Letter to AMF, TSX etc re confusion sewn by Rights OfferingIndecipherable terms created by SALP/PLI with contradictory termsfurther confuses shareholders and gives those in the know large unfairadvantage!
To the Ministre of Finance, AMF, TSX, Guy Ouellette, PM Justin Trudeau, FM Bill Morneau, MP Rachel BenDayan, Barbara Shecter (Nat Post)
Below, I have reproduced the Prometic Life Sciences (PLI: TSX) May 15 announcement on the terms of the Rights Offering with the relevant parts I need to bring to your attention highlighted in yellow and the punch line bolded in RED TYPE below.
I have several different brokers where I hold PLI shares. I called my brokers such TD Wealth Management and BMO Investorline and to a man the professionals who deal with these issues daily could not decipher the meaning of this convoluted and self contradictory information on when the shareholders Rights vest with him and he may sell his shares once vested without losing those Rights. Is it the close of May 21, “the Record Date” or is it some time later such as May 27 when it trades “Ex Rights”?? The normal usage of these terms has clearly been abandoned and the “clarification” that PLI introduces in its press release only serves to confuse and obfuscate when a share holder may sell his shares without losing his Rights. If they are “Ex Rights” only on May 27 then in what sense do shareholders “of Record” on May 21 matter if they do not get the Rights if they sell before May 27?? NO ONE HAS ANY CERTAINTY ON THE MEANING OF THE TERMS GIVEN AS TO WHEN THE RIGHTS VEST!! Thus shareholders face this uncertainty (I believe inserted by SALP/PLI with this purposely confusing language) to prevent shareholders from acting in this interim period while SALP affiliates in the know (who are certain on when the Rights vest) can trade with a large unfair trading advantage over those who are NOT IN THE KNOW. Many took the “of record” date (the norm when shares go ex-dividend or ex-rights) and on the morning of May 22, sold their PLI holdings as they believed their Rights already vested and they no longer needed to hold the PLI shares whose value was buoyed at 4 to 5 cents, well above the $0.01521 per share value only because of the assumed value in obtaining the Rights. But then the ambiguity became apparent and needed to buy back the PLI shares they sold hours earlier at a significant loss to those out there in the KNOW who were making money off this uncertainty injected into the Rights Offering by SALP/PLI. Recourse must be had for this highly unfair process which comes on the back of the totally fraudulent take over of PLI from the shareholders in an illegal, fraudulent and false hardship application that bypassed the shareholders fundamental right to a vote and fair valuation as I have presented in many emails before this one to the AMF.
I ask the AMF to therefore freeze the Rights Offering until correction and ADEQUATE clarification have been made and time allowed for them to be received by the investors AND CLEAR TO ALL, and full restitution must be paid by SALP/PLI to all those investors who have been injured and suffered losses due to this apparent purposeful ambiguity where in fact none was needed or a much more carefully drafted explanation submitted to shareholders in the press release. Clear, standard, simple language should have been used. Not this ambiguous and self contradictory language actually use by PLI with confusion as the sole consequence t hat caused many injury and uncertainty at a critical time in the already very injurious restructure fraudulently forced upon the unsuspecting investors by SALP/PLI.
Below is the relevant portion of the press release: You will see that the heart of the confusion and self contradiction is caused between the conflict of the 2
nd and 4
th bulleted items below that are in RED BOLD TYPE below. The first paragraph highlighted in yellow is in agreement with the 1
st bulleted item and what one would expect to be the normal situation with the understood adjustments for settlement dates. The 4
th bulleted item then contradicts this and totally confuses everybody.
Prometic announces terms of equity rights offering
T.PLI | 6 days ago
Canada NewsWire
LAVAL, QC, May 15, 2019
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/ LAVAL, QC, May 15, 2019 /CNW Telbec/ -
Prometic Life Sciences Inc. (TSX: PLI) (OTCQX: PFSCF) ("Prometic" or the "Corporation") is pleased to confirm the terms of its previously announced equity rights offering for gross proceeds of up to $75,000,000 (the "
Rights Offering").
The Corporation will be offering rights to the holders of record of its outstanding common shares (the "Common Shares") at the close of business on May 21, 2019 (the "Record Date"), on the basis of one right for each Common Share held, on the terms summarized hereafter and more fully detailed in the Corporation's rights offering circular which will be available under Prometic's profile at www.sedar.com (the "Rights Offering Circular"). Each right will entitle the holder to subscribe for up to twenty (20) Common Shares upon payment of a subscription price rounded to the nearest 5 decimals of $0.01521 per Common Share, subject to proration as described below. No fractional Common Shares will be issued. Mr. Ken Galbraith, Chief Executive Officer of Prometic, stated: "The Rights Offering represents the last step in our recapitalization plan announced last month,....
(irrelevant section of NR deleted for greater clarity)
The Corporation's current cash runway is shorter than 12 months. Depending on the net proceeds raised in connection with the Rights Offering, such proceeds will allow the Corporation to extend its cash runway beyond 12 months.
The Toronto Stock Exchange has advised the Corporation that due bills will be used in connection with the Rights Offering to ensure that the Common Shares do not effectively begin to trade on an ex-rights basis until the rights are issued. Accordingly, the key dates in respect of the due bill trading of the Common Shares are as follows:
- Due bill trading will commence on May 17, 2019 being one trading day before the record date, so that trades settling after the record date will have due bills attached.
- The record date to determine shareholders entitled to receive the rights will be May 21, 2019.
- The distribution date is estimated to be May 24, 2019.
- The ex-rights date is estimated to be May 27, 2019 (the first trading day after the distribution date).
- The due bill redemption date in respect of the distribution date is estimated to be May 29, 2019 (the second trading day after the ex-rights date, when all trades with due bills attached have settled).
- The due bill payment date in respect of the distribution date is estimated to be May 30, 2019.
Shareholders who are eligible to participate in the Rights Offering and who hold common shares of the Corporation through brokerage accounts will not be required to take any special action to receive their rights. Any trades that are executed during the due bill period will be automatically flagged to ensure that purchasers receive the entitlement to receive the applicable rights and that sellers do not receive the entitlement.
Full details of the Rights Offering are contained in the Rights Offering Notice and Rights Offering Circular which will be available under Prometic's profile at www.sedar.com on May 24, 2019. Readers should review these documents for the specific terms and conditions of the Rights Offering. Read more at https://stockhouse.com/news/press-releases/2019/05/15/prometic-announces-terms-of-equity-rights-offering#uYJjq3p9su78f1IS.99