Hillcrest Energy Technologies ties up C$5M equity facility agreement with Mercer Street

Hillcrest Energy Technologies Ltd (CSE:HEAT) (OTCMKTS:HLRTF) (FRA:7HI.F) has announced the closing of a $5 million equity facility agreement with Mercer Street Global Opportunity Fund LLC to execute against internal IP development initiatives and use as working capital. Hillcrest said it has received in escrow a first tranche of C$ $2,240,000. The Vancouver, British Columbia-based firm has the right, but not the obligation, to request further tranches under the investment agreement on meeting certain conditions. The funds drawn will be converted into shares in Hillcrest.  “I am delighted to partner with Mercer Street. This funding, combined with monthly production revenues, creates a strong financial foundation that not only meets our anticipated commitments through the upcoming fiscal year; it also expands our ability to pursue new development partnership opportunities and execute against internal IP development initiatives,” Hillcrest CEO Don Currie said in a statement. READ: Hillcrest Petroleum rebranding as Hillcrest Energy Technologies as it transitions from fossil fuels to clean tech innovation and IP development “Mercer Street’s shared vision for Hillcrest to be a leading catalyst in the transition to clean energy is backed by their unwavering support to see the team succeed," Currie added. The investment agreement provides for unit private placement offerings to be conducted between Hillcrest and the investor over a 12-month period starting on April 9, 2021. Each unit consists of one share and one-half of one share purchase warrant, with each warrant exercisable into one share at the warrant exercise price for a period of 24 months from the closing date of each tranche. The offerings will be completed in tranches, with each tranche initiated by Hillcrest and subject to acceptance by Mercer Street. A subsequent tranche may not be initiated until the expiry of 30 trading days following the closing of the previous tranche. The maximum units that may be subscribed for over the term is $5 million. The agreement says the purchase price for each unit shall be priced at a discount of 20% to the 20-day volume-weighted average market price of the shares. The exercise price of the warrants for each tranche shall be set at a 50% premium to the purchase price. In connection with the closing of each tranche, a finder shall receive a fee in the amount of 7% payable in cash for the aggregate proceeds to the company on each tranche. Hillcrest has closed in escrow, subject to ordinary closing conditions, a first tranche in the amount of C$2,24 million, following which it has issued 13,176,470 units consisting of 13,176,470 shares issued at a price of $0.17 per share, and 6,588,235 warrants exercisable at a price of $0.26 per share until April 9, 2023. In this connection, Hillcrest has issued to the investor a fee of C$100,000. All securities issued in connection with the first tranche and the share payment are subject to a statutory hold period of four-months and one day ending on August 10, 2021. Separately, the firm has granted 13,700,000 restricted stock units to certain directors, officers, consultants, and employees of the company as long-term incentive and performance awards. Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive