Convertible Facility

Overview of Convertible Facility

Structure


Provides ongoing access to capital and a channel to periodically and selectively raise equity.
Unlike traditional equity lines /SEDA structures, Broad Winds 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 should 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.



Securing long term financing at attractive levels



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 is retained by the company and aligns General Pacific Group 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.




Convertible Facility – Process & Timeline

Anticipated Process Timeline



Week 1:

Investor and company sign the Convertible term sheet.

Investor´s counsel begins drafting of the agreement.

Week 2:

Investor conducts due diligence (financial, legal and operational).

Investor´s counsel sends legal draft to the company and its counsel.

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.

Week 5:

Closing.
*(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)
Not necessary in order to enter into convertible facility.
Free trading, full-registered shares must be available at the time of initial funding.





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