Ayala Pharmaceuticals Inc (ADXS)

[DewDiligence]

Another, less probable reason, is that management wants a way to hedge against unwanted takeover attempts. If one party gets close to owning 50%, management can issue more shares to dilute said ownership.

That doesn’t really make sense. If management wanted to thwart a hostile takeover, a poison pill would be sufficient. Moreover, any party who acquires a 10%+ stake has to report such a holding on SEC Form 4 within two business days.

As indicated in my prior post, I have no idea why the shelf registration is for as much as $200M. It’s worth noting, however, that a shelf registration is valid for three years; so, in that context, the amount ADXS intends to draw down per year might not be all that large.