Top Shelf Brands Holdings Corp. (DKTS)

[hedge_fun]

The debt was transferred to TEXX, cancelling the shares.....

was the right thing to do. And the fact Alonzo was never paid for his private company, it's a no brainer.

From the Pena letter.......

The original debt was incurred by Team Nation Holdings Corp (Team), and was exchanged with Victory Partners, LLC (hereafter referred to by name or as “VP”) in exchange for the controlling interest of Team, and eventually acquired by EA. This debt
was duly reported, subject to audited review and an indebtedness that was subject to being transferred as a liability. The holder desired to transfer and assign this debt to another holder, and to other obligors. Such debt was acquired through transactions
between the debt holders and subsequent transferees and enumerated in certain notes. The purchasers were four separate entities, the first three entities sold their share of the
debt to the fourth entity, specifically VP, noted above.

Therefore, for purposes of this discussion all debt was acquired by a third party through transactions that making them holders in due course. The purchase of such debt was perfected by Victory Partners upon the exchange of consideration with Emperial Americas under the September 2011 agreement. At that point VP delivered all rights to such securities as it had of Team Nation to EA. In exchange EA became indebted to Victory Partners for the obligations on the notes that Victory had purchased from the Team Entities. This was a purchase of debt by Victory Partners, and therefore, is the only subject of this opinion; although the exchange between Victory and Emperial is relevant for purposes of consideration having been made and exchanged to some degree. Legally, EA assumed the debt obligation.

Having established that such debt was purchased through examination of the transaction with the four Team Entities, the next relevant matter is that the debt was acquired by EA when it was a private corporation. This transaction, between EA and VP was executed on September 20, 2011. The consideration for this transaction included certain shares and interests received by Victory Partners, of Team Nation. Notably, Emperial Americas did not execute a merger with Team Nation the public company due
to matters that arose later during EA’s due diligence. However, the transaction involving the debt becoming an obligation of EA. Emperial Americas as the surviving entity recognized the debt in an amendment to its articles of incorporation whereby the debt of Emperial Americas was recognized as a liability of the surviving entity, under the same terms and timing as the original debt was held and under the acquisition of debt by subsequent holders.

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