About every junior exploration company is 'insolvent' in the meaning of the CBCA Act.

It does not matter in day-to-day business since the paid-up capital (ie the money initially given by the investors against treasury shares of the corporation) is used to make exploration expenses in the hope to find something of value, and nobody cares of the deficit until a reverse-split is needed, or until they become unable to convince anyone more to invest in float turning too-heavy, with no real asset value in the balance sheet!

But when comes the time of an 'Arrangement', section 192 CBCA requires that the applicant corporation is solvent meaning that the realizable value of its assets are not less than its liabilities + stated (paid-up) capital - and the Corp. is also showing its ability to pay its debts when due.

So, in order to merge, they just virtually strike the paid-up capital appearing in the Balance Sheet, with no payment to shareholders, in order that the assets are now exceeding the posted Liabilities and Paid-Up Capital. Tax consequences may arise when the shareholders receive something from this operation, but there is none here.

In summary, the first item to vote on is prerequisite to allow the second item to go on. I voted NO on both anyways.

GLTA.

BaBe.