RE: RE: Just posted on BNC's ASX site... Diyodt...that is a helpful summary/estimate of the minimum cost of the loan exercising the prepayment option in 2015 after March. Thank you.
I would also assume that Urocidin-related milestone payments would be considered revenue in the year awarded (particularly in the case the loan is prepaid).
Your revenue figure is probably on the light side (at $140 mil) based on the ability to make a full prepayment in after tax dollars. My rationale is BNC's 2011 and 2010 "consolidated revenue" amounts were $36 mil. and $46 mil. respectively and "net losses" in both years ($15 mil and $1.5 mil losses respectively). Thus, we do need considerable "new" revenue which catalysts such as potential Econiche sales and particularly Urocidin's Ph3 completion and FDA approval-related milestone payments should provide the potential for this repayment in this timeframe. However, at 2% on the incremental amount... it is not a big factor.
My challenge (as you also indicated) is not having a complete understanding of all the nuances in the "make-whole" of the royalty interest of 2% on revenue if loan prepaid ( section 2.05 and schedule B).
On the plus side, the prepayment option is now a reality (although no partial prepayments). I did not see any unexpected and significant negatives at first glance. And, got a better glimpse (under-the-hood) at all that is happening and in place at BNC.
A "conference call" with Brian Ford taking us through this and the opportunity to ask questions again would sure be appreciated. I will try to learn more from an acquaintance over the week-end. And, from other posters on this board as always helpful and insightful.
Thanks again for the quick and helpful summary. rg