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That's not what it says. The regulation cited refers to "commercialization of the drug before it is approved for commercial distribution”. So if Cytodyn has been doing that (Phillipines?), it has to stop but it has nothing to do with routine clinical trial use and authorized compassionate use, if there is any compassionate use going on.
Sidley didn't leave. They submitted the bond to the court on Valentine's day. Jacquelyn Fradette is a Sidley attorney.
It's just part of Marc's plan that has to be done. So it's a necessary step, but one of many. As we all know, and as horsin just posted, there is a lot that's in the works and that needs to happen for the plan to come together.
Marc has said that he needs the price to be over $4.12 to meet Nasdaq requirements, which means the share price pre-split would need to be 83 cents at a minimum for a 1 for 5 split, and I'm sure Marc would want it higher than that to give himself a buffer in case the share price dropped after the split.
How soon the split will happen is yet to be seen. As the SEC filing says, a higher share price could open up new funding opportunities but, as the filing also says in the risks section, you don't want to do it too soon and have the share price fall back down if it takes longer than expected to get things accomplished (which often happens) and have Nasdaq move out of reach again. The company has until 2/15/23 to make the split happen.
Ah, thanks for the info stone. It's a great interview but not a $150 membership cost great.
So that may be why the long YouTube interview video disappeared. It didn't jibe with the quiet period.
I believe this is the agreement truthal referred to:
In the interview, Marc said they will file the next quarterly report as soon after March 16 as possible. Then they plan to file the final S-1 as soon as possible after that.
A company I'm in, PKKFF, took a little over a month from the time the specific ratio of the reverse split was announced until it took effect. Not sure how typical that is but it's probably a good gauge.
If the final version of the S-1 is filed in the 2nd half of March as Marc said in the interview, the SEC will need time to consider it and may ask for more info from Susglobal before considering declaring it effective, especially if the share price hasn't risen enough to make all of this feasible.
Then, once the S-1 is effective and the financing is completed, the process to uplist can take place. That depends on getting the share price above $4.12 and using the money raised in the offering to meet Nasdaq's capital requirements for uplisting. Marc needs to get the stockholders' equity above $5M for sure. It's important to remember that uplisting is not automatic. Nasdaq is a private company, they are in charge and they have to approve and allow SNRG to be listed on their exchange.
Nasdaq uplisting can happen a few days after a stock is approved by Nasdaq but the approval process can take some time.
The problem with setting realistic timeframes now is all of the contingencies. With everything depending on everything else, it's tough to say how long the approvals by the SEC and Nasdaq will take. The most important thing seems to be getting the price up by the time the next quarterly filing happens 5 weeks from now.
Thanks for linking that. Great interview. Marc does a really nice job laying out his plan with a massive amount of details.
Yeah, the notice of effectiveness won't happen until after the next 10k is filed at the earliest, which will be sometime after March 16.
He expects the press releases about the 3 acquisitions (deals pending), and maybe more news, to pump the share price up. The 3 acquisitions are: one with SKUs in Home Depot, another with compliance certifications in the US needed to get into big boxes and the third offers some kind of microbial product for aquaculture.
He says that him and the Board won't agree to anything more than a 2:1 split to get the price above $4.12 for uplisting (warrants included in the financing add the 12 cents). It's going to be very tough to 10x the share price with the way the general market is right now but we'll see. He says the offering won't be priced until after the S-1 is declared effective but I don't see how the SEC will declare it effective until they know the price will fit under the 150M authorized share cap. I could see that being a sticking point with the SEC if the share price doesn't at least triple.
The S-1 is a preliminary prospectus and will need an updated version filed before the SEC will consider deeming it effective. As the prospectus states, it "is not complete and may be changed". There are a lot of things left blank, like offering prices, that will probably need to be filled in.
And once the final S-1 is filed, there is no timetable for it to be declared effective. I've seen it take weeks and I've seen a year go by without a declaration of effectiveness (the notice of effectiveness will also show up on the SEC filing list for SNRG). With all of these contingencies, I think the SEC is probably going to give the S-1 extra scrutiny and thought before declaring it effective but I could very well be wrong about that.
Anyway, nothing can happen until Marc files the finalized prospectus.
It doesn't debunk anything, it just offers another possibility.
I don't buy that. Per their guidelines, the SEC doesn't sanction companies for wrongdoing until an investigation is finalized and that would be publicly disclosed (note the boilerplate disclaimer in the 10q). If and when Cytodyn is sanctioned, we will be informed.
I have no doubt that whatever happened with the S-3 is independent of the investigation.
Public companies enter quiet periods when financing rounds are pending:
For publicly traded companies, the quiet period refers to the time between the end of a financial quarter and the company announcing financial results. Public companies also enter into quiet periods during financings when securities (stock or bonds) are issued to the public. During a financing, the quiet period timeline mimics that of an IPO, while the quiet period at the end of each financial quarter varies from company to company.
https://gilmartinir.com/what-is-a-quiet-period/
I've seen it happen with other OTCs. Obviously we don't know if that's why the call was cancelled but it is a distinct possibility because we do know that some kind of financing has to be in the works.
Where does the PR say the company is in a period of silence, Evil? I'm not seeing it.
Of course a licensing deal could be a possibility but typically a period of silence precedes a prospectus being filed, so it would likely be related to an impending financing.
Just completing steps toward getting this plan executed. It's a complicated plan with everything depending on contingencies.
The S-1 will eventually have to be declared effective by the SEC (the filing yesterday is just a preliminary one that will be amended). I have no idea how likely the chance it will be declared effective at some point but we all know that this is not just a straightforward thing, there are a lot of moving parts, so we'll just have to see what happens. I imagine that there may be a period of back and forth with the SEC (sometimes these correspondences get filed so we can see them although there is usually a lag, it doesn't tend to happen immediately like a normal filing).
Another OTC company I was in and still watch closely filed an S-3 a year ago and it's still not been declared effective. There are myriad issues with that company and nobody knows why that S-3 hasn't been approved but a notice of effectiveness is not guaranteed, so getting that done would be a big step.
And obviously the share price would have to rise to have the chance to uplist and to be able to complete the financing without having to authorize more shares, because at the current share price the math doesn't seem to work within the 150 million authorized.
And finally the NASDAQ must approve the request for uplisting, which is not a given.
So we need fundamental growth with revenue shown or exciting, concrete news toward that goal, regulatory approval and the blessing of NASDAQ. As each goal is crossed off the list, risk decreases in my opinion.
Great question. Reading the Selling Stockholders section, it seems like they are just being added to the prospectus as a separate registration and they will definitely be sold on the market, not as part of the offering. This may be to get out from under these notes, as you guessed, or it may have been added simply to try to get everything approved by regulators at once.
The Selling Stockholders section (pg 66) says the company will not receive any proceeds from these shares sold by the noteholders and that the shares will not be sold through Spartan Capital. The noteholders will be free to sell these shares on the market and the S-1 lists everything from ordinary sales through brokerages to private transactions to short sales as possibilities.
Doesn't look like there is a holding period, so those 11.5 million shares can be sold at any time after the S-1 becomes effective.
It will likely be a lot more than 12 million shares pre-split. Of course it all depends on the share price when this happens but right now the note conversions are 11.5 million shares at 70% of the current share price, which would only bring in $1.75 million. The rest of the $13+ million in initial cash raised comes from issuing shares to new investors, which would be 45 million shares the current price. So that would already be 169 million shares without taking into account the $16 million worth of warrants.
So you see how this doesn't fit under the current amount of authorized shares unless the share price goes up a good bit. It looks to me like the share price will have to rise to around 59 cents for this to work without authorizing more shares. My calculation is $33 million total for the offering, everything included, divided by 56 million shares, the amount left of the 150 million authorized. (the numbers might be off when fees are subtracted).
Marc definitely doesn't disappoint in providing one of the most compelling stories on the OTC and swinging for the fences with risk/reward. I'd say the risk has gone up substantially with this but the possible reward is still huge if it works. Hopefully the share price rises now to grease the gears and get things moving.
I have so many thoughts about this. Please correct me if I get anything wrong.
First, I have never seen anything like this. Marc definitely gets points for creativity. Remember, though, that the SEC still has to go along with this and declare the S-1 effective before any of this stuff can take place. And obviously it all depends on a NASDAQ uplisting, and that is dependent on NASDAQ approving the uplisting. You don't just meet the requirements and get automatically uplisted.
So the uplisting would be under the NASDAQ Capital Markets requirements (per the S-1) and definitely under the Equity Standard:
https://listingcenter.nasdaq.com/assets/initialguide.pdf
The keys there are the $4 bid price, I believe for 5 days, or the $3 closing price if they meet that standard, and the stockholder's equity requirement of $5 million.
The S-1 says a reverse split is coming so a 20:1 would get the price just above $4 and drop the current oustanding shares to about 4.7 million. The price would have to show that it can stay above those minimums to get approval though, the NASDAQ is not looking for companies that just barely meet requirements. (I know the reverse split could be smaller but I'll use 20:1 for my calculations).
Marc would meet the stockholder's equity if the fundraising goes through because the initial sale (not counting future warrant conversions 120% of offering price) would be over $12 million to the company and the stockholder's deficit on the last 10q was $4.6 million.
The S-1 also gets creative with using 11.5 million shares from convertible notes (the note holders get a 70% discount on the conversion). At a 20:1 split this would only be 575k shares.
The share price will have to rise substantially to make this work under the 7.5 million post-split authorized shares number with 4.7 million outstanding + 2.8 million in shares in the offering at the current split adjusted price of $4.4 + 3.1 million shares worth of warrants at an exercise price of $5.28, which is 120% of current share price. That totals over 10.5 million shares, which would be more than currently authorized after the split. The company can issue preferred shares independently of stockholder's wishes so maybe that figures in somehow.
Hopefully this S-1 lights a fire under the price and it's not an issue.
The bottom line is nothing new. Marc is trying to go big in a very creative way and it depends on the SEC and NASDAQ to condone it.
We know from the 8k filed 8/10 that she still had all of her shares on 8/6 so she didn't sell in the months after the Form 144 was filed.
Maybe she's sold since 8/6, we haven't had a filing updating Kelly and his family's holdings since then (there is a filing for Kelly acquiring options but it says nothing about shares held), but she didn't dump her shares into the high price early in 2021 like is routinely stated.
Kelly's wife did not dump her shares. That's a myth. There are a lot of reasons to find fault with management but that's not 1 of them.
Flashbulb, if fingers' method of uploading your photos to Investor's Hub doesn't work it may be because the size of your photos are too large.
An easy alternative method would just be to make an imgur account and upload your photos there:
https://imgur.com/
Then you can either use the Image function on the left side when making a post here on Investor's hub and use each photo's link at imgur to insert them into your posts or just make sure your imgur gallery is public and link to your gallery and we can all see them there.
Thanks a bunch for the report and I'd love to see your photos.
That change was made in august. The changes just updated were 12 more hospitals and clinics added to the trial sites.
That form does not provide any information about how many shares he owns. It just shows how many options he will acquire once they vest.
She couldn't have sold 357,875 shares around 2/1 if she:
Held 616,408 shares on 8/28/20
https://www.sec.gov/Archives/edgar/data/0001175680/000180709420000016/xslF345X03/primary_doc.xml
Added 166,000 shares 2/5 to give her 782,408
https://www.sec.gov/Archives/edgar/data/0001175680/000180709421000001/xslF345X03/primary_doc.xml
And still had 782,408 shares 8/6/21.
https://www.sec.gov/Archives/edgar/data/0001703394/000089924321032395/xslF345X03/doc4.xml
The Form 144 is for a proposed sale. As of 8/6/21, she hadn't sold any shares since at least 8/28/20. So it seems extremely likely that the proposed sale didn't happen. And there has been no record of it happening since 8/6/21. That seems like all we know about this.
I'm just interested in what we can prove about issues like this and it definitely does not look like she sold any shares in early Feb. I'm not very invested in Cytodyn any more, I only have a tiny fraction of the amount of shares I once had, so I try to look at these things as objectively as possible.
This is the paper trail for Kelly's wife's possible sales as far as I can see:
The Form 4 for the gift of shares to their daughter 8/28/20 shows Kelly's wife with 616,408 shares.
Then she exercises options on 2/5 of this year and adds 166,000 shares to her total giving her 782,408.
The Form 144 showing the proposed sale 2/1 is for 357,875 shares.
But a Form 4 is filed for an 8/6 acquisition of shares by Scott Kelly that shows his wife still having 782,408 shares. So I don't see how she could have sold shares 2/1.
Then a Form 4 is filed for a 10/18 acquisition of options by Scott Kelly but that doesn't show the amount of shares owned by him or his wife, just the options acquisition.
So she didn't sell any shares before 8/6, we know that, which means she didn't sell shares 2/1.
That seems to me to be all we can say about it but I'd be interested in more info.
A Form 144 search doesn't show any filings for Cytodyn after 2/1.
The daughter's Form 4 is here:
https://www.sec.gov/Archives/edgar/data/0001175680/000180709420000016/xslF345X03/primary_doc.xml
Looking at it, she's probably not named because the shares gifted are held in custody for her.
I'm not convinced that means anything because he's not shown on her Form 4 from Feb. Doesn't seem that all family members are shown on each Form 4 (their daughter was gifted shares also according to a 2020 filing).
The only thing I can find is a Form 4 that shows she exercised 166,000 options on 2/5, so she acquired that many shares, which gave her a total of 782,408 shares owned. I can't find any record of her selling shares.
https://www.sec.gov/Archives/edgar/data/0001175680/000180709421000001/xslF345X03/primary_doc.xml
It will happen when it happens. Almost everything in business takes longer than expected.
Obviously a short-term fix. Looks to me like there has been a total of $2.6M in notes issued since last June, with $2.1M of that in the last 5 weeks. The notes will mature next June/July. So about 10% dilution if the share price is the same next summer, provided Marc doesn't have the cash to fulfill the notes then.
It's interesting, at least to me, that the lender is stated on this note: AJB Capital Investments, a small investment firm that has financed other micro-caps.
Great job getting that info, stone.
Does 7/1/22 mean January 7 or July 7?
I like the defined timetable but if it's July, that does surprise me being so far in the future. And we know how most things in business tend to take more time than expected.
Marc did mention to me a few months ago that there was the possibility of receiving grants to improve the building because it's in an economic zone so maybe that figures into this.
duplicate post
I'm not sure if any modifications to get fertilizer production going will be obvious anyway. I believe the former owner used or plan to use the facility to produce biogas from wood waste, so Hamilton may be pretty much in move-in-ready condition for Marc with the action just happening within the building where Susglobal's digesters will be installed.
The cosmetic work...hopefully no money is spent on that until well after revenue has begun to be generated.
The most recent presentation has Hamilton at a max of 65 million liters per year (at $4/liter wholesale) with 22 million projected for next year. And yeah, that'll need 22,000 tons of waste to meet the projection for next year.
With the crazy high fertilizer prices currently this is a good time to be in the fertilizer biz and the omicron variant could further strain supply chains and lead to continued inflation in fertilizer prices for quite some time into the future, but you gotta be making the fertilizer to capitalize on the seller's market.
I don't know what the brands are. I do know that essentially no revenue was generated from fertilizer in Q3 according to the last 10Q (the majority of revenue was from tipping fees with a lesser portion from compost sales).
Marc has said that he expects fertilizer revenue to be shown Q1 2022 so we'll see if we get fertilizer news sooner or will have to wait until Q1 is reported to get an idea of what's going on.
There is big box info on the investor's presentation from Sept
It says "Our Products are Sold Under 3rd Party Private Label at: Lowes, Home Depot, Metro, Rona and Garden Center".
And I'm pretty sure that was on the previous presentation from late spring although I can't find a cached version of it. So not sure if the big box partnership in the USA Today PR is new info or not.
Fertilizer prices are sky high and there doesn't appear to be any relief on the horizon due to high natural gas prices, China hoarding raw materials and weather problems in the US in the last year combining to dampen production and constrain supplies. Could have an effect on the stock price even if Marc can't start producing fast enough to capitalize.
If there's any way he could get Hamilton producing, maybe he should forego tipping fees and just take any waste that can be trucked. That may be a big ask with the company's cash position but now would be a good time to start making liquid fertilizer if at all possible because paying a premium for organic would not be an issue with the way chemical fertilizer prices have risen. The price of a ton of ammonia has increased 10 fold this year.
The SEC will have to declare the S-1 effective after Susglobal files it also. The SEC has to be satisfied that the S-1 provides all the info required and that the company didn't jump the gun and divulge info pertinent to the offering too early to hype the offering.
There is also the issue of authorized shares. It's unclear to me whether this may have been an issue with another company I was in so I'm not sure about it but the amount of authorized shares left could be an issue if there aren't enough left to cover the amount of the offering when outstanding obligations and cash in hand are figured in. If the price goes down to 19 cents, there wouldn't be enough shares to cover the cash and share amounts for initial amounts of the letter of intent purchase outright but Marc could still have some cash from the last offering and, with the deal seemingly being contingent on uplisting...I'm not sure how that figures in.
Anyway, there is a 30 day window for the SEC to provide its initial comments on the S-1 and there could be back and forth after the initial comments, whenever they are provided within the 30 day window.
And here is the NASDAQ info: