Desert Mountain closes $22.03-million public offering

Mar 24, 2023

2023-03-24 10:52 ET – News Release

Mr. Robert Rohlfing reports

DESERT MOUNTAIN ENERGY CLOSES PUBLIC OFFERING OF UNITS FOR GROSS PROCEEDS OF $22 MILLION

Desert Mountain Energy Corp. has closed its previously announced best efforts public offering of 11.3 million units of the company at a price of $1.95 per unit for gross proceeds of $22,035,000, which includes the partial exercise of the overallotment option. The Company entered into an agency agreement (the “Agency Agreement”) with Beacon Securities Limited (the “Agent”) to sell the Units on a commercially reasonable best efforts agency basis.

Each Unit is comprised of one common share of the Company (each, a “Common Share”) and one Common Share purchase warrant (each, a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at an exercise price of C$2.70 per Common Share. The Warrant is exercisable for a period of twenty four (24) months from the closing of the Offering (the “Closing Date”). If, at any time after the Closing Date and prior to the expiry date of the Warrants, the volume weighted average trading price of the Company’s common shares on the TSX Venture Exchange is greater than C$4.50 for a period of 10 consecutive trading days, the Company may, within 10 business days of the occurrence of such event, accelerate the expiry date of the Warrants by giving notice (the “Warrant Acceleration Notice”) to the holders of the Warrants, and issuing a concurrent press release, and, in such case, the expiry date of the Warrants shall be the date specified by the Company in the Warrant Acceleration Notice, provided such date shall not be less than 30 trading days following delivery of the Warrant Acceleration Notice.

Pursuant to the terms of the Agency Agreement, the Company granted the Agent an Over-Allotment Option (the “Over-Allotment Option”) exercisable, in whole or in part, at the sole discretion of the Agent, at any time and from time to time, until the date that is 30 days following the Closing Date, to arrange for the sale of up to an aggregate number of additional units or Common Shares and/or Warrants of the Company (the “Additional Securities”) equal to fifteen percent (15%) of the aggregate number of Units issued pursuant to the Offering, at a price equal to the Issue Price.

In consideration for the services rendered by the Agent in connection with the Offering, the Company has paid the Agent a cash fee equal to six percent (6%) of the gross proceeds of the Offering ($718,848), with the exception of gross proceeds raised and received by the Company from purchasers who settled their purchase of Units directly with the Company (the “Direct Settlement List”). As additional consideration for the services rendered by the Agent in connection with the Offering, the Agent received a number of compensation options (the “Agent’s Compensation Options”) equal to six percent (6%) of the number of Units issued under the Offering, and six percent (6%) of the number of Additional Securities issued in the event of an Over-Allotment Option exercise, with the exception of the Units issued under the Offering to purchasers included in the Direct Settlement List. Each Agent’s Compensation Option entitles the holder thereof to purchase, subject to adjustment in certain circumstances, one Common Share of the Company at an exercise price equal to the Issue Price for a period of twenty four (24) months from the Closing Date.

The Company has also paid the Agent a corporate finance fee of $600,000, plus applicable taxes. In addition, the Agent received 309,360 corporate finance fee compensation options, to purchase an equal number of Common Shares, subject to adjustment in certain circumstances, at the Issue Price for a period of twenty four (24) months from the Closing Date.

The Offering was made pursuant to a short form prospectus filed in each of the provinces of Canada with the exception of Quebec. A copy of the short form prospectus, which contains important information relating to the Units, and other matters, is available on SEDAR at www.sedar.com.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. state securities laws, and may not be offered or sold in the “United States” or to “U.S. persons” (as such terms are defined in Regulation S under the U.S. Securities Act) absent registration under the U.S. Securities Act and all applicable U.S. state securities laws, or in compliance with an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

ABOUT DESERT MOUNTAIN ENERGY

Desert Mountain Energy Corp. is a publicly traded resource company primarily focused on exploration, development and production of helium, hydrogen and noble gases. The Company is primarily looking for elements deemed critical to the renewable energy and high technology industries.

We seek Safe Harbor.

https://www.desertmountainenergy.com/