CLST Holdings Inc (CLHI)

[Renegades17]

Possible option that Stephenson might be pursuing



Stephenson might issue warrants to existing CLHI shareholders at a strike price above the market price.  The warrants might not be exercisable for a year (or until the company uplists, whichever is sooner) and then have a five year term.

I suggest this might be his thinking for a couple of reasons:
1.  He's indicated that he's trying to find a "long-term" solution to appease CLHI shareholders.  This would be one way as the warrants would strike above the current price and wouldn't be exercisable for a certain period (similar to what you see with SPACs).  If he does this, I hope they register the warrants to make them freely tradeable as they are for SPACs. 

2.  It would take some time for lawyers to draft the documentation for warrants and get them filed with the SEC.  It's obviously taking longer than expected for them to announce the corporate action, so this might be the reason.  The optimist in me hopes it's because they are increasing the AS and going to leave the existing OS alone, but that's most likely not going to happen. 

I think this is unnecessarily convoluted and a simple reduction of the RS ratio to 1:2 or 1:5 would appease most shareholders and achieve a favorable outcome for all stakeholders.  I would have preferred an increase in the AS and keeping the existing OS (float) the same, but it appears that's not going to happen. 

Just a thought.  Perhaps someone at the company is reading this and can consider this option.