PyroGenesis Canada (TSX:PYR), an attractive penny value stock, has closed a C$1.25 million non-brokered private placement composed of a convertible loan with Fiducie de Crdit Mellon Trust, a related party.
PyroGenesis intends to use the proceeds for working capital and general corporate purposes.
The loan bears an attractive interest rate of 3 per cent per year, will be paid quarterly in arrears, and will mature 18 months after the effective date. The funds will be secured by a subordinated hypothec on PyroGenesis’ movable property.
The lender may convert, in whole or in part, the principal amount of the loan into PyroGenesis shares for C$0.4918 per share, representing a 20 per cent premium to the volume weighted average trading price on the TSX for the five trading days preceding the effective date.
As part of the loan, the lender will also receive share purchase warrants for up to 625,000 shares priced at C$0.4098 each. The warrants expire 18 months after the effective date and will be subject to a four-month holding period in accordance with applicable Canadian securities laws.
Additionally, at any time after March 1, 2024, the lender may require the prepayment of the loan’s entire outstanding balance. The company, for its part, may prepay the loan balance at any time with 30 days’ notice.
A clear candidate for undervaluation
Given PyroGenesis’ leading-edge decarbonization technology, its trillion-dollar addressable market, and its growing presence in the industrial marketplace, it’s reasonable to suppose that the stock’s more than 50 per cent decline year-over-year places it in undervalued territory.
Despite the company’s consistent unprofitability, its technology’s revolutionary waste-destruction capabilities are likely to be in high demand as heavy industry looks to lower carbon emissions to meet 2050 net-zero targets.
PyroGenesis Canada specializes in the design, development, manufacturing and commercialization of advanced plasma processes and sustainable solutions to reduce greenhouse gases. The company’s technologies are being vetted by multiple multi-billion dollar industry leaders in iron ore pelletization, aluminum, waste management and additive manufacturing