Curious As To How SEV Will Trade On Monday?This is the sticky part. Hence I would not call this done yet.
- They want an expemption from the required Shareholder Approval of the PP. Which is normally required because it is greater than 25% of the shares oustanding.
- They are claiming Financial Hardship to get this exemption from the TSX.
- The TSX will not be able to provide a letter of exemption until Aug 16th and there is no guarantee they will. This is the day after earnings need to be released.
- The TSX will put SEV through a Delisting Review because SEV is claiming Financial Hardship. This is apparently routine?
As the aggregate number of Common Shares issuable in connection with the Private Placement exceeds 25% of the currently issued and outstanding Common Shares, and since greater than 10% of the currently issued and outstanding Common Shares are issuable to insiders of the Company in connection with the Private Placement, the Company would ordinarily be required to obtain shareholder approval pursuant to Sections 607(g)(i) and (ii) of the TSX Company Manual (the “Manual”). The number of Common Shares issuable pursuant to the Private Placement (assuming the exercise of the Warrants) and issuable to insiders of the Company represent 58.4% and 13.2%, respectively, of the current issued and outstanding Common Shares. Pursuant to the provisions of Section 604(e) of the Manual, the Company has applied for an exemption from shareholder approval requirements of the TSX, on the basis that the Company is currently in financial difficulty and that the Private Placement is designed to improve the Company’s financial situation to meet its business objectives including its objectives in the growing data center market. If granted, the Company will avail itself of the shareholder approval exemption. The Company’s Board of Directors has carefully reviewed the terms of the Private Placement and has unanimously determined that completion of the Private Placement and reliance on the financial hardship exemption is reasonable, that completion of the Private Placement and the Public Offering will substantially improve the financial position of the Company and are in the best interest of the Company and its stakeholders. Pursuant to Section 604(e) of the Manual, the TSX cannot issue its conditional approval letter for the Private Placement until August 16, being five business days following the issue of this news release. There is no assurance that the TSX shall grant such conditional approval and the completion of the Public Offering and the Private Placement are subject to the TSX providing its approval to the Private Placement.
Assuming the TSX grants its conditional approval with respect to the Private Placement, the Company will be the subject of a remedial delisting review by the TSX. It is routine for the TSX to require any issuer utilizing the financial hardship exemption to be the subject of such review. Pursuant to this delisting review, the TSX will require that the Company demonstrate to the TSX that the Company complies with all of the TSX requirements for continued listing after completion of the Offerings. The Company expects that it will meet the TSX’s continued listing requirements and thus maintain its listing on the TSX.
The issuance of units to insiders of the Company in the Private Placement is considered to be a “related party transaction” as defined Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”), however, the Company is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under MI 61-101 on the basis that the aggregate value of the units issued to insiders does not exceed 25% of the fair market value of the Company’s market capitalization.
Read more at https://stockhouse.com/news/press-releases/2019/08/09/spectra7-microsystems-inc-provides-update-on-previously-announced-short-form#Ezw1hLLIQljBOlct.99