Next Hydrogen Closes $20.7M Equity Private Placement led by Smoothwater Capital Corporation

Executive Summary

• Next Hydrogen Solutions Inc. closed a non‑brokered private placement of 46,069,198 common shares at CAD $0.45 per share, raising approximately CAD $20.7 million in gross proceeds.
• The offering resulted in Smoothwater Capital affiliate becoming the company’s largest shareholder (≈47.9% of outstanding shares) and created a new Control Person under TSX‑V policies.
• Proceeds will fund production and sales of the NH‑150 electrolyzer, development of the larger NH‑500 system, expansion of customer and channel‑partner relationships, and general corporate purposes.

Key Details

• Offering Size & Price: 46,069,198 common shares at CAD $0.45 per share.
• Gross Proceeds: Approximately CAD $20.7 million (inclusive of Shares for Debt Transaction and Debenture Conversion).
• Lead Investor: Affiliate of Smoothwater Capital Corporation; now holds ~47.9% of issued & outstanding common shares, becoming the company’s largest shareholder and a Control Person under TSX‑V rules.
• Use of Proceeds:
• Scale production and sales of NH‑150 electrolyzer.
• Continue development of NH‑500 system for larger industrial opportunities.
• Expand customer engagement and strengthen channel‑partner relationships.
• General corporate purposes.
• Debt Exchange Agreements: Settlement of CAD $560,527.37 debt to directors/officers in exchange for 1,245,610 “Debt Shares” at the same CAD $0.45 price.
• Debenture Conversion Agreements: Settlement of CAD $1,125,000 principal debentances for 2,499,998 “Debenture Shares” at CAD $0.45 per share; $1.6 million of debentures remain outstanding.
• Share Issuance Breakdown:
• 42,323,590 shares issued for cash → CAD $19.0 million gross cash proceeds.
• Consulting fee to Paul Currie: $50,000 paid via issuance of 111,111 common shares at offering price.
• Board Changes Post‑Closing:
• Stephen Griggs (CEO of Smoothwater) appointed Executive Chair of the Board.
• Paul Currie joins the Board as director.
• Susan Uthayakumar departs the Board.
• Investor Rights Agreement with Smoothwater: Grants Smoothwater rights to nominate up to three directors (including a Chair/Executive Chair) while holding ≥30% of shares, pre‑emptive and information rights at lower thresholds, and registration rights at ≥10% ownership. Stephen Griggs receives an initial grant of 1,000,000 share options and his corporation is entitled to a $225,000 annual management fee.
• Hold Period: All securities issued in the offering (including Debt and Debenture Shares) are subject to a four‑month‑plus‑one‑day hold period from December 17 2025.
• Insider Participation: Directors/officers received additional Debt and Debenture Shares as detailed in the release; percentages of ownership post‑closing were disclosed for each insider.

Notable Quotes

“Next Hydrogen has entered a new phase… we will deliver superior products in a scalable, capital‑light business model.” – Stephen Griggs, Executive Chair (Smoothwater)

“With our NH‑150 electrolyzer operating successfully in a commercial setting, we have demonstrated that a Canadian‑developed hydrogen solution can compete with the best globally.” – Raveel Afzaal, President & CEO

Materiality Assessment: Material – Positive – The financing substantially strengthens Next Hydrogen’s balance sheet, provides capital for commercial scaling, and results in a major shareholder shift and board changes, all of which are material to investors.