RE:RE:RE:RE:RE:RE:RE:RE:RTO ProcessSorry, typo in the last paragraph, should read "operational perspective", not "
operational expert". smallcap87 wrote: A fantastic response from AL8888. He is correct and I agree on all points and would just add the following:
The example AL8888 is not an oversimplification; its exactly what happened between public BVO and private SunPharm. To put a finer point on the example, the only difference is that BVO had 26.2m shares outstanding, and the exchange ratio was 14%(BVO)/86%(SunPharm), which resulted in ~187m total basic shares of Zenabis. (To clarify, the exchange ratio is what determines the relative value that each company brings to the transaction, so to speak, and was a negotiated ratio.) And so in other words, the share exchange ratio BETWEEN the companies is not 1:1, but each share of each pre-merged company received 1 share of the new merged company.
Its also worth pointing out that this was not a typical RTO like what we've seen on the CSE for example where a worthless shell and its shareholders (who typically issue themselves a very cheap founders round) then merges with a separate existing private operating company to form a new public co. I almost hesistate to call the Bevo/SP transaction an RTO. Really it was more of a merger of two companies, each bringing real, relative value. The Bevo "shell" that tookover SP was not just an empty shell, it was a wonderful operating business with a 30 year history. So really, the transaction with SP was really just a standard merger.
And lastly, AL8888 makes some great points regarding the integrity of the people and their intentions to to preserve and maximize value for all BVO shareholders, which shows plainly in the nature of the transactions themselves. My guess is this begins to be recognized more widely through 2019. And hopefully from an operational expert they can prove that not only do they have almost as much space as the two biggest players, but that they can grow, market and sell just as well or better than the competition.
Great discussion going here!