Hillcrest Announces $5M Equity Facility + Warrant Incentive Program – update on Non-Brokered Private Placement

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Hillcrest Energy Technologies Ltd. intends to enter into a $5-million equity facility and has provided additional financing updates.

The company further announces that it has negotiated a $5-million equity drawdown facility with a third party investor, pursuant to which the company may request drawdowns and which, in the investor’s sole discretion, may be then fulfilled pursuant to the equity facility. The company shall pay the investor a commitment fee equal to 2.5 per cent of the total capital of the company committed. On any drawdown amount, the company shall pay 12-per-cent annualized interest, which may be payable in common shares or by deduction from the financed advance, at the option of the investor. Each drawdown will be in units, with each unit consisting of one common share in the capital of the company and one-half of one common share purchase warrant. The units will be issued at the greater of the discounted market price permitted under the policies of the Canadian Securities Exchange (CSE) and 90 per cent of the 10-day average closing bid price of the common shares on the CSE. All drawdown warrants issued as part of the units will be exercisable at an exercise price equal to the greater of 125 per cent of the issue price and the minimum exercise price permitted by policies of the CSE, and will be exercisable for a period of three years from the date of issuance.

The parties to the equity facility intend to close the first drawdown on or prior to Jan. 12, 2024.

All securities issued pursuant to the equity facility will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.

Warrant incentive program

The company also announces the implementation of a warrant exercise incentive program to encourage the exercise of an aggregate of 5,114,690 common share purchase warrants exercisable to acquire common shares in the capital of the company. The eligible warrants include:

  • 2,404,167 warrants exercisable at a price of $2.10 per warrant share until Dec. 9, 2023;
  • 746,940 warrants exercisable at a price of $2.10 per warrant share until Dec. 17, 2023;
  • 1,963,583 warrants exercisable at a price of $1.50 per warrant share until Jan. 5, 2024.

Pursuant to the terms of the incentive program, and for the duration of the incentive program, which shall be until Jan. 5, 2024, holders of eligible warrants will be able to exercise such eligible warrants for 35 cents per warrant share. Additionally, the expiry date of the eligible warrants currently set to expire on Dec. 9, 2023, and Dec. 17, 2023, was extended until Jan. 5, 2024, to allow equal participation in the incentive program by the holders of all eligible warrants.

The company intends to use the proceeds from the incentive program for technology and product development, commercialization, and general working capital. At the discretion of the company, additional documentation may be requested from holders of eligible warrants wishing to exercise pursuant to the incentive program to ensure compliance with applicable securities laws.

Private placement

The company also announces that it will not be proceeding with a second tranche of its previously announced non-brokered private placement of units of the company. As disclosed in the company’s news release on Oct. 4, 2023, the company issued an aggregate of 4.35 million units at a price of 40 cents per unit for gross proceeds of $1.74-million.

Additional corporate update

The company also announces that it has granted restricted share units (RSUs) to consultants of the company to acquire up to 183,000 common shares of the company, pursuant to the company’s RSU plan dated July 28, 2021. One hundred fifty thousand of these RSUs will vest immediately, with the remaining 33,000 vesting in tranches of 8,250 on a quarterly basis in 2024. The RSUs have a three-year term.

About Hillcrest Energy Technologies Ltd.

Hillcrest Energy Technologies is a clean technology company focused on providing advanced power conversion technologies and digital control systems for next-generation powertrains and grid-connected renewable energy systems. From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future. Hillcrest is publicly traded on the CSE under the symbol HEAT, on the OTCQB Venture Market as HLRTF and on the Frankfurt Exchange as 7HI.