Post by
handyrandy321 on Jul 30, 2015 3:07pm
Loan repayments coming due by year end after tax loss season
Another red flag
During December 2014, the Company negotiated an extension of the loan facility, extending the maturity date to December 31, 2015 with the interest rate remaining at 9.0% per annum. In consideration of the extension, the Company paid an extension fee of C$0.1 million. Under the terms of the loan facility, the Company pledged all of its assets (including the assets of its subsidiaries) in favour of the lender as security for the loan facility. In addition, the subsidiaries have each provided guarantees to the lender for the repayment of any amounts advanced to the Company under the terms of the loan facility.
As part of the Newstrike acquisition, the Company inherited a C$2.0 million ($1.6 million) debenture. The debenture requires annual cash interest of 5%, paid semi-annually, and 225 common shares of the Company for every C$0.1 million ($0.1 million) principal value outstanding on a monthly basis. Unless extended, the debenture matured on the closing of the Newstrike transaction.