Sky and Space Global Limited (ASX: SAS) is a satellite company. SAS is a satellite and software industry expert along with European and Israeli centres of Aerospace. The core business of the company is to operate a communications infrastructure based on nanosatellite technology and develop highly sophisticated software systems that will deploy, maintain orbit control and handle the communication network in space to provide global coverage.
The company today, on 21st May 2019, announced that it has executed an unsecured convertible loan agreement of US$1.1 million with independent, third-party Israeli finance provider, Telefox Ltd. The funds from the loan will be utilised to provide working capital and allow SAS to finalise discussions around a new funding package that will support the company to achieve its stated goals.
The maturity date of the loan is one year from the date of the payment of the principal amount minus the initial interest to the borrowers. The lender shall provide the borrowers with a loan amount of US$983,000 being (the Principal Amount less initial interest payment and applicable VAT of the initial interest). The loan amount shall be paid to the borrowers in NIS currency (based on the exchange rate as published on the date of provision of the actual payment).
The initial pre-paid interest repayment is 2% per month for the first five months (USD 100,000). After the initial pre-paid interest period, the outstanding loan amount will have a monthly interest at the rate of 2%, unless converted.
The repayment of the loan is due on the earlier of the maturity date or the occurrence of an event of default under the agreement. The borrowers may, at any time, by giving three days written notice to the lender, repay the full amount of the then outstanding loan amount with additional 5% of the then outstanding loan amount to the lender.
The lender has the option to convert the loan amount to fully paid ordinary SAS shares prior to repayment of the outstanding loan amount and upon written notification to the borrowers, at its discretion.
The conversion price during the first 90 days from the effective date is equal to the lower of the discounted conversion price or US$0.05. However, thereafter, the conversion price shall be based on the discounted conversion price.
The discounted conversion price per share equals to 5% less than the average of the closing prices of the SAS shares on the Australian Securities Exchange over the five trading days, immediately prior to the date of the conversion notice. The conversion price floor states that the per share price for conversion of any amount under the agreement shall not fall below $0.015. As per the seniority of the loan, the amount shall be senior to any other debt of the borrowers and shall be repaid prior to any other debt.
On the price-performance front, the stock of Sky and Space Global Limited last traded at $0.028 as on 3rd April 2019, as the stock was put on suspension. Furthermore, today, the company informed the exchange that the shares would be on suspension post 22nd May 2019 and remain suspended till further notice. The stock has generated a substantial negative YTD return of 47.17% and exhibited negative returns of 54.10%, 46.15% and 3.45% over the past six months, three months and one-month period, respectively. Its 52-week high price stands at $0.120, with an average trading volume of ~7.56 million.