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Gold/Mining/Energy : Canadian-under $3.00 Stock-Picking Challenge
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To: Miner who wrote (10209)11/25/2002 7:54:17 AM
From: Al Collard   of 11802
 
Globe says Dimethaid financing a dud for shareholders


Mon 25 Nov 2002

The Globe and Mail reports in its Monday, Nov. 25, edition that what began
as one-year bridge financing with a private New York investment bank has
turned into a major headache for Dimethaid Research and has contributed to
a 75-per-cent decline in its share price during the past 23 months. The
Globe's Leonard Zehr writes that on the other hand, the $50-million equity
line of credit from Acqua Wellington North American Equities Fund has kept
Dimethaid afloat this year as it waits for regulatory approval of its
Pennsaid topical lotion for arthritic pain. The deal, which expires at the
end of this month, allows Dimethaid to call on Acqua for cash in exchange
for new stock. The Globe says Dimethaid has only $5-million left to draw
from Acqua, meaning the company, which has monthly expenses of
$1.3-million, could run out of money in February. What irks many investors
is that Acqua currently owns only 1.56 million shares of the 5.9 million it
has purchased from Dimethaid. Acqua says it is not in its mandate to
control companies. An unnamed former insider says Acqua's stock sales have
allowed Dimethaid to "finance itself on the back of retail investors
without having to issue a prospectus."
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