"the company is transforming from a innovation and research...

"the company is transforming from a innovation and research company to distribution company. Distributing its own products. 4 of the 5 pillars do that. Innovation now will be on supporting those divisions."

Pman is right to focus attention on this because in some ways it is a key difference between different groups of shareholders. The assumption by many is that if OBJ/Wellfully becomes a distribution company that means that it will continue to sell both NS supplements and OBJ products. Others question that.

The Memorandum says that there are a number of key resolutions. If any one of them is not passed the deal falls over.

IMO not enough attention has been given to Resolution 1, which says " “That, subject to and conditional upon the passing of all EssentialResolutions, for the purposes of ASX Listing Rule 11.1.2 and for all otherpurposes, approval is given for the Company to make a significant changeto the nature and scale of its activities resulting from completion of theProposed Acquisition of Export Corporation (Australia) Pty Ltd, as describedin the Explanatory Statement." Note the words "and for all other purposes" and ask yourself "Why are they there?"

The Memorandum explains this as follows:
"If successful, the Proposed Acquisition will result in theCompany changing the nature and scale of its activities. ASX Listing Rule 11.1.2 requiresthe Company to seek Shareholder approval where it proposes to make a significantchange to the nature and scale of its activities."

On page 18 it says

"Following Settlement, the Company will predominantly operate within thedistribution and wholesale of wellness products industry." and

"Nutrition Systems distributes some of the world's leading nutritional wellnessbrands."

Under the heading "Business Strategy" it says "Following Settlement, the Company will predominantly focus on the distributionand wholesale business undertaken by Nutrition Systems."

It then lists the executives who will take the key roles as being Danny Pavlovich, Chief Executive Officer, Djuro Kremenovic, Director of Operations and Shane Hunter, CEO Nutrition Systems, New Zealand. All belong to Nutrition Systems.

Paul Peros gets very little mention in the Memorandum and is referred to as a "Consultant". No where in the Memorandum is there any discussion of the Peros operation or how it will be funded, other than to say it might "potentially" get funding. He is not described as being a "key" executive nor is it stated that he has an ongoing role.

We also know that under the ASX Listing Rules that if a company changes its main business it needs shareholder approval, but if it sells a minor part of its business that minor business can be sold merely by a Director's Resolution. If some directors have an interest in the transaction they would need to declare that and could not vote. The decision would then be made by the remaining directors.

In voting on a resolution to sell a minor part of the business it does not matter a jot how many shares the directors hold, because at directors' meetings each has one vote.

Reasonable conclusions can be drawn from all of this.

1. The sentences "the Company will predominantly operate within the distribution and wholesale of wellness products industry." and

"Nutrition Systems distributes some of the world's leading nutritional wellness brands." and

"Following Settlement, the Company will predominantly focus on the distributionand wholesale business undertaken by Nutrition Systems."

should not give comfort to those who consider that there will be ongoing focus on OBJ's products.

2. Listing the executives who will have "key roles" in running the ongoing business as Danny Pavlovich, Chief Executive Officer, Djuro Kremenovic, Director of Operations and Shane Hunter, CEO Nutrition Systems, New Zealand

should not give any comfort to those who believe that Paul Peros will have a major ongoing role.

3. By listing Paul Peros as a "consultant" rather than a key executive the Memorandum does not support the idea that OBJ's products will feature greatly in the ongoing business.

4. "Reduit" gets one mention in the 162 page Memorandum.

5. When you think about it Resolution 1 is not necessary to put the deal through. The Directors have already decided to buy the NS business, so why is Resolution 1 necessary? Why is it there?

In saying "for the purposes of ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the Company to make a significant change
to the nature and scale of its activities"

what Resolution 1 does is to draw a distinction between the NS business and the OBJ business, the effect of which is to allow the OBJ business to be regarded as now being a "minor" business which, under the Listing Rules, can be sold merely on a Resolution by those Directors who do not have a financial interest in the transaction. In making that decision it is irrelevant how many shares the Directors have. At the Board table they get one vote each irrespective of their shareholding.

Now, I have no idea whether the Directors have even considered this point or who might buy the OBJ side of the business. Perhaps if Reduit is successful an offer might be made to buy that part of the business and the Directors might decide to sell it, especially if the NS side of the business needed cash or if an offer was made which exceeded the present Market Cap.

That's all hypothetical, but someone has gone to a lot of trouble to have the shareholders say that that the ongoing business is "predominantly" that part of it which relates to Nutrition Systems.