HIVE debentures worth $15M USD to be issued to US Globalhttps://hiveblockchain.com/news/hive-blockchain-announces-private-placement-of-convertible-debentures/
HIVE Blockchain Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (FSE:HBF) (the “Company” or “HIVE”) is pleased to announce, subject to regulatory approval, that it intends to complete a non-brokered private placement (the “Transaction”) of unsecured debentures (the “Debentures”), for aggregate gross proceeds of USD$15,000,000 with U.S. Global Investors, Inc. (“U.S. Global”).
The Debentures will mature on the date that is 60 months from the date of issuance, bearing interest at a rate of 8% per annum. The Debentures will be issued at par, with each Debenture being redeemable by HIVE at any time, and convertible at the option of the holder into common shares (each, a “Share”) in the capital of the Company at a conversion price of CAD$3.00 per Share. Interest will be payable monthly and principal will be payable quarterly.
This was issued on Dec 24. I'm a hobbyist trader and don't understand the finances deeply so I'm hoping some of the more knowledgeable posters here can shed some light on this.
Since the debentures being issued are for a total of $15M USD, it would be in US Global's (where Frank Holmes is the CEO & CIO) best interest for HIVE's SP to be as low as possible till they are issued. The lower the SP the more the number of debentures that can be issued.
Now the debentures can be redeemed by HIVE for $3 CAD at any time. That means if they are issued to US Global for more than $3, they will have lose money (minus the interest) when the deb. are redeemed.
So that is even more of a reason for US Global to want to keep the SP as low as possible till the debentures are issued.
Does this make sense to anyone else or am I getting this completely wrong?