RE:RE:RE:Why?From the PR. Emphasis is mine
Acquisition Terms
Lucara has agreed to purchase Clara for up-front consideration of 13.1 million shares of Lucara (approximately $29 million in up-front consideration based on the closing price of Lucara common shares as at February 22, 2018) resulting in approximately 3.7% dilution to its existing share capital. Further staged equity payments totaling 13.4 million shares become payable upon the achievement of performance milestones related to total revenues (revenues from rough diamonds bought and sold) generated through the platform. In the event that (i) Lucara’s ownership over the Clara platform decreases below 81% or (ii) a third party acquires greater than 50% of Lucara or Lucara merges with a third party such that the current shareholders of Lucara own less than 50% of the merged entity, all of the milestones set forth above will, subject to certain exceptions, be deemed to be met immediately and the balance of the 13.4 million shares will become issuable. However, if the acquisition or merger of Lucara occurs more than three years after Lucara’s acquisition of Clara, and the first revenue milestone has not yet been met, the 13.4 million shares will not vest and will only become issuable as and when the milestones are met.
Lucara has also agreed to a profit sharing mechanism whereby the founders of the Clara technology, and management of Clara, will retain 13.33% and 6.67%, respectively, of the annual EBITDA generated by the platform, to a maximum of US$25 million per year, for 10 years.
Eira Thomas, a current director of Lucara, was a shareholder of Clara and was issued a total of 1,192,000 shares of Lucara in consideration for her shares of Clara and, subject to Clara achieving the milestones described above (or upon the occurrence of a change of control event described above), Ms. Thomas will be issued up to an additional 1,788,001 shares of Lucara upon those milestones being achieved or a change of control event occurring. Ms. Thomas is also part of the existing and ongoing management team at Clara and, accordingly, will be a participant in the EBITDA sharing arrangement described above. As a result of the initial payment made by Lucara in respect of the Clara acquisition, based on the current amount of issued and outstanding shares of Lucara and those shares to be issued pursuant to the initial payment for Clara, Ms. Thomas will own 1.36% of the issued and outstanding shares of Lucara immediately after the closing of the acquisition.
As a result of the foregoing, the issuance of Lucara shares to Ms. Thomas is considered to be a “related party transaction” as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Lucara is relying on the exemptions from the formal valuation and minority approval requirements found in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the transaction, insofar as it involves Ms. Thomas, is not more than 25% of Lucara’s market capitalization. The acquisition of Clara was unanimously approved by the independent directors of Lucara (with Ms. Thomas abstaining). The acquisition of Clara may close prior to the expiry of the 21 day period following the filing of the material change report respecting this announcement if management of Lucara determines it to be necessary for sound business reasons.
nyoni wrote: ...and who are Clara?
New business registered on 30th Jan 2018 in BC Canada.
https://www.bclaws.ca/civix/document/id/corpreg/corpreg/crpn0208fin1018 Not bad eh?
Company formed and 26 days later sold for the equivalent of $29M.
Clearly a cash transaction would have incurred a lot of tax for the sellers of Clara.
So who got all the shares? Who were the creators and vendors of Clara?