatic, certified or otherwise, and the authenticity of the originals of such copies; |
| (e) | each natural person signing any document reviewed by us had the legal capacity to do so, none of which facts we have independently verified; |
| (f) | no order, ruling or decision of any court or regulatory or administrative body is in effect at any relevant time that restricts the issuance of the Securities; |
| (g) | there is no foreign law that would affect the opinion expressed herein; |
| (h) | at the time of the execution and delivery of any documents relating to the Securities or the offering thereof, to the extent such documents purport to constitute agreements, such documents constitute valid and binding obligations of such parties; |
| (i) | the due authorization, execution and delivery of all documents where authorization, execution and delivery are prerequisites to the effectiveness of such documents; |
| (j) | the Company has the necessary corporate power and capacity to execute, deliver and perform its obligations under the terms and conditions of any purchase, underwriting or other agreement, indenture or instrument relating to the Company’s creation, authentication, issuance, sale and/or delivery of the Securities to which the Company is party (any such agreement, the “Agreement”); |
| (k) | the Company has the necessary corporate power and capacity to authorize, create, authenticate, validly issue, sell and deliver the Securities and perform its obligations under the terms and conditions of the Securities; |
| (l) | all necessary corporate action will have been taken by the Company prior to the effective date of the Agreement to duly authorize the execution and delivery by the Company of the Agreement and the performance of its obligations under the terms and conditions thereof; |
| (m) | all necessary corporate action will have been taken by the Company prior to the time of issuance of the Securities to duly authorize, create, authenticate, sell, deliver and validly issue the Securities and to perform its obligations under the terms and conditions of the Securities, and all of the terms and conditions relevant to the execution, delivery and issuance of the Securities in the applicable Agreement will have been complied with; |
| (n) | all necessary corporate action will have been taken by the Company prior to the time of issuance of the Securities to duly authorize the terms of the offering of the Securities and related matters; |
| | Page 3 |
| (o) | prior to the effective date of the Agreement, the Agreement (i) will have been duly authorized, executed and delivered by all parties thereto and such parties had the capacity to do so; (ii) will constitute a legal, valid and binding obligation of all parties thereto; (iii) will be enforceable in accordance with its terms against all parties thereto; and (iv) will be governed by the laws of the Province of Ontario; |
| (p) | the Securities will have been duly authorized, created, authenticated, sold and delivered and validly issued by the Company and any other person signing or authenticating the Securities, as applicable; |
| (q) | the execution and delivery of the Agreement and the performance by the Company of its obligations under the terms and conditions thereunder do not and will not conflict with and do not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will conflict with or result in a breach of or default under any of the terms or conditions of the notice of articles or articles of the Company, any resolutions of the board of directors or shareholders of the Company, any agreement or obligation of the Company, or applicable law; |
| (r) | the authorization, creation, authentication, sale, delivery and issuance of the Securities and the Company’s performance of its obligations under the terms and conditions of the Securities do not and will not conflict with and do not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will conflict with or result in a breach of or default under any of the terms or conditions of the notice of articles or articles of the Company, any resolutions of the board of directors or shareholders of the Company, any agreement or obligation of the Company, or applicable law; and |
| (s) | the terms of the offering of the Securities and related matters do not and will not conflict with and do not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will conflict with or result in a breach of or default under any of the terms or conditions of the notice of articles or articles of the Company, any resolutions of the board of directors or shareholders of the Company, any agreement or obligation of the Company, or applicable law. |
Our opinion herein is limited to the laws of the Province of Ontario and the federal laws of Canada applicable therein now in effect on the date hereof (the “Applicable Law”), and we are expressing no opinion as to the effect of the laws of any other jurisdiction, domestic or foreign.
Based and relying upon the foregoing, and subject to the qualifications, assumptions and limitations expressed herein, we are of the opinion that:
| 1. | the Common Shares will be validly issued as fully paid and non-assessable common shares in the capital of the Company; |
| | Page 4 |
| 2. | the Warrants and Units will be validly issued by, and will be binding obligations of, the Company; and |
| 3. | upon full payment therefor and the issue thereof in accordance with the terms of the applicable warrant, the Warrant Shares, which have been validly authorized and allotted for issuance, will be validly issued as fully paid and non-assessable common shares in the capital of the Company and will, when sold and paid for as contemplated by the Registration Statement, continue to be validly issued, fully paid and nonassessable; and upon payment for the applicable Securities provided for in the applicable Agreement and when issued, sold and delivered and in accordance with such Agreement. |
We hereby consent to the use of our name under the heading “Legal Matters” in, and the filing of this opinion as an exhibit to, the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under the Securities Act or the rules and regulations promulgated thereunder.
This opinion is furnished solely in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise relied upon for any other purpose. This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. This opinion is expressed as at the date hereof and we disclaim any undertaking or obligation to advise you of any subsequent changes of the facts stated or assumed herein or any subsequent changes in Applicable Law.
Yours truly,
/s/ Cassels Brock & Blackwell LLP
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement on Form F-3 dated June 26, 2025 (“Registration Statement”) of our auditor’s report dated March 28, 2025, except for the subsequent events described in Note 24 and Note 17 as it relates to the share consolidafion in 2022, as to which the date is April 23, 2025, relating to the consolidated financial statements of Electra Battery Materials Corporation (the “Company”) consisting of the consolidated statements of financial position as at December 31, 2024 and 2023 and the related consolidated statements of loss and other comprehensive loss, shareholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2024, as filed with the United States Securities and Exchange Commission.
We also consent to the reference to us under the capfion “Experts” in the Registrafion Statement.
/s/ MNP LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
June 26, 2025
Exhibit 23.3
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Electra Battery Materials Corporation
We consent to the use of our report dated April 4, 2023, on the consolidated financial statements of Electra Battery Materials Corporation (the “Entity”), which comprise the consolidated statements of income (loss) and other comprehensive income (loss), cash flows and shareholders’ equity for the year ended December 31, 2022, and the related notes (collectively the “consolidated financial statements”), which is incorporated by reference in the Registration Statement on Form F-3 of the Entity dated June 26, 2025.
/s/ KPMG LLP
Chartered Professional Accountants, Licensed Public Accountants
June 26, 2025
Toronto, Canada
Exhibit 23.4
CONSENT OF MARTIN PERRON
The undersigned hereby consents to (1) the use of the undersigned’s name and the technical and scientific information derived from (a) the Technical Report titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA” dated March 10, 2023, and effective January 27, 2023, (the “43-101 Technical Report”) and (b) the technical report summary, titled, “SK-1300 Technical Report Summary and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA,” effective January 27, 2023 (the “1300 Technical Report Summary”), which are included in, or incorporated by reference into, the Registration Statement on Form F-3 of Electra Battery Materials Corporation being filed with the United States Securities and Exchange Commission and any amendments and exhibits thereto (the “Registration Statement”), and (2) all other references to the undersigned included or incorporated by reference in the Registration Statement and to the inclusion and incorporation by reference of the information derived from the 43-101 Technical Report and the 1300 Technical Report Summary in the Registration Statement.
| /s/ Martin Perron | ||
| Martin Perron | ||
| Principal Engineer | ||
| Date: June 26, 2025 |
Exhibit 23.5
CONSENT OF MARC R. BEAUVAIS
The undersigned hereby consents to (1) the use of the undersigned’s name and the technical and scientific information derived from (a) the Technical Report titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA” dated March 10, 2023, and effective January 27, 2023, (the “43-101 Technical Report”) and (b) the technical report summary, titled, “SK-1300 Technical Report Summary and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA,” effective January 27, 2023 (the “1300 Technical Report Summary”), which are included in, or incorporated by reference into, the Registration Statement on Form F-3 of Electra Battery Materials Corporation being filed with the United States Securities and Exchange Commission and any amendments and exhibits thereto (the “Registration Statement”), and (2) all other references to the undersigned included or incorporated by reference in the Registration Statement and to the inclusion and incorporation by reference of the information derived from the 43-101 Technical Report and the 1300 Technical Report Summary in the Registration Statement.
| /s/ Marc R. Beauvais | ||
| Marc R. Beauvais | ||
| Principal Engineer | ||
| Date: June 26, 2025 |
Exhibit 23.6
CONSENT OF PIERRE ROY
The undersigned hereby consents to (1) the use of the undersigned’s name and the technical and scientific information derived from (a) the Technical Report titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA” dated March 10, 2023, and effective January 27, 2023, (the “43-101 Technical Report”) and (b) the technical report summary, titled, “SK-1300 Technical Report Summary and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA,” effective January 27, 2023 (the “1300 Technical Report Summary”), which are included in, or incorporated by reference into, the Registration Statement on Form F-3 of Electra Battery Materials Corporation being filed with the United States Securities and Exchange Commission and any amendments and exhibits thereto (the “Registration Statement”), and (2) all other references to the undersigned included or incorporated by reference in the Registration Statement and to the inclusion and incorporation by reference of the information derived from the 43-101 Technical Report and the 1300 Technical Report Summary in the Registration Statement.
| /s/ Pierre Roy | ||
| Pierre Roy | ||
| Principal Engineer | ||
| Date: June 26, 2025 |
Exhibit 23.7
CONSENT OF ERIC KINNAN
The undersigned hereby consents to (1) the use of the undersigned’s name and the technical and scientific information derived from (a) the Technical Report titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA” dated March 10, 2023, and effective January 27, 2023, (the “43-101 Technical Report”) and (b) the technical report summary, titled, “SK-1300 Technical Report Summary and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA,” effective January 27, 2023 (the “1300 Technical Report Summary”), which are included in, or incorporated by reference into, the Registration Statement on Form F-3 of Electra Battery Materials Corporation being filed with the United States Securities and Exchange Commission and any amendments and exhibits thereto (the “Registration Statement”), and (2) all other references to the undersigned included or incorporated by reference in the Registration Statement and to the inclusion and incorporation by reference of the information derived from the 43-101 Technical Report and the 1300 Technical Report Summary in the Registration Statement.
| /s/ Eric Kinnan | ||
| Eric Kinnan | ||
| Principal Geologist | ||
| Date: June 26, 2025 |
Exhibit 23.8
CONSENT OF NORDA STELO GÉOLOGIE
(formerly Innovexplo Inc.)
The undersigned hereby consents to (1) the use of the undersigned’s name and the technical and scientific information derived from (a) the Technical Report titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA” dated March 10, 2023, and effective January 27, 2023, (the “43-101 Technical Report”) and (b) the technical report summary, titled, “SK-1300 Technical Report Summary and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA,” effective January 27, 2023 (the “1300 Technical Report Summary”), which are included in, or incorporated by reference into, the Registration Statement on Form F-3 of Electra Battery Materials Corporation being filed with the United States Securities and Exchange Commission and any amendments and exhibits thereto (the “Registration Statement”), and (2) all other references to the undersigned included or incorporated by reference in the Registration Statement and to the inclusion and incorporation by reference of the information derived from the 43-101 Technical Report and the 1300 Technical Report Summary in the Registration Statement.
| By: |
NORDA STELO GÉOLOGIE
/s/ Sophie Boisvert | |
| Name: Sophie Boisvert | ||
| Title: Vice President | ||
| Date: June 26, 2025 |
Exhibit 23.9
CONSENT OF SOUTEX INC.
The undersigned hereby consents to (1) the use of the undersigned’s name and the technical and scientific information derived from (a) the Technical Report titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA” dated March 10, 2023, and effective January 27, 2023, (the “43-101 Technical Report”) and (b) the technical report summary, titled, “SK-1300 Technical Report Summary and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA,” effective January 27, 2023 (the “1300 Technical Report Summary”), which are included in, or incorporated by reference into, the Registration Statement on Form F-3 of Electra Battery Materials Corporation being filed with the United States Securities and Exchange Commission and any amendments and exhibits thereto (the “Registration Statement”), and (2) all other references to the undersigned included or incorporated by reference in the Registration Statement and to the inclusion and incorporation by reference of the information derived from the 43-101 Technical Report and the 1300 Technical Report Summary in the Registration Statement.
| By: |
SOUTEX INC.
/s/ Elisabeth Reid | |
| Name: Elisabeth Reid | ||
| Title: Executive Vice President and General Manager | ||
| Date: June 26, 2025 |