TPS (ASX) Ann: TPS Secures $10.5 Funding Package for Acquisition Strategy-TPS.AX

Originally posted by 370830 ↑

redemption is buying back the notes which means $9+67c premium. If they convert it into stock at 3 cents there wont be any premium but it needs shareholder approval.
Notes does offer interest :
Interest rate of 9% per annum, paid bi-annually.

the one which doesn't need shareholder approval had already been granted at 3 cents
1st part
$0.9 million from the issue of 30 million shares under Tranche 1;
$0.6 million from the issue of 20 million shares under Tranche 2.

2nd part

Threat Protect may elect to redeem the Notes on issue in whole or part during the term, at a redemption amount equal to the face value of the Notes plus accrued interest and a redemption premium of $0.67 per Note. 

Subject to Threat Protect shareholder approval, Notes may convert to fully paid ordinary shares in Threat Protect at a conversion rate equivalent to 3 cents per share (subject to adjustments as provided in the terms of the Note Deed).

Correct me if i wrong

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I think you are of the mistaken belief that the redemption premium applies no matter what.

In actual fact the redemption premium only applies if the company chooses to repay or convert the notes before the maturity date.

The redemption premium is there to protect the note holder in the event that the company begins making a healthy profit and the SP sky rockets. In that situation the company may choose to repay some or all of the notes in cash (from the profits) as this would minimise dilution to existing holders. This would deprive the note holder of significant capital gains as well as the remaining interest payments.

However, a less bullish scenario will see the company make periodic repayments until the maturity date, at which point it will either repay or extend the notes, or convert the notes to equity at 3 cents per share. The redemption premium is no longer applicable at that point because the notes would have matured.

Ann: TPS Secures $10.5 Funding Package for Acquisition Strategy-TPS.AX, page-13