Stewart Lake Resources (TSE) recently received $500,000 under a Series A Debenture and Warrants issued under a March 12 loan agreement with Trinity Capital Corp. The 5-year debenture bears interest at prime plus 1% and the principal amount is convertible at Trinity’s option into Stewart Lake common shares at $1 per share.
Under an agreement, the company can also force conversion if its shares trade at an average price of $1.75 a share for 60 consecutive trading days and if the shares are free to trade.
Interest under the debenture may be capitalized and, subject to The Toronto Stock Exchange’s approval, can be converted into common shares of Stewart Lake at $1 per share or at a price that is acceptable to both the company and Trinity Capital.
Warrants under the Series A Debenture were issued to Trinity for a 3-year term to purchase 250,000 common shares of the company in four instalments of 62,500 shares at prices ranging from $1.25 to $2.
Stewart Lake can force the warrants to be exercised if the shares trade at an average price which is 25% above the exercise prices for 60 consecutive trading days and if the shares issued on conversion are free to trade. Stewart Lake is currently developing a graphite property north of Kingston, Ont.
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