SecureTech Raises $350K Tranche Under $10M Toxic Convertible Note at 40% Discount

summarizeSummary

SecureTech closed a $350,000 first tranche of a $10 million convertible note that converts at a 40% discount to the lowest recent price with no floor, netting only $293,000. The rest of the facility is unfunded and at the holder's discretion.

check_boxKey Events · Financing and Capital Events · SCTH

• First Tranche of $10M Note Funded

  Hinterland Partners funded $350,000 for $388,888.89 of principal on October 16, 2026; the remaining ~$9.65M is unfunded and requires mutual written agreement.

• 40% Discount, No Conversion Floor

  Conversion price is 60% of the lowest traded price in the prior 15 trading days, so the holder converts below market with no minimum price — structurally dilutive and sell-pressure inducing.

• Company Netted Only $293,000

  $350,000 purchase price less $24,500 placement agent fee to Craft Capital and $32,500 of holder legal/diligence fees; proceeds go to business development and working capital.

• Restrictive Covenants and Participation Right

  Note blocks dividends, buybacks, asset sales and affiliate loans without holder consent, and gives Hinterland a first-refusal right on future convertible debt for 12 months.

auto_awesomeAnalysis · SCTH · Manufacturing

SecureTech signed a $10 million master convertible note with Hinterland Partners, but only $350,000 was actually funded, and the company netted just $293,000 after fees. Because the conversion price is 60% of the lowest traded price over the prior 15 trading days — a built-in 40% discount with no floor — the holder is incentivized to convert and sell, pressuring the share price and diluting existing holders. This lands on top of previously disclosed going-concern doubt, restated financials and a material weakness, and follows the September S-1 that planned to repay toxic convertible debt. The remaining $9.65 million is not committed: Hinterland has no obligation to fund any further tranche.