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Re: nowwhat2 post# 867

Thursday, 10/08/2020 7:32:36 PM

Thursday, October 08, 2020 7:32:36 PM

Post# of 909
Gotcha. I see part of the confusion. At the time I wrote that the share price was .035-.04 I believe. The share price is now trading over the offering price of .05 which actually makes the offering more attractive for a potential buyer.

The shares that are currently trading don't belong to the company. The company already got the cash benefit when the shares were originally issued so the company doesn't directly benefit when share prices rise.

They need to sell additional shares outside of the trading market through an offering to raise cash. The shares they are offering aren't coming from the pool of shares that are being traded right now but they will be added to that pool which will dilute current shareholders. They need to provide an incentive for someone to pay them cash for the shares directly from them vs. buying shares from the market. The higher the trading price goes, the more attractive their offering is to a potential shareholder because the buyer will get each share at a cheaper price plus a warrant (future share they can sell once share price rises over .10).

The share price closed at .066 CAD, so a hedge fund manager would tell his client that he can give him x number of shares at .05 vs .066 on the open market plus they get another share that they can sell whenever the share price goes over .10.

So the new shareholders get a better deal on shares, the company gets the cash they need, and current shareholders own a lesser portion of the pie because there are more shares to go around.