RE:RE:Fine print in Dec. 15 press releaseSo, insiders bought about $1.1 million of the units. Divide by $0.75 and you get, roughly:
1,466,700 units
The main part of the offering sold:
6,666,700 units
Total:
8,133,400 units
Divide by 2 to get the number of warrants:
8,133,400 common shares
4,066,700 warrants ($1.05 strike price)
Equals:
12,200,100 common shares (fully diluted)
Actually, when I did the calculation before I neglected to include the additional 200,001 warrants that were allocated to the brokers. And those have an exercise price of only $0.87.
So, the fully-diluted share count actually increased by 12.4 million.
Thus, the total fully-diluted share count rose, roughly, from:
40,882,313 shares (Q3 report - pre-offer)
to
53,282,313 shares (post-offer)
That works out to an increase in the fully-diluted share count of 30.33%.
That is quite a whack of dilution to raise only $6.1 million gross. And note that you have to subtract the Agent commission of $266,251.50. (BYL is also on the hook for $75,000 in Agent legal fees. I don't know if that is included in the Agent commission.) So the net proceeds come in at about $5.8 million, maybe a little more.
I'd say it's looking like a pretty good bet that the Q4 loss will be at least $5.8 million. One quarter of losses in return for 30% dilution. We'll see in time.
Could we call this a desperation financing? I'm not sure if I'd go that far but . . . close.
In fairness, if the warrants are eventually exercised there will be more $$$ coming in.
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You proposed that we really shouldn't be counting the warrants in looking at share count. I have two answers.
First, fully-diluted share count is something that everyone looks at.
Second, and even more important, there are people on this board who think the stock is going to $5. And I agree there is a lot of potential in this story. To put it another way, no one is buying the stock in the belief that the shares will never go above $1.05 (let alone $0.87).
To expand on this, BYL certainly could get bought out some day. And, if and when that might happen, it surely won't be getting sold for less than $1.05 per share (i.e., the warrants will be exercised).
My point: regarding an eventual (possible) buyout, there will now be 53.3 million shares (for a buyer to pay for) instead of 40.9 million. That will take a sizeable bite out of any per share proceeds, if and when the time comes.
So, even if it was necessary to do the offering, this cannot reflect well on the Baylin board and management.
What's done is done.