CoTec Holdings Raises $12 Million via Convertible Debentures

CoTec Holdings Corp. completed the initial closing of a non-brokered private placement of unsecured convertible debentures, raising an aggregate principal amount of $12,059,000. The debentures feature a 12.5% annual interest rate payable semi-annually in cash and are set to mature on September 10, 2031.

The company intends to allocate the net proceeds toward general corporate purposes, working capital, and the purchase of equipment for its HyProMag USA permanent magnet recycling joint venture. CoTec expects a second closing, which remains subject to approval from the TSX Venture Exchange.

Kings Chapel International Ltd., an existing insider and control person, has agreed to backstop up to $5 million of the additional closing if third-party subscriptions are not secured. Pending approval, Kings Chapel will receive a 2% cash finder fee on gross proceeds from third-party investors for those backstopped debentures.