GUERNSEY, Channel Islands, Oct. 20, 2022 /CNW Telbec/ – This news release is issued by Pallinghurst Bond Limited (“PBL”) and Pallinghurst Graphite International Limited (“PGIL”), and together with PBL, collectively, the “Pallinghurst Entities”) pursuant to the early warning requirements of Canada’s National Instrument 62-104 and National Instrument 62–103 with respect to the common shares (“Common Shares”), unsecured convertible notes and common share purchase warrants (“Warrants”) of Nouveau Monde Graphite Inc. (the “Issuer”).

On October 19, 2022, PBL entered into a convertible note subscription agreement with the Issuer (the “Subscription Agreement” and the transaction contemplated thereby, the “Transactions”) pursuant to which the Issuer has agreed to issue to PBL an unsecured convertible note (the “Convertible Note”), for gross proceeds of USD12.5 million. The Convertible Note will mature 36 months from the date of issuance and shall bear interest at the higher of 6.0% per annum and the 90-day average SOFR+4% (calculated quarterly). Interest will be payable either quarterly in cash on the last business day of each quarter commencing on December 31, 2022, or the Issuer may elect to capitalize interest and settle in fully paid Common Shares, subject to TSX Venture Exchange approval. All or a portion of the principal amount of the Convertible Note will be convertible at the election of the holder thereof into units of the Issuer at a price of USD$5.00 per unit at any time until the maturity date, with each unit being comprised of one Common Share and one Warrant. Each Warrant will entitle the holder thereof to acquire one Common Share at a price of USD$5.70 per Common Share for a period of 24 months from the date of issuance thereof. Using the Bank of Canada daily exchange rate as of October 19, 2022, the aggregate purchase price for the Convertible Note equals C$17,223,750, and the conversion price and exercise price of the Convertible Note and the Warrants equal C$6.89 and C$7.85, respectively.

Immediately prior to entering into of the Subscription Agreement, the Pallinghurst Entities owned, directly or indirectly, 11,541,013 Common Shares (being 5,618,907 Common Shares owned through Pallinghurst Graphite Limited, a subsidiary of PGIL, and 5,922,106 Common Shares owned by PGIL directly), representing approximately 20.7% of the issued and outstanding Common Shares.

Upon closing of the Transactions, the Pallinghurst Entities will own, directly or indirectly, (i) 11,541,013 Common Shares, representing approximately 20.7% of the issued and outstanding Common Shares, (ii) up to an additional 2,500,000 Common Shares issuable upon conversion in whole of the Convertible Note, representing approximately 4.5% of the issued and outstanding Common Shares, and (iii) up to 2,500,000 Warrants issuable upon conversion in whole of the Convertible Note. Assuming closing of the Transactions and conversion in whole of the Convertible Note and immediate exercise of the underlying Warrants, the Pallinghurst Entities would own, directly or indirectly, 16,541,013 Common Shares, representing approximately 27.2% of the issued and outstanding Common Shares on a partially-diluted basis (excluding all other securities convertible or exchangeable into Common Shares).

In accordance with applicable securities laws and subject to the terms of the second amended and restated investment agreement to be entered into between the Pallinghurst Entities and the Issuer at closing of the Transactions, the Pallinghurst Entities may, from time to time and at any time, acquire additional shares and/or other equity, debt or other securities or instruments (collectively, “Securities”) of the Issuer in the open market or otherwise, and reserves the right to dispose of any or all of its Securities in the open market or otherwise at any time and from time to time, and to engage in similar transactions with respect to the Securities, the whole depending on market conditions, the business and prospects of the Issuer and other relevant factors.

For further information and to obtain a copy of the early warning report filed under applicable Canadian provincial securities legislation in connection with these transactions, please go to the Issuer’s profile on the SEDAR website (www.sedar.com). Pallinghurst has its registered office at 2nd Floor, 23-25 Le Pollet, St Peter Port, Guernsey, GY1 1WQ.

SOURCE Pallinghurst Bond Limited (PBL)