Starmet arranges $4M convertible debenture offering

Executive Summary

• Starmet Ventures Inc. announced its intention to complete a non-brokered private placement of unsecured convertible debentures to raise up to $4 million in aggregate gross proceeds.
• The debentures carry a 10% annual interest rate, mature in two years or upon listing on Nasdaq, and are convertible into units consisting of one common share and one warrant.
• Proceeds will be used for general working capital, and the transaction is subject to regulatory approval and closing in tranches.

Key Details

• Transaction Structure: Non-brokered private placement of unsecured convertible debentures.
• Gross Proceeds: Up to $4 million.
• Interest Rate: 10% per annum, calculated monthly and payable annually in cash or accrued for conversion of the conversion price.
• Maturity: The earlier of (a) the two-year anniversary of issuance or (b) the date the company's securities begin trading on Nasdaq.
• Prepayment: The company may prepay principal and accrued interest without penalty with 14 days' notice to holders.
• Conversion Terms:
  • Conversion Price: 35 cents per unit.
  • Unit Composition: One common share and one common share purchase warrant.
  • Warrant Exercise Price: 40 cents per common share.
  • Warrant Term: 24 months from the issuance date of the unit.
  • Conversion Right: Holders may convert outstanding principal and accrued interest into units at any time on or before the maturity date.
• Use of Proceeds: General working capital purposes.
• Finder’s Fees:
  • Cash fee: 8% of gross proceeds raised.
  • Share fee: 12.5% of the number of units issued upon conversion of debentures placed by the finder.
• Regulatory/Listing: Subject to approval by the Canadian Securities Exchange and filing of required documentation.
• Hold Period: Statutory hold period of four months and one day following issuance under Canadian securities laws.
• Closing: Anticipated in one or more tranches following receipt of necessary approvals.