RE:My View...from the bottomconsultant99 wrote: I would like to know who priced the offering and when?
In as the stock NEVER traded to 0.30 over the last month how did the offering get priced at that level? Were shareholders asked to commit to a dollar value dependent on the price?
The warrants at 0.35 for 5 years is just a bad joke. Is there a provision for early redemption at managements descretion?
WHile there was much discussion on this board about bringing in another company the reality is doing this financing was a huge mistake. Surely another entity could have been brought in to finance the phase 2 and provide additional funding for day-to-day operations. A fully subscribed offer plus overallotment will take the fully diluted sharecount to over 300 million. The market cap of the company prior to the offering was $74.9 million and essential 38% of the company is being sold for $15 million! Surely bringing in a thrid party should have generated $28 million. Instead the market cap of the company is now sitting at 41.1 million (pre shares) and at best $57.2 million assuming full subscription.
Shareholders in my humble opinion lost a bundle particularly those that did not particpate in the offering or added shares - you now have a smaller share of a smaller pie! This is the mistake of not expanding the shareholder base - we need new shareholders and fresh blood.
I expect better from management.
Could they have not accelerated redemption of the warrants by lowering the strike price for a limited time? Considering what they gave up there was a lot of room to provide a lower strike and be better off.
Why did they not look at other instruments like convertable debentures to fund the trials?
Did anyone think of asking the government to kick in the money in return for reduced rates on treatments? $15 million is chump change for the health budget federally and provincially.
Obviously shareholders have a much higher opinion of what the company is worth. We continually talk about how the process has been de-risked - 18 months and counting for patient #5 yet this offering was done at a lower share price, lower warrant strike price and for a much longer warrant term than the last one.
I don't know if there are any provisions as to how many shares the company could offer without asking for shareholder agreement. Best guess is they could have issued as many as 57.5 million shares on a current float of 146.8 or about 28%
Yea I am going to send management a note to express my profound feelings on this deal.
I might also send a note to the regulator as well.
That aside it is now paramount in my opinion that a shareholder group be formed to provide face-to-face representation. I know some will say that hey, we'll never need to do another raise again before getting approval BUT the reality is know one knows for sure. Shareholders need to be at the table before they do something stupid like this again.
Great comments. Let the stupid management know all the long shareholders don't deserve to be punished by this kind of b.s low levels dilution again and again.