Post by
RetailRube on Sep 22, 2015 3:22pm
What is a Registration Rights Agreement?
In Sedar.com "Other Material Contracts" filed on Aug 19, 2015 there are two documents for each of the new US investors. One document applies to the US and one to Canada. The document is called a Registration Rights Agreement. Based on reading the document as well as Wikipedia, I think it says the new shareholder can compel TST to issue a prospectus if the shareholder wants to sell their shares. Apparently, the new shareholders need a prosectus because they are deemed to be a controlling shareholder, although with only 20% ownership, that's something I've never seen before. The agreement also allows these shareholders to participate (sell some of their holding) in any TST share placement done by public placement. So if it's that hard for them to exit their position, it doesn't sound like they will be dumping shares as soon as the lockup period expires on Dec 20, 2016. So no more artificial selling pressure in the near-term like we are currently experiencing with the 21m warrant/option expiry.
However, will our new major US shareholder with 20% shareholding request a seat on the Board of Directors? Wells put Gubbitz on the Board when he only controlled 6% of the shares. We will find out when we get our AGM proxy voting document in October with all the resolutions and candidates for BOD.
Comment by
RetailRube on Sep 22, 2015 3:24pm
Correction: Lockup period ends Dec 20, 2015, not 2016. I always make one mistake per post, even with multiple proof-reads. (sigh)
Comment by
cheetio on Sep 23, 2015 6:30am
....No fairy's in that article....hey...When investors bid up the stocks of companies with phase III drugs, the companies raise money, which leads to bigger paychecks, more stock and options for company executives. It's a self-serving feedback loop.
Comment by
cheetio on Sep 23, 2015 6:49am
No fairy......The market also incentivizes larger companies to be more disciplined with R&D expenses. Wasted R&D steals from earnings...........