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Message: Share for debt coversion and claim
Hello Pete, Really impressed with the amazing milestones achieved as of late. Would you be so kind to elaborate on this topic by this poster who will not relent and causing a bit of stir. Hopefully you can give a simple clear explanation that all investors can understand.
Thank you kindly!
What Was Wrong With the 2014 Share for Debt Conversion?
Consider this extract from Q1 2018 F\S note no 9-Long term debt:
“In April 2018, a claim of $5,420,000, has been notified by the company under common control in connection with the share for debt conversion transaction that took place in 2014 over the Balance of sale. The claim and the Balance of sale of $111,928 outstanding as at December 31, 2017 have been settled as follows: (i) on February 9 and March 7, 2018, issuance of 1,899,999 units at a value of $0.70 per unit with each unit consisting of 1 common share of the Company and 1 common share purchase warrant which entitles the holder to purchase 1 common share at a price of $1.25 until August 9th, 2019, and (ii) on April 30, 2018, issuance of 3,385,715 units at a value of $0.59 per unit with each unit consisting of 1 common share of the Company and 1 common share purchase warrant which entitles the holder to purchase 1 common share at a price of $0.85 until April 19, 2020.”
So partial settlement of the claim was made on Feb. 9th and March 7th, but the claim only came in on April 30th? Really? Was this proof-read? I would have expected a bit more rigorousness from our new Chair of the Audit Committee reviewing this section of the F/S, especially given the sensitivity of this claim. The 2017 audited F/S clearly say that the “dispute” existed at Dec. 31, 2017.
Also, and more importantly, it was my expectation that the Q1 2018 F/S disclosures related to the claim would have been enhanced/expended from those of the 2017 audited F/S to provide more clarity on the precise reason(s) that motivated this claim and as to what exactly was wrong with the “share for debt conversion transaction that took place in 2014 over the Balance of sale.”
The F/S footnote indicates the following:“Under the share for debt conversion, the Company issued 7,500,000 common shares in 2014 to settle $6,000,000 of the carrying value of the Balance of sale payable.” Seems pretty straight-forward to me.
Again, what was wrong with that 2014 transaction that justified the recent claim? I think we are owed that simple explanation and that explanation could and should have been provided in the F/S.
“In April 2018, a claim of $5,420,000, has been notified by the company under common control in connection with the share for debt conversion transaction that took place in 2014 over the Balance of sale. The claim and the Balance of sale of $111,928 outstanding as at December 31, 2017 have been settled as follows: (i) on February 9 and March 7, 2018, issuance of 1,899,999 units at a value of $0.70 per unit with each unit consisting of 1 common share of the Company and 1 common share purchase warrant which entitles the holder to purchase 1 common share at a price of $1.25 until August 9th, 2019, and (ii) on April 30, 2018, issuance of 3,385,715 units at a value of $0.59 per unit with each unit consisting of 1 common share of the Company and 1 common share purchase warrant which entitles the holder to purchase 1 common share at a price of $0.85 until April 19, 2020.”
So partial settlement of the claim was made on Feb. 9th and March 7th, but the claim only came in on April 30th? Really? Was this proof-read? I would have expected a bit more rigorousness from our new Chair of the Audit Committee reviewing this section of the F/S, especially given the sensitivity of this claim. The 2017 audited F/S clearly say that the “dispute” existed at Dec. 31, 2017.
Also, and more importantly, it was my expectation that the Q1 2018 F/S disclosures related to the claim would have been enhanced/expended from those of the 2017 audited F/S to provide more clarity on the precise reason(s) that motivated this claim and as to what exactly was wrong with the “share for debt conversion transaction that took place in 2014 over the Balance of sale.”
The F/S footnote indicates the following:“Under the share for debt conversion, the Company issued 7,500,000 common shares in 2014 to settle $6,000,000 of the carrying value of the Balance of sale payable.” Seems pretty straight-forward to me.
Again, what was wrong with that 2014 transaction that justified the recent claim? I think we are owed that simple explanation and that explanation could and should have been provided in the F/S.
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