HYLQ closes $5-million first tranche of financing

Executive Summary

• HYLQ Strategy Corp. has closed the first tranche of its non-brokered private placement, raising approximately $5 million in gross proceeds.
• The company intends to use the capital to purchase HYPE (hyperliquid tokens) for its treasury, invest in the hyperliquid ecosystem, and fund general working capital.
• The transaction is classified as a related party transaction, with insiders subscribing for over 1.3 million shares, and results in a significant increase in the beneficial ownership of Antanas Guoga.

Key Details

• Transaction Structure: Non-brokered private placement financing.
• Units Issued: 3,337,353 units.
• Price Per Unit: $1.50.
• Gross Proceeds: $5,006,029.50.
• Unit Composition: Each unit consists of one common share and one whole common share purchase warrant.
• Warrant Terms:
  • Each warrant entitles the holder to purchase one common share at an exercise price of $1.75.
  • Term: 24 months from issuance.
  • Acceleration Clause: If the common share closing price exceeds $3.50 for 90 consecutive trading days (starting 4 months and 1 day post-issuance), the company may accelerate the warrant term to expire 30 business days after announcing the reduction.
• Broker Compensation:
  • Cash Commission: $74,976 paid to eligible persons.
  • Broker Warrants: 49,984 warrants issued (equivalent to 6% of securities issued).
  • Broker Warrant Terms: Exercisable at $1.75 for 24 months, subject to the same acceleration clause as investor warrants.
• Use of Proceeds: Purchase of HYPE (hyperliquid tokens) for treasury, investments in the hyperliquid ecosystem, and general working capital.
• Hold Period: All securities are subject to a hold period of four months plus one day from the date of issuance.
• Related Party Transaction Details:
  • Insiders subscribed for an aggregate of 1,300,078 common shares.
  • The company relied on exemptions from valuation and minority shareholder approval requirements under Multilateral Instrument 61-101 (MI 61-101) because it is not listed on a specified market and insider participation does not exceed 25% of market capitalization.
  • No material change report was filed 21 days prior to closing to expedite the offering.
• Ownership Changes (Antanas Guoga):
  • Pre-Closing: Owned/controlled 1,431,825 common shares and 321,500 stock options (~10.85% undiluted, ~12.97% partially diluted).
  • Post-Closing: Owns/controls 2,727,589 common shares, 1,295,764 warrants, and 321,500 stock options (~16.50% undiluted, ~23.94% partially diluted).
  • An early warning report will be filed on SEDAR+.