Revolve Renewable enters $40-million (U.S.) financing

Executive Summary

• Revolve Renewable Power Corp. entered into a secured convertible credit agreement with Callaway Capital Management LLC for up to US$40 million, structured in two tranches of US$20 million each.
• The transaction includes an initial US$10 million draw upon closing, with the remaining funds drawable monthly or subject to conditions. The facility carries a 15% payment-in-kind (PIK) interest rate and includes conversion features into common shares at specified prices.
• As part of the financing, Revolve will migrate its listing from the TSX Venture Exchange to the Canadian Securities Exchange (CSE) and grant Callaway the right to nominate four directors to the seven-member board.

Key Details

• Financing Structure:
  • Total facility size: US$40 million secured convertible credit.
  • Tranche A: US$20 million total; US$10 million initial advance at closing, remaining US$10 million drawable monthly for qualified purposes.
  • Tranche B: US$20 million available during the term subject to specific conditions.
  • Term: Four years.
  • Interest: 15% payment-in-kind (PIK), capitalized monthly and accrued until maturity or conversion.
• Conversion Terms:
  • Tranche A: Convertible at lender's option into common shares at 28 cents per share.
  • Tranche B: Convertible at lender's option into common shares at 40 cents per share.
  • PIK Interest: Convertible at lender's option at fixed prices of 28 cents (Tranche A) and 40 cents (Tranche B) per share.
• Use of Proceeds:
  • Advancement of Mexico-based wind energy projects (late-stage development, permitting, preconstruction).
  • Pursuit of near-term acquisitions of operating and late-stage renewable energy assets.
  • General corporate purposes, working capital, and balance sheet strengthening.
• Governance and Board Changes:
  • Callaway Capital has the right to select four nominees for the seven-member board.
  • Callaway will nominate the chair of the compensation committee and the nominating committee.
  • Lender holds investor rights including registration rights, right to match future financings, and approval rights over significant matters (e.g., change of control, IPO in the US, capital expenditures).
• Exchange Migration:
  • Revolve will transition its public listing from the TSX Venture Exchange to the Canadian Securities Exchange (CSE) immediately prior to the initial draw.
  • Delisting from TSX-V and listing on CSE expected within 2-4 weeks, subject to approvals.
  • Shareholder written consent required for both the exchange migration and the credit agreement (due to potential issuance of >50% of outstanding shares upon conversion).
• Company Portfolio Context:
  • Approximately 3 GW portfolio of utility-scale and distributed renewable energy projects.
  • Includes 12 MW net operating assets and over 3,000 MW in development across the U.S., Canada, and Mexico.

Notable Quotes

• "This strategic financing with Callaway Capital represents a transformative step for Revolve. It not only provides the capital to accelerate our three GW renewable energy portfolio, including our Mexico wind projects, but also gives us the flexibility to pursue selective acquisitions that enhance scale and value." — Myke Clark, CEO
• "In partnership with Revolve's leadership, we intend to build a North American energy powerhouse, combining its three GW project portfolio with a renewed focus on digital infrastructure and high-demand electricity markets." — Daniel Freifeld, Callaway Capital