Financing!For anyone that doesn't know me very well, one thing about me is that I always speak my mind and I am a straight shooter with no sugar on it. I am not happy at all with this financing and rather mistyfied about why they would do it. Clearly, the biggest explanation would be that they intend to do an acquisition or some major capital expansion that we are not aware of. I would be shocked if the end total doe not include the entire over allotment making this for 1M shares and $26M Cdn$ before cost.
That will more than double the share capital total. One of the things I loved about this stock is the lack of dilution and what I perceived as no need to dilute the shares. I work hard to pick companies that I think will not dilute becuae they are self sufficient. On paper there is no reason that BEV needs money. Their Liabilities/Equity is the lowest on my spreadsheet at 0.28. As per the last earnings report they had $12M in cash and no net debt. The shareholders equity will increase from $50.1M to about $75M & Working Capital from $28.4M to about $53M on this issue alone. While an already strong balance sheet will be further improved the ROE will take a big hit due to an increased E portion. The part that bothers me the most is the warrants for $30 within 18 months....give me a break! What are they thinking?
I only hope that they are working on something so exciting that this will be well worth it otherwise this makes no sense to me. I'm done now....Cheers!!!