Peak Processing Secures $2.4M to Fund 50% Production Surge in Q4 FY26
Peak Processing secures $2.4 million to fund 50% production surge in Q4 FY26
Peak Processing has received binding commitments to raise $2.4 million (before costs) via convertible loan notes, with funds earmarked for inventory build to deliver approximately 1.5 million beverage units in Q4 FY26. This represents 50% quarter-on-quarter growth from Q3’s ~1.0 million units, underpinned by confirmed purchase orders from market-leading brands. The conversion price is set at $0.015 per share, an 11.8% discount to the last traded price of $0.017.
High-conviction investment specialist Powerhouse Ventures (ASX: PVL) acted as sole lead manager through its subsidiary Powerhouse Advisory Australia Pty Ltd, with PVL’s Funds Management division participating as a cornerstone investor on the same terms as other noteholders.
The capital raise is directly tied to contracted orders rather than speculative growth, aligning funding with confirmed customer demand from the THC beverage segment’s leading brands.
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What are convertible loan notes?
Convertible loan notes are debt instruments that can convert into equity at a predetermined price, subject to shareholder approval. In Peak Processing’s case, these are unsecured loan notes with a 12-month maturity from the date of issue.
The conversion mechanism requires approval at an upcoming general meeting. If shareholders approve the conversion, the $2.4 million in outstanding notes will automatically convert into 160 million ordinary shares at $0.015 per share. An additional 4.8 million shares will be issued to cover the 3% establishment fee.
If the conversion mechanism is not approved, the notes will be repaid in cash at maturity or earlier in the event of an insolvency event. This structure provides investors with downside protection whilst giving the company the option to convert debt into equity rather than requiring cash repayment.
Key terms at a glance
| Term | Detail |
|---|---|
| Total Raise | $2.4 million (before costs) |
| Conversion Price | $0.015 per share |
| Shares on Conversion | 160 million |
| Maturity | 12 months from issue |
| Establishment Fee | 3% (4.8 million shares) |
From balance sheet repair to production ramp
The raise completes the financial reset executed in FY26 under new leadership. March 2026 marked the company’s first month of positive EBITDA under the new operating model, delivering approximately $159,000 EBITDA on approximately $1.2 million revenue at a 56% contribution margin, according to the company’s 29 April 2026 quarterly report.
The operational turnaround is supported by $2.25 million in annualised cost savings now flowing through the profit and loss statement. The Canada Revenue Agency (CRA) payable has been reduced from a peak of approximately $1.8 million to approximately $200,000 under an agreed monthly repayment plan.
Following conversion of the notes, the company expects to achieve a positive working capital position for the first time in recent reporting periods. This milestone represents the completion of the balance sheet repair programme initiated under the current management team.
Use of funds breakdown
Proceeds from the convertible note raising are allocated to three specific areas:
- Inventory build for approximately 1.5 million units: approximately $1.5 million
- Accretive capital expenditure at the Windsor, Ontario facility (anticipated payback of less than 12 months): approximately $445,000
- General working capital, customer programme support, CRA monthly instalment, US working capital, and costs of the offer: approximately $455,000
Every dollar raised is tied to specific, near-term revenue-generating activities. The capital expenditure component focuses on initiatives with sub-12-month payback periods, avoiding speculative or open-ended spending.
Production momentum heading into Q4 FY26
The Q3 FY26 quarter delivered approximately 1.0 million beverage units produced, exceeding prior guidance of approximately 900,000 units. The company maintained 99.95% on-time-in-full (OTIF) performance throughout the quarter, demonstrating operational consistency at scale.
The Q4 FY26 forecast of approximately 1.5 million units represents a 50% quarter-on-quarter increase, supported by confirmed purchase orders rather than projected demand. Recent customer wins underpinning this volume growth include:
- Electric Brands contract extension
- St. Peter’s Beverages 250% volume expansion
- 30 new Ontario Cannabis Store (OCS) listings
- New brand launches with Reggae Royalty and Juana Sip
Production volumes have increased 42% from Q2 FY26’s 702,289 units to Q3’s ~1.0 million units, with the trajectory continuing into Q4.
Barry Katzman, Managing Director and CEO
“This raise gives Peak the inventory and working capital to deliver our contracted Q4 production of ~1.5m beverage units and to keep building the US operating footprint. The customer wins of recent months — the Electric Brands extension, the St. Peter’s Beverages 250% expansion, 30 new OCS listings, and new brand launches with Reggae Royalty and Juana Sip — are now matched with the funding to execute on them.”
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Shareholder approval and next steps
A general meeting will be convened for shareholders to approve three resolutions:
- The conversion mechanism of the notes into ordinary shares (resulting in the issue of 160 million shares)
- Issue of shares in payment of the establishment fee (4.8 million shares)
- Issue of 25 million unlisted options to the lead manager (exercisable at $0.025, expiring 30 September 2028)
The conversion mechanism requires approval under ASX Listing Rule 7.1. A notice of meeting will be released in due course setting out all relevant details of the proposed security issues.
Manik Pujara, Non-Executive Chairman
“The Board approved this raise to fund contracted production. Every dollar is allocated against purchase orders already on the books, capex with sub-12-month payback, and working capital required to convert Q3’s operational momentum into Q4 cash generation. The discipline that delivered March’s EBITDA result is the discipline this capital will be deployed under.”
The lead manager will receive a fee equal to 6% of total funds raised ($144,000), plus the unlisted options (subject to shareholder approval). Powerhouse Ventures’ Funds Management division participated as a cornerstone investor on identical terms to all other noteholders.
Shareholders should monitor company announcements for the general meeting notice, which will provide voting details and the record date for determining voting entitlements.
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