One of the companies which may be worth tracking this week is Electric Royalties Ltd (OTCMKTS:ELECF) following the developments from last Friday. After having made the announcement through a press release last Thursday, it announced that it had decided to draw down as much as C$500000 under the convertible credit facility worth C$5,000,000 with Gleason & Sons LLC.
Electric Royalties Announces C$500,000 Drawdown Under Convertible Credit Facility
Gleason & Sons is actually controlled by a significant shareholder of Electric Royalties. The loan in question is going to be for a term of three years and is going to carry a floating interest rate with a maximum interest rate of 12.5%.
The interest payments are actually going to be capitalized on to the principal and would become due at the end of the term. However, at the same time, it should be noted that the lender also had the discretion to turn the loan plus interest into common shares in Electric Royalties after six months from the initial date of the drawdown.
The company did announce yesterday that the credit facility it managed to get was a ‘related party transaction’ and is also exempt from the MI 61-101 valuation requirement.
