Hillcrest Energy Technologies Ltd (CSE:HEAT, OTCQB:HLRTF) announced it has secured a $5 million equity drawdown facility from a third-party investor which it will use for technology and product development, commercialization and general working capital.
"The facility is being provided at a particularly challenging time for fundraising in the small-cap market and we appreciate the support and confidence in the company demonstrated by the investor,” Hillcrest CEO Don Currie commented in a statement.
“The facility is one of several financing initiatives currently being pursued and we will continue to provide updates as material events occur."
Under the Equity Facility, Hillcrest said it will pay the investor a 2.5% commitment fee based on the total committed capital, either in cash or common shares at $0.30 per share. When funds are withdrawn, the company will pay 12% annualized interest, which can be in shares or deducted from the advance. Each withdrawal will be in units, including a common share and half a share purchase warrant. These units will be issued at the greater of the discounted market price allowed by the Canadian Securities Exchange policies or 90% of the 10-day average closing bid price. Warrants are exercisable at 125% of the issue price for three years.
The first drawdown is expected by the end of January.
Hillcrest is a clean technology company focused on providing advanced power conversion technologies and digital control systems for next-generation powertrains and grid-connected renewable energy systems.
The company's shares were up 3.8% at C$0.28 by midday in Toronto.
~Updated with share price movement~