$15 Billion bought deal offering -From another board ;
Message from Darrell Bishop to the lads;
“Every decision we make is with existing shareholders in mind as our first priority. This deal is one of the least dilutive instruments available to us to bring in a lot of capital ($15M or more) and considerably derisk the runway to revenue in Q2 2023.
Consider the alternative: If we did a $15M common share deal, the stock would open at $1.80 tomorrow (10% discount) and then trade down to $1.70 with the warrant. We would be eating paper for months as guys short the stock and hold the warrant. Doing it this way eliminates the risk of hedge fund manipulation (you can’t sell the unit and hold the warrant / short the stock / etc).
This convert is an unlisted security (ie. it’s not tradable by the holder). The warrants are also unlisted. Hence, the institutions are long only capital partners. The only dilution in the first 1-2 years would be interest payments if we elect to pay-in-kind.
Our view is that after two years, if there is a cheaper cost of capital debt solution we will redeem and pay out this instrument (ie. no conversion). If it does eventually convert, it would be at a 20% premium to today’s market and we have a solid group of institutions.
Now, bring on the catalysts…”