Ephraim Resources Ltd (ASX: EPA) announced a private placement of 50,000 convertible notes for gross proceeds of AUD 50,000 with individual investor Lam Gim Hua on October 31, 2018. The convertible notes will be converted into fully paid ordinary shares in the capital of the company at a conversion price per ordinary share which is a 30% discount to the price per ordinary share issued pursuant to the proposed Bio-Nexus Limited acquisition as announced on the Australia Stock Exchange on 10 July 2018. However, the conversion price is subject to a minimum conversion price of AUD 0.20 per ordinary share. The notes will have a maturity period of 24 months from the date the convertible notes are issued, with interest accruing at a fixed rate of 10% per annum compounded monthly in arrears on the last day of the month. The convertible notes will automatically convert into ordinary shares on completion of the transaction subject to receipt of any requisite shareholder approvals and only if the transaction has completed by 31 March 2019. On completion of the transaction, the company will also issue one option for each ordinary share in the capital of the Company issued on conversion of the convertible notes. The options will have an exercise price equal to the conversion price of the convertible note and expire 24 months after completion of the transaction.
On the same day, the company announced that it has issued the convertible notes.