RE:News out
In an effort to fully understand the information provided in the News Release I made a few notes at various points in the Stockwatch version of the release (notes provided below).
In real simple terms IMO:
Due to Mr. Brink’s position as President of NS USA the transaction is considered a related party transaction and NS is essentially providing assurances that the transaction is not an “Insider bid” to facilitate a take-over proposed by one or more “insiders” of NSP. This avoids obtaining “minority shareholders” approval and the expense of obtaining a formal valuation prepared by an independent valuator.
NSP will have to raise approximately $ 835,000 Can before Dec. 15
th to ensure that it can meet the initial $ 725,000 US payment required to close the deal. I assume that the balance of the “minimum private placement financing of $1.5-million” is for general working capital purposes and can be raised subsequent to Dec. 15
th.
Always DYODD
DKM
******
Notes:
https://www.stockwatch.com/News/Item.aspx?bid=Z-C:NSP-2230019&symbol=NSP®ion=C
The novation agreement
(the replacement of an old contract or obligation with a new one)
is subject to a number of conditions,
including acceptance of the above transaction by the TSX Venture Exchange
and Naturally Splendid completing the financing.
NS – USA -> Boreal -> $ 725,000 US -> approx. $ 835,000 Can. minimum required to make payment by Dec. 15, 2014 as per below
In the event that the transaction does not close by Dec. 15, 2014, the novation agreement will be terminated and be of no further force or effect.
Charles Brink was appointed as president of Naturally Splendid USA in October, 2014, as part of the negotiation process of the novation agreement. As Mr. Brink is also a director of FSL, the transaction is considered to be a related-party transaction,
subject to TSX Venture Exchange Policy 5.9
https://www.tmx.com/en/pdf/Policy5-9.pdf
and Multilateral Instrument 61-101.
https://www.canadianmandalaw.com/ma-activity-canada/minority-shareholder-protections-under-mi-61-101/
Naturally Splendid is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(a) of Multilateral Instrument 61-101 on the basis that participation in the private placement by insiders will not exceed 25 per cent of the fair market value of Naturally Splendid's market capitalization.