Not even sure a White Knight can come to our rescueIf you doubt that our ‘management team’ have placed us in a rather precarious financial position, read the ‘not so fine’ print in the agreement with Fancamp.
The Secured Convertible Promissory Note shall be convertible, in whole or in part, at the option of Fancamp, at any time following the closing date, up to and including the maturity date, into fully-paid MVS at a conversion price equal to a premium to the Base Conversion Price if converted anytime on or before the two year anniversary of the closing date, and at the Base Conversion Price if converted anytime thereafter (up to, and including, the Maturity Date), in each case, subject to adjustment in accordance with the terms of the Secured Convertible Promissory Note.
Immediately following the issuance of the Secured Convertible Promissory Note and the Warrants, Fancamp beneficially owns or controls the Existing Shares and securities of KWG which are convertible or exercisable into: (a) 8,088,908 MVS, assuming the conversion in full of the Principal Amount on the basis of a base conversion price of C$4.2651 and subject to adjustment (if any) as contemplated in the Secured Convertible Promissory Note; and (b) 4,044,453 MVS, assuming the exercise in full of the Warrants, collectively representing, in the aggregate, approximately 68.27% of the issued and outstanding MVS (approximately 41.83% of the issued and outstanding Shares, assuming the conversion of all issued and outstanding SVS into MVS at the current conversion rate).
On any announcement of a business combination, take-over bid or other change of control involving KWG as the target, Fancamp will have the right to convert the Secured Convertible Promissory Note at the Base Conversion Price and/or to exercise the Consideration Warrants at the Base Conversion Price, in each case, in whole or in part, at the option of Fancamp, prior to completion of the change of control event.