Artivision: The convertible loans are approx $5m in total and are convertible to shares at $0.20. This is definitely beneficial to the company as they are still sustaining losses approx over $1m every quarter. While the interest at 8% seems high, if the company goes bankrupt, the lender will effectively lose his capital as well. The convertible loans are due in 12 mths after the first drawdown. Co as of last reported is in negative equity.
There is another clause which allows the lender to participate in the upside assuming the company performs. Artivision has given the option for the lender and a nominee to subscribe for $1.25m worth of shares at $0.18. Note that this is a benefit to the lender and nominee as they can choose to exercise the option if the shares trade above the value of $0.18.
This comes with a lock-in clause that Artivision’s controlling sh/h Algotech will not dispose of its 35.3% stake. The lender incidentally appears to be Oxley’s Ching Chiat Kwong.
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