Make-Whole Provision
During the six-month period between the close of the transaction and the Make-Whole
calculation, the shareholders of Company E will be able to sale or acquire additional shares of
Company E. The holders of common shares of Company E will be entitled to their proportionate
share of any shares required to be issued under the Make-Whole calculation,
If on the six-month anniversary of the transaction, Company S’s common shares are trading at
$10 or more there will be no shares required to be issued. The value of the Purchase Shares
would still be $450 million. The shares would be paid as a dividend to the shareholders of
Company E and they would be the owners of 90+% of Company S and each individual
shareholder would still own their proportionate percentage of Company E.
If on the six-month anniversary of the transaction, Company S’s shares are trading at $5.00 on
NASDAQ, the value of the Purchase Shares would be $225 million and the Make-Whole
calculation would require an additional 45 million shares to be issued to Company E to MakeWhole the $450 million Purchase Price. The additional shares would be allocated proportionately
to the holders of Company E’s common shares on the declared dividend date. In this example,
the percentage ownership by Company E prior to the dividend would be 95.2% plus.
After the dividend to Company E shareholders, there would be no assets or operations in
Company E, but management would be able to purchase new operations or develop other
products that would be the assets of Company E. The Company E common shares would
continue to trade on OTC Markets as a new business strategy is implemented.
