>> anyone read the 'particulars' with the warrant's forced exercise??? <<
Under the terms of the warrants, the company is entitled to redeem the warrants for $0.05, after notice. That notice can be given only after the AVERAGE closing BID over 30 consecutive trading days is above $9.10. The notice must give warrantholders 30 days within which they can exercise - can turn in each warrant plus $6.02 for a share of TTP stock.
TTP first closed above $9.10 on 8/26 (closes in the days before were 8 11/16, 7 ¾, 7 5/8, etc.). 30 trading days from August 26 is October 6. But we have had closes above $9.10 every day since, so the 30-day moving average above $9.10 will be achieved some days before October 6. Without committing a spreadsheet, I looked at the trading prices the other day; it could be today or tomorrow.
After the 30-day moving average is above $9.10, the company has up to 15 days to give notice of redemption (although of course, as long as the 30-day average is above the threshold, the 15-day period restarts every day -- nothing limits the right to call for redemption to 15 days after the average first climbs above $9.10).
It's not certain TTP will call for redemption, even if it has the authority to do so under the warrants' terms. On the Yahoo TTP board, I believe, TTP IR was quoted as saying there were two camps within the company as to whether to call for redemption. There was a bit of a debate on the Yahoo board a few days ago about whether they should, roughly: "It would be prudent to get the $45 million into the treasury, against the possibility of Novartis finding trouble in the Phase 3 Zomaril trials" vs. "TTP doesn't really need the money now, so why add all that additional stock, some of which would be sold, knocking down the price." Probably depends in part on how confident TTP is on Zomaril.
My own view is that they should err on the side of prudence, and force the exercise in the near term.
--RCM |
