IPO update, page-973

Finally had a look at the terms for the $5,000,000 con note. A bit hard to work out, but seems very generous to Lind - no surprises there. The amount to be paid back is $5,800,000. The conversion price of $3.50 is a bit misleading because the note will not necessarily be converted for shares at that price. The note has to be repaid in 20 equal monthly installments starting 3 months after the money is handed over. The installments can be cash or shares. If the company chooses shares, the price is calculated by 5 days of VWAP. If the shares are trading at around $2, then that's what Lind will get them for, not $3.50. I assume that if the VWAP is over $3.50 (we can only dream), then they will convert at $3.50. Lind also gets over a million warrants with an exercise price of $3.50 and an expiry of 60 months. This is basically free money if the share price goes over $3.50 in the next 4 years. Quite a lot of dilution here if GMVD chooses to pay back with shares instead of cash and the warrants are exercised.

There is also a provision for a 2nd con note for another $5,000,000. This one is even more generous if it is repaid in shares as Lind only has to pay 50% of 10 days of VWAP - half price!

That's my humble interpretation.

I still maintain a stubborn skerrick of hope for our investment even though I shouldn't. I will at least give them the benefit of the doubt until the Guthy Renker campaign is over and the VSMS is commercialised.