8-K: Energy Vault Secures Additional $15M in Convertible Debt

Energy Vault Holdings, Inc. amended its Securities Purchase Agreement to secure an additional $15.0 million in senior unsecured convertible debentures from YA II PN, Ltd.

Summary

• Energy Vault Holdings, Inc. (the "Company") entered into an amendment to its Securities Purchase Agreement with YA II PN, Ltd. (the "Investor") on December 30, 2025.
• This amendment facilitates the issuance and sale of an additional $15.0 million in senior unsecured convertible debentures (the "Debentures") to the Investor, referred to as the Third Closing.
• This brings the total aggregate principal amount of Debentures issued under this agreement to $65.0 million, following initial closings of $30.0 million on September 22, 2025, and $20.0 million on December 16, 2025.
• The proceeds from the Third Closing are designated for general corporate working capital and to support energy storage project development, construction, and related growth initiatives.
• Key terms of the Debentures include issuance at 98% of principal, a maturity date of August 30, 2027, and an annual interest rate of 7% (increasing to 18% during an uncured event of default).
• The conversion price is set at $7.41 per share, which is 150% of the Bloomberg volume-weighted average price (VWAP) of the Common Stock on December 29, 2025.
• Monthly installment payments, consisting of principal and accrued interest, are scheduled to begin on January 26, 2026, with principal amounts of approximately $0.5 million for each $10 million of original principal.
• The Company has options to satisfy installments via cash plus a 4% payment premium, allowing the Investor to convert at a variable price (subject to a $0.60 per share floor price), or a combination.
• Conversion by the Investor is subject to caps, including not exceeding 19.99% of outstanding Common Stock without stockholder approval and not resulting in beneficial ownership exceeding 4.99% for the Investor.
• An "Amortization Event" (e.g., stock trading below floor price, exceeding conversion cap, or registration statement issues) would increase monthly installments and the cash payment premium to 10%.
• The Company also entered into an amended and restated registration rights agreement, committing to file a resale registration statement for the third tranche Debentures within 10 business days and seeking effectiveness within 30 days.
• The agreement includes customary covenants, such as prohibitions on variable-rate transactions and limitations on additional indebtedness, and specifically prohibits the Company from using its at-the-market equity program until all third tranche Debentures are repaid.

Sentiment

Score: 6

Explanation: The company successfully secured additional capital to fund operations and growth initiatives, which is positive for liquidity and project development. However, the convertible nature of the debt introduces potential future dilution, and the terms include restrictive covenants and a high default interest rate.

Positives

• Secured an additional $15.0 million in capital, enhancing liquidity and funding for strategic growth initiatives.
• The financing supports the development and construction of energy storage projects, which are core to the Company's business.
• The ability to satisfy installment payments through a combination of cash and conversion provides financial flexibility.
• The conversion price of $7.41 per share is set at a premium (150% of VWAP), indicating a higher threshold for dilution compared to market price at the time of agreement.

Negatives

• The convertible nature of the debentures introduces potential future dilution for existing shareholders if converted.
• A high annual interest rate of 18% applies during an uncured event of default, significantly increasing financing costs.
• The Company is prohibited from using its at-the-market equity program until all third tranche Debentures are repaid, limiting future equity financing flexibility.
• Amortization Events can trigger increased monthly installment payments and a higher cash payment premium (10%), potentially straining cash flow.

Risks

• Potential for significant dilution of existing shareholders if the Debentures are converted into common stock, especially if the stock price declines towards the floor price.
• Risk of increased financial obligations and cash outflow if an Amortization Event occurs, leading to higher installment payments and payment premiums.
• Restrictions on the Company's ability to incur additional indebtedness and liens, which could limit future financing options for other projects.
• Prohibition on using the at-the-market equity program restricts a common method for public companies to raise capital, potentially impacting future liquidity management.
• Market price volatility of the common stock could impact the effectiveness of the conversion price and the Company's ability to manage its debt obligations through conversion.

Future Outlook

The additional capital secured is expected to fund general working capital, development, construction, and investment in energy storage projects, indicating a continued focus on expanding the Company's operational capacity and market presence in the energy storage sector.

Management Comments

• The Company's action to secure additional financing underscores its commitment to funding ongoing operations and strategic growth initiatives in the energy storage market.

Industry Context

The energy storage industry is capital-intensive, requiring substantial investment for project development and deployment. This financing positions Energy Vault to continue its expansion and maintain competitiveness in a rapidly growing sector driven by increasing demand for renewable energy integration and grid stability solutions.

Comparison to Industry Standards

• NA

Stakeholder Impact

• Shareholders: Potential for dilution upon conversion of the debentures, which could impact per-share value.
• Creditors: The Company incurs additional debt obligations, but the capital raise also strengthens its working capital position, potentially improving its ability to meet financial commitments.
• Employees, Customers, and Suppliers: Enhanced financial stability and funding for project development could support continued operations, job security, and business growth.

Next Steps

• The Company will file a registration statement covering the resale of common stock issuable upon conversion of the third tranche Debentures within 10 business days after December 30, 2025.
• The Company will use commercially reasonable efforts to obtain effectiveness of the registration statement within 30 days.
• Monthly installment payments for the Debentures will commence on January 26, 2026.

Key Dates

Recommendation

The additional capital provides necessary funding for Energy Vault's growth initiatives and working capital, which is a positive for the company's operational stability. However, the convertible nature of the debentures introduces potential future dilution for existing shareholders, and the specific terms, including conversion caps and potential for increased payment premiums under certain conditions, warrant a cautious approach. The prohibition on using the at-the-market equity program until the third tranche is repaid also limits future financing flexibility. Given these factors, a 'hold' recommendation is appropriate as investors should monitor the company's execution on its projects and the impact of potential dilution.

Keywords

Energy Vault, NRGV, Convertible Debentures, Debt Financing, Capital Raise, Energy Storage, SEC Filing, 8-K, YA II PN