Vela Technologies, an investing company focussed on early-stage and pre-IPO disruptive technology investments, announced on Wednesday that it has entered into an unsecured convertible loan note instrument with Hamak Gold, a Liberia-based gold exploration and development company listed in London.
The AIM-traded firm said the agreement would see it issue 2,424,242,424 new shares at a deemed issue price of 0.012375p per share to Hamak, in exchange for £300,000 worth of unsecured convertible loan notes.
It said the deemed issue price represented a 7.61% premium to Vela’s closing mid-market price of 0.0115p on 16 July.
The board said the investment aligned with Vela’s opportunistic investments category, and constituted less than 5% of the company’s net asset value.
It was intended to be a short-term investment, diverging from Vela’s core focus on disruptive technology.
The loan notes have a 24-month term, maturing on 16 July 2026.
Vela would be subject to a six-month lock-in period during which it cannot convert the loan notes.
The notes would accrue interest at 10% per annum, payable on conversion or maturity, while the notes and accrued interest could be converted into Hamak shares at a 25% discount to the volume-weighted average price over five days prior to conversion or at 3p per share, whichever is lower.
If not converted by the maturity date, the principal and accrued interest would be payable in cash by Hamak.
The loan notes are transferable.
Hamak had undertaken to redeem £75,000 of the loan notes through monthly cash payments to Vela, ranging from £10,000 to £25,000, starting on 31 July.
Vela said Hamak Gold operates in Liberia with two mineral exploration licences covering 1,116.2 square kilometres.
For the year ended 31 December 2023, Hamak reported a loss after tax of $0.68m and net assets of $1.55m.
“This is an opportunistic transaction, in which Vela is using its equity as currency,” said executive director James Normand.
“We continue to be open to similar opportunities which have, in our assessment, the capability of enhancing shareholder value.”
At 1423 BST, shares in Vela Technologies were down 9.09% at 0.01p.
Reporting by Josh White for Sharecast.com.