LIBERTY STAR URANIUM & METALS CORP. (LBSR): Entry into a Material Definitive Agreement
LIBERTY STAR URANIUM & METALS CORP. (LBSR) filed an SEC Form 8-K — Entry into a Material Definitive Agreement. EX-3.85 2 ex3-85.htm EX-3.85 Exhibit 3.85 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITI
How this was made
The 30-second read
Why it matters
The note’s economics (issue price vs purchase price, 8% coupon, 22% default interest, and 75% discounted conversion) create an equity overhang and potential volatility around conversion dates and any default risk.
Market read
New convertible-debt terms are disclosed, providing concrete inputs for dilution/credit-risk modeling and near-term sentiment.
What to watch
Traders should model the conversion price formula (75% of average of three lowest bids over prior 10 trading days) and the 180-day conversion start; actual dilution timing may be delayed.
Background
The SEC 8-K reports entry into a material definitive agreement and creation of a direct financial obligation, including a convertible promissory note issued June 11, 2026.
Ticker impact
Liberty Star Uranium & Metals entered a material definitive agreement via a convertible promissory note with 8% interest and 75% of market-price conversion discount.
Near-term downside bias from dilution/financing overhang; magnitude depends on conversion price vs current market and trading liquidity.
Convertible notes with discounted conversion (75% of market) and high default interest typically increase dilution risk and can widen credit/equity risk premia, especially for small-cap issuers.
Market effects
Adds another example of financing via discounted convertibles in resource/uranium microcaps, reinforcing dilution risk as a sector theme.
Primarily impacts US-listed microcap sentiment and small-cap credit/equity risk appetite.
Limited direct global impact; could marginally affect investor perception of funding conditions for uranium developers.
Counterpoint
The 4.99% beneficial-ownership conversion cap can limit immediate share issuance, reducing near-term dilution pressure versus unconstrained converts.
Key entities
- issuerLIBERTY STAR URANIUM & METALS CORP.
Subject of the 8-K; borrower under the convertible promissory note with conversion rights and default interest terms.
- lender/holder1800 Diagonal Lending LLC
Holder of the convertible promissory note; receives principal plus interest and has conversion rights subject to a 4.99% cap.
