Jbuffet62,

Yes, only holders of Royalty Preferred shares would directly benefit from said royalties. From how I understand it, Zenith Epigentics Corp currently owns all of the Royalty Preferred Shares and thus Zenith Epigenetic Corp is the direct recipient of the dividends from the Royalty Preferred shares. As a holder of Zenith Epigenetics Corp common shares, one does not directly receive a dividend from the Royalty Preferred shares. Instead, any dividend from the Royalty Preferred shares flows directly to Zenith Epigenetic Corp and, at the discretion of Zenith management/board of directors, this may indirectly result in a dividend being paid to holders of Zenith Epigenetics Corp common shares. However, even if dividends are not paid to holders of Zenith Epigenetics Corp common shares, shareholders still indirectly benefit by money flowing into Zenith Epigenetics Corp to fund Zenith research, development and clinical trials. This above example is more straightforward since the same company owned the Royalty Preferred shares and performed the Zenith research.

Once the new proposed arrangement takes place, the structure changes and things get a bit more complicated. Potential dividends from the Royalty Preferred shares will now directly flow to Zenith Capital Corp and the Royalty Preferred shares will now be independent of Zenith Epigenetics Ltd. So if and when Zenith Epigenetics Ltd goes public in an IPO, Zenith Epigenetics Ltd as well as its shareholders are not directly linked to the Royalty Preferred shares. Holders of common shares of Zenith Capital Corp will be the indirect beneficiaries of these dividends from the Royalty Preferred shares and may potentially receive a divident payment, but again at the discretion of Zenith Capital Corp management/board of directors.

But what will Zenith Capital Corp do with the income from the Royalty Preferred shares if they do not provide a dividend to its shareholders? One idea is that Zenith Capital Corp may become a venture capital type company to provide private equity to Resverlogix, Zenith Epigenetics Ltd, and other spin offs for research, development and clinical trials to avoid these companies having to go the route of Eastern Capital and NGN in the future for financing. I might be way off base there, but just an idea.

BearDownAZ