Convertible Debenture Example

An Example Convertible Debt Deal

• Market share price on date of close $2.10
• $2 million in the form of a two-year fixed price Convertible Secured Note, which is convertible into common shares at $2.33 a share
• Represents a premium to market of approximately 10%
• The note carries interest of 1.75 percent above prime with a floor of six percent per annum
• The Company can elect to pre-pay the note in cash
• The investor was granted a warrant to purchase 125,000 shares common stock for a period of five years from the date of the transaction.
• The per share exercise price of the warrant is $2.68 for 75,000 shares subject to the warrant, $2.91 for 35,000 shares, and $3.38 for 15,000 shares.
• Market share Price 60 days post closing $2.30