Metals and mining company, Lithium Australia NL (ASX: LIT) announced, on 16 December 2019, to have executed an agreement with The Lind Global Macro Fund, LP, an entity managed by The Lind Partners, for an investment of up to AUD 6.3 million. The initial funding commitment will be provided within seven days.
The Lind Partners, established in 2011, is a New York-based institutional fund manager, with a reputation of a flexible and supportive capital partner to junior companies, having completed over 100 direct investments totalling over USD 850 million in value.
Lindâs core investment strategy is to provide new growth capital via direct investment, through its three main funds â
- The Lind Global Macro Fund,
- The Australian Special Opportunity Fund and
- The Canadian Special Opportunity Fund
With initial investments ranging from USD 1 to USD 20 million plus follow-ons. Lind also invests in equity placements and selectively buys on the open market.
Under the agreement, Lindâs initial investment of AUD 3 million will be provided by way of a secured convertible security and AUD 100,000 share placement. The funds raised from the placement, along with LITâs current cash, will be directed towards:
- Growth of the Soluna Australia battery business.
- Commercialisation of the Companyâs cathode business, owned by its subsidiary VSPC Ltd.
- Growth of the Companyâs battery recycling business, owned by its subsidiary Envirostream Australia Pty Ltd.
- Costs of the funding, as well as general working capital.
In addition, the Funding Agreement includes provisions that allow for conversion of securities outstanding to the Investor into fully paid ordinary shares in the capital of the Company, optional cash payments by the company or early repayment, subject to Lindâs buy back conversion rights for up to 30% of the outstanding Face Value.
Funds are expected to be received within 5 business days of execution of the agreement.
Funding Agreement-Key Aspects
- LIT will issue a zero-interest redeemable secured convertible security with a face value amount of AUD 3.3 million for an advance of AUD 2.9 million.
- Lind can convert the Convertible Security into Shares after an initial lock-up period at a price being the lower of AUD 0.055 per Share or 92.5% of three consecutive daily VWAPs during a specified period of time.
- Lind will also subscribe for Shares for up to AUD 3.4 million over 12 months by way of pre-payments ranging from AUD 100,000 to AUD 300,000 per month for 12 months, which can be extended for an additional 12 months by agreement between the parties.
- As part of the consideration payable for this Funding Agreement, Lithium Australia will issue 33.33 million LIT options to Lind with an exercise price of AUD 0.055 per option and expiry of three years from issue.
- The parties have agreed that no more than 71,440,776 Shares can be issued under the Convertible Security without shareholder approval.
Management Commentary
âWe have been following Lithium Australia since 2013. In that time, we have seen Lithium Australia evolve from an explorer to a diversified battery and battery minerals Company with three distinct complimentary business units with excellent commercial potential. We are thrilled to invest in Lithium Australia and its management team to support the strategic plan of expanding operations into a diversified battery Company.â - Jeff Easton, MD, The Lind Partners
Stock Performance: Lithium Australiaâs market cap stands at ~ AUD 29.26 million with ~ 541.77 million shares outstanding. On 16 December 2019, the LIT stock settled the dayâs trade at AUD 0.074, zooming up 37% by AUD 0.020. LIT has also delivered positive returns of 17.39% in the last three months and 54.29% in the last one month (as on 13 December 2019 price).
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