Verus International Inc (VRUS)

[GermanCol]

He is trying to make people believe that 0.001 is the conversion and exercise price for the notes and warrants, which is not true. 0.001 is just the par value, which is totally different from market price.

Link to Investopedia

Par value for a share refers to the stock value stated in the corporate charter. Shares usually have no par value or very low par value, such as one cent per share. In the case of equity, par value has very little relation to the shares' market price.

In our case, the conversion price for the notes and warrants is 90% of the lowest sale price per share during the 30 trading days immediately preceding the date of the Notice of Conversion. This is great news and very unusual in the OTC, just 10% discount. Normally discounts are around 50% because investors are just looking for a short term - high percentage benefit over a low share price. The lower the price goes before conversion, the better for them. On the other hand, when discounts are so low, as is our case, the investors get the benefit not from a high percentage of discount, because they don’t have it, but from an expected high share price increase. That is the way they benefit, with prices going really higher. As this is the case, there is no incentive for them on geting out in the short term, the real benefit comes from waiting for the prices to go higher. Also, this is a proof that what the company mentioned is true, we have friendly investors that are here for the long run. They are on our same side.

Link to 8K

Convertible notes (pgs. 114 and 238 of pdf):

Conversion Price . The “ Conversion Price ” shall be determined as follows, subject to adjustment herein as provided in Section 5 below. Except during the occurrence and continuation of an uncured Event of Default, the Conversion Price shall be ninety (90%) percent of the lowest sale price per share on the Principal Market during the thirty (30) Trading Days immediately preceding the date of the Notice of Conversion (“ Base Conversion Rate ”).

Warrants (pgs. 81 and 207 of pdf):

(b) Exercise Price . For purposes of this Warrant, “ Exercise Price ” shall be determined as follows. At each conversion, in whole or in part, of the Note, the Conversion Price in effect for such conversion of the Note shall become the Exercise Price hereunder and shall remain so until the next immediately following conversion, in whole or in part, of the Note. Additionally, the number of Warrant Shares as to which this Warrant shall be exercisable at such price shall be the same number as the number of Shares received upon such conversion of the Note. Upon each and every subsequent conversion, in whole or in part, of the Note, the Conversion Price in effect for such subsequent conversion shall become the Exercise Price hereunder and shall remain so until the next immediately following conversion, in whole or in part, of the Note and the number of Warrant Shares as to which this Warrant shall be exercisable at such revised price shall be the same number as the number of Shares received upon such conversion of the Note. In the event that, for any reason, there has not yet been a conversion, in whole or in part, of the Note, then the Exercise Price shall be ninety (90%) percent of the lowest sale price per share on the Company’s Principal Market during the thirty (30) Trading Days immediately preceding the date of the Exercise Notice.

VRUS