Not such a weird financing after all?What I thought was rather weird in the financing is that maverix exercises 19.5m warrants at 40c then to sell them to Eclipse at 50c with money raised with new NEE shares (indirectly) at 50c. So that doesn't exactly help in any way, other than paying Maverix a nice bonus.
However, I have the impression there may be a deal here we have not explicitly heard about. Mike did mention in one of his interviews that the money raised was partly to reduce warrant overhang, which to me did not make any sense since you can hardly call anulling those 19,5m maverix warrants with money raised from newly created shares a reduction in dilution. Creating shares on one side of the fence to annul some on the other side does not make sense.
It only makes sense if there is another part of the deal that is not yet communicated (or I have overlooked it at least?). And that would be that the remaining Maverix warrants aren't effectively exercised.
Why I think this?
I notice this in the new eclipse presentation: "Assumes C$20M Eclipse Gold financing at price of C$0.50; assumes non-exercise of certain warrants".
Then doing the math based on the past financial statements and comparing that with the numbers on slide 11, I also have the impression the assumption on that slide is that those warrants are gone.
251,355,988 NEE shares
57,576,108 Eclipse shares = 62,757,958 NEE shares
40,000,000 new NEE shares
= 354,113,946 shares. The slide mentions 355,3m shares.
(not counting the 44,596,666 maverix warrants due in 2 days)
48,475,643 other NEE warrants
907,470 Eclipse warrants = 989,142 NEE warrants
775,000 Eclipse RSUs = 844,750 NEE warrants
= 50,309,535 NEE warrants. The slide mentions 52.1m warrants.
I guess the slight discrepancies might be because the conversion is not exactly 1.09, but e.g. 1.094 or whatever. Or some things have happened after the financial statements that I don't include.
Either way, I fully excluded the 44,596,666 Maverix warrants due December 12. That number is too large to just be missing. These warrants are ALL gone according to the slide. They are not included in the common shares, nor in the outstanding warrants. 19.5m vanishing we can explain with the deal. But the rest cannot be explained based on the communication done so far. So my conclusion is there might be some "hidden" part to this deal yet to be revealed: the non-exercise of about 25m warrants.
I have no idea why Maverix would agree to this, other than being a really really supportive shareholder. So maybe I'm completely wrong, but maybe I'm not. If I'm right, it does shed a more positive light on this financing and the timing thereof. We'll know in 2 days.
Just thought I'd share since I've not seen anybody make this kind of observation. :-)