RE:Eligibility for Right OfferingWhyme16 wrote: Extract from refinancing transaction announcement on April 15th: .... The Rights Offering is planned to close thirty days following its commencement and will consist of rights being offered to the existing holders of Prometic's Common Shares as of a date that is yet to be confirmed following the receipt of necessary TSX approvals (the "Record Date")... Any idea on what date this could be? April 2nd (2018Q4 financial results), April 15 (announcement of refinancing transactions) OR some date in near future yet to be announced? Thanks in advance for your response.
Whyme16 From yesterday's two PR (1.
Prometic's PR 2.
SALP's PR )
What is clear:
1. Prometic will commence the rights offer in May.
2. 'It is
not SALP's current expectation or intention to exercise its rights in the rights offering and purchase additional common shares.'
What remains unclear:
1. Which date is the Record date?
2. Whether or not Consonance will exercise their rights in the rights offering.
If Consonance does not (and SALP sticks to their current intention), then the rights should probably ONLY eligible for the 736M original shares. Therefore, it's between 6.7 to 20, depending on whether how fully described they are.
The below from
my seeking alpha article shows you what multiples you need (i.e. when the market cap of this company increases in the future) to break even or to become profitable). The with cap is x6.7; with cap is x20.
Imo, for those who decide to stay with the company and can afford it (i.e. to throw good money to rescue the bad=your prior investment), the ONLY way forwards is to excercise your rights as much as you can to effectively lower your average cost.
For those who decide
not to put in new money, then perhaps you'll need to start watching for more favorable point to exit. GLTAL!
Table 5 below summarizes the key data from table 3 and 4. I also include columns for those who do not want to participate in the rights offering.
Table 5
| | New cost av. for those notparticipating in the rights offering | Multiples needed to break even | New cost av. With $75M Cap | Multiples needed to break even With $75M Cap | New cost av. Without$75M Cap | Multiples needed to break even Without$75M Cap |
| $3 prior av. | $3 | 197 | $0.40 | 26 | $0.16 | 10 |
| $2 prior av. | $2 | 131 | $0.27 | 18 | $0.11 | 7 |
| $1 prior av. | $1 | 65 | $0.14 | 9 | $0.06 | 4 |
| $0.06 prior av. | $0.06 | 4 | $0.02 | 1.4 | $0.02 | 1.1 |
| SALP and Consonance | $0.01521 | all upside | $0.01521 | all upside | $0.01521 | all upside |