Next Hydrogen receives $1.5-million in loan advances

Executive Summary

• Next Hydrogen Solutions Inc. announced the closing of a $1.5 million loan facility, consisting of a $530,000 unsecured loan from existing directors and officers and a $1 million loan from an arm's-length commercial lender.
• The transaction includes the issuance of 214,140 common shares as bonus shares to the director/officer lenders, representing approximately 20% of the principal amount of their loan.
• Proceeds are designated for working capital and general corporate purposes to bridge the company's financial position while it evaluates longer-term strategic solutions.

Key Details

• Total Loan Amount: $1.5 million.
• Loan Structure:
  • $530,000 Loan: Unsecured loan from certain existing directors and officers.
    • Interest Rate: 5.0% per annum.
    • Advance Date: July 23, 2025.
    • Maturity: One year from the advance date.
    • Set-up Fee: $20,000 payable to lenders on the maturity date.
  • $1,000,000 Loan: From an arm's-length commercial lender.
    • Timing: Advanced immediately after the director/officer loan.
• Equity Component (Bonus Shares):
  • Shares Issued: 214,140 common shares.
  • Recipient: The lenders of the $530,000 loan (directors and officers).
  • Deemed Price: 49.5 cents per share.
  • Value: Represents approximately 20% of the principal amount of the director/officer loan.
• Conversion Option:
  • Subject to TSX Venture Exchange approval, the loan may be converted into common shares at the company's option, in whole or in part.
  • Conversion Trigger: Earlier of the maturity date or the closing of an equity securities offering.
• Use of Proceeds: Working capital and general corporate purposes.
• Strategic Context: Funds are intended to bridge the financial position to retain staff and continue operations while the board and management evaluate longer-term financial and strategic solutions. No definitive timetable or specific transaction has been approved.

Notable Quotes

• "Next Hydrogen intends to use the proceeds of the loan and the original loan for working capital and general corporate purposes. The loan and the original loan will assist the company in bridging its financial position in order to keep its talented team and continue operations while it evaluates longer term financial and strategic solutions."