KWESST Micro Systems (KWE.V) announced a non-secured loan financing with various lenders for $1.8 million, and received $120,000 Notices of Exercise from certain warrant holders.
The loan has a 9% year interest rate, compounded monthly, with a maturity in 13 months. The company has the option to repay the whole or any part of the loan, without penalty or premium at any time. Kwesst issued 900,000 shares to the lenders, which is about 20% of the total dollar amount divided by the market price, or $0.40.
A notice of exercise is when a grantee of a company gives a written notice of an award. This is usually to be delivered by a warrant holder when they exercise any part of their holdings.
“Given current financial market conditions and hostilities in Eastern Europe, we felt it was prudent to strengthen the Company’s cash position at a time when it is advantageous to be able to build product for ready delivery of expected orders. I, and others in the Company, are pleased to have participated in the Loan as well as exercising warrants,” said David Luxton, executive chairman, who added
It’s probably a good call on Luxton’s part. As the situation heats up in the Ukraine there’s going to be more demand for the type of services KWESST offers and having some cash on hand to operational uses, not to mention any potential acquisition opportunities, is warranted.
Insiders and employees threw in an aggregate of $100,000, with insider participation at $74,000 in shares. The fact that insiders are looking to pick up good sized parcels of stock suggests considerable confidence in the company, the product, and the leadership, and if these guys can roll into the Ukraine situation all cashed up, who knows what they might roll out with.
Good deal.
—Joseph Morton
