Li-Metal Corp. announced the signing of an exclusive strategic collaboration agreement with Mustang Vacuum Systems Inc. With nearly two decades of experience across the automotive, defence and solar sectors, MVS is a specialist in PVD equipment and technologies, operating in Sarasota, Florida. Jointly, MVS and Li-Metal will be able to accelerate the development and commercialization of the Company's innovative roll-to-roll PVD anode technology, leveraging MVS expertise in developing PVD machines to improve equipment efficiencies, and MVS equipment manufacturing facilities to deliver anode production machines.

Under the agreement, the companies will collaborate exclusively in developing PVD processes and equipment, and MVS will manufacture PVD equipment exclusively for Li-Metal and Li-Metals customers in the next-generation battery anode market. The exclusive collaboration adds MVS proven large-scale advanced equipment development and manufacturing capabilities, while protecting Li-Metals intellectual property. Pursuant to the terms of the agreement, Li-Metal and MVS intend to enter into further definitive agreements within the next 28 days, which include a Master Supply Agreement relating to the exclusive supply by MVS of PVD equipment and technologies, a Master Services Agreement relating to support services to be provided by MVS to Li-Metal and its customers and a Contract Operation and Production Agreement relating to production services to be provided by M VS to Li-Metal and's customers.

Upon signing of these definitive agreements, and primarily in consideration for the exclusivity of the supply of MVS PVD equipment and technology, the Company has agreed to issue to MVS 4,375,000 common shares of Li-Metal and 21,000,000 warrants to purchase common shares of Li-Metal, with warrants being exercisable for a period of five years at a price of $0.627 per common share.