RE: Financing News..dshdsh...Sprott does not have any rights to convert to ED shares unless MOA defaults. This is a "limited recourse convertible note"...it is not convertable at the call of the holder.
Sprott cannot convert his debt into ED shares except if MOA doesn't pay him back. MOA has the option of paying Sprott back in Cash or ED shares anytime after one year and must by the end of 2 years.
If MOA choses to pay back in shares, they have a minimum value already set at $2.00 no matter whether ED goes public or not. Thus Sprott under no cicumstance can ever get more that 1MM shares to cover the $2MM debt. If ED goes public and the price increases above $2.00, MOA has the option of paying cash or paying back in market valued shares. In other words, if ED shares are trading above $2.00 and MOA decides to give Sprott some ED shares to settle the debt, they get priced in the open market. Example: ED shares trading at $4.00; Sprott get 500K shares to settle the debt. It should also be well noted that MOA has the "right" to do a transaction like this anytime after one year.
Should ED not go public or trade below $2.00, then MOA's total obligation is just the 1MM shares Sprott holds as security. This needs to be fully understood to see how well MOA has structured this deal and how Sprott has found it a very accceptable risk....C.Gert