Structure
● Provides ongoing access to capital and a channel to periodically and selectively raise equity.
● Unlike like traditional equity lines/SEDA structures, Allied is investing capital up-front.
●Stock is not sold in order to fund the transaction.
Issuer Friendly Terms
● Funding available regardless of market conditions.
● Quick to market – funding occurs within days of submission of executed agreement.
● Shares are issued at Investor’s option, interests are aligned with the Company.
● Convertible Facility could be used to further enhance credit and borrowing capacity.
● Provides investors and market with comfort that the company has a long-term partner to fund
growth in addition to commercial bank financings.
Flexibility
● Company receives capital up front and can assess from there.
● No covenants or restrictions to prevent the company from seeking outside financings.
● Provides access to equity capital without complications of traditional offerings .
Commitment Amount
● Typically 33% of Market cap at time of agreement (fixed amount) over 2-3 year period.
● Cash up front and mutually agreed upon additional tranches.
Up-Front Advances
● Designated as a function of anticipated use of proceeds and daily market liquidity.
● Typically priced off historical market prices.
Notes
● If larger amount is required due to unforeseen short term capital requirements, Issuers may request
larger advance from the Convertible Facility subject to trading parameters
● Company management has option to redeem
● Benefit of stock price appreciation over the repayment period retained by the company and aligns
Broad Winds interests with those of the Company
Restriction on Resale
● The Investor may resell a portion or all of the Shares from the Convertible Facility
No Short-Selling
● The Investor is prevented from selling or short-selling any of the Company’s securities except selling Shares which are due to be delivered to the Investor pursuant to a Conversion Notice which has been issued by the Investor or from any share lending facility that the Company may arrange
Anticipated Process Timeline
| Week 1 | ||||||
|---|---|---|---|---|---|---|
|
Investor and company sign the Non Binding Convertible term sheet. Once signed, investor sends Engagement letter to company. |
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| Week 2 |
Investor conducts due diligence (financial, legal and operational). Investor’s counsel sends legal draft to the company and its counsel. |
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| Week 3 & 4 |
The company and its counsel render comments on the agreement. Address any additional due diligence points and Investor completes due diligence. Final draft of the agreement circulated. |
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| Week 5 |
Closing |
Note: Timing can be decreased depending on certain factors.
Shareholder Approval
●Grant of issuance on non pre-emptive basis.
●Standard board authority required in order to issue new equity.
Prospectus (if applicable)
● May not necessary in order to enter into convertible facility.
●Free trading, full-registered shares.
