PyroGenesis Canada Inc. (TSX:PYR, NASDAQ:PYR) said it has so far received commitments in excess of $10.0 million under its private placement of units of the company, including the concurrent $2.5 million private placement to the CEO.
The offering, which was announced on February 14, 2023, is expected to close on or about February 23, or such other date as the company and Cormark Securities Inc may agree.
The closing of the offering and the concurrent private placement to the CEO is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the acceptance of the Toronto Stock Exchange.
READ: PyroGenesis Canada inks agreement for 'best efforts' private placement for gross proceeds of up to $10M
PyroGenesis said the net proceeds from the offering and concurrent placement will be used for working capital and general corporate purposes.
Revised payment schedule under DROSRITE contract
As announced by the company on October 4 last year, it received an additional payment of approximately C$682,000 (US$0.5 million) under its DROSRITE contract. As at December 31, 2022, the company was owed a balance of approximately C$12.8 million (US$9.4 million) under the contract.
An initial off-site facility has been commissioned by the end user of the DROSRITE systems and is fully operational since April 2022. The construction of the facility, using DROSRITE systems, has begun, and PyroGenesis said it has agreed, following discussions with its customer and its financing partners, to revise the payment schedule with its customer while it is completing its additional financing for the on-site facility.
As a result of the strong relationship developed with the customer, PyroGenesis said it believes “it was in its best interests to support its customer”.
The revised payment schedule provides for the payment of US$1.5 million in the coming weeks, followed by US$6.2 million to be paid on a monthly basis over a period of six months commencing in April 2023, with the balance to be paid at a later date to better reflect the timing of need and usage.
Regulatory matters
PyroGenesis also announced that on February 17, 2023, it received a motion from the Autorité des marchés financiers (AMF), the securities regulatory authority in the Province of Québec, filed with the Superior Court of Québec, under which the AMF is asking the Court to determine whether certain documents previously requested by the AMF from the company are subject to solicitor-client privilege.
The motion was filed by the AMF in connection with an investigation being conducted in the context of applicable securities laws.
PyroGenesis said it understands the AMF is investigating certain actions taken by the president and chief executive officer of the company, P Peter Pascali, in connection with a settlement agreement entered into on April 30, 2018, between the company and Phoenix Haute Technology Inc, a company controlled by Pascali’s father, and ancillary transactions.
Under the terms of the board-approved settlement agreement, the company issued for $3.7 million of units comprised of common shares and warrants to Phoenix in 2018, to settle a $5.5 million claim of Phoenix with respect to the unpaid portion of the consideration payable by the company to Phoenix for an acquisition of intellectual property rights completed in 2011.
PyroGenesis noted that, to its knowledge, the AMF investigation does not involve any allegations of wrongdoing by the company. The AMF has neither announced any proceedings nor filed any charges, it added.
“The company and its president and chief executive officer will continue to cooperate, if and as requested, consistent with their practice to always cooperate with regulatory authorities and both believe that no corporate or securities laws have been breached, but cannot predict whether any enforcement action will result from the investigation,” it said.
PyroGenesis Canada is a leader in the design, development, manufacture and commercialization of advanced plasma processes and sustainable solutions which reduce greenhouse gases (GHG) and are economically attractive alternatives to conventional “dirty” processes.
Contact the author at jon.hopkins@proactiveinvestors.com