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Carbon Revolution plc (NASDAQ:CREV) (the "Company"), a Tier 1 OEM supplier and the leading global manufacturer of lightweight advanced technology automotive carbon fiber wheels, today announced that it has reached agreement with Orion Infrastructure Capital ("OIC") to provide a further up to US$7 million of funding. The Company also reports the cancellation of two electric vehicle ("EV") wheel programs, which is consistent with the weakening of demand across the broader EV market.
Further US$7 million of OIC funding
Of the up to US$7 million of OIC funding, US$5 million was released on October 31, 2025, in exchange for the issuance of additional senior secured notes. The notes will have substantially the same terms as the Company's existing senior secured notes outstanding (the "Existing Notes"). In connection with this funding tranche, the Company will also issue to OIC penny warrants to purchase an aggregate number of shares equal to 5.0% of the Company's shares outstanding.
The release of the second US$2 million tranche of funding is subject to the agreement of both parties, with funding to occur on a date no earlier than March 31, 2026. As part of this funding, both OIC and the holders of Existing Notes have agreed to partial payment in kind, in lieu of cash, for certain interest payments until July 2026 and a further deferral of the commencement of principal repayments to January 2027.
Program cancellations and important business update
As previously disclosed in the Company's release of July 25, 2025, the Company has a number of new programs entering, or expected to enter, production in the near-term, however, as a result of a decline in the volume of wheels ordered or projected to be ordered by certain customers, the Company revised its revenue forecasts downward and slowed its initial short-term expansion plans.
The Company has continued to experience lower than expected demand for certain programs, especially those tied to the EV space. The weakening of the broader EV market has led to the early cancellation of two programs by a customer, which the Company had initially expected to contribute substantial wheel volumes. The Company is pursuing claims in relation to these cancelled programs.
In addition, as disclosed in the Company's release of June 3, 2025, the Company is currently not in compliance with certain Nasdaq continued listing requirements. The Company has submitted a plan of compliance to Nasdaq where it has sought an extension in accordance with its plan and is waiting for Nasdaq's determination. However, even if such plan is accepted, the Nasdaq staff only has the discretion to grant an exception for regaining compliance until November 26, 2025.
Notwithstanding the additional US$5 million of OIC funding announced today (and the expected release of a further US$2 million of OIC funding), the Company expects that it may need to obtain additional funding in the short term and is actively seeking other strategic alternatives to be completed within this fiscal year (ending June 30, 2026).
In order to obtain sufficient liquidity to fund its business and operations, the extent of which funding need is partially dependent upon the outcome of the customer claims being pursued by the Company mentioned above, as well as to contribute towards regaining compliance with Nasdaq continued listing requirements, the Company is exploring other potential strategic and financing options, a portion of which may need to be obtained significantly earlier than the end of the Company's fiscal year. The Company makes no assurances that it will be able to secure any of the aforementioned on satisfactory terms, or at all.
Posted In: CREV
