GREY:IPRSF - Post by User
Comment by
lscfaon Feb 17, 2016 12:34pm
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Post# 24566640
RE:Amended credit agreeement
RE:Amended credit agreeementThis is a good deal that minimizes dilution considering the alternative.
If LAB did an equity issue now @ $0.10 to repay the $14 million US it would have issued 192 million shs. (14 mil x 1.37 / 0.10). Instead, LAB has to reduce the strike price on 35 million warrants from $0.195 to $0.10, reducing potential future proceeds by only $3.325 million.
Deferring all debt repayments until the end of the year gives the co. time to post several quarters of results and boost the share price so that existing warrants may be exercised and/or an equity issue can be done at a less dilutive price than now.
The 2 yr. $28 mil loan with a $14 mil payment in 90 days was unusual. LAB and the lender must have thought the share price would climb from the $0.20 level at the time due to the large synergies of merging Akamon/Diwip and an equity issue at say $0.40 would have been done to repay the $14 million. Unfortunately the general stock market tanked and LAB investors became even more irrational.