Verus International Inc (VRUS)

[GermanCol]

I think most of people don’t understand the greatness of this new White Lion financial deal. I want to share my analysis about it after reading in detail the corresponding 8-K. Also I want to share why I think this is a much better deal for the company and shareholders than Andrew Garnock’s. The following table summarizes the differences and all without exception are advantages of the new White Lio deal vs. Andrew Garnock’s.



On the other hand, as shown below, last year the price started to increase and multiplied by around 20 times in 6 months when the new notes and warrants to replace the previous notes were announced. Important to notice it was not announced that Garnock and Berdon were the notes and warrants holders, that was publicly known later:



I think the story is going to repeat and now with a much higher price increase than 20 times, because the company has a much bigger business (when previous agreement was done, the company only had the GCC business) and much higher Revenue (last Q Revenue $4.647 million during Covid and $6.173 million pre covid and last Q Revenue reported when previous agreement announced was only $1.371 million). Additionally, now the funding is not only for paying notes but mainly for growth.

Because of not financing for growth through Garnock and Berdon agreements, the company ended having to take the notes that converted. I think Anshu learned from his mistake and now reached an agreement that left money for growth in case he doesn’t get comercial lending soon.

This new financing is a novel system that fully aligns investor and company . Contrary to toxic financing, both parties maximize benefits ONLY if price goes up as I’m going to explain. There is a limitation in the amount of financing of $5M and in the number of shares that the investor can buy of 4.9% of outstanding shates, that corresponds to 133,625,991 as shown below:

New OS if White Lion buys all shares: 2,593,435,051 / (1 – 4.9%) =2,727,,061,042
Maximum number of shares for White Lion: 2,727,,061,042 * 4.9% = 133,625,991

From company’s point of view, the ONLY way to get the $5M in finance is if share price goes up, because at the prices we have now, it would only receive $400,878 of the $5M (133,625,991 shares X 0.003 = $400,878).

From the investor’s point of view, since they have a limited number of shares that they can buy, the ONLY way to maximize the benefit is if they buy not at this share prices but much higher and with higher percentage increase in price.

Examples using just a 50% increase in price;

133,625,991 shares X 0.003 x 50% increase= $200,439

133,625,991 shares X 0.03 x 50% increase = $2,004,390

And if the percentage is more than 50% benefit for investor will be much higher;

133,625,991 shares X 0.03 x 500% increase = $20,043,899

For both, investor and company is not favorable to execute all the deal at this pirces, but higher. All this is shown with the following calculation:

Average price:
5,000,000 / 133,625,991 = 0.03742

This is more than ten times the price we have now. So max conversion price is expected to be much higher than 0.03742.
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No more dilution from others permitted according to terms of the agreement, so guess what will happen with OS.

If Anshu can negotiate new notes supported in this agreement would be much better because he will be able to use more of the $5M for growth and then he will be able to use it at much higher share prices with all the benefits yhat will bring.

The due diligence done by the investor and the limitations for any additional limitation also favors us as shareholders. No short sales

You don’t have to believe me blindly. My advantage, more than 3 years as a shareholder, so I know what I own. Your own Due Diligence is your best weapon.