Maybe they read their emails , and thought they should throw us a bone. I hope it all works out , but IMO I dont see any deal being inked until the half way mark of Africa trials at the earliest. We all know that the trials won't be complete until the begining of DEC. and that is if they begin Aug 1st. GLTA
On the first page for Nasdaq under Title of Each Class, they list equities as "Units" consisting of shares and Rights:
There are two classes of commons. Only Class A is traded on Nasdaq:
In a business combination, existing SAGA shareholders will also be awarded new shares because of their "Rights":
There are existing holders of Class B but they are effectively restricted from converting to Class A:
However they are likely to bypass that restriction if the SAGA price exceeds $12 for 30 days (it's currently trading just under $11):
Here are the current SAGA classes and totals. Are there enough shares available to issue a meaningful dividend?:
There may be other instruments that need to be accounted for, that could have a strong dilutive effect if exercised (emphasis below is mine):
I saw something interesting on pages 4 and 5 of the ENZC quarterly filed 5/22/23. Only Series C and Series D are entitled to receive dividends (emphasis below is mine):
Assuming this can be overridden with a special dividend, and/or whatever bypass is needed for ENZC common shareholders to be awarded SAGA shares, there are further considerations:
- If ENZC shareholders get paid a dividend in SAGA shares, will those be subject to a lock-up period? (eg Dividend shares are restricted and cannot be sold for, say, a year.) Can other SAGA shareholders sell theirs sooner?
- Would fractional shares be issued? Otherwise, would ENZC shareholders with smaller portfolios get any meaningful dividend? Remember as of 3/31/23 ENZC reported 2,880,435,953 common O/S, 941,078 Series C O/S, and 21,259 Series D O/S. Especially the common O/S is a huge pool.
- ENZC has a Common class and Preferred classes A through F. Would a special dividend apply to more classes than Series C and Series D? Would the dividend shares be divided at equal rates or different rates for each class?
- If the "value" of the ENZC-SAGA transaction is $450 million, but equities will be exchanged as payment, that would suggest the cash exchanged will be less than $450 million. Will there be enough cash to fund operations or will SAGA and ENZC still need to raise money for their separate businesses through dilution/other means? The subsidiaries ENZC is selling currently have nonzero operating and research expenses and do not yet have a profitable revenue stream. The subsidiaries ENZC is keeping are likewise. If there's a lock-up period, SAGA dividend shareholders would be along for the ride, for better or worse. ENZC shareholders might also face dilution if ENZC has A/S capacity, no new private investors, and insufficient operating cash to fund its remaining subsidiaries.
Hopefully they address these questions in the upcoming filing.
Some quick and dirty math: If the value of the SAGA transaction is $450M, and SAGA stock is valued at $12, and there's zero other considerations for simplicity, SAGA could issue 37,500,000 Class A shares to equal the transaction value. If that's then split between ENZC Common shares only, the dividend could be equally distributed 1:76, ie one SAGA share for every 76 ENZC shares. Dramatically oversimplified but it's maybe a ballpark. In the real world, there are other parties all entitled to a piece of the very complicated pie.