Scimitar Equity Blog

The public offering/ financing further strengthened its’ balance sheet and to complete ongoing Phase II clinical trials:

• Receiving approximately $12.4 M from the sale of units including the over-allotment,
• The 52,077,100 units consisted of 52,077,100 shares of common stock, Class A Warrants to purchase an aggregate of 39,057,825 shares of common stock and Class B Warrants to purchase an aggregate of 26,038,550 shares of common stock,
• Each  Class A Warrant entitles the holder to acquire 1 share of common stock upon payment of $0.3718 per share, exercisable for a 5 year period commencing on a date 6 months after the closing date and each whole Class B Warrant entitles the holder to acquire 1 share of  common stock upon payment of $0.26 per share, exercisable for a 6 month period,
• The public offering format was better then a PIPE or an RDO as retail investors could  participate,
• The stock tumbled to $0.23 after ASTM priced the offering  at $0.26 a share,
• The GOOD news … the “pre-baked” offering was over-subscribed … as a few investors could not get in,
• The offering was done at $0.26 while the stock was trading lower, now at $0.236, up $0.007 and continuing to … edge-up,
• Investors (and ME) should have realized something was in the air when ASTM amended (12/09) its Restated Articles of Incorporation that increased the authorized shares of common stock from 250 M to 500 M,
• The fully diluted value is heavy with approximately 230 M (+) of outstanding shares plus warrants plus the incentive options,
• But, the reverse is … still … DUE … to eliminate by 3/31/10 the NASDAQ listing issue,
• So, the question is creating a share price balancing act of appreciation to the future,
• News is the … only factor as interim clinical data from its cardiac and limb ischemia  trials are due,
• The pure risk benefit … made sense … unfortunately price depreciation was inevitable … as in biotech, dilution is a constant,
• The REAL choice was the value of money, now or later,
• However, the proxy vote for the reverse split defined a range of 5 to 8 for 1,
• We can all multiply the current price against/with the current price but no one wants a post-reverse sell-off,
• Responding to our 1/15/10 post: the new CEO, Tim Mayleben deserves credit for a big and bold move … with this market slipping as it has: he raised $$, added a few institutions/hedge funds but, the piper (reverse) still has to be paid,
• Ranked a … BUY … as still below the offering pricing and news is due.