Not a basher. Just trying to explain something about securities law that seems to be missed on a lot of people on this thread. Its really simple. To all those who messaged me thanking me for explaining this so they can get out of the stock, no, thank you for seeing what I have tried my best to explain. I'm not trying to make a profit. I'm not trying to trick anyone. I am just trying to explain something that many people seem to not understand.
That being said, I have pasted the letter of intent so you can see what it all means.
TORONTO, Nov. 27, 2017 (GLOBE NEWSWIRE) -- Telferscot Resources Inc. (CSE:TFS) (“Telferscot” or the “Company”) is pleased to announce the signing of a binding Letter of Intent (“LOI”) to acquire the issued and outstanding shares of Canntab Therapeutics Limited (“Canntab”). The LOI calls for the consolidation of the Telferscot shares on the basis of one (1) post-consolidated share for each two hundred (200) pre-consolidation shares. Telferscot will then acquire all of the outstanding Canntab shares at a ratio of four (4) post consolidated Telferscot shares for every one (1) Canntab share (the “Transaction”). The Company currently has 114,856,961 shares outstanding. It is anticipated that prior to closing, Canntab will raise up to $5,000,000 through the issuance of up to 1,250,000 shares. A definitive agreement is anticipated to be completed on or about December 15, 2017 with the Transaction expected to close in February of 2018. The Transaction will result in the Company having approximately 24.4-million common shares and approximately 3.5-million warrants and options outstanding together with approximately $5-million in working capital. Read it again. I want to walk you all through this. Its really simple. 200 TFS pre-consolidated shares will become 1 TFS post-consolidated share. Then you will need 4 of those post-consolidated shares to buy one Canntab share. So it will take 200 x 4 = 800 current TFS shares to make 1 Canntab share. At a current price of 0.05 per TFS share, that means the current price of TFS shares assumes that Canntab will be valued at 0.05 x 800, or $40 per Canntab share. After the deal there will be 24.4M Canntab shares. If they are worth $40 each, then Canntab is valued at 1.5 Billion. That's insane. Canntab is selling 5 million shares at a value of $4 per share. That would put the current TFS shares, after the Transaction, valued at 0.005CAD.
GUYS THINK ABOUT IT. Canntab is going public. The owners of Canntab currently have 100% ownership in the company. They are selling 1.25M shares of a total of 24.4 million shares, so about 4% of the company. They are selling 4% of the company to raise money so that they can expand. If you owned a company and wanted to raise money, this is the cheapest way to do it.
But why would you allow someone to profit from your company before it was even public? It makes no sense. Canntab is valuable, but you cannot buy it right now because it is not public. TFS shareholders are getting nothing. It would be unfair to the Canntab shareholders if some were allowed to have an unfair advantage. That's why securities law exists. And you aren't going to be able to cry to the Ontario Securities Commission, because the LOI spells out pretty clearly what is happening with the shares, and they have subsequently issues statements saying there is no material change and that they intent to carry out the transaction as explained in the LOI.
Everyone holding is probably holding at a loss and is trapped in a bubble where they cannot come to the clear and reasoned understanding about this stock. It is worth 0.005CAD. Please get out before its too late. There will be no hope or miracle. There will be no spike in the price. This is a reverse takeover. Its a very simple securities law tactic. It happens all the time. I know you don't want to admit defeat, but I warn you, if you do not get out now, you will be left with 0.005 CAD per share. I sincerely hope you are prepared to live with the consequences. But I hope more that you head my advice. It will sting, but I like I say below, I think Canntab will spike WHEN IT OPENS IN FEBRUARY, so you can ry to use that to regain any losses. This may be the most difficult decision you make, but it may save your life.
I do not want to spend too much time or space on this, so I am not pasting my original explanation in this post. You can go to my profile and see my previous posts in TFS to find it. It explains what is happening pretty clearly and why the price of the stock is actually 0.005CAD and even tries to explain why the price increased the way it did in December.
To the guy who said he will have to divorce his wife if he sells at this price, you should not be investing so recklessly with money that you cannot afford to lose. And if you do not sell now, you will lose all of it.
As always, if anyone can explain to my why I am mistaken in my assessment of this stock, I would like to hear your clear and reasoned arguments as to why.
Sincerely,
1.61