Exercise of warrants (and options)Folks,
I have this question for which I don't have an answer, hope some experienced folks out there could help. I did check the TSX-Venture rules on Private Placements but could not find the an aswer. Here is the question.
AZX an outstanding number of wts and opts which have not been exercised. See e.g. AZX MD&A for 3 months ended Oct 31, 2018 (have not checked any later one), but apparently some wts @ $0.055 have not been exercised. This is strange since they are (significantly) in the money, so why not exercise them to get the shares, especially in this current situation.
Question 1: Customary, there is a hold period (4 months?) for the shares, presumably the wts as well, after the closing. But after the 4 months period, the shareholders can start trading the shares and can exercise the wts if the condition is right for them (usually people would do that when the wts are in the money). So why AZX still have a many in-the-money wts and option still not exercised. Is there any other rules or restrictions from the TSX or any other agencies?
Question 2: This question is similar, but more specific than the above case, since this deals with ES. He has 33.3M wts @ $0.09. If he is looking for more shares, is he allowed to exercise them? Is there any hold period after the exercise? (e.g. for voting purposes). Presumably, he can do a partial exercise to bring up his 7%OS to just below 10%, if he has not bought the shares from the market for the same purpose. Or, he would be allowed to exercise all 33.3M wts (regardless of the SP) to push his holding above 10%OS. He would become an insider, but if he does not mind to appear on the radar screen and has to report any change with respect to his holding subsequently.
Options: Gundy was given 1M opts @ 0.065(?). Can he exercise them now? He would get 1M shares and AZX would have $65k in the kitty. Similarly, 33.3M wts from ES would bring in $3M.
Any legal beagles out there?
Cheers,
GH