Carbon Revolution Secures Further Release of $5 Million from OIC and further $0.4 Million Reserve Release from Existing Lenders

Rhea-AI Summary

Carbon Revolution (CREV) has secured an additional US$5 million release from Orion Infrastructure Capital (OIC), representing the second tranche of the previously announced US$25 million facility. Additionally, Existing Noteholders have released US$400,000 from loan reserves, bringing total reserve releases to US$800,000 of the agreed US$2 million.

As part of this funding arrangement, CREV will issue penny warrants to OIC and Existing Noteholders, representing 5.0% of outstanding shares. Both lenders may agree to accept partial interest payments in kind rather than cash. The combined US$27 million funding package aims to support business liquidity and fund customer demand satisfaction. The company is investing in capacity expansion with several new programs entering production soon.

Positive

• Secured additional US$5 million funding from OIC facility
• Obtained US$400,000 release from existing loan reserves
• Lenders agreed to potential interest payments in kind, improving cash flow flexibility

Negative

• Dilutive impact from 5.0% warrant issuance to lenders
• Company remains non-compliant with Nasdaq listing requirements
• No assurance of meeting conditions for remaining US$15 million facility release

Insights

Financial Analyst

The latest $5.4M funding release represents a critical but potentially concerning development for Carbon Revolution. While securing additional liquidity is positive, several red flags warrant attention:

• The incremental nature of the funding release ($10M out of $25M) suggests tight controls from lenders, possibly indicating concerns about the company's financial health or execution capabilities.
• The issuance of penny warrants representing 5% dilution of outstanding shares, combined with the potential for PIK interest payments, indicates significant concessions to secure funding.
• The delayed annual report filing and pending Nasdaq compliance issues raise governance concerns and could impact investor confidence.

The company's focus on capacity expansion amid confirmed OEM demand presents a double-edged sword: while it validates the market opportunity, it also increases execution risk given the capital-intensive nature of manufacturing scale-up. The $27M total funding package, if fully accessed, would provide important working capital, but the conditional nature of the remaining $15M creates uncertainty about long-term liquidity.

The shift towards allowing PIK interest payments suggests lenders are providing flexibility while acknowledging potential cash flow constraints. This arrangement helps preserve short-term liquidity but could increase long-term debt burden and financing costs.

GEELONG, Australia, Jan. 24, 2025 (GLOBE NEWSWIRE) -- Carbon Revolution plc (Nasdaq: CREV) (the “Company”), a Tier 1 OEM supplier and the leading global manufacturer of lightweight advanced technology automotive carbon fiber wheels, today announced that Orion Infrastructure Capital ("OIC") has released an incremental US$5 million of the US$25 million facility announced on December 23, 2024. As a result of this most recent release, $10 million of this US$25 million facility has now been released. Concurrent with this US$5 million tranche, lenders under the US$60 million PIUS loan entered into in May 2023 (“Existing Noteholders”) have also released a further US$400,000 of existing loan reserves, taking reserves released to US$800,000 of the up to US$2 million agreed to be released. In connection with this funding tranche, the Company will issue to OIC and Existing Noteholders, penny warrants to purchase an aggregate number of shares equal to 5.0% of the Company’s shares outstanding.

Following this combined US$27 million of additional funding, both OIC and the Existing Noteholders may also agree to partial payment in kind, in lieu of cash, for certain interest payments. The incremental $25 million of capital, US$2 million reserve release and changes to interest terms, are intended to support the ongoing liquidity of the business and fund the Company as it works to satisfy the demand from Carbon Revolution's OEM customers. The Company is making substantial investments in capacity and throughput and has a number of new programs entering, or expected to enter, production in the near-term. The Company makes no assurances that it will be able to satisfy the conditions to the receipt of the remaining US$15 million of the US$25 million facility.

The Company continues to work diligently to file its Annual Report as promptly as practical to regain compliance with Nasdaq Listing Rule 5250(c)(1) as described here.

About Carbon Revolution plc

Carbon Revolution plc (Nasdaq: CREV) (the “Company” or “Carbon Revolution”) is the parent of Carbon Revolution Pty Ltd, an early-stage growth company which has successfully innovated, commercialized and industrialized the advanced manufacture of carbon fiber wheels for the global automotive industry. The Company has progressed from single prototypes to designing and manufacturing lightweight wheels for cars and SUVs in the high performance, premium and luxury segments, for the world’s most prestigious automotive brands. Carbon Revolution is creating a significant and sustainable advanced technology business that supplies its lightweight wheel technology to automotive manufacturers around the world.

For more information, visit carbonrev.com

Forward Looking Statements

All statements other than statements of historical facts contained in this communication are forward-looking statements. Forward-looking statements may generally be identified by the use of words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “forecast,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” “target” or other similar expressions (or the negative versions of such words or expressions) that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the expectation of continued listing of Carbon Revolution’s ordinary shares and warrants on Nasdaq, the Company’s ability to file its Annual Report and promptly regain compliance with Nasdaq Listing Rule 5250(c)(1), the future financial performance, business strategies, financings and expectations for the Company’s business. These statements are based on various assumptions, whether or not identified in this communication, and on the current expectations of Carbon Revolution’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from such assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of Carbon Revolution.

These forward-looking statements are subject to a number of risks and uncertainties, including (i) the ability to maintain the listing of Carbon Revolution’s securities on Nasdaq or any other exchange on which such securities may be listed in the future; (ii) the failure to realize the benefits of being listed on a U.S. securities exchange and publicly-traded in the United States; (iii) Carbon Revolution's liquidity, including its ability to pay its obligations and to issue equity, refinance its indebtedness or otherwise obtain financing at all or on acceptable terms, (iv) risks related to its ability to meet financial covenants and other key covenants under existing financing arrangements or to obtain waivers or forbearance from compliance with such covenants, which could result in the acceleration of outstanding indebtedness, (v) changes in domestic and foreign business, market, financial, political and legal conditions; (vi) risks related to the rollout of Carbon Revolution’s business strategy and the timing of expected business milestones; (vii) the effects of competition on Carbon Revolution’s future business and the ability of the combined company to grow and manage growth, establish and maintain relationships with customers and retain its management and key employees; (viii) risks related to domestic and international political and macroeconomic uncertainty, including the Russia-Ukraine and conflicts in the Middle East; (ix) the outcome of any legal proceedings that may be instituted against Carbon Revolution; (x) the impact of pandemic and governmental responses on any of the foregoing risks; (xi) risks related to Carbon Revolution’s industry; (xii) changes in laws and regulations; and (xiii) those factors discussed in the documents Carbon Revolution filed with the SEC, including the Shell Company Report on Form 20-F.

If any of these risks materialize or Carbon Revolution’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Carbon Revolution does not presently know or that Carbon Revolution currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Carbon Revolution’s expectations, plans or forecasts of future events and views as of the date of this communication. Carbon Revolution anticipates that subsequent events and developments will cause Carbon Revolution’s assessments to change. However, while Carbon Revolution may elect to update these forward-looking statements at some point in the future, Carbon Revolution specifically disclaims any obligation to do so, unless required by applicable law. These forward-looking statements should not be relied upon as representing Carbon Revolution’s assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.

For further information, please contact:

Investors
Investors@carbonrev.com

Media
Media@carbonrev.com

FAQ

How much funding has Carbon Revolution (CREV) secured from OIC's US$25 million facility?

Carbon Revolution has secured US$10 million total from OIC's facility, with the latest release being US$5 million.

What is the total amount of loan reserves released by CREV's Existing Noteholders?

Existing Noteholders have released US$800,000 in total, with the latest release being US$400,000 out of an agreed US$2 million.

What warrants is CREV issuing as part of the January 2024 funding tranche?

CREV is issuing penny warrants to OIC and Existing Noteholders representing 5.0% of the company's outstanding shares.

How will CREV use the combined US$27 million funding package?

The funding will support business liquidity and help satisfy OEM customer demand through investments in capacity and throughput.