Ms. Heather Smiles reports

ELECTRA COMPLETES US$5 MILLION FINANCING AND SETTLES ACCRUED INTEREST ON CONVERTIBLE NOTES

Electra Battery Materials Corp. has closed its previously announced financing transaction with the holders of the existing secured notes issued by the company on Feb. 13, 2023 (the existing notes), for gross proceeds to the company of $5-million (U.S.), the financing being on terms previously announced by the company on Oct. 25, 2024. These funds enable the company to initiate certain early works and winter preparations at the Ontario refinery project site in Temiskaming Shores, Ont., as well as being used for general corporate purposes.

In connection with closing the financing, the company issued secured convertible notes in the principal amount of $4-million (U.S.) and 1,841,620 common shares at 54.3 U.S. cents per share. The notes were issued together with 4,545,454 detachable common share purchase warrants entitling the holders to acquire an equivalent number of common shares at a price of $1.00 per share until Nov. 26, 2026.

The company has also issued additional existing notes to the holders, in the principal amount of $6,521,000 (U.S.), as payment-in-kind for all outstanding accrued interest owing on the existing notes through to Aug. 15, 2024, as previously announced. The additional existing notes carry the same payment and conversion terms as the balance of the existing notes and were issued pursuant to a supplement to the indenture dated Feb. 13, 2023, entered into among the company, GLAS Trust Company LLC, as trustee for the existing notes and their holders.

In connection with closing the financing, the holders of the existing notes have waived certain existing events of default regarding the non-payment of interest under the existing notes and the minimum required cash balance through until Feb. 15, 2025, and have agreed that the previous failure to register the resale of the common shares issuable pursuant to the terms of the existing notes and the existing warrants (as defined below) will not constitute an event of default. The holders of the existing notes have also agreed to the cancellation of a total of 4,545,454 common share purchase warrants currently exercisable at a price of $1.74 until Au.g 11, 2025, for no further consideration.

The company has also amended the terms of an aggregate of 10,796,054 outstanding share purchase warrants (the existing warrants). The existing warrants were issued in connection with the offering of the existing notes and were previously exercisable at a price of $1.00 until Feb. 13, 2028.

Following the amendment, the exercise price of the existing warrants has been reduced to 85 cents per share. In addition, the existing warrants now include a revised acceleration clause such that their term will be reduced to 30 days in the event the closing price of the common shares on the TSX Venture Exchange exceeds 85 cents by 20 per cent or more for 10 consecutive trading dates, with the reduced term beginning seven calendar days after such 10-consecutive-trading-day period. Upon the occurrence of an acceleration event, holders of the existing warrants may exercise the existing warrants on a cashless basis, based on the value of the existing warrants at the time of exercise, subject to compliance with the policies of the TSX Venture Exchange.

Company update and shareholder meeting

Following receipt of notice, received Sept. 17, 2024, from The Nasdaq Stock Market LLC of noncompliance with the minimum bid price requirement of $1.00 (U.S.) per share under Nasdaq Listing Rule 5550(a)(2), the company submitted an appeal of Nasdaq's determination. A hearing on the appeal was held on Nov. 5, 2024, and the company was notified it has been granted until Jan. 15, 2025, to regain compliance with the minimum bid requirement, subject to certain conditions.

The company has called a special meeting of shareholders on Dec. 20, 2024. At the meeting, the company will seek shareholder approval for a reverse stock split of the issued and outstanding common shares of the company at a ratio of one postreverse split common share for between three to five prereverse split common shares, as determined by the board of directors of the company, and to approve the revised employee share purchase plan for the company. Additional information and details of voting are available in the management information circular distributed to shareholders in connection with the meeting. All meeting materials are available on the company's website and SEDAR+.

Registered shareholders who have not received their meeting materials due to the continuing Canada Post strike are advised to reach out to their financial institution or the company for assistance.

The implementation of the reverse split would not affect the total shareholders' equity, however, conclusion of the reverse split would support the company's efforts to regain compliance with the minimum bid requirement. This matter does not impact the listing of the shares on the TSX Venture Exchange. Failure to regain compliance either by share price appreciation or completion of the reverse split will result in delisting from the Nasdaq. Completion of the reverse split remains subject to receipt of applicable regulatory and shareholder approvals.

About Electra Battery Materials Corp.

Electra is a processor of low-carbon, ethically sourced battery materials. Currently focused on developing North America's only cobalt sulphate refinery, Electra is executing a phased strategy to onshore the electric vehicle supply chain and provide a North American solution for EV (electric vehicle) battery material refining. In addition to building North America's only cobalt sulphate refinery, its strategy includes integrating black mass recycling, potential cobalt sulphate processing in Becancour, Que., and exploring nickel sulphate production potential within North America.

We seek Safe Harbor.