SPT (ASX) Ann: Trading Halt

Originally posted by Tekvest: ↑

The company asked for suspension pending an announcement, in view of an event which will result in holders being asked to vote upon:

1/ the already known resolutions regarding Convertible Notes, issued in 3 tranches over the ensuing 12 months

2/ an as yet unannounced resolution which will result in holders being asked to delist the company

Within today's announcement the company states that the hitherto mentioned Convertible Notes funding is the only option available to it and without it the company will be in breach of its covenants with Goldman Sachs, it will run out of cash and will be wound up. It also states that it has no other short or long term funding options. It sets out a vast table of consequences of dilution at various prices, should all tranches of the Convertible Notes be taken up. Those effects of dilution will result in extreme concentration of ownership of stock by the 2 holders of the Convertible Notes.

The company is domiciled in Israel. Under Israeli law the 2 Convertibles Notes holders may hold a maximum of 24.99% of the company's stock each.

In my opinion holders will be asked to vote upon a proposal for the 2 Convertible Holders to purchase the entire stock of the company it does not hold, avoiding a breach of Israeli Corporations Law, under a Scheme of arrangement, most likely at only a few cents, and only to avoid the company being liquidated with no return to its shareholders.

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Hi Tekvest, you understand the position of the company clearly. There may be some upside for shareholders and the con notes do not fall into the category of 'death spiral funding'. I would expect that there will be a lot more shares on issue but in fewer hands.

It may be seen as a direct threat to shareholders and there is no real 'White Knight, only the choice not to go broke this month. Maybe go broke later.

The board should loose their jobs by inadvertently threatening shareholders i.e. if you don't vote for what we want, don't be surprised if we are forced to delist the company because we are not sophisticated enough in getting other forms of funding.

The board actually lied to shareholders in what they have stated. They can hold another meeting in another 28 days with an alternative scenario re; funding.

This is hotting up and the ASX may step in.

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