Lexaria Bioscience Corp (LEXX)

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Have you every participated in a IPO or a secondary? Its the same process. Broker dealer runs the deal as the book runner, brokers contact their clients to garner interest and obtain indications of interest and then shares are allocated. For this service fees are charged so Lexaria gave the firm HC warrants and the brokers get 8% commission as an incentive to sell the deal.

All of this information is in the sec documents.


"The Company agreed to pay Wainwright an underwriting discount equal to 8% of the gross proceeds of the offering and a management fee equal to 1% of the gross proceeds of the offering, and reimburse Wainwright for a non-accountable expense allowance of $50,000, up to $100,000 in legal fees and up to $12,900 for clearing expenses. Additionally, as partial compensation for Wainwright’s services as underwriter in the offering the Company also issued to Wainwright five-year warrants (“Representative Warrants”) to purchase 166,781 shares of common stock with an exercise price of $6.58 per share."