Ann: Unmarketable Parcel Share Sale Facility, page-22

I hope this is easy to follow?

Why would Mercer lend MXC money?


Tranche 1 cash = $2.25m
Notes issued, face value = $2.475m

That’s a $250k draw down fee. #1

Plus Commencement shares,
9,375,000 @ say 2.3c = $216k

Note - A prospectus has been lodged that will remove any trading restrictions that would have been applied to these shares. They can be sold.

Lend $2.25m and get ~$460k return, plus any profit that could be made from selling shares from conversion of notes.


Subsequent drawdowns $12.75m SUBJECT TO ......with $14.025m $1 notes to be issued.


In other deals of this type that I have seen, normally there is a condition for subsequent drawdowns.....

That being......That all shares issued from conversion of notes from previous drawdowns must be sold and further drawdowns are subject to.....


(Research so called “death spiral” financing)


And the winner is Mercer Street! As long as they can sell the shares from any conversions. If not, their money is secured against assets.


Commencement shares,
9,375,000 @ say 2.3c = $216k


Tranche 1
10% drawdown fee. #1
2 month floor price 2.4c
After which it’s 2c
And ~8% discount



Further Drawdwns
10% drawdown fee. #1
~8% discount on the notes
Floor price 1.8c

#1 - drawdown fee is used, face value less issue price less.

Feel free to check my figures.