BSD Medical (Long Term Investment Oriented) Message Board

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Biotech / Medical : BSD Medical (Long Term Investment Oriented)

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From: geoffrey Wren	4/10/2013 3:58:00 PM
	2 Recommendations Read Replies (1) of 178

BSDM does a perplexing secondary yesterday: "BSD Medical Corporation ( BSDM) today announced that it entered into a securities purchase agreement with two institutional investors for the sale of 4,065,042 shares of its common stock in a registered direct offering at $1.23 per share. In addition, warrants to purchase 3,048,782 shares of common stock in the aggregate will be issued to the investors. The warrants are exercisable beginning six months and one day after closing, expire 5 years after becoming exercisable, and have an exercise price of $1.65 per share. Gross proceeds of the offering, before deducting placement agent fees and other estimated offering expenses payable by BSD Medical Corporation, are expected to be approximately $5 million. These securities are being offered through a prospectus supplement pursuant to the Company’s effective shelf registration statement and base prospectus contained therein." The day before yesterday the price was up on announcement of a distribution agreement. The announcement of the secondary sent prices down to 9 month low. From this I would infer: (1) the timing of the two announcements was no coincidence. For some reason management thought it best to do it this way-- most likely to make it easier to sell the secondary. Those who bought in at the announcement of the distribution agreement will not be happy with the sequence of events. (2) Secondary was done from a position of weakness. They gave up the stock and warrants at a sale price that was priced to ensure a quick distribution to those well-connected cats who get to buy in on these sorts of deals. From this it would appear that upcoming earnings report will not be so good; otherwise why not wait a month to get better terms on the secondary? Those recent reports of improved sales in consumables will in hindsight be shown to be cherry-picking of the data. Just the way I see it. This management team seems slippery to me.

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