Neurobiological Tech (NTII) Message Board

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Biotech / Medical : Neurobiological Tech (NTII)

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Mar 7 3:00 PM EST

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To: Apache Indian who wrote (498)	4/20/1999 11:55:00 AM
From: BRAVEHEART	Read Replies (1) of 1494

Interesting Perspective Apache Indian... Of course I see that perspective as a worse case scenario. Actually all of Biotech requires money money and more money. Sure the added cash does dilute the stock but responsibly IMO. It is not some preferred with some 20% premium attached with a floorless provision. That and there is a lock up provision. So any real dilution is a year + off. That is assuming insiders were to sell at that time. Actually it is 2.2 million shares and 440,000 warrants. ie two for every 5 shares. Yes 30% dilution would be a problem if there were already an excessive number of shares outstanding but there will be approximately 10 million shares outstanding when all is said and done. Heck Apache these added shareholders are not getting much more for their investment for this lock up period. 440,000 warrants at a strike price of a dollar is not very much IMO and is very reasonable. Besides this stock will comfortably absorb the added dilution once in P-3. Hence I don't see a problem. Also understand that such willingness to invest by insiders actually sends out a message that NTI will not sell out the company to any Pharma pressure and cut a cheap M&D deal. IMO dilution has to be viewed as does it create a problem for existing shareholders and are those whom are getting the shares getting them at an unreasonable price. Well considering one could by NTI at .53 or so over the past few months I would argue no on the second point. In fact I have managed to buy at .53. As for the first point I would argue no. It does not flood the market. Nor does it invite shorting behavior. Also Apache did you ask to be included in on the financing. Understand this financing included existing shareholders. Would you have been willing to add say $50,000 for the rights to a couple of warrants and been willing to lock those funds up for another years time. Also Apache understand the MERZ collaboration was a genius deal. It gave NTI negotiating Leverage and Clinical Data way beyond it's former means. Without Merz at this point there is no way I would be invested in NTI to the extent which I am currently. It is because of MERZ that I am confident that NTI will cut a very faviorable deal for shareholders. I think the one year lock up is very fair to existing shareholders. Do you understand the risk these shareholders must endure for a years time. Essentially three products in P-2 clinicals must pass the FDA before then. Where do you think we will be trading at that time Apache. Heck you could sell your shares before this added dilution will ever influence the marketplace if it concerns you that much. But you have a year to decide that fate not a month as most convertable preferreds kick in that fast. Your perspective on the MERZ deal is absolutely erronious. There is no way the MERZ collaboration could hurt NTI options with a Big Pharma. Do you understand both companies are looking to partner Memantine now. It was a consolidation out of joint needs. It gave NTI much more leverage and made Memantines potential and reduced risk much more appealing to Big pharma. You should be glad insiders see their collaboration with MERZ as such a positive that they are willing to fork out money money and more money at this time. Actually your reasoning suggests one should at least hold if not buy even based on a worse case scenario Apache. Sure we could idealize the situation and say Hmmm the company is worth some arbitrary amt. Let's say a buck and a half. Then we could say well the insiders who are providing some much needed cash should pay $1.50 per share. The problem is Apache things don't work that way with venture capital etc. There is often some sort of incentive attached to Big Bucks. Get used to it if you are going to proceed to invest in Biotech it happens all the time. As far as I am concerned this is the best form of financing NTI could expect at this stage of operations. BEST WISHES Jeffrey

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