Blackboxstocks (BLBX) said Wednesday it finalized an agreement with Five Narrow Lane for financing of up to $2 million in senior secured convertible debentures, with an initial funding of $250,000 completed on Jan. 17.

The company said the financing, which carries a 7% annual interest rate, is tied to milestones related to a potential merger. The remaining $1.75 million will be issued in stages, contingent on actions including signing a merger agreement and regulatory filings, it added.

The debentures mature within 12 months or at the merger's completion, whichever occurs first, Blackboxstocks said.

The company said debenture holders may convert their investments into common stock at 175% of the prior day's market price, with a minimum conversion price of $5 per share. Conversion is capped to limit ownership stakes to under 10% unless reduced to 5% at the holder's discretion, Blackboxstocks added.

Last week, Blackboxstocks said it terminated its merger deal with Evtec Aluminium and was exploring other merger possibilities.

Shares of the company were up more than 93% in recent Wednesday premarket activity.