The Company and the Note holder agreed to enter into a restructuring agreement regarding the settlement of the Note. The reasons for seeking the settlement consisted of a) the Company seeking an early pay-off on the Note so as to limit the amount of total debt service required if the Note were to run through term (the principal and the accrued but unpaid interest amounts outstanding under Note being reduced by $19,096,347 as a result of having this early payoff adopted); b) the additional cost of the Note running through full-term and its impact on the Company’s ability to repay the full debt plus interest upon its due date in 2020; and c) the depreciation in share price having curtailed any value for the Note holder to accept the amount of accrued interest to date into shares of common shares and the viability of exercising their option to convert any portion of the Note’s principal and future interest into SIAF common shares at $9.90 per common share (terms of the original Note) considering that the market had not been reacting more favorably toward the stock over an extended period of time while leaving little indication that there would be any reversal in this trend for the foreseeable future.
Both parties have agreed to restructure the indebtedness represented by the Note, as follows: (a) SIAF issues 5,196,333 shares of its common stock at $3.00 per common share and the transfer of 400,000 common shares of Tri-way Industries Ltd. to the Note holder; and (b) SIAF executes a new promissory note in the principal amount of $15,589,000 to the Note holder to be paid in installments over a period of time. However, both parties remain open to negotiate an all-cash settlement of the Note.
The Company feels that this arrangement serves its shareholders’ best interest by reducing the overall cost of the Note to the Company had it been carried out to full-term.
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