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Re: XenaLives post# 102600

Sunday, 04/23/2017 6:19:40 AM

Sunday, April 23, 2017 6:19:40 AM

Post# of 470043
You said:

"So the above incorrectly states that a PIPE would be a suitable replacement for Anavex's current agreement with LPC... but Missling as put an ATM in place which is more favorable than a PIPE. "


Let's begin with the concept that a PIPE and an "ATM" ( which you apparently still believe is the correct term for the LPC agreement) are not mutually exclusive and can both be used simultaneously.

Here is an example of a PIPE which occurred with another company who has an ELOC ( what I believe is the correct term) in place simultaneously.


"We are offering 2,471,912 shares of our Class A common stock, par value $0.0001 per share, which we refer to as our common stock, directly to the investors in this offering at a price of $0.89 per share. "

https://www.sec.gov/Archives/edgar/data/1355250/000147793217001372/ctix_424b5.htm

Secondly, you should notice that I asked for an "opinion" on the possibility of Anavex planning to utilize the proposed preferred stock (that failed to pass) as a PIPE rather than suggesting it was a "preferable" method.

Third, I believe the correct term for the LPC agreement is an ELOC and in a previous post I even provided you a link to an SEC document from another company that described an LPC agreement as an ELOC.

Please read the following link and see if an ELOC is a different thing than you believe it to be.

http://www.ascendiant.com/upload/Equitylinesarticle.pdf


"First, an interesting point of clarification about the term “Equity Line”. Within the securities industry, the Equity Line has been known for years as an “Equity Line of Credit”, however, that is a confusing misnomer as there is no “credit” involved and the Equity Line is not a debt instrument. Unlike debt, an Equity Line does not charge interest and the funds received through the Equity Line do not have to be repaid. However, much like a traditional line of credit provided by a bank or asset-based lender allows a company to carry accounts receivable and inventory, an Equity Line allows a public company to “draw” against its equity on a periodic basis by selling registered shares of common stock to an investor for cash. For this reason, just as every company should consider a bank line of credit to support its operations and working capital needs, every public company should consider an Equity Line as a potential source of funding that can be accessed if and when needed."



Lastly, Consider the "possibility" that Anavex might want to has $50 million in the bank before they start the Phase 2/3 for Alzheimer's. With the current LPC agreement, the process will be slower, as they trickle the shares to LPC. If the "blank check preferred stock" had passed, they "could" have been planning to use those to accomplish the raise in one fell swoop.

Every form of financing has some sort of drawback, so I don't claim to have the answers about which works best with each situation. That's why I asked for an opinion rather than stating a preference.

Of note, even though PIPE's are at a discount to market, which is undesirable, sometimes the share price rebounds quickly as investors realize that the company now has the ability to move ahead with trials quickly.

Are you still of the opinion that Anavex should not consider it as a possible financing method?



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