Why Did Chariot Delay Convertible Note Conversion and Issue 1.75M Shares?
Chariot Corporation has extended the deferral period on its convertible notes with Obsidian Global, issuing 1.75 million shares as part of the amendment. This move delays potential dilution while reinforcing investor support.
- Convertible note non-conversion period extended to 13 July 2025
- 1 million shares issued to Obsidian Global GP, LLC as extension consideration
- 750,000 shares issued to Max Wealthy International Limited for facilitation
- Shares issued under existing capacity without shareholder approval
- Chariot’s lithium exploration projects remain the company’s core focus
Extension of Convertible Note Terms
Chariot Corporation Ltd (ASX – CC9) has announced an amendment to its convertible note agreement with New York-based investor Obsidian Global GP, LLC. The key change extends the non-conversion and share placement deferral period from 1 June 2025 to 13 July 2025. This means Obsidian cannot convert its convertible securities or request placement shares until after mid-July, effectively delaying potential dilution for existing shareholders.
Share Issuance as Consideration
In return for this extension, Chariot will issue 1 million fully paid ordinary shares to Obsidian Global GP, LLC. Additionally, 750,000 shares will be issued to Max Wealthy International Limited, a consultant who facilitated the negotiation. These shares will rank equally with existing shares and are being issued under the company’s existing capacity, avoiding the need for shareholder approval. The shares are expected to commence trading around 11 June 2025.
Strategic Implications and Investor Confidence
This amendment signals ongoing support from a key investor, which can be interpreted as a vote of confidence in Chariot’s strategic direction and project pipeline. By extending the deferral period, Chariot gains additional time to advance its lithium exploration projects without immediate pressure from convertible note conversions. This could provide breathing room to enhance project value before any dilution occurs.
Focus on Lithium Exploration
Chariot remains focused on its portfolio of lithium projects across the United States and Australia. Its flagship Black Mountain Project in Wyoming and the Resurgent Project spanning Nevada and Oregon continue to show promising high-grade lithium mineralisation near surface. The company also holds interests in several pipeline projects and exploration licences in Western Australia’s Southern Cross Greenstone Belt, an emerging lithium hotspot. While the convertible note amendment is a financial maneuver, it underscores the company’s commitment to advancing these assets.
Looking Ahead
Investors will be watching closely as the new deferral period unfolds, assessing how Chariot leverages this extended runway to progress its projects and manage its capital structure. The issuance of shares to both investor and consultant also highlights the company’s pragmatic approach to securing support and managing negotiations.
Bottom Line?
Chariot’s convertible note extension buys time but raises questions about future dilution and project milestones.
Questions in the middle?
- What are the detailed financial terms and potential dilution impact of the convertible notes post-extension?
- How will Chariot’s lithium projects progress during the extended deferral period?
- Could further amendments or capital raises be on the horizon before maturity?
