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Five days later - still feel that we were absolutely ripped off!Dear fellow Zenith Epigenetics minority shareholders, So, as we all know, San Fran declined to participate in the latest Zenith financing. If I read into his posts, I assume that it was because of the "cone of silence" that has once again become the norm here for Resverlogix and Zenith. Who has forgotten the lacklustre performance by our CEO in that one "recent" presentation to the men and women who got him to where he is today? Was it a sign of pure disdain for those annoying minority shareholders from the hood, or was it due to a rare off day? Minority investors are clamoring for some real meat, as opposed to the Pablum that has on occasion been doled out by our CEO, who doubles as our "generous" benefactor who ultimately controls the information flow. But hey, that didn't stop our resident billionaire from diving in for more exposure to our potential cancer fighting knockout ZEN molecule dividends, let alone that cash cow RVX-208 dividend flow that McCaffrey has alluded to for years. Again, why no hesitation on Dart's part? (LOL, sort of) Yesiree-bob! There are two people who I would dearly love to subject to an RCMP polygraph!!! So, if the real deal is Zenith, which I believe it is, why did Li Li (Hepalink) and Eastern (Dart) agree to pay CAD$2.67 per unit for Resverlogix just over one year ago? Notice again, how minority approval requirements were skirted (deliberately???) then (for Resverlogix) and again now (for Zenith)? No, this US$1.00 per share Zenith financing is absolutely highway robbery, unless you're totally convinced that all of the trials will end in complete failure. I've seen the numbers that were crunched on these BBs over the years re potential dividend flow - it's what kept us here! Yup, we've been punched in the face and kneed in the stomach late in this game! Unlike the few who still support this latest financing fiasco, I believe that a rights offering should have been done, with equal access to all (or at least more) of the information on the table. That way, minority shareholders could have decided for themselves if they wanted to be involved in this US$24.6 Million Private Placement. FYI: The Private Placement was a related party transaction within the meaning of applicable Canadian securities laws as Eastern is an insider of Zenith. The transaction was exempt from the formal valuation and minority approval requirements applicable to related party transactions on the basis that the value of the transaction was less than 25 percent of Zenith's market capitalization, as determined by the Board of Directors of the Company. Zenith did not file a material change report more than 21 days prior to closing as contemplated by the related party transaction requirements as the insider participation was only recently confirmed. (Zenith, May 16, 2016) Under the terms of the transaction, Hepalink will subscribe for 13,270,000 Resverlogix common shares and 1,000,000 common share purchase warrants, for aggregate proceeds of approximately CAD$35 million, or CAD$2.67 per unit. Each warrant is exercisable into one common share at CAD$2.67 per share for a period of five years. After giving effect to the transaction, Hepalink will hold approximately 12.69% of Resverlogix's common shares. The common shares and warrants issued to Hepalink will be subject to a three year lock-up period. Hepalink will also be entitled to nominate one mutually agreed representative for election to the board of directors of the Company. In addition, subject to completion of the Hepalink transaction, Eastern Capital Limited ("Eastern") will purchase 5,600,000 common shares and 422,005 common share purchase warrants for aggregate consideration of approximately CAD$15 million, or CAD$2.67 per unit. Therefore, total equity investment by Hepalink and Eastern exceeds CAD$50 million. Eastern holds 14,965,307 shares of Resverlogix which represents 17.46% of the 85,699,287 common shares outstanding before giving effect to any outstanding warrants. Eastern currently holds 7,578,232 common share purchase warrants of Resverlogix. Assuming all warrants are exercised before giving effect to the transaction, Eastern will hold approximately 24.17% of the common shares outstanding. After giving effect to the transaction, assuming all warrants held by Eastern are exercised, Eastern would hold 28,565,544 common shares of Resverlogix representing 25.38% of Resverlogix's issued and outstanding common shares based on shares outstanding as at today's date. The subscription for common shares and warrants by Eastern is a related party transaction within the meaning of applicable Canadian securities laws as Eastern is an insider of the Company. The transaction is exempt from the formal valuation and minority approval requirements applicable to related party transactions on the basis that the value of the transaction insofar as it involves related parties is less than 25 percent of the Company's market capitalization. (Resverlogix, April 27, 2015) http://www.newswire.ca/news-releases/resverlogix-and-china-based-shenzhen-hepalink-pharmaceutical-c o-ltd-announce-a-combination-licensing-and-equity-arrangement-517474701.html Rights Offering (Issue) What is a 'Rights Offering (Issue)' A rights offering (issue) is an issue of rights to a company's existing shareholders that entitles them to buy additional shares directly from the company in proportion to their existing holdings, within a fixed time period. In a rights offering, the subscription price at which each share may be purchased in generally at a discount to the current market price. Rights are often transferable, allowing the holder to sell them on the open market. BREAKING DOWN 'Rights Offering (Issue)' For example, a company whose stock is trading at $20 may announce a rights offering whereby its shareholders will be granted one right for each share held by them, with four rights required to buy each new share at a subscription price of $19. The company will also specify that the rights expire on a certain date, which is usually anywhere from one to three months from the date of announcement of the rights offering. Companies typically issue rights to give their existing shareholders the opportunity to buy additional shares before other buyers, and also to enable current shareholders to maintain their proportionate stake in the company. Read more: Rights Offering (Issue) Definition | Investopedia http://www.investopedia.com/terms/r/rightsoffering.asp#ixzz49K9iR264 Follow us: Investopedia on Facebook |
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