Westport Fuel Systems Inc. has closed its previously announced registered direct offering and concurrent private placement, generating gross proceeds of approximately US$10 million before deducting placement agent’s fees and other offering expenses. The transaction involved the sale of 1,600,000 common shares and 3,254,369 pre-funded warrants in the registered direct offering, alongside warrants to purchase up to 4,854,369 common shares in the private placement. The combined effective purchase price for each common share or pre-funded warrant and associated private placement warrant was US$2.06. Westport intends to use the net proceeds for working capital and other general corporate purposes.

The private placement warrants have an exercise price of US$2.06 per common share, are immediately exercisable, and will expire two years following the date of issuance. Craig-Hallum acted as the sole placement agent for the offering. If the holders of the private placement warrants exercise such warrants in full in cash, the company would receive additional gross proceeds of approximately US$10 million before deducting the placement agent’s fees. The company stated that it cannot predict when or if the private placement warrants will be exercised for cash or exercised at all, noting that it is possible the warrants may expire without being exercised.

Subject to limited exceptions, a holder of warrants will not have the right to exercise any portion of its warrants if the holder would beneficially own in excess of 9.99% of the number of Westport common shares outstanding immediately after giving effect to such exercise.

Key Offering Details

The securities offered in the registered direct offering were issued pursuant to a prospectus supplement to a shelf registration statement on Form F-3 (File No. 333-289669), which was filed with the United States Securities and Exchange Commission on August 15, 2025, and declared effective on August 22, 2025. The private placement warrants and the common shares issuable upon exercise of such warrants were offered in a private placement under a prospectus exemption from applicable Canadian securities laws and Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder. Westport relied on the eligible interlisted issuer exemption in section 602.1 of the TSX Company Manual in respect of the offering.

Westport Fuel Systems Inc. shares rose 11.29% to $2.07 on Thursday after its joint venture Cespira signed a development agreement with Volvo Group to advance hydrogen-powered heavy-duty engines. The agreement covers the final development and commercialization of Cespira's HPDI fuel system for Volvo's 13-liter engine platform, targeting a European-certified commercial launch before 2030. This move underscores Volvo Group's commitment to low-carbon heavy-duty transport through multiple technology pathways.

The agreement governs the activities required to extend the 13-litre engine platform to operate on hydrogen. Volvo trucks are currently undergoing on-road testing, a status previously announced by Volvo Trucks on April 1. The technology is designed to allow the engine to run on hydrogen while delivering diesel-equivalent performance using a zero-carbon fuel.

Cespira's HPDI fuel system enables direct injection of alternative fuels at high pressures into internal combustion engines. Westport stated that hydrogen HPDI can tolerate a wider range of hydrogen fuel compositions than fuel-cell systems and offers competitive performance and efficiency under heavy-duty load cycles. The system also allows for blending with natural gas to support better economics for stakeholders.

Mehdi Ferhan, Senior Vice President of Powertrain Technology at Volvo Group, emphasized the potential of hydrogen internal combustion as a viable long-haul option for fleets to reduce emissions in demanding applications. Cespira CEO Carlos Gonzalez highlighted that the technology enables fleets to reduce CO₂ emissions without compromising performance and allows OEMs to adapt trucks to regional realities in fuel availability and infrastructure.

Key Features of the HPDI Technology

Market Outlook

The next major catalyst for the stock is its expected earnings report on Aug. 10, 2026. Wall Street expects the company to report a loss of 37 cents per share, an improvement from a loss of $1.98 per share a year earlier. Revenue is projected to decline sharply to $2.29 million from $88.80 million in the year-ago quarter. Most recently, RBC Capital maintained its Sector Perform rating and lowered its price forecast to $1.75 on April 27.