SiNtx Technologies Inc (SINT)

[OhManIDied]

Yes, good observation dp. I made a mistake with my review due to some unexpected changes and I decided to scrap the entire post.

To be precise, there is a significant difference between the revision to the S-1/A filed on 10May2018 and the final effected Prospectus filed on 11May2018.

I made a last check of the wording right after I submitted my post and confirmed that rather than each Unit/Preferred Series B share being convertible to the variable number of common shares & warrants, where the number of common shares is equal to the number of warrants received - as was indicated in versions of the Form S-1 prior to the final Prospectus (quoted below) - a "Unit" now appears to consist of a Series B Preferred share and a set quantity (=758) warrants per unit; the warrants are standalone.

This was a bit of a tricky change since the previous S-1 revisions were using examples of the number of warrants given a theoretical variable conversion price for Units into Series B Preferred Shares - now the Preferred shares are converted instead of the units and warrants are part of the package.

From the 10May2018 amendment (third paragraph):
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=12742899-874-292784&type=sect&TabIndex=2&companyid=603456&ppu=%252fdefault.aspx%253fcik%253d1269026

The number of Warrants included in each unit shall be equal to the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock at the Conversion Price. Assuming a Conversion Price of $ 2.41 per share, the closing price of our Common Stock on the NASDAQ Capital Market on May 9 , 2018, each unit shall consist of one share of our Series B Preferred Stock convertible into 457 shares of Common Stock and 457 Warrants, each of which entitles the holder to purchase one share of our Common Stock.

The above language was completely removed in the final prospectus.
The header was revised to reflect the modification:
https://ih.advfn.com/p.php?pid=nmona&article=77412425

15,000 Units
Each Consisting of
One Share of Series B Preferred Stock and
758 Warrants to Purchase One Share of Common Stock

This means that the total warrants outstanding is 11.37M - representing ~18M in cash paid to the company before fees if fully-vested. And changing the worst and best case scenarios (from a common shareholder's perspective).

Best-case:
$15M *1.1 = $16.5 converted at $1.4512/share = 11.37M common issued.
Combined with the 11.37M warrants this represents dilution of ~79% to the common shareholders (assuming pre-S1 fully-diluted share count of 6M).

Worst-case (theoretical only; many were surely converted at best case):
$15M *1.1 = $16.5 converted at $0.48/share = 34.275M common issued.
Combined with the 11.37M warrants this represents dilution of ~88.5%

On a different note that I discussed in the deleted post:
In the event of a merger or similar transaction, the Preferred holder are treated as if they have converted to common. There are Forced Conversions (which will not positively change the best-case scenario) and Alternate Consideration terms to build a bridge for acquisitions/licensing/etc in Exhibit 3.5 "CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES B CONVERTIBLE PREFERRED STOCK"(link to most recent revision below).

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=12742189-64385-147349&type=sect&TabIndex=2&companyid=603456&ppu=%252fdefault.aspx%253fcik%253d1269026

OMID