Hydrograph Clean Power closes $29.99-million offering

Executive Summary

• Hydrograph Clean Power Inc. has closed its previously disclosed best-efforts, fully marketed brokered private placement, raising aggregate gross proceeds of approximately $30 million.
• The offering consisted of 5,882,348 units priced at $5.10 per unit, with net proceeds allocated to establishing a Texas headquarters, advancing a second graphene production facility, R&D, and general working capital.
• The transaction included specific warrant terms with a potential acceleration clause and involved Canaccord Genuity Corp. as the lead agent.

Key Details

• Gross Proceeds: $29,999,974.80
• Net Proceeds: Not explicitly stated, but gross proceeds were $29,999,974.80.
• Units Sold: 5,882,348 units
• Price Per Unit: $5.10
• Unit Composition: Each unit consisted of one common share and one-half of one common share purchase warrant.
• Warrant Terms:
  • Each warrant entitles the holder to purchase one common share.
  • Exercise Price: $6.10 per share (approx. 20% premium to offering price).
  • Duration: 36 months from the closing date.
• Warrant Acceleration Provision: The company may accelerate the expiry date of the warrants if the daily volume-weighted average trading price on the Canadian Securities Exchange equals or exceeds $12.20 for 10 consecutive trading days, subject to 30 days' notice.
• Use of Proceeds:
  • Establishing and staffing the company's new Texas headquarters.
  • Advancing the development of its second graphene production facility in Texas.
  • Expanding marketing and sales initiatives.
  • Supporting continuing research and development programs.
  • Strengthening the company's intellectual property portfolio and strategic partnerships.
  • Financing general working capital needs.
• Lead Agent: Canaccord Genuity Corp. (acting as agent and sole bookrunner).
• Agent Compensation:
  • Cash Commission: 6.0% of gross proceeds (reduced to 3.0% for units sold to purchasers on the president's list).
  • Broker Warrants: Issued in an amount equal to 6.0% of the number of units sold (reduced to 3.0% for units sold to purchasers on the president's list).
  • Broker Warrant Terms: Exercisable to acquire one common share at an exercise price of $5.63 for a period of 36 months following the closing date.
• Hold Periods:
  • Common shares, warrants, and shares issuable upon exercise are not subject to a Canadian statutory hold period.
  • All other securities not issued pursuant to the listed issuer financing exemption are subject to a hold period expiring four months and one day.
• Lock-up: Directors and senior officers have entered into a voluntary four-month lock-up agreement.

Notable Quotes

• "This financing represents an important milestone for Hydrograph as we continue to accelerate our growth strategy," said Kjirstin Breure, chief executive officer and president of HydroGraph. "The strong investor support reflects confidence in our technology and long-term vision. The proceeds will help us scale operations, advance our Texas expansion and continue strengthening our leadership in ultrapure graphene solutions."