Mr. Stavros Daskos reports
ENCANTO POTASH CORP. ANNOUNCES PROPOSED SHARE CONSOLIDATION
Management of Encanto Potash Corp. has determined that a consolidation of its share capital may be required in order to provide for further equity financing to meet its current working capital requirements and to attract new equity investment in the company. The board wishes to be in a position during the ensuing year, if it considers to be in the best interest of the company, to effect one or more share consolidations.
The company's articles of incorporation permit the board of directors to consolidate the outstanding common shares on any ratio determined by the board. The policies of the TSX Venture Exchange permit the board to implement a share consolidation on the basis of up to 10 old shares for one new share without shareholder approval. The board wishes to have the flexibility to consolidate the common shares further and in addition to the up-to-10-old-for-one-new ratio. The company is seeking shareholder approval for a further consolidation, in addition to an up-to-10-for-one share consolidation, on the basis of one postconsolidation common share for up to every 20 preconsolidation common shares currently held, the timing, number and magnitude of the consolidation ratio, to be determined by the board. The cumulative effect of these consolidations could be up to a one postconsolidation common share for every 200 preconsolidation common shares currently outstanding.
The consolidations remain subject to shareholder approval and approval of the TSX Venture Exchange. Shareholders will be asked to approve the consolidations at the upcoming annual general and special meeting of shareholder scheduled for Aug. 19, 2020.
The name of the company and trading symbol will remain the same after the consolidation(s). The company currently has 45,748,349 common shares issued and outstanding. If approved, following the one-for-20 consolidation, the company would have approximately 2,287,417 common shares issued and outstanding. Furthermore, if the board of directors determined to effect a further one-for-10 consolidation, the company would have approximately 228,741 common shares issued and outstanding.
Upon completion of the consolidation(s), the company's transfer agent, Endeavor Trust Corp., will send a letter of transmittal by mail to registered shareholders advising that the consolidation(s) has taken effect. The letter of transmittal will contain instructions on how registered shareholders can exchange their share certificates evidencing their preconsolidation common shares for new share certificates representing the number of postconsolidation common shares to which they are entitled.
No fractional common shares will be issued upon the consolidation(s). In the event a holder of common shares would otherwise be entitled to receive a fractional common share in connection with the consolidation(s), the number of postconsolidation common shares to be received by such shareholder will be rounded down to the next whole number if that fractional common share is less than one-half of a common share, and will be rounded up to the next whole number of common shares if that fractional common share is equal to or greater than one-half of a common share.
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