Post-deal share diluted count for valuation purposes:
>…how many new shares is GTCB planning on creating to sell to LFB…<
18.2M shares, excluding any shares that LFB may subsequently acquire from conversion of the $2.6M term loan.
>…what will the effective share count for valuation purposes be following the execution of this deal?<
After LFB has purchased all of its shares for a cumulative $25M, GTC will have 91.7M basic shares outstanding.
To get the effective share count for valuation purposes, we must add in pre-existing warrants and options, excluding those that are too far out of the money to be material in any realistic scenario during the next few years. There are 15.1M of these options and warrants (excluding 4M that are too far out of the money to be material).
91.7+15.1 = 106.8M diluted shares for valuation purposes.
Please note that the preferred shares to be issued to LFB are equivalent to common shares for valuation purposes and have been counted as such in the calculation above. The only distinction between these preferred shares and common shares is that the preferred shares entitle LFB to elect one director on GTC’s BoD.
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”
