Mexus Gold US (MXSG)

[1manband]

The claims that the note will be repaid before maturity debt are not believable.

If they had other sources of funds, why didn't they tap them BEFORE issuing a toxic death spiral note in the first place?

Besides the truly AWFUL conversion terms (among the worst in history), the other terms were also onerous. 17% annual interest rate AND the issuance of 3,591,940 common shares as a bonus to the lender, which in addition to the $16,667 in interest was another $51,920.

Even if the note is repaid before maturity, the cost to Mexus was huge. For borrowing $150,000 for 7 months, it will cost Mexus $68,587. That is an effective annual rate of 78%!

And if the note is not repaid before maturity and the lender is allowed to convert into shares at a more than 50% discount to market, it will cost Mexus hundreds of thousands of dollars more.

If it is at all plausible that Mexus has alternate sources of funds to repay the note, why didn't they tap them in the first place instead of paying a 78% rate? Those are loan shark terms and obviously given to a debtor who is a very bad credit risk as a lender of last resort. So either PT is not being honest, or he is very stupid to have entered into a deal at an annualized cost of 78% of the loan instead of tapping one of the other sources of funds which we are now expected to believe exist to pay off the loan shark even though Mexus is now in worse shape than when the loan was originally taken?

That is very difficult to believe.