CoTec Holdings Corp. Announces TSXV Approval Of Convertible Loan With Kings Chapel International Limited

Rhea-AI Summary

CoTec Holdings Corp. (TSXV:CTH) has received TSXV approval for the conversion component of its convertible loan agreement with Kings Chapel International Limited. The outstanding principal amount of $6,351,387, plus accrued interest of $664,668, can be converted into common shares at CAD$0.75 per share at Kings Chapel's discretion or automatically when the 15-day volume weighted average trading price reaches CAD$1.00. The conversion is capped at 49% ownership for Kings Chapel and affiliates. The agreement involves CEO Julian Treger, making it a related party transaction, but is exempt from certain MI 61-101 requirements. All issued securities will have a four-month statutory hold period.

Positive

• Potential conversion price of CAD$0.75 per share provides clear terms for debt-to-equity conversion
• Automatic conversion trigger at CAD$1.00 offers upside potential
• 49% ownership cap protects against excessive control concentration

Negative

• Significant dilution potential with over $6.3M convertible debt
• Related party transaction with CEO's family trust raises governance concerns
• Substantial debt burden with $664,668 in accrued interest

VANCOUVER, BC / ACCESS Newswire / June 2, 2025 / CoTec Holdings Corp. (TSXV:CTH) ("CoTec" or the "Company") today announces that it has received the approval of the TSX Venture Exchange (the "TSXV") for the conversion component of its convertible loan agreement dated November 25, 2024 (as amended, the "Convertible Loan Agreement") with Kings Chapel International Limited ("Kings Chapel"), previously disclosed in the Company's news releases dated November 25, 2024 and February 28, 2025.

The outstanding principal amount under the Convertible Loan Agreement as at May 30, 2025 is $6,351,387 and $664,668 in interest has accrued thereunder.

The outstanding principal amount under the Convertible Loan Agreement will be converted into common shares of the Company ("Common Shares") (i) at any time at Kings Chapel's election, at a price of CAD$0.75 per Common Share, and (ii) automatically at a price of CAD$0.75 per Common Share, on the first day on which the volume weighted average trading price of the Common Shares on the principal stock exchange on which the Common Shares are then traded over the immediately preceding 15 trading days is equal to or greater than CAD$1.00. No conversion of the outstanding principal amount will occur to the extent that, after giving effect to the conversion, Kings Chapel, its affiliates and any person with whom Kings Chapel or its affiliates would own more than 49% of the outstanding Common Shares.

Kings Chapel is an existing insider and Control Person (as defined by TSX Venture Exchange ("TSXV") Rules) of the Company. Julian Treger, a director of the Company and its Chief Executive Officer, is a beneficiary of a family trust associated with Kings Chapel. As a result, the execution of the Convertible Loan Agreement was a related party transaction subject to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI61-101"). The execution of the Convertible Loan Agreement was exempt from the formal valuation requirements of MI 61-101 pursuant to subsection 5.5(b) of MI 61-101 because the Common Shares are listed only on the TSXV and is exempt from the minority shareholder approval requirements of MI 61-101 pursuant to subsection 5.7(1)(a) of MI 61-101 because the fair market value of neither the Convertible Loan Agreement nor the Common Shares issuable pursuant to the conversion of the outstanding principal amount under the Convertible Loan Agreement exceed 25% of the Company's market capitalization as determined in accordance with MI 61-101.

All securities issuable in connection with the Convertible Loan Agreement will be subject to a statutory hold period of four months plus a day from the date of the Convertible Loan Agreement in accordance with applicable securities legislation in Canada.

About CoTec

CoTec is a publicly traded investment issuer listed on the TSXV and the OTCQB and trades under the symbol CTH and CTHCF respectively. CoTec is a forward-thinking resource extraction company committed to revolutionizing the global metals and minerals industry through innovative, environmentally sustainable technologies and strategic asset acquisitions. With a mission to drive the sector toward a low-carbon future, CoTec employs a dual approach: investing in disruptive mineral extraction technologies that enhance efficiency and sustainability while applying these technologies to undervalued mining assets to unlock their full potential. By focusing on recycling, waste mining and scalable solutions, the Company accelerates the production of critical minerals, shortens development timelines, and reduces environmental impact. CoTec's strategic model delivers low capital requirements, rapid revenue generation and high barriers to entry, positioning it as a leading mid-tier disruptor in the commodities sector.

For more information, please visit www.cotec.ca.

For further information, please contact:

Braam Jonker - (604) 992-5600

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE: CoTec Holdings Corp.

View the original press release on ACCESS Newswire

FAQ

What is the conversion price for CTHCF's convertible loan with Kings Chapel?

The conversion price is CAD$0.75 per common share, with automatic conversion triggered at CAD$1.00 based on 15-day VWAP.

How much is the total outstanding amount of CoTec Holdings' convertible loan?

The total outstanding amount consists of $6,351,387 in principal and $664,668 in accrued interest as of May 30, 2025.

Who is Kings Chapel International Limited in relation to CoTec Holdings?

Kings Chapel is an insider and Control Person of CoTec Holdings, associated with CEO Julian Treger through a family trust.

What are the ownership limitations in CTHCF's convertible loan agreement?

Kings Chapel, its affiliates, and associated persons cannot convert shares that would result in them owning more than 49% of outstanding Common Shares.

How long is the hold period for securities issued under CoTec's convertible loan?

All securities issued will have a statutory hold period of four months plus one day from the date of the Convertible Loan Agreement.