<<However, it is not forgone conclusion that the shareholders have been hurt more although it may look that way so far. Lets look at the two cases. $25M/$7 = 3.57M shares if done all at once previously. So far, we have gotten $9M for 1.67M shares or about $5.4 per share. So if we get the remaining $16M at a price of over $8.4, the shareholders will have come out ahead.>>
add, you are forgetting the $2 million financing on September 23rd.
Total amount raised so far (since June) = $11 million. Total shares sold = 2,107,438. Average price per share sold = $5.22.
In order for the "just in time financing to minimize dilution" scenario to come out even to raising $25 million at $7, they would need to raise the remaining $14 million at an average price of $9.56.
Given the current weakness in the stock price, I'd guess it is approaching the time to go back to Daddy Warbucks for more money. Assuming they raise another $2 million very soon for $4.35 per share, they would now have raised $13 million in exchange for 2,567,208 shares, at an average price of $5.06 per share. They would then have to raise the remaining $11 million at an average price of $11.95 per share in order to come out even with raising $25 million at $7.
With each increment of the "just in time" financing at low prices, the "just in time to minimize dilution" scenario becomes more dubious. |
