Post by
jwall34 on Mar 25, 2022 1:24pm
Private Placement Closed! Let's do some Math!
Thought it would be an interesting exercise to map out what the private placement means for Oroco and Oroco shareholders. Lots of talk about dilution so we'll see if that's warranted.
Note this will assume all warrants will get converted at some point.
Fully diluted share count pre-placement: 213,522,305
From the press release: Together with the first tranche, the Company has issued an aggregate of 10,708,696 units for gross proceeds of $18,204,783
Each share had a warrant valued at $2.40, making the total issuance 21,417,392 for total proceeds of $43,905,653.
We can include finders fees, which are
$373,724.20 cash (tranche 1) + $182,000 cash (tranche 2) = $555,724.2
80,000 common shares (tranch 1) + 25,000 (tranche 2) = 105,000 common shares
215,344 warrants @ $2.05 (exercise value of $441,455.2)
Therefore, net impact, once all warrants converted is:
$43,905,653 + $441,455.2 - $555,724.2 = $43.79 million cash proceeds
21,417,392 + 105,000 + 215,344 = 21,737,736 increase in the share count
(21,737,736 / 213,522,305) * 100 = 10.18% Total Dilution
Bottom Line
From an investor perspective, Oroco gains $43.79m in cash in exchange for a 10.18% dilution. Given that this will allow the company to ramp up the drill count and provide runway for the next 18-24 months, I'm very happy with the equation.