Post by
Possibleidiot01 on Oct 22, 2024 4:36pm
from the final short form prospectus - company priorities
Principal Purposes
The Company expects to use the net proceeds of the Offering to advance its long term strategy,
including: (1) investing in expanded facilities and increased manufacturing capacity; (2) providing
flexibility to take advantage of opportunities for accretive acquisitions of complementary
technologies and businesses; (3) increasing the Company’s attractiveness as a stable and
reliable long-term supplier; (4) strengthening the Company’s balance sheet to provide additional
10
working capital to meet customer requirements in connection with potential additional large
orders, as well as new program and contract opportunities; and (5) for general corporate
purposes. The anticipated use of the net proceeds from the Offering after deducting the
Underwriters’ Fees (assuming no exercise of the Over-Allotment Option) are more particularly set
forth in the following table:
Principal Purpose Approximate Amount
Capital expenditures including increased capacity
and leasehold improvements(1) $12,200,000
Continue to build and acquire sensor and systems
products $12,200,000
Supply chain/parts and inventory(2) $9,000,000
General corporate purposes and working capital(3) $9,000,000
Offering expenses(4) $350,000
Total $42,750,000
Notes:
(1) Additional manufacturing space and equipment in Newfoundland, Nova Scotia and
Rostock, Germany to expand existing production capacity to be able to more quickly
fulfil large orders in our products business.
(2) Improvements in the supply chain to reduce cycle times including additional
inventory.
(3) Includes expenditures to expand and advance products and services in new
geographies and software development. In addition, approximately $6,000,000 will
be allocated towards increasing the number of highly skilled and qualified
employees and the costs associated therewith.
(4) Represents the total expenses in connection with the Offering, including the
estimated Underwriters’ expenses of $75,000.
The above noted allocation represents the Company’s intentions with respect to its use of
proceeds based on current knowledge, planning and expectations of management of the
Company. Actual expenditures may differ from the estimates set forth above. There may be
circumstances where for sound business reasons, the Company reallocates the use of proceeds,
see “Risk Factors – Discretion in Use of Proceeds”.
Until applied, the net proceeds will be held as cash balances in the Company’s bank account or
invested in certificates of deposit and other instruments issued by banks or obligations of or
guaranteed by the Government of Canada or any province thereof. Unallocated funds from the
Offering will be added to the working capital of the Company, and will be expended at the
discretion of management.
If the Over-Allotment Option is exercised in full for Over-Allotment Shares, the Company will
receive additional net proceeds of $6,412,500. The net proceeds from the exercise of the Over-
Allotment Option, if any, is expected to be added to general working capital.
The Company confirms that there have been no changes to the business objectives it intends to
achieve using the net proceeds from the May 2024 Bought Deal, or the anticipated time period or
cost of achieving those objectives.
Business Objectives and Milestones
The primary business objectives for the Company over the next 12 months are to:
11
1. Continue expanding profile in the minehunting technologies sector and pursue appropriate
strategic opportunities that arise from anticipated increased demand for our products and
services that address dual defense and commercial technologies for subsea security,
surveillance and infrastructure.
2. Pursue opportunities to grow revenue from our subsea pressure tolerant batteries by
onboarding new UUV customers and executing and growing with our current customers.
3. Expand and advance our products and services into new geographies and markets by
increasing manufacturing capacity including potential investment in facilities.
4. Continue to build out our corporate organizational structure to support the acceleration
and scaling of our business.
5. Invest in long lead parts and inventory to shorten production times and be able to meet
demand for shorter turn order cycles.
Significant events that need to occur for the business objectives to be accomplished are as
follows:
Significant Event Anticipated Time
Period
Anticipated
Cost
Continued execution with existing customers and onboarding of potential
new clients and partners for demos and field evaluation trials
To be completed
by the end of
2026.
$5,500,000
Continue to meet manufacturing and delivery milestones for our Remote
Minehunting and Disposal Program and maintain production and sales levels
of our KATFISH™ and ALARS, subsea batteries, SAS sensor systems and
the deployment of our Sub-Bottom ImagerTM and Acoustic CorerTM
technology
To be completed
by the end of
2025.
$3,600,000
Identify and engage on opportunities to augment manufacturing capacity and
equipment for subsea power activities.
To be completed
by the end of Q2
2025.
$14,300,000
Identify appropriate personnel to support the acceleration and scaling of our
business, including in project management, engineering, quality, and
customer support.
To be completed
by the end of
2025.
$6,300,000
Continue to build and acquire sensor and system products for use in our
services business.
To be completed
by the end of
2025.
$12,700,000