Next Hydrogen Solutions Inc. (“Next Hydrogen” or the “Company”), announced today that it has completed a closing of its previously announced offering (the “Offering”), on a private placement basis, of 10% unsecured convertible debentures of the Company (the "Debentures"). Pursuant to the Offering, the Company has issued and sold 2,725 Debentures for aggregate gross proceeds to the Company of C$2,725,000.
“We are grateful to our shareholders for driving a successful outcome for this strategic offering,” said Raveel Afzaal, President & CEO. “This offering coupled with (1) $4.8M in approved government grants and $1.7M in advanced discussions and (2) up to $5M working capital debt financing Letter of Interest from EDC provides us with good visibility to meet our capital requirements for 2025. In addition, we are in advanced strategic discussions which include technology licensing opportunities in attractive geographies which have the potential to capitalize us for 2026 and beyond.”
The Debentures shall mature on the earlier of the following to occur: (i) 24 months from the date of issuance; (ii) on (x) a sale, merger, arrangement, amalgamation, business combination, or other transaction or series of transactions which results in a person other than the shareholders of the Company immediately prior to such transaction holding more than 50% of the votes attributable to the shares of the surviving issuer or acquiring corporation; or (y) the sale, lease, transfer, exclusive license, or other disposition of all of substantially all of the assets of the Company, unless such sale, lease, transfer, license or disposition is to a wholly-owned subsidiary of the Company; or (iii) on any demand for payment as a result of an event of default under the terms of the Debenture.
The Debentures shall bear interest at a rate of 10.0% per annum from the date of issue, calculated and paid in cash on a semi-annual basis. The holders of the Debentures may elect to convert the principal and all accrued, but unpaid interest under the Debenture into that amount of common shares of the Company (“Common Shares”), computed on the basis of the outstanding principal and all accrued, but unpaid interest under the Debenture divided by the conversion price, which shall mean: (i) in respect of the principal amount of the Debenture outstanding, $1.00 per Common Share; and (ii) in respect of any interest accrued but unpaid thereon, $1.00 per Common Share or the last closing price of the Common Shares listed for trading on the TSX Venture Exchange (the “TSXV”) before the date of conversion, whichever is greater. Any conversion of interest accrued but unpaid thereon into Common Shares will be subject to the prior approval of the TSXV.
Mr. MacKenzie, a control person and director of the Company, has subscribed for $500,000 principal amount of Debentures in the Offering. Mr. Guglielmin, a director and an insider of the Company, has subscribed for $50,000 principal amount of Debentures in the Offering. The Company has relied on the exemptions from the valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) contained in sections 5.5(b) and 5.7(1)(a) of MI 61-101 in respect of such insider participation.
The proceeds of the Offering will be used for working capital and for general corporate purposes.
The Company has not paid any finder’s fees in connection with the Offering.
The completion of the Offering remains subject to the final approval of the TSXV. All securities issued pursuant to the Offering are subject to a statutory four month hold period from their date of issuance.
None of the securities issued in connection with the Offering will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.
