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We've all been investing and losing. They've been able to game the system, both upside and downside with mitigation.
That recent deal was a sweetheart deal, they came in at a great price with convertible stock plus warrants, then they had the downside mitigated. That wasn't just a risk free deal with huge upside (their money could simply be paid back, thus risk free), it was structured such that their downside, if you want to call it that, basically steals the assets of the company on the cheap... These scumbags have no shame!!!
Hell, they set this shareholder vote up with a date that allows them to vote shares they've already sold, knowing that pounding the price down will give them a better deal.
Investments are supposed to carry risk, they've just used insider manipulation to work out a better deal than everyone else... I'm not sure it's legal, that may have to play out in the legal system...
I'm pretty sure that at least most of them were selling, knowing there was another PE deal around the corner, they did this over and over again... Why not sell at a profit (while retaining warrants), then buy back into the next PE deal, priced lower and with warrants, and repeat over and over again...
They are the reason the stock price never ran and stayed suppressed, IMHO...
It's a nice trading strategy to be able to sell, knowing that in doing so, you are driving the price down to a fixed level (non-market) that you will be able to buy your shares back and then some... That should be illegal...
I have ZERO sympathy for them, we all lost money, they've been able to buy and sell repeatedly with the protection of having the warrants if the stock ran away from them... They are the ones that have made money on this stock!
It should also be illegal that they would have voting rights for shares they sold a month ago... There is no check and balance here, they've become emboldened by what they think they can get away with...
I just voted "NO" for my shares. I just read the proxy materials and found it very interesting that they chose Dec 20, 2022 as the shareholder of record date for this vote. This is total BS! Those in the PE deal sold their shares after the news, which has created the downward price pressure to then price their new sweetheart opportunity. These guys are scumbags and I can only dream that an angel investor comes in and starts buying and blows up their best laid plans...
Merry Christmas everyone!
I expect the price to remain suppressed at this approximate $1 level for some time.... I do have a fantasy of a short squeeze popping this as there is value here and a relatively low float... But, it is a fantasy, lol...
We keep going back and forth on this point, the company with $24 million in cash is nowhere close to the point of going out of business. There is a lot going on in 2023 and they don't need to crush common shareholders at this point in time.
You have been arguing as if the company is out of business in days if not for the preferred deal, I think this is preposterous and we are just not going to agree on this.
I actually think this company could get sold for cash plus $10 million, so essentially $10 million for the company. Heck the Nasdaq listed shell might be worth $10 million...
It's not irrelevant until there is about to be no money. The cash value gives the company the room to maneuver a better outcome for shareholders. There is enough cash to get the company through this year and there is enough going on for investors to potentially assess value and see a price increase...
IMHO, the reason this stock has traded way below comparable biotechs is precisely because of price manipulation to effect PE deals which were done over and over again, and they were selling their shares...
I'm in because of the science and I trust the scientists, I don't trust the financial stewardship. I accept the downside risk of trial outcome, but getting fleeced out of a fair market value of this company is not okay with me...
It's a bad deal. Remember, this deal was done BEFORE the results were released. So, for negative results, getting shares at $1.55 when the company has $3.50 in cash is a bad deal for shareholders.
The preferred deal was a clever scheme, they win either way...
From a shareholder standpoint, the deal should have been like it was before the read out at Neurotrope, buy common and get warrants, they are being given upside at the price of downside risk. In this case, they learned and got bold and created this scheme where they win both ways. From a shareholder standpoint, I view that deal as unacceptable. Their money was not needed, this was a way to profit them regardless of which way the results went, thus this deal should not have been done.
My point it they don't need to do this bad deal at this point in time. $24 million is a lot of money and it should last more than 12 months, with everything they've got going...
The warrants were for their upside, their downside strategy is to get as many shares as possible for as cheap as possible... IMHO, it's just not necessary to do that right now...
This company is not dead.
I'm familiar, BUT, in this case, the company has plenty of money and doesn't have to do such a punitive dilution and transfer of the value of the company. I mean, in the future, the company could be in the position to need to do a deal like this, but we are long ways from that as of today...
So, I see it as a win because after they secure the dirt cheap shares, and probably do some reverse split, the share price will magically correct and they'll be in the money...
Think of it as each current shareholder has their pro rata ownership of what the company is intrinsically worth. This deal, done the way I've suggested, transfers out of the existing shareholders and into the preferred shareholders. In essence they are fleecing us...
The deal with the preferred getting the company on the cheap only makes sense if the company is about to go out of business and that is clearly not the case at this point in time...
As I see it, I don't see them coming anywhere near burning through the $24 million over the next 12 months. They don't need to spend much on the two sponsored trials. The dosing trial shouldn't cost that much... The bioequivalency shouldn't cost that much... Their operations do not burn much case relatively...
There is a lot that can play out before needing to act in manner as if the very existence of the company were on the precipice of ending... In fact, the cash position is much stronger than when they chose to route most of our money into that garbage Petros play...
I'm familiar! Those investors were well rewarded with their shares and warrants and I'm confident were able to sell out of their positions at a profit and carry the warrants. Then, they got to do it again and again, rinse and repeat...
Private equity is fine, but there is abuse and management still has a fiduciary responsibility to shareholders. You are arguing as if there is no scenario where private equity and management can't just crush the public common shareholders??
This company is NOT on the verge of bankruptcy, but you are arguing as if it is.... There are better paths for shareholders that keeps the company in business.
Correct, but regardless, they can steal a large number of shares if the company chooses to pay them in stock instead of cash. If they know the company will do that, then they can easily keep the share price deeply depressed and I suspect that is exactly what we are seeing right now...
See the heads they win, tails they win aspect of that deal?? That kind of BS has no business in public markets...
If the company wants to get the share price up to $3, they can probably achieve this by spending less that $3 million. Is that really something they shouldn't do???
This is not a price to sell at. You were right on the $1 prediction, but it is because of the potential consequences of the preferred convertible deal as that changed everything. The private equity side has been abusive here, they manipulate the price to give themselves the best deal possible, they are the reason the price is holding right at a $1. Issuing 26 million shares for $15 million against a cash position of $24 million with a low burn rate and just 6.85 million shares is an obscenely obvious abuse!
I disagree, there is an appropriate and smart way to manage the current circumstances to maximize shareholder value and management has a fiduciary responsibility to shareholders. This isn't all that complicated!
Note this is a PUBLIC COMPANY!!!! They are not anywhere close to being out of cash.
SNPX should buy back shares until up to a certain price. The market value is sitting at $7 million for the company right now and there is about $40 million in cash. This would actually be the best way to leverage the money provided by the preferred convertible option. They could buy up to $3.50 per share and I'm not sure how many shares would do that but maybe less than one million once intentions were known. So, it wouldn't have much effect on available cash.
That of course ASSUMES a desire by management to maximize the share price and that might not be Silverman's goal...
I have good reason to believe that there are people that were not original investors participating in these PE deals. Further, I have good reason to believe that they've been selling shares at profit, knowing that they would just be in the next one and the pricing would be favorable, and that is in addition to their warrants which gave them continued upside. That has continued to play out over and over again. IMHO, that is why the price was suppressed and not able to run... I sincerely believe that these people have made good money on their "investments" in SPNX and predecessor...
They enjoyed the upside potential of the big hit and have been able to not merely mitigate their downside, but profit from their overall participation...
Last time around, there was a shareholder rights poison pill to protect the assets (cash) of the company, this time around, they were clever with their preferred convertible scheme to essentially steal the company's cash with this structure. I just can't see this holding up in litigation if they play it out this way...
RC, respectfully, the "lenders" are principals and clients of Katalyst Securities, they are not necessarily the same people that have been investing in this company from the beginning. There was another VC firm, Intuitive Venture Partners that was involved previously.
I don't see these "lenders" as deserving of anything more than any of the rest of us. This reeks of a slimy insider deal and I believe this time, they've gone way too far if SNPX plans to pay them in uber cheap shares rather than cash.
Fortunately, the first installment payment is not due until 4/1/23 so there is a lot that can happen between now and then. The tough thing with the share price is that they can easily manipulate a low price if they plan on issuing themselves up 26 million shares. We have time though, and I'd love to see an angel show up and bury them...
RC, this company didn't need that deal. The $24 million in cash is a nice cushion. Those two sponsored trials will not cost SNPX much at all as most of those expenses are being incurred by Numours and the Cleveland Clinic.
That deal is for a company that has no cash and would be out of business with bad trial results. In this case, if it is used to buy the company for way less than the tangible book value (cash), then as I said, that is not a business strategy, that is a scheme to steal the company. Looking at that preferred deal, that was a heads they win, tails they win deal and I'm confident that can be challenged in court if they try to pull this steal off...
It makes no business sense to pay the preferred holders in shares valued at $1 when the company has $4 a share in cash with a low burn rate.
They could pay back the BS preferred convertible deal in cash, to allow this scheme to move forward, is to transfer the assets of the company over to the preferred shareholders at substantially less than fire sale prices.
The company has $24 million in cash other than the preferred money that can be paid back. The company has enough cash to move forward, the convert into dirt cheap shares strategy is for a company that is about to go under. What you've suggested is not a business strategy it is a scheme to steal the company!!!
The Shelf Registration is procedural given the option to pay the preferred shareholders in shares versus cash, and thus because of this possibility, they needed to file the shelf with the SEC.
It doesn't mean they have to do this. If the share price is $1-2, they should pay them back in cash as there is plenty of it. That is what they SHOULD do if they are working for the existing shareholders, which is technically their fiduciary responsibility. There is plenty of cash to pay them back in cash, new shares should not be issued if the dilution reduces the book value of the company.
Why was that preferred convertible deal done?? They were given a tremendous upside potential, what did they pay for it, which is to say, what did we shareholders get for that deal?? As a shareholder, I'd like to know??
You just articulated the worst fear that any of us would have right now! Obviously, what you are suggesting is not crazy when it comes to how Silverman operates.
But, those two trials are not going to cost SNPX all that much money as the partners (Nemours DuPont and Cleveland Clinic) are largely incurring the expenses. The burn rate is relatively low and there is a lot of cash. For Silverman to orchestrate for the company to pay the preferred holders with dirt cheap stock rather than cash, has to, and I mean has to expose him to legal consequences!
The deal was absurd and completely unnecessary, if he wants to push it, we've got a lawsuit to slam him with!!!!
Regarding the S3 that was reported after the market closed, I'm neither a lawyer nor accountant and the legalese of these documents can be painstaking to review, that said, I think this is simply a shelf registration for the number of shares that could potentially be necessary in the event that the company chose to pay the preferred holders in stock rather than cash. They are due 15 monthly installments (principal plus interest) beginning on 4/1/23. Obviously the company has the cash they just provided and a big cushion, so it would be deeply disconcerting if they chose to keep the company going along and burning cash such that they would be paying these people at the absurdly depressed current pricing level with newly issued stock. IMHO, it would be a MASSIVE BREACH OF FIDUCIARY RESPONSIBILITY TO SHAREHOLDERS IF THEY DIDN'T WORK OUT A MUCH BETTER OUTCOME FOR CURRENT SHAREHOLDERS. There is no need to not merely pay back their money. That whole offering was BS with their downside protected and the grant of the upside that none of us ever realized. They basically got something close to a risk free sweetheart deal...
https://discord.com/channels/939484106658562048/939484106658562051/1053433605503864872
Agreed! That Petros play was a colossal disaster! Work a sale of the company to maximize remaining shareholder value, no more schemes from Silverman and his buddies!!!
Darn!!! Hopefully, management will focus on maximizing shareholder value from this point forward. I would think that they should be able to get us $4-6 per share based mostly on cash on hand and additionally value of Nasdaq listing, patents and licenses. There is a basis for the sponsored trials in Fragile X and MS so there could be something to the drug, and ALZ might offer added complexities to treatment yet understood...
Tough day for all of us, there was so much hope in this one!
I believe the presentation is statistically credible so that should mean something and bode well for our chances... Of course, we've become conditioned to getting the bullet in Russian Roulette, so who knows... We have to respect the unknown...
I thought Runncoach put it very well!
I found that analysis to be quite compelling!! Thus, I'm in big here...
I concur with you gentlemen, Monday seems like the best guess at this point....
Good stuff, nobody can really put a price ceiling on what SNPX could potentially be worth if Bryostatin proves to work the way Alkon hypothesizes it works, and this is not just for ALZ but all other CNS issues... It would certainly be a game changer and could skyrocket to the moon quickly, especially considering there aren't that many shares trading right now...
Yes, the asymmetry in market values here is astounding! If the two companies had equal MV, I'd easily choose SNPX over AVXL, and it's not really close to me...
Could be some shorting too, as crazy as that sounds... Short interest actually expanded for 11/30... Some players operate under the assumption that all ALZ trials fail, which has rewarded them, until it doesn't...
Exactly, pricing before the readout is meaningless... We'll know soon enough!
I like the discord site a lot!!!
Oh, I do expect a negative overreaction in the case of disappointing news, I just think it will be irrational and it will bounce back to something closer to rational... Unshakeable clear heads needed...
True! Indeed the market can be irrational!
It could go to a $1, BUT, the market cap would be like $6.9 million with $24 million in cash, low burn rate, two sponsored trials, and a patent and licensing portfolio... Crazy things happen but that would be absurd, I would be buying all I could get at that pricing...
The crazy thing to me is that SNPX should be worth $5 WITH disappointing results! I firmly believe that management could work out a sale/partnership with big pharma at such a low depressed valuation, because the company already has most of that in cash.
I do realize that with disappointing results, this will gap down to $2 or so, but over time it should bounce back into this range, IMHO...
We probably should be something like $20/share right now with the possibility of dropping to $5 on disappointing results, lol, it's all relative...