About the recent loan. It looks rather bullish but.............
First, LP's pub and ASCO presentation did not do the trick in sustaining a rise in the pps. Investors were expecting more than a dog and pony show on what we already knew from the pub and the lack of spring refresh updates which Les had told a number of investors including myself would happen at ASCO. No string of PRs either before or reasonably after ASCO. Carrot dangling on business matters that would be announced in coming weeks. Well, at least one has been announced wrt to the loan.
LP had little choice but to raise funding in this manner since her pps expectations were dashed and she did not wish to risk the ire of large investors, already p*ssed by the incomplete presentation and lack of timely follow on news, by still another piecemeal dilutive toxic financing deal.
So she was able to negotiate a loan deal. Interest is steep when taking into account the discount but the 18 month term appears bullish.
Anyway, what is strange, at least to me, is why the lender did not either demand or failed to get convertible rights. After all, in reviewing the financial history in their DD, the lender must have known that LP made convertible loans to the company. Why not them as well? In order to convince the lender to loan money and for an 18 month term, LP had to open the kimono to convince them. If the revelations were bullish enough to entice this loan, they would have been enticing enough to require a convertible loan by the lender. The lenders are not well known. It is not as though LP had lenders all lined up begging to give her a loan.
So one would presume she had some leverage. When it came to conversion rights, which probably would have come up during the negotiations, she drew the line and told them no-- take it or leave it. Maybe she played guts ball and if the lender balked, she would have advanced the money herself, as a last resort, perhaps on the same T&Cs so as to avoid accusations of self dealing. However, the lender would never advance money no matter what the return if he were not reasonably certain that he could get his money back with interest. Especially considering a term of 18 months. So, all in all, this looks bullish. JMHO.
