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Warrant
Practical Law Canada Glossary 8-580-3613 (Approx. 2 pages)
Glossary
Warrant
A security that entitles (but does not otherwise require) the holder to acquire underlying securities (typically common shares) of the issuer at a set price (or a price to be calculated in accordance with a set formula) and during a specified period.
Warrants may be issued by:
- Reporting issuers (public companies) in certain circumstances, including:
- as a "sweetener" to attract investors to purchase common shares that are being offered concurrently as part of an offering made under a prospectus or as part of a private placement transaction (for more information, see Practice Note, Warrant Offerings in Canada: Overview); and
- a private investment in public equity (PIPE) transaction negotiated by a reporting issuer with a private equity or other strategic investor (for more information, see Practice Note, PIPE Transactions in Canada).
- Private corporations as part of a private equity, venture capital or other financing transaction (for more information, see Practice Note, Minority Investments: Overview).