So I got the phone call last night asking me about how I will be voting my shares with respect to the proxy vote for AVXL.
The gentleman really don't know anything. When I asked why do they want to be able to issue preferred shares he responded by reading the prospectus. When I asked again why they needed another method of financing when they still have over 50 million common shares which can be issued without a shareholder vote he referred to the Lincoln Park deal and read about the $50 million dollars of stock AVXL can sell to Lincoln Park... basically read the agreement to me. I then asked again why they need authorization to issue 10M preferred shares when they can still issue over 50 million common. He went back to the $50M Lincoln Park deal and started reading the prospectus again. I politely interrupted this time and pointed at that even at $5 per share the Lincoln Park deal is only going to increase the outstanding share count by 10 million and that some had already been issued... and that this still leaves 45-50M that they can still issue without a share holder vote. He fumbled a bit and started reading portions of the prospectus on what the proceeds of the 10 million might be used for. The only thing I got out of this call was he read several times that the 10 million preferred might be used for mergers and acquisitions... but this is really just boiler plate. So if we vote yes we are really trusting Dr. Missling and the board to do the right thing with the shares.
I told him I wanted to think about it for a couple more days. He is going to call me on again on Monday.
I have no clue if anything is going on behind the scenes but it is interesting that AVXL really wants the authority to issue the 10M preferred... even though they can still issue ~55M common. Someone posted on here that maybe the preferred are to be issued to a BP company (BIIB?) that might want to by into some equity of AVXL. Could be but we really have no way of knowing.
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