Spectrum Pharmaceutecals Inc (SPPI)

[AVII77]

What's more of a stumper is that the Sept 25th SCHEDULE 13D/A indicated there were 93,937,040 shares outstanding. And per yesterday's form indicated we now have 102,335,540 shares outstanding or an increase of 8.4M shares. But from the transcript of the 3Q 2017 CC I would think we'd have increased by ~19M shares not 8.4M.

The frequent change in outstanding shares due to the ATM makes it difficult to follow. I think you may be double counting; some of the 12.6 million shares are included in the Sept 13D/A.

"As of July 28, 2017, 84,502,205 shares of the registrant’s common stock were outstanding." Q2 10Q

During the third quarter, we raised a $114 million due to the sale of 12.6 million shares [~$9.05/sh] utilizing our at-the-market security offering program. We ended the quarter with $248 million in cash and cash equivalents versus $139 million at June 30.
Subsequent to the end of the quarter, we issued 1 million shares for net proceeds of approximately $14 million [~$14/sh] of our ATM. Also subsequent to the end of the quarter, we entered into agreements with a few of our convertible bondholders and exchange approximately $69.5 million in aggregate principal of bonds for approximately 5.4 million newly issued shares of stock plus $26.7 million cash. Following these and other exchanges, we have reduced our debt from $120 million down to approximately $40.5 million.

84,502,205 +
12,600,000 +
1,000,000
98,102,205

As of October 31, 2017, 100,662,238 shares of the registrant’s common stock were outstanding.

So I am unsure where the extra 2.5 million shares came from (though not losing sleep over it, LOL)

Raj then did a cashless exercise of his warrants in Jan 2018 and they issued him 1,690,472 shares

100,662,238 +
1,690,472
102,352,710

which jives with the 102,335,540 reported in his most recent 13D/A (I'm off by 18k shares but whatever)

On a related note, what are we to surmise from him exercising ALL his options in Jan 2018?
He hasn't sold any of the shares they were converted to (only the shares needed to pay exercise price and withholding taxes -which were cancelled by the company).

On a related related note, how the heck do you get the company to pay the withholding taxes by cancelling shares?

1. Represents shares withheld by Spectrum to satisfy the Reporting Person's payment of the exercise price and tax withholding obligations. The shares have not been sold by the Reporting Person or by Spectrum. The shares have been cancelled by the transfer agent.

What happens? Spectrum sends a check to the IRS on behalf of Raj to pay his Cap Gains tax? Is there even Cap Gains tax when you exercise options (if you don't sell?). Well, I guess he had tax to pay on the shares he "sold" to exercise the options. Very confusing for me.

By converting his options in Jan it sets the clock on Long term Cap Gains for those shares and establishes a cost basis. Is that right?

Sorry for the rambling post.......