Rewardle Secures $2M Revolving Facility at 12% Interest Secured by CloudHolter Shares

New Financing Boosts Rewardle's Working Capital

Rewardle Holdings Limited (ASX, RXH) has entered into a significant financing arrangement, securing a $2 million revolving standby debt facility with Temorex Pty Ltd, acting as trustee for the Nitram Family Trust. This facility, designed to provide working capital flexibility, carries a 12-month availability period and an interest rate of 12% per annum on drawn amounts.

The facility includes an establishment fee of $25,000 and a facility fee of 1.5% per annum on the total facility amount, both payable either in cash or Rewardle shares. This dual payment option introduces a potential dilution factor for existing shareholders, though the company has capped the maximum number of shares issuable under the facility to 10,172,413 to manage this risk.

Security and Governance Considerations

Crucially, the facility is secured by a first-ranking security interest over all shares Rewardle holds in CloudHolter Pty Ltd, a key asset in its portfolio. This means that in the event of default, Temorex could enforce its security, potentially resulting in Rewardle losing control of these shares. The company has emphasized that while all CloudHolter shares are initially provided as security, there is flexibility to release some shares to facilitate additional financing arrangements.

Governance protocols were carefully observed, with directors holding convertible notes in CloudHolter abstaining from voting on the facility due to conflicts of interest. An independent, non-conflicted director approved the arrangement, ensuring compliance with the Corporations Act and ASX Listing Rules.

Strategic Implications and Market Outlook

Executive Chairman Ruwan Weerasooriya highlighted that this facility enhances Rewardle’s financial flexibility as it advances its growth strategy. The company is actively engaged in ongoing discussions about further financing secured by CloudHolter shares, signaling potential future capital raises or restructuring.

Investors should note the balance Rewardle is striking between securing necessary capital and managing dilution and asset risk. The ability to repay drawn amounts early without penalty adds a layer of financial agility, but the relatively high interest rate and fees reflect the cost of this flexibility.