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Gold/Mining/Energy : International Precious Metals (IPMCF)
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To: Richard Mazzarella who wrote (27386)11/18/1997 1:19:00 PM
From: Gerald Walls  Read Replies (4) of 35569
 
Lee, the company convinced the funding people of something didn't they? I'm sure it wasn't the 0.045 OPT. Why would you invest in something with a 25% premium or at only 5% interest unless you knew you would make money. Now, if you are interested in conversion, would you do it cheap or expensive? Wild thinking? Maybe, walk it through.

Where did you get your info (honest question, not an attack)? All I can find is the 125% mentioned in the PR and this:

Q11. What are the details of the US $10 million funding?

The company will issue redeemable convertible notes to several institutional investors to raise up to US $10 million. The notes will be converted at some time in the future at the option of the holders or at 5 years, and will appear as equity on IPM's balance sheet. The notes will also have a strike price that takes advantage of any upward moving share price. This allows for smaller dilution of capital as the price increases.

I can't find anything about 5%.

To me this looks like IPM is selling $10M in notes that will pay some amount of interest not specified here and in a maximum of five years will be paid back with $10M ($10M / 1.25?) worth of IPM stock based on the market price at that time. Is this correct?

One thing I notice here is that if the price drops enough the bond holders can convert enough shares to control the company (around 50 cents for absolute control, maybe $1 for effective control). It looks to me that since the bond holders will receive $10M worth of stock regardless of the price then they would benefit from a lower stock price as long as the company is still a going concern.

Help me understand here.
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