An anonymous director reports
ACASTA ENTERPRISES INC. ANNOUNCEMENT
Acasta Enterprises Inc. has responded to the press release issued yesterday by Anson Funds Inc.
The proposed transaction announced on Feb. 8, 2019, was necessitated by Acasta's desire to reduce its overall debt burden and associated high-interest expenses. After careful consideration, the independent directors determined that the proposed transaction was in the best interests of the company. It benefits all shareholders except the lenders who are converting secured, high-yield debt into equity at a challenging time for Acasta.
The proposed transaction complies with all applicable securities laws and Toronto Stock Exchange policies concerning transactions with non-arm's-length parties.
The net effect of the proposed transaction on overall shareholdings in Acasta is non-material and will not affect control of the company. The company's largest shareholders will remain its largest shareholders.
The statements made by Anson Funds concerning a possible transaction involving the company's sole operating asset in 2018 are not factual and are misleading. Even more disconcerting to the company is the fact that Anson Funds appears to have had access to confidential information about the company, which raises serious concerns for the company as to whether Anson Funds traded in the company's securities while in possession of material undisclosed information, including the November, 2018, share acquisitions reported in Anson Funds' December, 2018, alternative monthly report.
In light of the potentially serious implications under securities laws, the company has shared its concerns with the applicable regulators regarding possible insider trading by Anson Funds, as well as Anson Funds' and its joint actors' non-compliance with early warning reporting requirements.
Its actions and statements, including its press release, clearly suggest that Anson Funds and its apparent joint actors (including 683 Capital Management LLC, Tappan Street Partners and 2JG Investments Ltd., a company controlled by David Cynamon, who is a member of the board of advisers to Anson Funds) are acting opportunistically for their own benefit to the detriment of all other shareholders. Any sale by Acasta of its sole operating asset at a discounted value would only benefit Anson Funds and its joint actors, many of whom are believed to have acquired their shares recently at prices below the current trading price. In contrast, the current Acasta management, who beneficially acquired their Acasta shares at $10 per share, have a long-term vision for the business, including streamlining operations, reducing debt and enhancing profitability, thereby building value for the benefit of all shareholders.
We seek Safe Harbor.
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