Can you imagine if America was structured the way nsph buyout is?
Instead of 1 vote per person; you vote based on your wealth!
Lmnx was very clear (I don't blame them- they do not want to be involved in this share structure massacre), $1.35 per share cash. If NO warrants below strike don't exercise they will pay ~$40m and new company will have zero debt and zero cash on hand. Most recent NSPH funder will walk with $26m on their $10m investment (dec 22, 2015 funding). ..... However..... If ALL warrants exercise below strike...Lmnx will pay ~$48m and new company will have zero debt, but it will have $10m is cash; and the dec 22, 2015 funders will wall with $26m on their investment + another .65 per share on 20m shares (the difference between strike = .70 and buyout=1.35) which equals another $13m cash. That's a grand total of ~$39m return on a $10m investment in 5 months that absolutely favors the nsph Dec 2015 funders another 130%++! However it is only a $3m expense to Lmnx!!!! Retail = 1.35.
Most should see whew I am headed with this, but i will continue for those that don't....
Throw away the $1.35 cash per share. Call it $50m even (which is $8m below "pr references price for all O/S" of $58m). That inherently means nobody exercises warrants! The O/S drops to 30m shares which = $1.67 share (more mamagememt options were granted at 1.68 share in sept....they not included....). In this case dec 2015 funder gets $33.4m.
Retail = 1.67
.....the
Tricky....
Lmnx ManDates zero debt - place that on new company or require min warrants exercise; do not place that capital on the common!!!! Hence my initial sentence....if America were??!!??""
Then add loopholes.... Miss covenant by $300k resulting in 500k dilution, loss is access to capital for 12 months (which subsequently would have resulted in "no" financing in December 2015 ; which subsequently would reduce O/S buy 40m shares ((400% increase)) which would subsequently result in a ~$4-$6 pps!!!!) seriously a $300k covenant resulted in $10m delayed financing (which caused dec 2015 40m share dilution) which subsequently resulted in $1.35 share vs $4-$6 per share!!!!
Duh!!!
