RE:Drops.6 cents What now ?
NRs are not clear. Per fins co. has only issued $900,000 US in convertible notes due March 01, 2023. Convertible at $0.17 US means 5,29$,118 Shs.
Convertible Note Payable
On November 1, 2022, the Company issued a secured convertible note payable (the “Note”) to Meridian LGH Holdings 2, LLC, (the “Lender”) an affiliate of an insider of the Company, in the aggregate principal amount of up to $1,600,000. The Note matures on March 1, 2023 and has an interest rate of 12%, unless an event of default has occurred and is continuing, at which time at the election of the Meridian LGH Holdings, interest would accrue at a rate equal to the lesser of 16% per annum or the maximum rate permitted under applicable law. The Note contains customary events of default, which accelerate the maturity date of the Note. The Note also contains an accelerated maturity clause if the Company obtains equity financing of not less than $5,000,000, completes a merger, an amalgamation or a sale of all or substantially all assets of the Company.
The Note is convertible in full or in part at any time at the discretion of Meridian LGH Holdings 2, LLC, into common shares of the Company at the rate of $0.17 (CAD$0.23) per share. Accrued interest is converted at the last closing price of the Company’s Shares on the TSX-V on the day prior to issuing a news release announcing the conversion. The Note is collateralized by the assets of the Company and is guaranteed by the subsidiaries of the Company.
The Company accounted for the Note in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). After assessment of the Note, no embedded features requiring bifurcation from the debt host contract were identified.
As of November 30, 2022, the Company received a total of $900,000 from the Lender. The Company paid $67,564 in issuance costs related to the debenture, which were recorded as a reduction of the balance of the Note. Debt issuance costs are being amortized using the straight-line method over the term of the Note, which matures on March 1, 2023.