Groove: Re: Where the previous convertible notes considered "death spiral"?
No.
Can these notes that NVEI just obtained be paid off early?
Yes.
In regards to the warrants. What happens if it gets bought? What happens to those warrants then?
Geez. Do any of you cheerleaders ever even read the filings?
First off, the warrants are, by definition, a right to purchase stock in the future at a pre-determined price. The "investors" were "given" the warrants, but that *only* means that they were granted the right to purchase stock in the future at the guaranteed price as stated in the agreement.
The warrants have a "cashless" exercise option where the holders can convert them into shares without actually buying the shares. This will *only* work if the current share price is greater than the strike price for the warrants. There are two types of warrants in the deal. The first are exercisable at any time within the next year at a strike price of $0.15. If, in the next year, the share price goes above the strike price, the holder can effect a cashless exercise that basically would give them a number of shares equal in value to the difference between the price at the time of conversion and the strike price. For the warrants to have any value at all, the share price must be greater than the strike price. If, after a year, the share price never exceeds the strike price, the warrants expire worthless.
Same thing goes for the second set of warrants except the term is 3 years, and the strike price is $0.30.
Now, the suspicious part of me believes that there will be another orchestrated PR pump campaign intended to briefly drive the share price above the strike price sometime in the next year, so these holders can convert the warrants into free shares.
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