Next Hydrogen Solutions Inc. announced the closing of an unsecured loan agreement of CAD530,000 ($387,000) with several members of its management, as well as the negotiation of an additional CAD1mn ($730,000) loan from an independent commercial lender. This financing aims to support the company’s financial position while ensuring the continuation of its activities and retention of its employees.
Financing terms and share issuance
The loan granted by Next Hydrogen’s management carries an annual interest rate of 5.0% and must be repaid within one year. Additionally, the company will pay an arrangement fee of CAD20,000 ($14,600) to these lenders. The company plans to issue 214,140 common shares at a deemed price of CAD0.495 per share to these same executives, representing approximately 20% of the loan’s principal amount, subject to the approval of the TSX Venture Exchange (TSXV).
Furthermore, the management loan may be converted into common shares at the company’s initiative, either upon maturity of the loan or at the closing of an equity offering. The final terms of conversion and issuance remain subject to regulatory approval, notably from the TSXV.
Use of funds and company outlook
Next Hydrogen plans to use the proceeds from these financings to cover its working capital needs and general expenses. This temporary financial arrangement will allow the company to continue its operations during the review of longer-term financial and strategic solutions. No timeline has been set for this review, and management does not plan to provide further updates unless a specific transaction is approved or disclosure is otherwise required.
Management’s participation in this financing constitutes a related-party transaction under Canadian regulations. However, Next Hydrogen benefits from exemptions from valuation and minority shareholder approval requirements, with the total amount involved remaining below CAD2.5mn ($1.8mn).
Regulatory developments and listing information
The share issuance and loan conversion remain subject to obtaining the necessary regulatory approvals. Next Hydrogen also specified that the last day of trading of its shares on the OTCQX will be July 24, 2025. This operation takes place in a context where the company seeks to maintain the continuity of its operations while evaluating available options for its future.
Next Hydrogen’s management reaffirmed its commitment to act in the interest of the company and its shareholders in the ongoing strategic review.
