Theralase Technologies Inc. V.TLT

Base shelf prospectus ! How is this diff than PP ?

[Oden6570]

The company estimates the cost to complete the clinical study to range between $15 million and $30 million over the next three years dependant on patient recruitment rate and the number of clinical study sites required to successfully complete it. The company's primary mandate is to be properly cap[talized by securing funding to complete the phase two clinical study through receipt from the Ontario Securities Commission to register a $100 million base shelf prospectus. If granted, this would allow the company 25 months from date of approval to access funds from the base shelf up to a maximum amount of $100 million. These funds would be raised in various tranches based on need. In order to be base shelf eligible, the company is required to demonstrate 12 months worth of cash flow, which according to our latest financial statements is approximately $4.5 million. Therefore, the company plans to raise approximately $10 million in debt and or equity instruments and government programs in the form of grants and loans to become base shelf eligible.  

 

A base shelf prospectus is a regulatory document that allows a company to offer securities to the public over a period of time, usually up to three years, without having to file a new prospectus each time it issues securities. This can include stocks, bonds, or other financial instruments. Here’s a breakdown of its implications:

• Flexibility in Capital Raising: The company can raise funds more quickly and efficiently as it does not need to go through the full prospectus approval process for each offering.

• Market Timing: It allows the company to take advantage of favorable market conditions to issue securities.

• Dilution of Shares: If the offering comes from the company, it can dilute existing shares because new shares are being created.

For example, Northern Graphite recently filed a preliminary base shelf prospectus to offer and issue up to $100 million of securities over a 25-month period. Similarly, Verano Holdings announced a $100 million bought deal private placement of special warrants2.

This approach provides companies with greater financial flexibility and the ability to respond quickly to market opportunities

Northern Graphite Files Preliminary Base Shelf Prospectus - Northern Graphite

[DJDawg]

The only thing I like about base shelf is no warrants to dilute as well. I'm no expert but my recollection of other companies I follow is that the base shelf approach allows them to sell more shares when there is an uptick in enthusiasm and momentum. They slide out some more shares and take advantage of the fact that everyone is happy with the price tick to not complain much. Plus the do

[riverrrow]

Yes, with a base shelf the company can keep pounding the share price with a continuous selling of new shares into the market.  Financially desperate companies do not have the luxury of waiting for an uptick to sell into.