Mina Mar Group

Due diligence is defined as investigation or audit that reasonable business and person undertakes before potential investment or before entering an agreement to confirm all facts. Most investor are doing research before buying a security but due diligence can be done by a seller who investigates buyer's capability to complete the purchase. After the Securities Act of 1933 due diligence become common practice in United States when brokers and dealers became responsible for disclosing all relevant information about securities they were selling or they will otherwise be accountable and liable for prosecution. This put brokers into sensitive position where they could be unfairly prosecuted. In response creators of the Act set rule that says if broker performed due diligence when investigating companies whose securities they are going to sell and disclose that information to the public they are not held accountable. Not only prospective investors perform due diligence but also ...

Many small-cap and micro-cap companies are in a need of additional capital. Obtaining funding can be tricky and it is best to have someone experiences to advise you about financing proposals. Many of the offers can seem legit at first sight but if you look deeper they are just  camouflaged toxic financing contracts. The real question is what is toxic financing and how you can recognize it? Toxic financing can be defined as convertible debt or preferred stock that allows financier to receive unlimited number of common shares by converting their debt. This type of debt has low chance that it will be repaid because it carries an interest rate that company usually cannot repay. Financier uses this situation to convert debt or preferred shares to common shares and sell them on the market. Formulas that are used for conversion in toxic financing  is structured so there is no downside limit on the price for converted shares. It gives discount to the marke...

Warrants are similar to options but there are few key differences. Warrants are derivatives that give the right but not the obligation to the holder to buy or sell security before expiration date. The price at which underlying security can be bought is called strike price and should be bought before an expiration date. Like option there are call warrants that give holder the right to buy a security and pit warrants that give the right to sell security. Underlying securities are commonly equity but they can also be currencies, commodities and other financial instruments. Warrants are issued directly by the company and not the third party. Investors can write options but they can't write warrants. Finding and trading warrants is also more difficult because they usually trade on over-the-counter market and not stock exchanges. If they however trade on exchange they have a thicker of an underlying stock but with letter W attached at the end of the ticker. Warrants are dilutive...