RE: Incentives24 May 2019 14:53
ValJu,
The louder you beat the drum the better it will be / less worse it will be for shareholders.
Unfortunately, the BOD has entered into the agreement with EHGO with such egregious terms that voting down the approval of new shares could lead to bankruptcy. But the terms seem so one sided...
From the funding RNS:
Terms
Under the terms of the Agreement, the Investor has committed convertible funds of up to £6,000,000 ("Total Commitment") with a 0% coupon. The first tranche of £500,000 will then be subsequently followed by 22 additional tranches of £250,000. The Company may request to suspend the automatic disbursement of these tranches, but covenants to drawdown up to a maximum of eight tranches on demand of the Investor.
A "make whole amount" provision shall apply to the first tranche of the Convertible Funds such that the subscription price for the £500,000 tranche shall be reduced in the event that the Company's share price declines in the period to the issuance of the first tranche. This is to be calculated by multiplying the stock performance of the Company (expressed as a percentage) by £1,000,000.
The convertible funds may be converted into shares in the company twelve months from issuance at a price equal to 95% of the lowest closing bid price in the 15 days immediately preceding the issuance of a conversion notice by the Investor.
Warrants
The Investor shall have the option to purchase an amount of the Company's shares equivalent to 25% of the Total Commitment during a period of five years. The exercise price is to be calculated as 120% of the lower of either the lowest closing bid price in the 15 days immediately preceding the date of the signing of the letter of intent or immediately preceding the request to issue the first tranche.
Additionally, the Investor shall have the option to purchase an amount of the Company's shares equivalent to 15% of the value of each tranche of convertible funds during a period of five years. The exercise price is to be calculated as 120% of the lowest closing bid price in the 15 days immediately preceding the issuance of a new tranche.
Share Authorities
The directors of the Company have sufficient authority to issue shares and rights to subscribe for shares in relation to the subscription, but will be required to receive authority at a forthcoming shareholders meeting to enable the Convertible Funds, including the attached Warrants, to be implemented.
Should this not have occurred by 21 June 2019, it will prevent the Company from being able to sign the definitive documentation relating to the Convertible Funds, and as such the Break Fee will crystallise.
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