Are there any covenants, redemption rights, or special terms attached to the private placement that could affect the company’s capital structure?

No disclosed covenants or redemption rights

The press release only specifies the mechanics of the private placement: 4,368,333 units were sold at $0.06 each, with each unit consisting of one common share and one 24‑month warrant to buy an additional share at $0.08. There is no mention of any covenants (e.g., leverage limits, dividend restrictions), redemption features, or other “special” terms that would obligate the company to repurchase shares or otherwise alter the capital‑structure balance. In other words, the transaction is a straightforward equity‑plus‑warrant issuance without any embedded redemption or protective clauses.

Implications for the capital structure

* Dilution: The immediate effect is a modest increase in the share count (≈4.37 M new shares). The attached warrants represent a potential future dilution of roughly another 4.37 M shares if fully exercised, which could expand the float by up to ~8.7 M shares (≈ 10‑12 % of the current outstanding shares, depending on the pre‑placement base).

* Cash‑flow impact: Because there is no redemption right, the company does not face a near‑term cash outflow obligation tied to this financing. The only cash impact will be the $262 k of gross proceeds now on hand.

* Capital‑structure risk: The lack of covenants means the placement does not impose additional leverage or liquidity constraints, but the warrant pool creates a “latent” equity that could be triggered once the 24‑month window opens, potentially pressuring the share price if a large number of holders exercise simultaneously.

Trading take‑aways

1. Short‑term: The placement is unlikely to cause immediate volatility beyond the modest dilution already priced in, so the stock can be treated as relatively stable in the near term.

2. Mid‑term (12‑24 months): Watch the warrant‑exercise window. A surge in exercised warrants could increase supply and push the price down, so a watch‑list for any large‑volume redemptions is advisable.

3. Action: Maintain a neutral‑to‑light‑long bias now, but set a reminder to re‑evaluate the capital‑structure impact as the warrant‑exercise deadline approaches, especially if the company’s cash‑burn rate or growth prospects change.