CoTec Holdings draws down $4M convertible loans from insiders Kings Chapel and Epic Capital
What's the deal? CoTec HoldingsDealroom has a profile for this one. Try Dealroom → Corp., a Vancouver-based company listed on the TSXV and OTCQX, has drawn the full $4,000,000 available under its amended and restated convertible loan facilities. The loans come from two lenders: Kings Chapel InternationalDealroom has a profile for this one. Try Dealroom → Limited, which provided $3,000,000, and funds managed by Epic CapitalDealroom has a profile for this one. Try Dealroom → Management Inc., which contributed $1,000,000.
The company plans to immediately convert the full principal into roughly 3,007,518 common shares at $1.33 per share, pending final approval from the TSX Venture Exchange. It has also issued about 1.5 million warrants to the lenders, each exercisable at $1.33 per share for one year.
Proceeds will fund general working capital.
Why now? The loan terms were first announced on April 30, 2026. The full drawdown and planned conversion suggest CoTec needs near-term liquidity and wants to clean up its balance sheet by swapping debt for equity quickly.
What could go wrong? The deal is a related-party transaction. Kings Chapel, the larger lender, is an existing insider and control person of CoTec. Julian Treger, CoTec's chief executive officer and a director, is a beneficiary of a family trust associated with Kings Chapel.
The company says the transaction is exempt from formal valuation and minority shareholder approval requirements under Canadian securities rules because it falls below 25% of CoTec's market capitalisation. Still, the insider dynamic could raise governance concerns among minority shareholders watching their stakes get diluted.
The conversion and warrant issuance also remain subject to TSXV approval, and all securities issued will carry a four-month hold period under Canadian securities law.
The signal: CoTec Holdings is classified as a mature-stage company on Dealroom, yet its reliance on insider-led convertible debt for basic working capital underscores how thinly capitalised many TSXV-listed holding vehicles remain. With Kings Chapel — both control person and related party — supplying 75% of the loan, the deal reinforces a familiar pattern in small-cap public markets where founders and insiders act as lenders of last resort, blurring the line between governance and survival financing.
Read more: AP News
Image: FlorianRost / CC BY-SA 4.0 (via Wikimedia Commons)
