narvo, before I answer, ns is right and
with the twists and turns of the pr, I turned left where I should have turned right...LOL
Excellent call ns, and thank you.
ns is correct, how it will work is that UCAD will have 50% of the LIC's shares in escrow.
If UCAD's pps is less than the market value at the close, the LIC will receive it's own shares back from what UCAD was holding in escrow. The shares given back reflects the decline in value. Then, the remaining LIC shares will be released to UCAD.
Forgive me on that one guys. I was wrong on that point and very glad ns caught it. : )
ns is also correct in saying it is like an insurance policy for the LIC, but I see it as a limited one, and here's why.
Tell me if I'm wrong, but it almost sounds like a 1 time deal.
If there is a difference in UCAD's pps to market value after a close (which means after only 1 trading day which this occurs), the LIC is paid it's shares back for the difference and by that UCAD is in full ownership and control of the remaining LIC shares in escrow.
Thus, the LIC would be protected from any pps to market value difference for 1 day. UCAD's benefit however is the ability to now trade (sell) the LIC's share for additional liquidity or financing. And all it takes to execute these terms is ONE CLOSE resembling the terms of the agreement.
Narvo, to best answer your question, anytime venture capital places monies or equity at risk toward and enterprise, the market normally looks favorably upon this. The company with the added resources is of course in a better position to support and expand their business. I'm not sure where you got in, but over the last month UCAD is holding water and fairing nicely, in what has been a very tough big board market over the last 3 weeks.
Be well, and thank you again ns. It's been a long week. : ) Bo
AI
