News - SEDAR

IF one share is worth $100, then I figure that the one share probably represents something like 787,500 shares. This is going by the amount the shares are valued at in my account divided by the total number shares. (Not what the shares were purchased for, or valued at the market before trading halt)

We have been through the pro-forma bankruptcy, and we are now in the restructuring of the capital of the company that they are calling extinguishment.

http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00007862

via PWC - Financing Debt, Transactions, Equity Instruments IFRS Accounting Manual

In the Price Waterhouse Accounting manual which deals with derivatives instrument valuation under IFRS accounting, the following quote is the only source of information on what might be meant by extinguishment:

Pg. 9-50

9.2.2 "Conversion accounting–convertible equity instruments

In a conversion of convertible preferred stock pursuant to original conversion terms, the preferred stock is exchanged for common shares with no effect on retained earnings. However, the exchange of common shares for preferred stock that does not contain a conversion right in its original terms is considered an extinguishment"

So the conversion of a common share for preferred stock, which is the reverse of what you would normally expect, is called an extinguishment. It's an accounting term. This is how the capital of the company will be restructured.

Normally you would expect that preferred stock is converted to common shares.

You can go through the 333 pages in an attempt to determine how they arrived at such a low valuation of the shares in your brokerage account, but that is meant to change.

So extinguishment actually means conversion in this context. The liabilities were paid in full, so this extinguishment or conversion transaction has to do with the share structure of the company.

https://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc-guide-financing-transactions-debt-equity-second-edition-2015.pdf

-F6