Avid Bioservices Inc (CDMO)

[DrRocker]

IMO they have something coming soon or they wouldn't openly be talking about fighting the RS. I do not think it is just Ronin. Ronin would not be buying at escalating prices unless they knew about something coming that had a real chance to move the ops. Could be exosomes test kit partner

I am in complete agreement with this George. The relevant question for me is why would they unload 26 million ATM shares at around 50 cents with knowledge of imminent news that will drive up the share price. They could then raise needed capital using far less shares and keeping dilution down. Must be some kind of deal with Ronin or others in exchange for supporting the price until news breaks.
Gwen's note to the company below does an excellent job of laying out the real question.

Hi Stephanie,
This doesn't require a response from you, I just ask that you send it to the board of directors, King and Lytle. If Mr. Lytle could respond to the reason for the ATM usage after 1/31, it would be most appreciated.

Gentlemen:

After a thorough review of the 10Q filed 3/13/17, a couple of glaring issues need to be clarified for shareholders. First and foremost, the ATM sales between 1/31/17 and 3/13/17 totaled over 26 million shares. No reason was given for this incredible outpouring of shares in a very short time frame. Not discussing this on the conference call was an omission of a very material fact. It leaves the shareholders wondering if this huge increase in rate of ATM usage is continuing unabated or if the 26 million was for a specific purpose and has ended. The effect of the release of so many shares is obviously to dampen down the progress made in increasing the share price in attempting to reach $1. It makes it appear unlikely that management and the board are serious about regaining compliance and avoiding a reverse split. It also appears to be very poor financial planning. Since it occurred after the quarter end, it clearly wasn't needed to avoid a going concern statement on the financials. With $40 million in the bank as of 1/31/16, it shouldn't be due to an immediate cash need that couldn't be covered over a more extended period of time, and fewer shares would need to be issued as the stock price increased, thereby reducing dilution but still allowing the additional cash to be raised for whatever purpose exists(ed). It would be most helpful if an announcement could be made that the ATM would not be used for the immediate future. That would give investors confidence that purchasing shares won't be met with an even faster dilution of their interests.