Anavex Life Sciences Corp (AVXL)

[neiu]

Yes and no but more than likely yes. Forgot this point and most important point from what shareholders passed.

Because the total number of shares issued by us to date in connection with the Purchase Agreement did not exceed 20%, we were not required to seek stockholder approval for those sales. However, future use of the Purchase Agreement may result in the issuance by us of more than 20% of our outstanding Common Stock, which requires stockholder approval under NASDAQ rules. Accordingly, we are seeking approval from our stockholders of the proposed issuances of shares under the Purchase Agreement in excess of 19.9% of our outstanding Common Stock.

How i understand it is that through the purchase plan agreement we have sold an amount of shares to lpc which has not equaled $50 million. Though the number of shares sold to lpc has not reached 20% of the float, i believe they are authorizing the maximum number of shares at the minimum price they have agreed upon. If they were to sell all 5 million shares then the total number of shares that lpc would have owned would exceed 20% and be in violation of a Nasdaq rule unless shareholders were to approve a motion that would allow them to sell more than 20%. If we did not approve then they would no longer have access to lpc funds once they reached 19.9% sold to lpc and if there was a point where money was needed, they would have to get a new source of funding. So it isn't new dilution perse but an allowance for the currently approved purchase agreement to continue under the same terms. Whether they do continue to sell to lpc is totally up to them.

So to answer your question, yes this is dilution where the company can issue another 5 million shares until the full $50 million allotment is exhausted. So hope for some free funding coming our way and the sp to go up some so hopefully reducing the need to sell the full amount to lpc.

Does that make any sense, sorry on my phone and tough to reference stuff without my regular computer setup.