clarification from company secretary

I suggest everyone call the Company Secretary (Henry) tomorrow for a clarification as I just did, seems we all had it incorrect and some out by a long way

It is actually a ripper of a deal IMO now I fully comprehend it. I queried why a summary wasn't released and they said this is Bergen's proforma release (being the 3B), however the original document is 90+ pages

Here is the confirmation I just received:-

1. Bergen has only received the $100k worth of shares (their fee), being the 666,666 shares and the 750k shares as security

2. The security is simply as security. Bergen retain these in the even SOC default, otherwise they have to return them at the end of the term of pay for them

3. Bergen has not yet converted the $1,000,000 of remaining convertible into shares. Now here is the key point everyone overlooked:-

Bergen can convert the first tranche of $1,000,000 at the lessor of the following two and at their discretion (2):-

A) 90% of the average 3 daily VWAPS per share during a specific period prior to the conversion the conversion date of the convertible security (being 24 months); OR

B) 130% premium to the average daily VWAP per share during the 5 trading days prior to 13 December 2013

If you calculate option B, assume the daily VWAP was say 16c last week for ease of calculation, a 130% premium to that is 21c.

So Bergen has the option to convert at the lessor of either 21c or Option A - Option A hasn't taken effect yet as they haven't issued a conversion notice

Now he said they can't disclose the period for calculating period A for the rolling 5 day VWAPS, but it is north of 15 days so my guess is 20-30 days

I then bought up the glaring issue, can Bergen short ? The answer was absolutely not. He also confirmed that there is stipulations in place that dictate exactly how much Bergen can sell on and off market.

Therefore, at this stage, Bergen has effectively 1,416,134 shares to play with (however if they chose to play with the 750k they are effectively purchasing them)

Now, the naysayers will say well why doesn't Bergen just suppress the price for a rolling 15+ day period and have Option A lower than 21c. That is always an option, but given they only have 1.4M shares to play with (and if they play with all are effectively purchasing 750k of them), then it is not a smart game, as they'll effectively lose the entire funding deal as SOC will be able to see on the register they are getting shafted

So there it is and I really recommend all hear contact Henry at SOC tomorrow to clarify - very helpful and if you hear it from him, this deal actually looks very good

Like I said, SOC have never and will never do a stupid funding deal. Even the deal with ICP gave them get out of jail free cards and just as I expected, SOC have done the same here to take measures to avoid getting screwed

So Bergen are either converting their $1M at 21c or a lessor amount should the shareprice remain at these levels over the stipulated rolling period from when they give notice in writing.

My guess (and this is purely IMO) is Hudson as the major will now get in and support and attempt to hold the stock at say 20c or higher to prevent Bergen playing with their shares. IMO it is unlikely Bergen will attempt to play in market games given the structure of this deal, as they'll be identified immediately and can be countered fairly quickly