RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Good Move Up on Double Average Volume I am sure HC Wainwright was well aware of this share issuance matter when they moved forward with the $5 million placement last May. I thought the placement deal was bad, but I now completely understand. I think the terms were bad precisely because of the share issuance matter. If it weren't for the share issuance, I think the price of this stock would be double what it is right now.
So the market cap is currently $20M with 80M shares outstanding. A market cap of $20M with 120M shares outstanding as of November 22 would put the share price at 0.16, 8 cents less than the current 0.24. This stock was actually at 0.14 cents 18 months ago, but for different reasons.
This is why the PEA needs to get out at least a good two weeks before November 22, so that investors large and small can have an opportunity to digest it and help soften the blow of the share issuance. Again, if the NPV calculated by SRK comes to $1.5B or more, there isn't a substantial difference between 80M and 120M shares, given what the current SP is. So, again, I think the current SP is taking into account, at least to an extent, the November 22 share issuance.
Was this a bad deal? Sure, but as I stated in my previous post, I don't really know the reasoning behind it - it may have been that DEFN did not have the cash at the time, and so they worked out this deal with Spectrum, with the hope they could prove up the property and have a PEA in hand well before November 22. But Covid obviously threw a wrench into everything, and now here we are.
Without a doubt, the next two months will be interesting, and some steel nerves may be needed. The PEA is the MUCH bigger deal than the share issuance.