Indiva Limited (OTCQX:NDVAF) (TSXV:NDVA) has entered into a shares for debt agreement, to satisfy an aggregate of $172,075.98 of the company's outstanding debt related to accrued but unpaid portions of the interest payments outstanding under certain convertible debentures of the company as well as certain trade payables for products and services provided to the company.
An aggregate of 1.01 million common shares in the capital of the company at a deemed price of $0.17 per share are proposed to be issued to the creditor. The creditors include certain related parties of the company, including, Niel Marotta, the CEO and a director of the company, Jennifer Welsh, the CFO of the company, and Rachel Goldman, a director of the company. Every other creditor is an arm's length party who subscribed for convertible debentures of the company.
The company offered all debenture holders the opportunity to elect to receive common shares of the company in lieu of a cash payment in order to preserve its cash for development of its business. The shares will be issued upon acceptance by the TSX Venture Exchange. The shares issued pursuant to the shares for debt agreements will be subject to a four month plus one day hold period pursuant to the policies of the TSX Venture Exchange.
The shares for debt transaction involving the related parties will constitute a "related party transaction" under Multilateral Instrument 61-101 - Protection of minority securityholders in special transactions ("MI 61-101"). However, the issuance is exempt from: the valuation requirement of MI 61-101 by virtue of the exemption contained in section 5.5(b), as the shares are not listed on a market specified in MI 61-101, and from the minority shareholder approval requirement of MI 61-101 by virtue of the exemption contained in section 5.7(1)(a) of MI 61-101, as the fair market value of the shares does not exceed 25% of the company's market capitalization. The participation by the related parties in the shares for debt transactions has been approved by directors of the company who are independent in connection with such transaction.
Photo by Mackenzie Marco on Unsplash
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