Let’s look at a couple of recent issue that were available. The first one is not a marijuana-based opportunity but shows how warrants can enhance the offering. The second offer is a marijuana related issuer with an offering that does not include warrants but shows the potential upside with private placements.
Nova Leap Health Corp. (NLH - TSX Venture Exchange)
Equity Units - 0.20 (CAD) Commercially Reasonable Efforts
Deal Type: Private Placement
Security Type: Equity Unit: Share and Warrant
Offer Price: 0.20 (CAD)
Component Products: 1 Common Share, 0.20 CAD, 0.500 Non-Transferable Warrant 0 CAD
Strike Price: 0.35 for the term 24 months from closing for the term
The closing price of that stock as of January 31st, 2018 was 0.33 (CAD). So, while they made money on the share price if the price hits 0.35 (CAD) or higher in the next 24 months those warrants become the gravy.
Valens GroWorks Corp. (VGW - Canadian National Quotation)
Common Stock - 1.40 (CAD)Commercially Reasonable Efforts
Deal Type: Private Placement
Security Type: Common Shares
Offer Price: 1.40 (CAD)
The closing price of this stock as of January 31s, 2018 was 2.25 (CAD). That’s an upside gain of almost 62%. While this is not the norm it does demonstrate the opportunity.
This is just a sample of the offering that come out. Each one obviously must be vetted by the advisor and the investor to see how and if it is suitable for your investment portfolio.
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