The Company did a reverse merger.
So essentially what ENUM did was look for a company that had filed all their registration to incorporate with the SEC, and used them to quickly become a biotech company on the OTC. The executives in this company are well versed in how M&A's work. And the accountant they used found them this on-line travel and backpacking company, Cerulean (let's call them xyz) who incorporated in 2012, and filed properly every year, but never really had any profits or losses. Basically, the business had OTC shares, but no one on the market bought them for a couple of years. And so, no real earnings, no real profits or losses, a perfect shell company to reverse merger with. Potentially the xyz company was going to close shop -- seriously, it was expensive for them to file each year. Or maybe xyz continued to run it in hopes that some private company would need the leg work done for the "incorporated" aspect of a company. It's quite possible they looked for a buyer who wanted to merge with them. Anyway that is where Enumeral came in. This company management team that had been running on private money doing research and potentially they had though to remain a private company. But somewhere along the line they decided to go the OTC route, as it would be the quickest to up list -- which I believe is their true intention. And it would also make these executives the most money long term. The MIT technology was working well and they received large grants, and finally did a big capital raise which you were part of. And, they had a business model that they knew could work -- I'm speculating here, but I have also done my research so I don't think I'm far off. Not to mention, I have seen a lot of scientific presentations and this CEO is probably one of the most qualified to present! Anyway, back to the subject of the reverse merger... ENUM found the online travel agent backpacking xyz company and negotiated with xyz, offered them shares in the new company, ENUM, in exchange of their incorporated registered OTC shell. The paperwork was drawn up, the reverse merger, the raise, and a new company was born.
And so basically upon reverse merger, those shares that the prior on-line travel agent received were the ones that initially hit the float. It was all profit for xyz -- except the money xyz spent keeping the company, with no real revenues, SEC filings up to date, which were costly. But basically, I imagine the prior owner made out very well for selling the shell company. I actually have not checked if xyz owns any more shares.
And after xyz sold their shares hit the float, then other shares were from legal fees and that sort of thing. And then Tompkins sold some he picked up. Some shareholders may have been spooked too from the filings, "going concern" language which is normal for early stage biotech. Although a very real concern, it's less so when a biotech has assets that they could sell for millions (and that would be giving it away). And when there are shares hitting the float (supply overload) but the company really isn't known (lack luster demand), you have what happened to you, suddenly down on your shares. But those things will change as news on the company comes out. ENUM seriously cut 6 months easily to get on the OTC. And they have been able to give themselves shares on each deal and collaboration (so far there have been a few!), bonuses; and so they have a vested interest in market success. Assuming success, these executives will make more going public than they will have made remaining private, as now they will be building stake in the business. They know what they are doing, on both the corporate and scientific front. And their objective is not to fleece shareholders IMO. Instead it's to grow a viable billion+ dollar biotech business, with big and small Pharma being their customers and/or collaborators; and research institutes being their collaborators; and them having aspirations of being big Pharma one day too. They are running the business as though they already are on the main exchange, ethics committee and all. It's all part of the master plan to get their immunotherapy single cell discoveries from the micro chip to pre-clinical up through clinical and to the market in the shortest timeframe. Two years is a short time in biotech. And in a few months, I imagine they will announce an IND. Trust in the process. You are doing the right move, and waiting it out. I know it's been tough holding. But in a heart beat your shares can return above your entry price. The move up will be swift when news begins to come in. The Company had good news in February (Merck extended the contract to include lung) but instead of PRing it, they released it in the SEC statements. They also have yet to disclose MD ANDERSON targets. And they only revealed in slides that they are working on IND steps. They are in no way trying to pump the stock. In fact, they simply are just working smart. That tells me that they are not worried about the share price or about raising capital. Keep in mind that Mgmt gets shares as part of their bonus, collaboration deals, etc., so the longer the stock price stays low, the more shares they will get, and greater their vested interest will be and the increased chance that their wealth grows as this rises, naturally, as the market learns of ENUM. And the market will eventually notice them. I'm not saying they are purposely trying to keep the share price low. I'm suggesting that they are in no way concerned that the share price hasn't risen. And there is a difference. They negotiated the last few collaboration deals from a position of strength, not weakness. They're not worried, so I'm not worried. I have no doubt that they will continue to excel in M&A and with the technology. The only hump we may have to get over is if the company raises before the next "big" news. But given that the Most Favored Nation clause ends this week, the fact that they haven't yet is excellent news, as that means less dilution for us in the long run. Anyway, net net, you shouldn't worry about your holding. There is reason why it fell, but that was simple supply-demand, and it has nothing to do with the science or management. I imagine that one day xyz seller is going to kick themselves for selling. Until then we wait. :)
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