Ann: MSB Enters Into $75 Million Non-Dilutive Credit Facility, page-24

A quick research on Hercules Capital reveals that their venture debt financing deals usually come with warrants to purchase shares in the company at a discount.

The warrants are usually included to compensate the higher risks of default.

In MSB's announcement today, there is no mention whatsoever about options/warrants being issued to Hercules.


If in the next few days, there is an Appendix 3B announcement about warrants/options issued to Hercules, then today's announcement about a "Non-Dilutive" financing deal is quite misleading.

If there is no Appendix 3B issued, then well done to MSB for convincing Hercules to lend them money without any kind of securities.

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This deal with yet another new financing partner confirms that the deal that they had with Kentgrove was very disadvantageous for MSB, otherwise MSB would have used it by now.

I hope this announcement settles the debate about the merit of the Kentgrove facility.

MSB will try their very best to avoid the use of that facility.

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9.45% interest rate, interest only, in this very low interest rate environment, confirms that this deal is very much similar to a loan shark deal.

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Cantor Fitzgerald, acting as MSB's adviser, will definitely get nice commissions out of this. This makes the award that MSB got from them quite meaningless since it's not independent at all.

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Still, well done to MSB for pulling this rabbit out of nowhere.