Hillcrest Closes First Tranche of Convertible Debenture Financing

Hillcrest Energy Technologies Ltd. (CSE: HEAT) (OTCQB: HLRTF) (FSE: 7HI) has successfully closed the first tranche of its non-brokered private placement of unsecured convertible debentures, raising $1,942,825. The company anticipates closing a second tranche in the coming weeks to complete the offering.

The debentures issued in this tranche bear interest at a rate of 10% per annum and mature on two years following the date of issuance. Hillcrest may, from time to time, prepay all or a part of the principal amount and accrued interest without penalty. The outstanding principal amount owed under a debenture may be converted into units of the company at a conversion price of $0.12 per unit by the holder thereof at any time on or before the maturity date. Each unit consists of one common share in the capital of the company and one common share purchase warrant exercisable at a price of $0.12 per common share for a period of 36 months from the date of issuance.

At maturity, the company may convert the outstanding principal amount, together with any accrued and unpaid interest, into units at the conversion price. If the holder of a debenture and the company make different elections at maturity, the election by the party who opted in favour of the largest conversion of the principal amount into units at the conversion price will prevail. The debentures are also subject to a forced conversion right, whereby the company may convert the outstanding principal amount and any accrued and unpaid interest into units at the conversion price if the closing price of the common shares on the Canadian Securities Exchange is greater than or equal to $0.36 for a period of ten consecutive trading days and the company gives notice to holders of the debentures by way of a news release.

If the company arranges a distribution of securities, other than pursuant to an equity incentive plan, holders of the debentures may elect to complete a securities for debt transaction in connection with such subsequent financing, to settle the outstanding principal and interest accrued and owing. The company must provide notice to the holders of debentures of any subsequent financing by way of a news release.

Hillcrest intends to use the proceeds from the offering for retirement of existing accounts payable, technology development, general working capital, and, where feasible, enhanced marketing and investor relations activities. The company anticipates closing a second tranche of the Private Placement in the coming weeks.



The successful closing of the first tranche of the convertible debenture financing is a significant milestone for Hillcrest Energy Technologies. The proceeds from the offering will enable the company to retire existing accounts payable, invest in technology development, and enhance its marketing and investor relations activities. The terms of the debentures, including the interest rate, conversion price, and forced conversion right, provide investors with a attractive return on their investment while also offering the potential for capital appreciation through conversion into equity. The company's strategic use of the proceeds aligns with its growth prospects and financial performance, positioning Hillcrest for continued success in the clean tech and e-mobility sectors.