Zyla Life Sciences (fka ZCOR)

[finesand]

Little Update, Events & Timeline

Cash $70M (2018-06-30 unaudited)
OS 52.99M as of 2018-05-11
Total Debt $99.97M
EV ($15.9M MCAP @ 30c + Debt - Cash): $45.87M EV

Sales MRQ $26.97M
- EV/R 1.70
- P/S 0.59

Net Change in Cash MRQ +$6.69M
Net Operating Cash Flow MRQ -$65.22M

28.78% tutes ownership hmm, almost steady https://whalewisdom.com/stock/eglt-2 (weird)

Timeline
- 2018-05-02 5.50% Notes $37.75 x 146,000
- 2018-06-20 5.50% Notes $29.50 x 15,000 -21.85%
- 2018-06-28 5.50% Notes $35.00 x 15,000 +18.64%
- 2018-06-30 $70M Cash (unaudited)
- 2018-07-11 NASDAQ GM -> CM
- (we are here)
- 2018-07-31 5.50% Noteholder notice + buyback offer (20d post event)
- 2018-08-08 ER CC 8:30 a.m. Eastern Time to review the company's financial and operating results and provide a general business update
- 2018-08-21 $1 bid price Compliance 10 days start (extension possible!)
- 2018-09-04 $1 bid price Compliance Deadline 10 days (extension possible!)
- 2018-09-04 5.50% Noteholder optional repurchase last day
- 2018-10-02 FDA ADF Label Extension for Arymo ER
- 2018-11-06 $35M MCAP Compliance 10 days start (extension possible?)
- 2018-11-20 $35M MCAP Compliance Deadline 10 days (extension possible?)

+++

2018-07-11 https://www.sec.gov/Archives/edgar/data/1586105/000110465918044601/a18-17112_18k.htm
- On July 9, 2018, the Company received notice from The Nasdaq Stock Market LLC (“Nasdaq”) that the Nasdaq Hearings Panel has approved the transfer of the listing of the Company’s common stock from The Nasdaq Global Market to The Nasdaq Capital Market effective at the open of business on July 11, 2018 (the “Transfer”)
- 2018-07-11 NASDAQ GM -> CM
- (ii) the Company’s evidencing a market value of the Company’s common stock of over $35 million for at least 10 consecutive trading days not later than November 20, 2018
- The Company was provided with an initial grace period of 180 calendar days, or until September 4, 2018, to regain compliance with the minimum bid price requirement.

Fundamental Change under 5.50% Convertible Notes Indenture
- In accordance with the Indenture, the Company is required, on or before the 20th calendar day following the Transfer, to give notice of the Fundamental Change to the holders of the approximately $24.6 million in aggregate principal amount of 5.50% Notes outstanding and to make an offer to purchase all or any portion (equal to $1,000 or an integral multiple of $1,000) of each holder’s 5.50% Notes on the terms set forth in the Indenture
- In such offer, the Company is required to repurchase the 5.50% Notes for a price in cash equal to 100% of the aggregate principal amount of 5.50% Notes repurchased plus accrued and unpaid interest thereon, if any, to the date of repurchase, which date is to be no less than 20 business days and no more than 35 business days from the date on which such notice is mailed
- As of June 30, 2018, the Company had cash and cash equivalents, restricted cash and marketable securities of approximately $70 million. This information is preliminary,
- 2018-07-11 + 20d: Noteholder notice + buyback offer 2018-07-31
- 2018-07-11 + 20d + (20d - 35d): Date of possible repurchase
So latest date of possible repurchase is 2018-07-11 + 20d + 35d = 2018-07-11 + 55d = 2018-09-04

Label extension is on 2018-10-02 http://egalet.investorroom.com/2017-12-15-Egalet-Receives-FDA-Tentative-Approval-for-Expanded-Label-for-ARYMO-R-ER-morphine-sulfate-C-II-an-Extended-Release-Morphine-Product-Formulated-with-Abuse-Deterrent-Properties-for-Treatment-of-Chronic-Pain

+++

Given the guaranteed note buyback at 100% face value of $24.6M + interest, their price should now be at their issuance 100%
No trade happened since.

Possible events:
- Company needs to buyback all or some of the ~$30M round about, leaving cash at only $40M minimum - or -
- Deal with Note holders and no buyback.
- Note price goes up either way
- Good ER runup 8/8 and/or actual OK ER
- Finally some asset sales (EGL-002) or licensing deal (Guardian Tech)? - Sprix-2 Update? $50M - $100M proceeds would be more than enough.
- $1 bid price extension +180d or RS end of August, start of September (would harm MCAP as well, needs to be avoided) ?
- Worst case scenario: Company fails in all categories and says goodbye

- See 5.50% Notes http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?symbol=EGLT4352513&ticker=C650855