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Lol, I like how they say it will extinguish the convertible notes if you vote yes. Then come around and say we got 40 million warrants ready to rip as soon as RS passes.
If this was 50 cents staying on NASDAQ might be a big deal, but when some of us average from 0.02 - 0.11 NASDAQ or not doesn't really matter much.
Problem with Delcath right now is that they have that bad offering of convertibles. The loan sharks won't let them off without getting paid. So RS and warrants was the way to pay them back.
The way I see this is that they sold convertible to these institutions so that the institutions would be able to exchange for warrants when RS goes through.
This is the reason why people believe Aryton Captial bought 41 million to try and influence the vote result since they were the notes holders.
So if RS fails, it is likely Delcath start yet another proxy for a 4th vote for RS maybe in a later day. This time around, they can include Hudson Bay and Renaissance or even Vanguard. Eventually, Delcath may get enough votes.
The bet is that these institutions buying in will need an exit prior to RS passing. Otherwise, their money gets reduced just the same longs do.
My bet is that RS fails, current institutions will exit and create a pop. Then new institutions may buy in again when thing settle setting up for the next RS vote.
But, another factor is current funding. Delcath have no money left and the restricted cash well is restricted without more shares to satisfy the conversion. So this is where a wild card like a partnership or BO may happen. But, eventually they will ask for RS again, and likely more institutions may join in. They might offer more of those series A and B preferred shares to get more institutional support.
Here is a full report of the combined trials and history of Chemosat. They didn't get the FDA approval last time because the filter efficiency wasn't high enough and side effect was a problem. Now with generation two filters efficiency was up to 93% and side effects were manageable. They need a formal phase 3 to get the data for FDA approval. There is nothing that shows this isn't a viable treatment. Instead the reports all shows Chemosat was an effective treatment. The value of this treatment is there.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5126197/
"Toxicity data were reported in the noncomparative study by Vogl et al. [41]. Toxicities following CS-PHP were consistent with the toxicity profile seen in the clinical trials of CS-PHP with melphalan. The most common adverse effects were hematologic events (thrombocytopenia, anemia, neutropenia), which were managed effectively with supportive measures. Three patients were initially treated with the first-generation filter, then switched to the second-generation filter, providing an opportunity for a comparison of toxicity profiles with the two systems. Toxicity was less severe and patients required fewer supportive measures (i.e., no transfusions, shorter courses of colony stimulating factors) with the second-generation filter than the first-generation filter."
This was from their recent read out of 46 patients from 2008 to 2016 released this year. On average people diagnosed with metastatic ocular melanoma to the liver have an average of 6-8 months of survival. The treatment was extending their life to 657 days or 1207 for those with complete or partial response. That's huge difference!
This is the reason why I don't understand why they are pushing RS so hard and not look into a partnership deal sooner. Most new drugs barely extend OS or overall survival to more than 8-19 months barely 2 years at best are getting FDA approval and generating billions of annual revenue. Chemosat is extending OS to 3 years.
So if management tells me they can't get a partnership deal and must RS. I would basically call them incompetent or not even trying.
Cytrx as an example designed a new delivery system that reduce side effect of an existing drug got a 350 million deal. Chemosat is far better and they can't get a deal done is unbelievable.
https://globenewswire.com/news-release/2017/02/21/925818/0/en/Analysis-From-Two-Institutions-Shows-Strong-Tumor-Response-Overall-Survival-Potential-of-Delcath-Investigational-PHP-Therapy.html
"Patients diagnosed with metastatic ocular melanoma to the liver have an average of 6-8 months of survival. This retrospective analysis reported a much longer survival after Melphalan/HDS , and provided an interesting long-term look at patient outcomes after treatment with Delcath Melphalan/HDS,” said Dr. Jennifer K. Simpson, President & CEO of Delcath. “The projected 657-day median OS and 1,207 day median OS in those with a partial or complete response is very impressive, and we believe speaks to the potential of the system to provide meaningful durable response.”
Sam, some shorts will likely have more info just like some longs do, but last time it was a pretty big squeeze of shorts I don't think anyone would disagree with that. If shorts were prepared it wouldn't have ran up to 37 in a day.
Don't think shorts always have more info than longs do. Both sides are making bets just the same. Both sides can and do lose money if the RS vote goes one way or another.
legally, the company can't really come out and say we have a M&A in progress. Unfortunately, if there were deals they are supposed to keep quiet. So BO is always a wild card that can really throw things off when least expected.
The company is desperate no doubt and it's natural we see this kind of reaction. Obviously they can't satisfy their debt requirements without more shares and the funding are locked.
So they need the RS is plain and simple to understand. Now they proposed to get rid of this bad finance instead offer warrants with a fixed price to the notes holders if RS passes. Problem is warrants are not any better than convertible notes. Unfortunately, it's the nature of business because the lender have to be paid one way or another. Otherwise, why would they lend money to the company right?
In any case, that doesn't justify the fact that the shareholders will be killed on RS. They need a better solution for shareholders to vote yes. Manipulating the votes will just get them lawsuits.
It's just not the way to go with attempting to manipulate the votes. They may have realized that. Or at least I hope they realize that will get them lawsuits.
They should be focusing on finding a partnership deal to help inject new funding and help them develop and market the treatment. That way they get to keep their jobs, solve the funding problem and remove existing debt. At the same time shareholders aren't going to get diluted to nothing. Then propose a sound RS will get 100% of the votes.
Instead management made it looked like they are all focused on RS and only RS. That's not going to help them get the yes votes.
A letter to shareholders right now is badly needed. They need to acknowledge the problem they are facing and the shareholders of fear of further dilution. They need to show leadership that they are actively seeking strategic alliance and other options to solve both shareholders and company's problems.
Yeah, they are expecting further dips before 9/7. But I doubt these guys shorting at this level will all hold through 9/7. They probably just day trading or short overnight hold and cover at anything lower.
No matter what, fear will get to people and likely sell lower for them to cover and maybe profit 10%. Then as we get close to 9/7 short will have the same mental feeling that they aren't sure RS is a yes and may cover before 9/7 which can cause a reverse especially if words gets out they don't have the votes. Then any short still there will try to exit in a hurry.
It would depend on sell side if ask is set high, we can see a pretty big squeeze here. Depend on if sellers are smart to watch for trends of a reversal and set higher sell price.
We will get a good feel as we get closer to 9/7.
Yes Blue, 0.51 is tempting and about the loading zone. Starting up a small position again see if I can get order filled at 0.50.
Pretty much, they can ask to increase AS later. It's clear they are trying to persuade holders to vote yes.
Give a little to see if vote passes, if still no vote, I am sure management will try something else to eventually get the votes. Have to find a middle ground between shareholders and them.
It's a gamble Sam, the same reason some of us are holding long. Shorts that's holding is on the bet that RS pass just like last time.
Depend on what price you shorted. For example if you short at 0.24 last pop. It's relatively safe even if it starts to run to 0.20. Shorting at current level 0.13-0.12 is betting that RS will pass and SP drop.
The last squeeze was that no one was expecting the RS vote be a NO back in June. So shorts wasn't prepared. The massive run is due to shorts all try to exit and the momentum traders and new retail chasers all piles in to fuel to run up to 0.37 from 0.02. Some 600 million volume if I'm not mistaken.
Some traders are good at what they do. They can take advantage of a 2-3 days run to buy sell, and buy at dip and sell again in order to break resistances. That's why you have volumes so large that's over total share outstanding because the same shares are traded over and over possibly buy the same group of people.
If RS is a no again, these people will do the same thing again and shorts will run to exit just like last time.
As you know, however unlikely BO might be but if RS don't pass and management are out of options, a BO maybe their only option left. If that were to happen, it would be like DGLT a run to 1$ is highly likely.
Just short making small trades. It's relatively safe to short for the time being but won't get much out of the trades. I expect shorts to potentially start to cover as we get close to 9/7 just the same as some of the longs may shake out and sell.
JPaso thanks for the information but chart at this moment in time is meaning less. This all rest on the RS vote result come after 9/7.
Some people will no doubt get scared and sell possibility for a lost as we get closer to 9/7.
The bet is still on that a RS is a No and they will be forced to look for alternative that doesn't dilute the shareholders.
Shares will be hard to come by for short especially after RS. Plus the funds will be doing it so retail is going to compete with them for shares.
Regardless, if RS pass short will go all out. The company is just setting up for another death spiral and they know it.
Sam the problem is the company didn't say anything whether they will be seeking strategic alliance. They simply said we need more money and we need RS or delist from NASDAQ. That's not showing us they at least are looking at posible strategic alliances.
Mintmoondog, Hudson Bay have been fined before for participating in offerings then shorting a company stock so not surprised they are still at the game.
What I don't get was that the OS was well above 400 million at the 7/13 cut off date. Even with the combine of all institutions according to fintel including the 41 million sold by Ayrton Capital. It's no more than 100 million shares if you count the preferred shares maybe 110. They would need another 100 million votes from retail holders. So I am guessing they are counting on the broker non votes where the broker will automatically do a yes for the holders that don't vote.
The recent push back of the voting date might suggest they are trying to convince more people to vote yes. They could be close to getting above 200 million votes.
Thanks James, often times we got to read these over and over to truly understand it.
0.35 being pre split is better, but we weren't told what the price would be post RS. Generally speaking warrants are below market value otherwise, holders wouldn't benefit from it.
What concerns me is that warrants are often used as safety net/insurance to short a stock because in the even of the short squeeze you can use warrants to buy shares and cover your position to negate your loses. This allows the holder to short with confidence. Excessive warrants are never a good thing. Plus the holder may choose to buy shares and sell for profit = dilution.
Only difference is that warrants are fixed at a price unlike convertible terms where you always get shares below market price regardless of what the share price was. Makes me feel better, but nothing that will benefit the current shareholder.
RS looks like still a no and it's already 8/30. Next Thursday it's the due date for vote count.
I just read through the entire 8k again. I was right. The 2.4 million remaining convertible will be exchanged for 40 million warrants with exercise price of 0.35 on the condition that RS is at least a 1 for 20. What that means is that as soon as RS passes, the convertible notes holder will get 40 million warrants and able to buy that many shares at only 0.35 post RS!!!!
It stated at least a 1 for 20 RS or more. So that means at 0.12 at the minimum of 1 for 20 RS share price would be $2.40 or more and they get instantly $2.05 per share profit! The warrant holders will be filthy rich.
The selling will instantly cause a straight down drop in share price as the shares flood the market for huge profits. Wake up all and read the sec filing again. Any longs after RS is going to get killed instantly.
Only way to play this is a big fat short if RS is a yes. Once longs wakes up and realize this, no way in hell they will vote yes.
The institutions holding the convertibles will get the warrants that's why they will vote yes because it's a sugar deal for them. Buying at 0.35 post RS and being able to sell for dollars? 700% or more gain? They will vote yes. Aryton Capital Hudson Bay, and Ren all of them likely participated in last years and this years convertible finance. That's why they hold millions of shares because what they get in return is far more than 25 million shares at 0.12!
The dirty secret has now been exposed. Plus Aryton pump and sold out so they now have no loses what so ever. If RS passes they get these sweet warrants and massive profit. Longs will get crushed. This is the very reason why the institutions will vote yes! It all becomes clear to me now.
One other thing I didn't bother reading the sec filing again. If the 40 million warrants are not adjusted with the RS. It would mean the warrant holder get to buy shares at 0.35 post RS and likely be able to sell for dollars. I don't recall they mention anything in the filing that the warrants will adjust according to RS ratio. All it said was they will exchange 2.4 mill remaining convertible for 40 million warrants at 0.35. What sweet deal for the institutions. No wonder they will vote yes.
They keep doing this shit they will be forced with yet another no vote. The company is going to keep ticking off the retail investors. They are going to get sued big time.
Lol, that's why there are no trust in K and team. Only trade here. Unless K goes and a better management takes over including a merger.
N3, a no RS will likely present another trading opportunity. As I said 0.50 is the fair price right now. I wouldn't want to pay more than 0.50 for a share.
The deal with NantCell will likely present more trading opportunity. This stock is no longer a long and hold. Unfortunately, it is being treated as it is a penny stock.
I may change my views if conditions changes such as NantCell actually files the NDA or we get FDA approval and milestone payment. Share price will anticipate these catalysts if they do come near. I may trade again and potentially hold a small position with profits made here. And see if i can build on that position for the next year.
James, various people with various interests. But with stocks like this, there are whole lot of people simply want a pop to 35 and don't care for anything else.
Management got their own problems and things on their mind. long time investors probably long gone.
Institutions only care to invest if they get a return making deal with the company as long as they get paid.
You get bag holders that might be angry with management. Bunch of trader on the sidelines waiting to jump and skilfully trade it up on any opportunity.
You got bears hoping nothing but a big crash. Or simply try to profit while the RS scare is in the air.
All I can say for anyone reading this is discipline yourself to never chase a stock that already took off big percentage. Best you do is get in for a day trade. Only buy when it crash hard and of course only if it has potential to rise again.
You wana know why they have such a hard time with a yes vote? Because of the June run to 0.37 it created a ton of bag holders when SP crash back down to 0.08. Those guys will not vote yes. No RS is the only way out for them and they knew it. No matter how the company scare them, RS = death for them. They don't care about Delcath future. They only care about a no vote and either get out or greedy ones might stick around for potential BO. That's what's going down here.
BO as I said if was staged will be close and immediately follow RS vote result because Delcath can't afford to sit around with no funding. If no BO shortly after No RS, risk increases.
Apparently bears are betting on it with the increased shorts. On the other hand, company extended the voting closing date from 8/28 yesterday to 9/7 next week Thursday.
If they had the vote, RS would have passed already today. So logic suggest they don't have the vote. But you never can be sure that's why it's called a bet.
Recently company is coming out with news on the restructuring. Some calls it a scare tactic that if you don't vote RS they might get delisting from NASDAQ.
Company coming out saying things like that and the shorts pile in might point to a potential yes on RS. But, the funny thing is the vote is in shareholders hands and it is the shareholders that decides a yes or no.
If shareholders stand unchanged with a no vote. Bears and their short will run for hills and cover after the voting result is out. Because management would be forced to look for alternatives that does not result in RS and dilution.
Hard to say what will happen after a no vote. Apparently, the company needs funding so at the minimal they will renegotiate new terms with the current debt holders. Keep in mind Delcath have some revenue. They aren't burning try.
If the current debt holders pressure the company, the company may file for bankruptcy protection. Or they would have to accept a cheap buyout potentially from another company. Or they will need some other financial entity to bail them out of the current debt. Restructuring refinance type of thing that would be positive since it would remove the risk of BK.
If being pressured to BK, or sell the company. The choice is obvious. Delcath will try to sell itself or its main assets. If they can't do it then the debt holders may force them to in a BK sales. I don't think BK will result because Delcath has revenue and their debt isn't to the point of unmanageable.
Yeah, massive dilutions 40 million common shares we don't know when they plan to dilute after RS approval, and possibly more due to fund raising after RS. It's basically RS or we go OTC and who knows what. Shareholders have a good chance to get screwed big if RS pass.
If no RS big short squeeze as indicated short is increasing which results in pressure on current share price.
Just feels like DCTH is at the end of the chapter. 35 employee or 11-50 per linkedin. They don't have what it takes to market a cancer treatment. Simple facts here.
Dilution is understandable in startup bios, but when you over do it this is what happens after two 1 for 16 RS. A third RS between 1-20 and 1-500?
US approval is inevitable. It will happen sooner or later. Company has a viable treatment but no means to generate any substantial return even if it were to get approval worldwide.
They willing to put it up for sales, there will be buyer. EU market is wide open and the UK Germany success is generating head lines.
A promotional campaign to get more hospitals involved will generate substantially more revenue.
In EU currently they have a center in France, Germany, UK, Italy, The Netherlands, and Spain a total of 8 centers in the entire continent. OK, that's not going to generate much revenue.
If there is hundred of centers in EU it's a completely different story. Just think of all the patients in EU have to travel to one of these 8 centers. Availability is very limited. 11-50 employees trying to run a global company you get the picture.
After you look into the treatment results and the people it affected. You wouldn't want Delcath to continue running the show. It gets no where fast. Therefore, it's time to change hands.
Lol, it all depend on how we look at things. Chemosat being viable and save lives shouldn't be delayed. One could argue that point. It needs to be moved swiftly through approval and made available worldwide to save lives. Stuck in current state due to greed and personal agendas, is that the right thing to do?
Voting No and potentially bankrupt the company sound unethical. But, then people will always argue what about the last two RS and how management destroy shareholders value and the 35 mil convertible last year? That's equally as bad. There is no moral here, it's strictly business.
Voting No is suggesting Chemosat is a viable treatment and it should be turned over to a capable hand and shareholders gets a pay day where this management owe it to shareholders with what they have done in the past.
Otherwise, BK and the treatment will still turn over to a more capable hands to save lives. The pain with the Delcath shareholders ends here in September.
Sam, if any BO it won't wait. It should be close proximity to a NO vote. I absolutely agree with you not to hold long if RS is a NO. I'd suggest get out on a good run 9/8 or 9/9. Then possibly gamble again with profit earned if it drops big. Because if no BO news follow no RS, we likely go very bearish with potential delisting and BK talks.
Yes Metal that seems to be the sentiment right now is that they already have 2 RS and look what happened. Current Shareholder aren't going to take a third chance with this management and trust them with yet another RS.
We all felt how desperate management was in trying to convince a yes vote. That is a clear message RS vote is unlikely to pass.
But, like what Sam said, it's a high risk play a No vote = potential BO but no guaranty.
Why are some betting on BO? Because Delcath financial is at a breaking point. They can't afford to wait if RS is still a no. They be forced to file BK or accept cheap BO.
There are few tickers out there in similar situation. They aren't going to wait till last minute to negotiate. There is probably talks going on already and management is looking at all possible options. Anything from a successful RS, to No RS, to partnership, BO or BK. It's desperate times.
So don't bet on this if you can't afford to lose.
Agree, definitely not a long hold. Achieve a target and get out. 9/7 is coming soon next week. RS vote result will be out once again. As I said, my feeling is that shareholder still don't approve for RS. They do not trust management for what they have done. Many are counting on that No and cause a short squeeze to get out.
Of the 36k watchers or potential holders, they don't really care about the future of Delcath. They want a no RS get paid either through a squeeze or BO. If that don't happen they will simply dump and leave.
James, it's a gamble no doubt. I am still leaning toward a NO on RS. These people holding the shares have sent a clear message to management.
They don't want an RS, they want management to sell to highest bidder. Many sees Chemosat as a viable product and it's way too costly for Delcath to move it through FDA approval alone. The new planned phase 3 hasn't started yet, that will require a whole lot more funding.
Even if Delcath burns another 35 million to get FDA approval, couple years from now, they don't have to means to capitalize on the US market. In any case, they will need a strong partner for marketing sooner or later. It's just they can get more with an FDA approval compare to now.
Jenny is doing everything she can. RS is her focus for sure, but I also think she's trying to line up news for a final pump to see how high this goes. But, it won't make 1$ without RS or partnership BO of some sort.
No RS and going to OTC will seriously close some doors for them to get funding and it will end up BK or sell. It may not come to BK if they can negotiate with the creditors. Other option is more toxic finance and we be going straight to 0.001 and beyond.
So a no RS scenario they will be force to reduce spending likely including a big pay cut for management to reduce any an all spending they can.
They will be out of money and will need to negotiate with the creditors to prevent a need to file a chapter 11 for protection.
The only other option left is accept any offer for BO. It might be a low balled deal but it's the absolute last resort. I still think there are interested parties who can pickup chemosat and take advantage of the EU market. Not necessarily US market. Remember this is approved for marketing in EU and Australia. Management is holding back BO until absolute last resort. As we all know, they hold little interest in Delcath and their job is far more important.
As of now, the prediction is still no RS.
Yeah, they won't risk holding short over night. It's a very high risk to short and hold. It may fluctuate until 9/7. Watch if any institutions buy in or sell out.
James, SEC won't do anything here. It's up to the RS vote result. That will squeeze the shorts. Potentially run pass 0.35. That's my sell target not more.
Market share price usually match the warrants because warrants are used to basically buy shares from the company like options that's good for period of time.
Investors basically have a fair value that takes all things into consideration including warrants. Cus you either buy shares from the company directly or you buy shares from the open market. Either way no one will pay more for shares. That's why if 40 million warrants exist that some investor can buy at 0.35 that usually puts a floor in the stock meaning the lowest possible price it would be. A lot of stocks have similar characteristics if you look around, you'll see what I mean.
If the warrant exercise price is 0.35 pre split and will be adjusted according post split I'm actually not too concerned about RS. But, I don't intend to hold long term.
So they delayed the news to first propose the restructuring, then Germany news today. I bet we would get a NASDAQ extension soon. All this is setting up for an RS they want the share price close to 35 - 50 if possible.
If we shot down RS once again, it be interesting. I highly doubt BK would result but we might not get much other than a short squeeze.
In my opinion Hudson Bay, Ren, and Vanguard all sees the same outcome. Either way RS or no RS there something to be gained from 0.12. Shorts might not win this even if RS goes through with current restructuring.
Because after RS, share supply would be very low, it be very difficult to borrow shares and if company do promote the stock, it's a very dangerous game for shorts due to potential short squeeze with low float.
With the warrants in place and potential new source of investment after RS, it may not crash hard like we originally predicted due to the restructuring there will be zero convertible. Both series A and B will be redeemed by the company with the remaining exchange for warrants.
I think management for once is looking out for existing shareholders. Because, they knew if they don't give us something good in return they will not get RS vote.
So the conclusion is RS vote yes chance has increased but still no guaranty until we see the numbers. I am just saying I am conformable holding my shares after recent development.
I wonder if Hudson participated in the convertible offering of the series A and Series B convertible. When they convert, they turn those shares into common shares. Maybe they haven't sold them after the conversion.
Same as Ren and Ayrton Capital. Except Ayrton capital sold their shares. This might be why people believe these institutions will support the RS because they can get new warrants after RS and not lose money.
In any case read the yahoo news version you'll have a better understanding. Right now we basically got most of the convertible extinguished.
The 40 million warrants won't take effect unless RS passes. So either way regardless if RS passes or not, they got rid of 90 % of the existing convertible notes and got 1.65 million cash released to them.
The convertible is bad in the case of M&A. So they are getting rid of the convertible if RS don't pass they would have a easier time with M&A process if any.
Here is what's written in the filing. The restructuring is two parts.
Part I. initial restructuring.
(i) the Investor shall release restrictions on $1,650,000 of Restricted Cash (the “Initial Release”)
One is just saying they will release 1.65 million of restricted cash so they can operate.
(ii) the Investor shall consent to the use of additional Restricted Cash to effect redemptions of the Series A Preferred Shares and the Series B Preferred Shares.
Two is saying to authorize the use of restricted cash to redeem Series A and Series B preferred shares. Basically they are canceling these convertible notes using restricted cash.
(iii) the Investor shall cancel $1,200,000 aggregate principal of the Notes (such portion of the Notes, the “Cancellation Note”)
four and five just saying they are paying back to the investors for the series A and Series B notes 4.2 and 2.006 million.
So initially they are getting rid of the 90 percent of the convertible notes. Basically saying we're giving the money back to you and you cancel the previous convertible agreement. Ok that's good they dropped the previous convertibles.
So when initial restructuring is done they would be left with no cash. So they need refinance for additional funding.
The next part:
"as amended, $2,436,852.80 aggregate Restricted Principal of the Restricted Notes (such portion of the Restricted Notes, the “Exchange Notes”, and together with the Redemption Notes, the “Restructured Notes”) for new warrants to purchase 40,000,000 shares of our Common Stock (the “New Warrants”, as exercised, the “New Warrant Shares”). The New Warrants expire on the 42 month anniversary of the date of issuance and bear an exercise price of $0.35 per share (which shall be adjusted to the new lower purchase price per share if there is a subsequent “down round” financing). The Investor, in lieu of an exercise of the New Warrants pursuant to a cash payment of the aggregate exercise price of the number of New Warrants being exercised, may exercise the New Warrants, in whole or in part, by electing instead to receive upon such exercise two shares and one hundred and twenty-five thousandths of a share of our Common Stock for each Warrant Share exercised pursuant to this provision."
So yes, after RS passes, the remaining 2.436 million will be exchanged for warrants to buy 40 million common shares. The warrants expires 42 months later and will be adjusted if they refinance again for something lower. So yes, if after RS, they may temporary have a 0.35 floor, but as you said, the warrants are good for 42 months and maybe adjusted depends on if company do new finance.
I don't think this alone is enough to convince a yes vote without something else in the mix.
Because assuming they got yes for RS, they canceled the convertible and pay back the money they would still be left without funding !!
Where are they going to get more funding to continue if the 40 million warrants won't exercise right away?
They have to have new round of offering or some sort of deal to solve their funding issue. That is why there has to be something more we don't know yet. It doesn't solve their funding issue. I think we will see more revealed to us soon.
I don't need to go find the post where I stated I sold out. Knox knows it but he seems to be gone too. I'm bullish on future of the company yes, but I have said short term it wasn't time to buy or hold. Maybe if you did actually read all my post you wouldn't be confused where I am standing. Apparently I am still here and not holding any shares.
There were talks of Kite being M&A target, they were right about this one. :)
As to Cytrx folks, the share price is 50 cents that's the fair price because last presentation about 18 million warrants out there at 0.50 good till 2018. This is the price people can buy shares from company.
So regardless of RS or not, the fair price is 0.50 until the warrants expire or they have new development like FDA approval and milestone payment that actually adds value. Market may fluctuate but the current fair price is 0.50 in case anyone was wondering why we won't run up or drop much.
This news actually puts my minds at easy. Even if RS do go through, we should have a floor price of 0.35 short term. If no RS we may still see news and potential BO partnership.
I now understand why Hudson Bay, Ren and Vanguard all increased holdings. They knew about this refinance taking place and even if RS passes they should still be looking at at 23 cents gain at the minimal. If no RS, I don't know what would be the outcome.
This now explains why institutions would vote yes.
James, they said notes holders not the company. The company often seek funding from private or financial groups as they call them notes holder or creditors if in the case of a loan.
The term is contingent upon RS. Meaning RS passes the terms come into effect. The notes holders will be exchanging their convertible notes for warrants to purchase, the key here is the word "Purchase" 40 million shares. They did not say the shares are lock up and cannot trade. The 40 million shares at 0.35 are common stocks the same common stock you and I are current holding unless the terms specifically address a lock up period which I did not see. What that's saying is after RS, the notes holders will be exchanging their notes for warrants to buy 40 million commons stocks at 0.35.
Where do you think the 40 million shares will come from? Exactly, they will be new shares issued from the company to the warrant holders exercising their warrants.
I don't get how you think the company is buying the 40 million shares. The company needs funding, management isn't buying 40 million shares. The preferred notes holders are.
Yes James,
"The Company and the Note Holder shall exchange $2.4 million of the remaining Convertible Notes for new warrants to purchase 40 million shares of Common Stock at an exercise price of $0.35."
That's saying they will exchange the 2.4 million for warrants to buy 40 million share at 0.35. Which actually gets them new funding. Cus that's 14 million dollars taking 40 million x 0.35. So they get rid of 2.4 million convertible and ended up getting more funding from the notes holders. What that's telling you is after RS we're going to get 40 million shares added to the shares outstanding and company gets 14 million operating cash. That's not bad for the company.
They are hoping the warrants buy in at 0.35 will put a new floor on the stock market at 0.35 because that's what the notes holders will be paying for the shares even though directly buying from Delcath. But it maybe not work that way. The warrant purchase isn't from the public market, it's direct purchase from Delcath that they create 40 million new shares to satisfy the transaction after RS. Therefore it doesn't affect the public market directly.
The market share price may not be affected by that at all. Instead, the shares out standing will increase by 40 million! So assuming we do a 1-20 RS using 500 million shares we would be at 25 million shares after RS. But, when RS goes through, we're immediately going to get 40 million more shares added so our OS will be at 65 million share already. Guess what, the notes holders will now be the majority of the holders. 40 million versus 25 million!
We don't know if the share price will ever rise beyond 0.35 because they aren't buying back from the public market. They are buying directly from Delcath where Delcath issues more new shares.
With this level of confidence in Delcath, it's hard to say we have positive result with a yes vote. The only thing is that the notes holders will be with us because they are buying in at 0.35. It aligns their interest with ours to see a higher SP. That may sound good but you never know if those notes holder and us gets screwed again together by this management if they need to raise additional funding beyong 2017. So my conclusion is that we see a short term rise in SP value.
I might just set my sell price at 0.35 unless no RS, then we have to see if they get a deal or what else going down including BK.
As I mentioned the new terms is upon a yes vote to RS. And a new floor is 0.35 only if RS pass.
Maybe the public don't think an RS is a yes so this news is all irrelevant. Therefore it didn't move the share price.
I guess it still comes down to a no vote and a force M&A or BK.
James not sure I understand your statements on this one. The terms are contingent upon RS. That means, RS must pass or these new terms won't go into affect.
We potentially see some change vote to Yes, and I agree SP should rise since management is trying to put a floor in at 0.35. Another words, they are trying to give the current shareholders 0.23 return but there is no guaranty this will work after RS if fear breaks and shorts take advantage of it plus the 10% remaining convertible. It can cause panic sell.
If no RS none of these terms will take affect. They are still stuck with the same problems.
The one thing we won't ever know is whether or not we have a buyer and an offer. We don't get to choose between that or RS. In theory, as owners we should be entitled to know, but that's not how a public company works.
So we can't really make a good decision right now. We only know what they are telling us what will happen if we vote Yes. But, they aren't telling us anything else if no vote. So we take a gamble here.