The loan notes are convertible into 95.5 million new ordinary shares in Addvalue’s capital or at the conversion price of 1.3 cents per share. Each share will also have 95.5 million free detachable warrants with each warrant carrying the right to subscribe for one new share at an exercise price of 1.3 cents per warrant share.
The notes bear interest at the rate of 9.0% per annum on its outstanding principal amount from the issue date. The interest is payable in cash on March 31 and Sept 30 of each calendar year with the first payment occurring on March 31, 2024.
The right to convert the loan note into shares may only be exercised if the outstanding principal amount of the loan note is less than $130,000 or if the note’s outstanding principal amount is over $130,000.
According to Addvalue, the company expects to raise $1.1 million in net proceeds of the convertible loan notes, which will go towards repaying its loans. The amount will also be used for working capital.
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The warrants are expected to net the company $1.2 million in proceeds.
On a pro forma basis, had the loan notes and warrants been converted into shares on April 1, 2022, the group’s earnings per share (EPS) for the FY2023 ended March 31 would have been at a negative 0.09 US cents (12.3 cents), from 0.10 US cents.
Had the loan notes been converted into shares as at April 1, 2022, Addvalue’s net tangible assets (NTA) per share would have been a negative 0.04 US cents and at a negative 0.01 US cents if both the notes and warrants were converted into shares. This is compared to the negative 0.07 US cents as at March 31.
Shares in Addvalue closed flat at 1.2 cents on Oct 13.
