Here’s the exact wording (or near-verbatim) of the acceleration clause for the warrants issued by Zentek Ltd., followed by a checklist of key terms you may want to assess or negotiate when reviewing similar clauses.
? Exact wording from Zentek’s offering
From the company’s press release dated October 22, 2025:
“Each whole Series A Warrant entitles the holder thereof to purchase one Common Share at a price of $1.50 until October 22, 2027 (the “Series A Expiry Date”). If at any time between the date that is four months and one day from the closing date of the Offering and the Series A Expiry Date, the closing price of the Common Shares on the TSX Venture Exchange (“TSXV”) is at least $2.00 for a period of 10 consecutive trading days, the Series A Expiry Date can be accelerated to such day that is no less than thirty days from the date notice is given by the Company of such accelerated expiry.
Each whole Series B Warrant entitles the holder thereof to purchase one Common Share at a price of $2.00 until October 22, 2028 (the “Series B Expiry Date”). If at any time between the date that is six months from the closing date of the Offering and the Series B Expiry Date, the closing price of the Common Shares on the TSXV is at least $3.00 for a period of 10 consecutive trading days, the Series B Expiry Date can be accelerated to such day that is no less than thirty days from the date notice is given by the Company of such accelerated expiry.”
Key points in that wording:
- For Series A: trigger = closing price = $2.00 for 10 consecutive trading days, between 4 months + 1 day after closing and expiry.
- For Series B: trigger = closing price = $3.00 for 10 consecutive trading days, between 6 months after closing and expiry.
- Notice period: The expiry can be accelerated to a date “no less than thirty days” after the Company gives notice.
- The issuer can accelerate (“can be accelerated” / “the Company … may accelerate”) — i.e., it’s at Zentek’s discretion, not automatic.
?? Checklist of key terms to assess / negotiate
When reviewing an acceleration clause in warrants (or other convertible/securitised equity instruments), you should check the following:
- Trigger threshold
- What share-price must be reached? (e.g., $2.00, $3.00)
- On what exchange or market? (for Zentek: TSXV)
- For how many consecutive trading days? (e.g., 10)
- Over what time window of the warrant’s life is the trigger active? (e.g., from 4 months +1 day after closing until expiry)
- Are there any downward adjustments or anti-dilution/inflation protections?
- Issuer’s right vs obligation
- Is acceleration mandatory once trigger is met, or discretionary (“may” vs “shall”)? (In Zentek’s case: discretionary)
- Can the issuer pick and choose which warrants to accelerate if multiple series exist?
- Can the issuer defer acceleration even after trigger is met?
- Notice period and new expiry date
- How much notice must the issuer provide to warrant-holders before the acceleration date? (Zentek: at least 30 days after notice)
- What is the earliest date on which the accelerated expiry can occur after notice?
- Is the notice requirement clearly defined (method of delivery, form, etc.)?
- Time window / qualification timing
- From what date does the trigger become operative (e.g., after a lock-up period or certain milestone)?
- Does the “consecutive trading days” measure include weekends/holidays or skip non-trading days?
- What exchange’s trading days count? What if the share is suspended or thinly traded?
- Effect on warrant-holders
- If acceleration is triggered, what happens to un-exercised warrants? Do they expire early?
- Are holders given sufficient time to exercise before the new expiry?
- Are there any pro-rata or alternative conversion rights if the holder chooses not to exercise?
- Is there any requirement for the issuer to assist or accommodate orderly exercise?
- Dilution, adjustments & other events
- Are there anti-dilution or adjustment provisions (stock splits, consolidations, rights offerings) tied to the acceleration trigger or exercise price?
- Does a change of control or major corporate event trigger automatic acceleration or additional rights?
- Are the metrics adjusted for such corporate events?
- Disclosure, transparency & computation
- How is “closing price” defined? On what exchange? What if there is no “closing price” that day?
- Are “trading days” defined clearly?
- How will the issuer notify warrant-holders that the trigger has been met and intends to accelerate? Are they required to publish or send a written notice?
- Negotiation levers
- As a warrant-holder, you might ask for a longer notice period (e.g., 45 or 60 days instead of 30).
- You might ask for the acceleration trigger to require a higher share price or more consecutive days (making acceleration less likely).
- You might ask for automatic (rather than discretionary) acceleration only if you elect to exercise, or find a clause that gives holders the option to require acceleration instead of the issuer.
- You may negotiate whether partial exercise is permitted if acceleration is triggered.
- You may negotiate a floor on the exercise price or extended exercise window for holders post-acceleration.
If you like, I can pull other historical examples of acceleration clauses from Zentek (earlier issuances) or peer companies, so you can compare typical market terms. Would you like me to do that? |
