Why I think AEZS IS a Good Value.
What about this 37 Million Dollar Warrant Deal?
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Banks recently (April 2015) Paid 37 million dollars for 59 million units (each unit having a conversion Rate to A, B, and C class Warrants. Expected full
Dilution once all Warrants exercised is 79 million shares. Expected Full Float of Shares once All Warrants exercised: 93 million common shares (float as of
march 2015) and 79 million once all warrants exercised = 172 million shares.
Fully Diluted (All Warrants from deal exercised) Cash per share currently.
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53 million (most recent balance) / 172 million = .31 cents per share
Why is stock Trading in High 20's??
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Since the A and B class warrants offer a Cashless Exercise Provision, Warrant shares are currently being sold into the market to pay the exercise price of
the A and B class Warrant shares.
(I'm sure that the banks also want to own the Warrant shares being sold into the market as well, which is why it makes sense to have "Aliases" on the
Message boards for AEZS telling us longs to go away, as that means more cheap shares for the banks.
What happens when the Banks are finished Exercising their Warrants?
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Simple, the Market Makers (more banks) will run the stock up on whatever Positive news the BOD of AEZS can pump out at the time. Once the A and B class
Warrants are fully exercised, the Warrant shares being sold (accumulated by other banks) will dry up, and essentially, the stock will have Zero additional
selling pressure. In short....Up we go!
Also, these banks exercising A and B class warrants, may not get the opportunity to exercise them all, we shall see. If AEZS shoots above .74 on news,
the spicket is cut off, and the banks will have to exercise the remaining A and B class warrants at a price of 62 cents.
What about the C Class Warrants?
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The C class Warrants are Prepaid as part of the deal, and had an exercise price of 81 cents.
(ONce again, things that make you go hmmmmmmm)
Why be so bullish on AEZS now?
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Stock is being artificially held at RAW cash value (essentially assigning a value of ZERO to all assets, Patents, the Products currently being marketed World
Wide, and various Products in Phase I, Phase II, and PHase III testing, including two very exciting Phase III Products, one of which is being Fast Tracked.
This allows the banks to minimize their cost on accumulating the Warrant shares sold to exercise the existing Warrants.
Are Non Warrant Deal Banks Buying AEZS too?
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Yes, if you check Morning Star or Nasdaq.com, you will see that INST banks accumulated 15 million shares of Common AEZS stock, from Jan 1 2015 to March 31
2015 in a price range of (.55-.75) Since Q2 provided (thanks to the warrant deal) even cheaper prices, I suspect the banks would continue their buying
programs through out Q2, at a similiar pace, or perhaps accelerated, due to cheap prices, providing at at this end of Q2, my estimate, atleast 50 million
total INST owned shares not included in the 79 million owned through Warrant deal.
What Might the Banks Average share price be?
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Folks, that means of the new float...172 million, banks may soon owns....ready for this...about 130 million of those shares, and will have positioned
themselves between high 20's and .81. (I'll assume about 60 cents dollar cost average when all is said and done.
But what about the Reverse Split Warning?
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Now that you can see based on my estimations, banks are in the process of eating up around 75% of all AEZS common shares, ask yourself a question.
Do you think the Banks will let AEZS get reverse split or delisted at the end of 2015??
Do you? I think we all know the answer to that.....NOPE!
My Position
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After coming essentially to the conclusions I have just expressed, through reading through the company history, and paying particular attention to the SEC
documents, I took every penny of investment capital I own, and purchase AEZS common shares. My dollar Cost Average is .293
My Recommendation
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Simple....do what I did.
Cheers and Happy AEZS Investings (Let's not let the banks have all the fun with AEZS)
