Best reason to vote no
July 02, 2019 - 06:02 PM 120 Reads
$2 Million Scandal shown in the Ecobalt Information Circular
I used to wonder why Jervois insisted in its "firendly" mergfer offer that Ecobalt must raise $2 million as a condition for the deal to happen.
If you read the Ecobalt Information Circular of June 19, 2019 it is all in there. Here is a summary of who gets big money in the deal retroactively.
Page 51 of the Informaion Circular gives a timeline of the deal From May 2018 when Jervois bought Ecobalt Shares.
On August 15, 2018 then they did a non disclsure to view each other's data rooms.
On October 1, 2019 Ecobalt appointed a new President Callahn and he met Jervois' President "periodically".
On 20 February 2019 Ecobalt institured cash saving measures because money was getting tight.
On March 4, 2019 Jervois submitted "A non-binding letter of Intent ("LOI"
" to acquire Ecobalt. and they negotiated the terms of the letter from March 5 - 12.
On March 13 Jervois submitted its agreed updated LOI and with its terms of their "merger' offer. In part the March 13 Offer contained "severance or change control payments for those eCobalt parties terminated as a result of the transaction"
On March 14, 2019, the eCobalt Board reviewed the March 13 revised LOI but they also did something else
Page 87 of the Ecobalt Information Circular of June 19, 2019 says that on same day of March 14 the Board enriched and backdated the Change of Control payment for Officers. READ THIS QUOTE from Page 87 where I bolded some importatnthings:
If a change of control of the Company had occurred on December 31, 2018, the total cost to the Company of related payments to the NEOs as described above is estimated at $1,867,594. Estimated payments to individual NEOs are as described below assuming a change of control event described above had occurred on December 31, 2018:
(a) Based on Mr. Callahan’s October 1, 2018 employment agreement, Mr. Callahan would be paid the sum of 1.5 years of base salary ($777,594 or US$570,000) in the event of change of control. The change of control obligation was subsequently amended to 2 years of base salary ($1,036,792 or US$760,000) on March 14, 2019 and was retroactively effective on October 1, 2018;
(b) Mr. Tran would be paid the sum of 2 years of base salary ($440,000); and
(c) Mr. Varley would be paid the sum of 2 years of base salary ($650,000).
So our Company, while saying we were short of cash, retroactively increased the Change of Control Buyout Payments for our Officers to just over $2 million, This was done the day after getting the finalized Jervois takeover offer that they had negotiated in the past week, and then they backdated it to December 31, 2018.
About an extra $ 1/2 millon was agreed to be depleted from our Treasusry retroactively, andit was agreed on the day after the Jervois merger deal LOI was officially presented
That March 13 jervois LOI included a requirement for Ecobalt to raise an extra $ 2 million. It looks like Jervois was not ready to be the one to pay them that rich Change of Control "benefit". So how would they get that new money?
If you read page 34 of the Ecobalt Information Circular of June 19, 2019 it says in part:
On March 31, 2019 eCobalt entered into a binding agreement with Dundee Resources Limited to sell 6.25 million eCobalt units for approximately $2 million. Each unit is comprised of one eCobalt share and one common share purchase warrant
If you think the above is pure coincidence, I think you should think again. I thought that the $ 2 million was at least for the purpose of developing our IDP project in future.
Sadly I still wish this were true, but I think that the real truth is plainly that we were having our shares diluted to pay a backdated enriched buyout ripoff for our own officers who are actually supposed to look after our shareholder interests.
There are other bad deals to get more rrches for Officers and Directors identified in the Information Circular too in the RSUs and RSIs.
I will tell you about them later - once I get over being sickened by what I see with this $ 2 million grab.
Good luck to real shareholders.
Forour own good we should protect our Treasury and VOTE NO
Read more at https://stockhouse.com/companies/bullboard?sy...UkI5RwR.99