Warrants In the November 8th, 2019 News Release, the company indicates that it is treating certain warrants (the re-priced warrants) differently from the remaining warrants as it relates to notice of early expiry. It does so by stating the following:
The acceleration clause of such Non-Repriced Warrants provides that, in the event that the closing trading price of the Company's common shares on the TSX-V is greater than $0.50 for ten (10) consecutive trading days, the Company may provide notice to the holders of the Non-Repriced Warrants of the acceleration of the expiry time of such warrants to the date that is thirty days after the deemed delivery of such notice. While the condition to the provision of a 30-day notice of acceleration of the expiry date of such Non-Repriced Warrants has been satisfied, the Company has not delivered any such notice and has not made any decision to do so, but retains the right to do so at a future date.
I believe the above is factually incorrect and as a result the Company should send the notice of early expiration to all warrant holders.
I can find no News Release or any other publicly available document that states that notice of early expiry is at the discretion of the company. Nor can I find any News Release that states that only those warrants that were re priced would be sent said notice
My review includes the News Releases of
- Feb, 22, March 20 and April 20th of 2018 (originating press releases,
- November 27th 2018
- February 4, 15th and 25th of 2019
- The Financial Statements for the period ending June 30th 2019
To the extent that the warrant agreement itself may or may not contain the language they refer to above is irrelevant in my view as it is that which is publicly disclosed that takes precedent in my opinion. The markets do not have access to the original documents. The News Releases are supposed to accurately reflect the terms and conditions.
What I do find interesting is that the warrants for which notice has been delivered ( the repriced warrants) the language in the press releases pertaining thereto was "the company shall have the right" which is ambiguous enough to warrant an argument that THOSE WARRANTS MAY NOT BE SUBJECT TO NOTICE.
So the question is "Why did the Company treat these warrants differently?
Why does the company still want these warrants overhanging the stock price?
What criteria will the company use in order to determine when the notice will be delivered? Should the markets not know this?