The idea that buyer and seller are projecting a mi
Post# of 158771
(Total Views: 1737)
Posted On: 11/04/2025 9:56:06 PM
Re: KenChowder #158289
The idea that buyer and seller are projecting a minimum share price isn't a correct way to look at this (IMO). The price will be the price according the document (e.g 98% of the lowest VSAP at the time).
The timing is determined by CYDY, not by Yorkville. CYDY will sell when they feel they need to or want to.
The 5% limitation protects Yorkville in a couple of ways. First, 5%+ ownership drives reporting and other duties. It appears they don't want those obligations.
Second, suppose something bad happens and the share price goes to 15 cents. The 5% limitation prevents Yorkville from being forced to buy the full $30 million worth. In this example, the maximum Yorkville could be required to buy is 69 million shares for $10.3 million. The thinking is that they wouldn't want to buy any if something really bad was happening, but this would cap their exposure.
On the other hand, if something great is happening, and the price is 50 cents or $1, and CYDY wants money, then they can get the full $30 million on demand.
(There are limits on how many shares CYDY can force them to buy at one time, and these limits are related to recent average trading volume.)
There is also a clause that allows Yorkville to sell the shares short as soon as CYDY presents a notice requiring them to purchase. This allows Yorkville to lock in the 2% spread if that is their choice.
As z_smith pointed out, CYDY seems to have negotiated a nice deal, as the 2% discount seems very small. And, they only needed to pay a commitment fee of about $300,000 (in shares, about 1.2 million shares). Seems like a very reasonable deal to acquire the optionality that CYDY has in this agreement.
That said, there is no reason that the deal itself would drive the price to 43 cents.
The timing is determined by CYDY, not by Yorkville. CYDY will sell when they feel they need to or want to.
The 5% limitation protects Yorkville in a couple of ways. First, 5%+ ownership drives reporting and other duties. It appears they don't want those obligations.
Second, suppose something bad happens and the share price goes to 15 cents. The 5% limitation prevents Yorkville from being forced to buy the full $30 million worth. In this example, the maximum Yorkville could be required to buy is 69 million shares for $10.3 million. The thinking is that they wouldn't want to buy any if something really bad was happening, but this would cap their exposure.
On the other hand, if something great is happening, and the price is 50 cents or $1, and CYDY wants money, then they can get the full $30 million on demand.
(There are limits on how many shares CYDY can force them to buy at one time, and these limits are related to recent average trading volume.)
There is also a clause that allows Yorkville to sell the shares short as soon as CYDY presents a notice requiring them to purchase. This allows Yorkville to lock in the 2% spread if that is their choice.
As z_smith pointed out, CYDY seems to have negotiated a nice deal, as the 2% discount seems very small. And, they only needed to pay a commitment fee of about $300,000 (in shares, about 1.2 million shares). Seems like a very reasonable deal to acquire the optionality that CYDY has in this agreement.
That said, there is no reason that the deal itself would drive the price to 43 cents.
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