I’m only now coming up to speed with the terms of the placement. Dangerous territory for shareholders.
The Company entered into a Share Placement Agreement with Specialty Materials Investments, LLC (the Investor) on the 27th of May 2021.• Total AUD amount that can be drawn down: $8,000,000
• Initial deposit shares issued: 2,800,000 shares at $0.235 per share
• Fee paid: 1,021,276 shares at $0.235 per share
• Final AUD value of shares to be issued: $8,480,000 (“subscription amount”)
• Other Terms:
• The final number of shares to be issued by the Company will be determined by
applying the Purchase Price (as set out below) to the subscription amount. The Purchase Price will initially be equal to $0.30 per share and will reset after 10 August 2021 to the average of the five daily volume-weighted average prices selected by the Investor during the 20 consecutive trading days immediately prior to the date of the Investor’s notice to issue shares, rounded down to the next half a cent if the share price is at below 50 cents and whole cent if the share price is at above 50 cents, with no discount applicable to this formula. To the extent that Placement Shares are issued after six months, or 12 months, the Investor will receive a discount of, respectively, 3% or 6% to the foregoing Purchase Price formula.
• The Purchase Price will be the subject of a Floor Price of $0.16. If the Purchase Price formula were to result in a purchase price that is less than the Floor Price, the Company may refuse to issue shares and instead opt to repay the relevant subscription amount in cash (with a 5% premium), subject to the Investor’s right to-receive Placement Shares at the Floor Price in lieu of such cash repayment. The
Purchase Price will not be the subject of a cap.
• The Company will issue the Placement Shares in relation to all or part of each of the
above investments on the Investor’s request, during the period ending 24 months
after the date of the investment.
• The Company has retained the right (but has no obligation) to repay the
subscription amount in cash in lieu of issuing shares by way of a repayment of the subscription amount together with the difference between the market price of the shares and the Purchase Price (if any) in relation to the shares that would otherwise have been issued.
