Post by
mrmoribund on Apr 12, 2021 11:06am
What happened to Randy Dewey's 41,500 $1.05 warrants?
On February 22 the company announced that the warrant expiry was accelerated. The new expiry date would be March 25, 2021. Any shares issued from the warrant exercise would be subject to resale restrictions until April 16.
As a result of their participation in the share offering of late 2020:
- chair Jeffrey Royer held 666,800 of the $1.05 warrants;
- CEO Randy Dewey held 41,500 of the $1.05 warrants.
Throughout March 2021 it seemed obvious that all warrantwould be exercised because the stock remained substantially and consistently above $1.05.
Mr. Royer exercised all of his 666,800 warrants effective March 17.
Curiously, though, to this day there is no indication that Mr. Dewey ever exercised any of his warrants. There is no SEDI filing that would indicate either an exercise of his warrants or an increase in the number of shares he holds.
(Curiously, also, there was no press release following the March 25 warrant expiry. The February 22 press release disclosed that if all the warrants were exercised it would lead to the company receiving proceeds of roughly $3.5 million. You'd think there would have been a press release--soon after March 25--disclosing what portion of that would have been realized. But nothing.)
What to make of this? Well, it may just be a slip in SEDI reporting. If Mr. Dewey did in fact exercise those warrants then perhaps this post will trigger a disclosure. There would likely be a fine for late SEDI disclosure. (I got hit with it once myself. $1,000. Ouch.)
But if Mr. Dewey did NOT exercise? If he simply let the warrants expire? On one level it's just strange because even if Mr. Dewey had been a little tight for cash he could have simply exercised the 41,500 warrants and turned around and sold the same number of other shares he held that were not subject to sale restrictions. The stock on March 25 closed at $1.32. He could have had an immediate gain of 27 cents per share, over $100,000.
Of course the optics are never good when the CEO sells shares but likely in this case shareholders would have understood. His overall level of shareholding would have remained constant. Besides, there is arguably a question of optics also in Mr. Dewey not exercising those warrants at all.
Regardless, if Mr. Dewey did in fact NOT exercise those 41,500 warrants it would have to make shareholders wonder if he really believes the shares are worth as much as $1.05.
Furthermore, this would be strange because it could raise questions about how Mr. Royer and Mr. Dewey are getting along. Over the past few years there has been a great deal of turnover in executives and board members. Through it all, however, controlling shareholder Mr. Royer appears to have maintained a united front with Mr. Dewey. This is the first time, as far as I am aware, that they may have so publicly gone in opposite directions.
As I say, this may just be a case of late SEDI reporting on the part of Mr. Dewey. If so, most of what's in this post would be moot. We'll find out soon enough.
Comment by
mrmoribund on Apr 12, 2021 12:29pm
One striking boo-boo in that last post of mine. The gain on the exercise of those 41,500 warrants followed by selling the same number of shares at the March 25 close, $1.32, would have been a little over $10,000 and not, as I wrote, a little over $100,000. Apologies. A number like that should not be off by a factor of 10.
Comment by
mrmoribund on Apr 12, 2021 12:53pm
Okay, I see now the relevant SEDI page has been updated. It turns out Mr. Dewey's warrants WERE exercised and it was just a matter of late reporting to SEDI. As I noted previously, this makes my initial post on the matter largely moot. Delighted to have been of service in helping Baylin keep up to speed with its required disclosures.
Comment by
BIGMOE on Apr 12, 2021 3:43pm
Where is the news release? We need to know number of warrent exercised.
Comment by
BIGMOE on Apr 12, 2021 3:51pm
As I said it before, we have poor manageemnt and board of directros. Suggestion, just sell the company.