I always found this quite "odd" somehow... "On July 28, 2020, the Company requested that the Pascali Trust convert the 2020 Convertible Loan on or before September 30, 2020.
The Pascali Trust agreed to such request subject to the prepayment of 5 years rent, plus estimated yearly municipal taxes, no later than December 31, 2020, for a total prepayment of $1,438,530.
As a result of the conversion of the 2020 Convertible Loan, the Company saved approximately $110,000 of interest payments that would otherwise have
been required to be paid under the 2020 Convertible Loan.
The agreement with the Pascali Trust in respect of the prepayment of rent constituted a “related party transaction” as defined in MI 61101.
The related party transaction was exempt from the formal valuation and minority approval requirements of MI 61-101, as the transaction had a value of less than 25% of the Company’s market capitalization (calculated in accordance with MI 61-101). The transaction was unanimously approved by the board of directors of the Company."
What a great deal!
The company saved $110,000, and your landlord got $1,438,530 in rent paid up front.
It must have been a good deal, the board approved it.
Approval by minority shareholders wasn't necessary.