Warrants
On July 16, 2013, USA announced:
Debt Re-financing and Liquidity Update
The Company has agreed on terms to extend its current debt of $7.9 million under its senior secured line of credit facility agreement (the "Credit Facility") with Hale Capital Partners ("Hale") for an additional 24 months. The parties are working on definitive documentation and the extension is subject to customary conditions. An additional $2.1 million will be made available under the Credit Facility on the satisfaction of conditions that the Company expects to be attainable (including the delivery of the final SMP). In consideration of the extension and other amounts advanced or forgone (including an additional $1.0 million in cash, the additional $2.1 million under the credit facility and a waiver of all fees except professional fees associated with the extension), the Company has agreed to grant Hale a 1.5% net smelter return ("NSR") royalty on its Galena properties.
This absurd deal was trumpeted by SandySoyle and his merry crew of propagandist minions. It's hard for me to believe that this was actually contemplatged, yet announced.
On August 08, 2013, USA announced:
The Company has signed a credit agreement with Royal Capital Management Corporation as security agent, and certain lenders for the issuance of CDN $8.5 million notes (the “Notes”) with a three-year term. The Notes carry a comparable annual interest rate of 12%, payable monthly, and are secured by a first charge on all material assets of the Company. Beginning two years following the date of issue, the Notes will be redeemed in monthly increments of $500,000 with the balance due and payable on maturity. The debt may be repaid at any time during the three-year term, subject to a repayment fee. In connection with closing the transaction, the Company will issue 10,625,000 warrants. Each warrant allows the holder to purchase one of the Company’s common shares for a five-year term, and will be issued with an exercise price of $0.68, subject to downward adjustment in certain circumstances.
Unlike the previously announced term sheet with Hale Capital Partners, this new credit agreement does not require the Company to pay a net smelter return royalty.
In place of the net smelter royalty the company instead gave up 10,625,000 full warrants. What's that? about 15% of the company for the privilege of borrowing some cash? Again, SandySoyle and the merry moron minion crew is ecstatic. Totally awesome in their eyes.
Now, when you take into account trading 30% of your share value for an uneconomic garbage mine, another 15% for just a loan, the massive drop in share price of about 70%, it's a catastrophe for shareholders. However, SandySoyle and his merry crew of idiots just love it. We haven't even talked about the millions of options that management has awarded itself.
Oh, and if you want more.... just go and read this..... I know that SandySoyle and his idiot followers will just love this, too......
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=102452885
You see.... no matter what the company does..... SandySoyle and the merry band of idiot followers have no problem with it. You have to question the integrity of people that don't care how much value the common shareholders lose and at the same time don't mind at all how much value insiders are awarded.