The Prospectus-from SEDAR:
Synopsis:
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This prospectus constitutes a public offering of these securities only in jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. No securities commission or similar regulatory authority in Canada has in any way passed upon the merits of the securities offered hereunder and any representation to the contrary is an offence. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, and, subject to certain exceptions, may not be offered or sold within the United States or to U.S. persons. See “Plan of Distribution”.
Public OfferingOctober 28, 1998
DELICIOUS ALTERNATIVE DESSERTS LTD.
$1,500,000
5,000,000 Special Warrants each convertible into
one Common Share of the Corporation
Price: $0.30 per Special Warrant
$2,984,200
7,460,500 Special Warrants each convertible into
one Common Share of the Corporation
Price: $0.40 per Special Warrant
$1,974,954
4,293,381 Special Warrants each convertible into
one Common Share of the Corporation
Price: $0.46 per Special Warrant
$3,500,000
in principal amount Subordinated Debentures
convertible into 7,608,696 Common Shares at a deemed
exercise price of $0.46 per Share
Delicious Alternative Desserts Ltd., a corporation incorporated pursuant to the laws of the Province of Alberta (the “Corporation”) hereby qualifies for distribution 16,753,881 Common Shares of the Corporation (the “Common Shares”) to be issued on exercise or deemed exercise of, 5,000,000 Special Warrants previously issued at a price of $0.30 per Special Warrant (the “First Warrants”), 7,460,500 Special Warrants previously issued at a price of $0.40 per Special Warrant (the “Second Warrants”) and 4,293,381 Special Warrants previously issued at a price of $0.46 per Special Warrant (the “Third Warrants”) (the First Warrants, Second Warrants and Third Warrants are herein referred to collectively as the “Special Warrants”). Each Special Warrant is convertible into one common share of the Corporation (the “Common Shares”) on the occurrence of certain events and at no extra cost. In addition, for a period of 60 days following the date a receipt is received herefor, the Corporation qualifies for distribution 7,608,696 Common Shares to be issued under conversion of Subordinated Convertible Debentures (the “Debentures”) in principal amount of $3,500,000 at a deemed conversion price of $0.46 per Common Share. The Corporation will use the proceeds to increase its manufacturing capacity and for working capital (see “Business of the Corporation” and “Use of Proceeds”).
Number of Units Price to Public(1) Proceeds to Corporation(2)
Per First Warrant 1 $0.30 $0.30
Total 5,000,000 $1,500,000 $1,500,000
Per Second Warrant 1 $0.40 $0.40
Total 7,460,500 $2,984,200 $2,984,200
Per Third Warrant 1 $0.46 $0.46
Total 4,293,381 $1,974,954 $1,974,954
Debenture Offering 7,608,696(3) $3,500,000 $3,360,000(4)
Total Offering 24,362,577 $9,959,154 $9,819,154
Notes:
(1) The subscription price per Special Warrant and the deemed share price of the Debentures was determined by the Corporation with reference to the then market price of the Common Shares.
(2) Before deducting expenses from the sale of Special Warrants and Debentures of $253,000 and the expenses of the Prospectus, estimated at a further $25,000, which will be paid by the Corporation. There are no commissions that will be paid on the sale of the Special Warrants.
(3) Assumes the Debentures are converted in their entirety prior to June 4, 2000 at a deemed price of $0.46 per share.
(4) Under an Engagement Agreement, Ballantrae Capital Corp. (“Ballantrae”), a limited market dealer in Ontario was paid a 4% commission on the Debentures.
These securities offered hereby are speculative due to the nature of the Corporation's business and its present stage of development. Subscribers will be relying upon the expertise of the directors and officers of the Corporation. Investments in small business involve a high degree of risk and investors should not invest any funds in this Offering unless they can afford to lose their entire investment. In addition, the Corporation has historically operated at a loss and consequently it has no earnings coverage. (See “Risk Factors”).
The offering price of $0.30 per First Warrant exceeds the net tangible book value per share as of May 31, 1998, after giving effect to the First Warrant offering, by $0.21 or 70%. The offering price of $0.40 per Second Warrant exceeds the net tangible book value per share as of May 31, 1998, after giving effect to the First Warrant offering and the Second Warrant offering, by $0.25 or 63%. The offering price of $0.46 per Third Warrant exceeds the net tangible book value per share as of May 31, 1998, after giving effect to the First Warrant offering, the Second Warrant offering and the Third Warrant offering, by $0.28 or 61%. The deemed exercise price of the Debentures of $0.46 exceeds the net tangible book value per share as of May 31, 1998, after giving effect to the first, second and third warrant offerings by $0.24 or 52%. (See “Dilution”).
Each Special Warrant entitles the holder thereof to acquire, subject to adjustment in certain events, one Common Share at no additional cost to the holder until 4:30 p.m. (Calgary, Alberta time) on the earlier of: (i) Five business days after a receipt for a Prospectus has been issued by the Securities Commission of the jurisdiction in which the subscriber resides; and (ii) October 31, 1998 (the “Expiry Time”). Any Special Warrants not exercised prior to the Expiry Time shall be deemed to have been exercised at the Expiry Time without any further action on the part of the holder. Any Common Shares issued as a result of the exercise of Special Warrants prior to the date upon which a receipt for this Prospectus has been obtained from the last of the Qualifying Jurisdictions to issue such receipt will not be qualified by this Prospectus and will be subject to applicable hold periods. No additional proceeds will be received by the Corporation upon the exercise of Special Warrants. See “Details of the Offering”.
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There is lots of info in the "Details of the offering" but there was too much to post it all here now so I settled for the above basics.
Cheers,
Don
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