Liberty Star raises $67K in high-cost convertible note
What's the deal? Liberty Star Uranium & Metals Corp.Dealroom has a profile for this one. Try Dealroom → (OTCQB: LBSR) has secured $67,000 through a convertible promissory note issued to 1800 Diagonal Lending LLCDealroom has a profile for this one. Try Dealroom →. The note, issued on 11 August 2026, carries an 8% interest rate and a 10% original issue discount of $6,700. Liberty Star plans to use the gross proceeds for general working capital.
The terms: The note matures on 30 May 2027, with conversion into common stock available 180 days after issue. The conversion price sits at a 25% discount to the average of the three lowest closing bid prices over the 10 trading days before conversion.
What could go wrong? The structure is highly dilutive. The discount lets the lender acquire shares well below market value, and Liberty Star must reserve 3.5 times the shares issuable on full conversion. That block of discounted convertibles can create downward pressure on the stock.
Why now? This is a quick re-raise for the company, which is again tapping expensive short-term financing to cover working capital. The 10% original issue discount plus the 25% conversion discount make it a costly source of capital.
The signal: Small-cap miners with limited access to conventional funding often turn to convertible notes like this one. The trade-off is speed and availability against a high cost and the risk of heavy shareholder dilution.
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