This is the fundamental paragraph in the CN, having held XPE, in italics below. I don't think it is as bad as XPE. My take is the floor is 1.5c, but lets assume the price for 10 days averages 2c on all 10 days then the holder can convert at 1.5c. But now lets say that the SP is 1c on each day for 10 days - my take is then the holder can convert at a 10% discount to 1c, been o.9c. A 10% discount probably isn't too bad as might prevent the type of dumping we saw in XPE. In other words CN holder would dump only if prices rises. This is an uneducated guess as CNs are not my bread and butter. Anyway anyone else have thoughts?
Each Convertible Note will be convertible into ordinary shares in the Company from the date that is 2 months after they are issued, at the option of the Investor at the lower of an agreed floor price or at a price equal to 90% of the average of the four (4) lowest daily VWAPs over the ten (10) Trading Day period on which trading in shares occurred on ASX immediately prior to the election to convert. The agreed floor price at the time of conversion will be the lower of A$1.5 cents per share and the lowest price at which the Company issues shares during the term of the Convertible Notes (other than pursuant to the conversion of a Convertible Note, an entitlement offer, or the exercise of any outstanding performance shares on issue).
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- Ann: Convertible Note Issue for $1.0 million
Ann: Convertible Note Issue for $1.0 million, page-20
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