RE: RP's Warrants by March 2020 - what will happen with those?16 Nov 2019 08:46
Ah good morning OSG! A nice early post from you, after letting the dog out and having a fag and a cuppa in the yard..... I think I am going to unpick your post for a bit of Saturday fun and set this straight for those mystified... and there might be some... and in so doing address the often mentioned placement / cash running out theme covered here by some trolls ( jaimee, dickyboyholmz, burning D )
Firstly, I presume you have an ID in ADVFN... lol, coul it be you? Secondly, of course he has his shares and warrants still, they are his, so naturally they are not in treasury at ZOE. The BOD at ZOE cannot tell him not to excise them. It is his decision.
He has 23 million or so I believe. If he excises them all at 5p then we will drift up from the current 150 million shares to approx 175 million, representing approximately a 15% dilution of the company shareholding. But the company will receive £1.2 million for that and will thus be even less likely to need to place or raise capital in the manner most feared by flighty investors.
But it is not a free process for him. He will have to use a broker who will need paying and there will be tax implications for him. He would need a SP of 7p or more to make it really worth his while and I suspect he would much rather use the warrants in a double figure share price environment. The dilutive effect of the warrants is in one view significant but in another, once we have strong sales news from the multiple sales outlets ( online US, online UK, Schrader stores US, Mr Checkout US, distributor UK, more products UK, more deals US to be announced.....?) and as we approach first seed sales revenue ( we will have seeds ready for sale in January and early buyer or broker revenue could be announced earlier than many expect...) then the combined 'penny-dropping' moment for investors seeing what the future of ZOE looks like could lead to strong buying both here and in the as yet inactive OTC market and the warrant shares would be swallowed up in the frenzy to get on board cheaply.
I assume that is his intention and i expect that in the early part of Q1 2020 we will see these getting used. For now we await news from the US. Nick Tulloch is there and has implied that the company is busy. Busy talking to US investors, more US distributors, busy working on new products and sure very busy with the indoor facility seed production of a targeted 1.2 million seeds per 2,500 plant 'bay' per month and busy pumping out Chill smokes and Chews at maximum rate to feed a hungry distribution outlet network such as Mr Checkout.
Remember, Nick is a Finance Director turned CEO. He has and is guarding his cash pile to facilitate production of his highest revenue generating lines so that he does not run into the kind of problems HNR used to. He has cut costs and staff and has decided to focus on branded products and feminized hemp seed. High value products at the beginning and end of the CBD business model.
And he has 600,000 s