Taking it right down to the wire....
By my reckoning, a reckoning confirmed with a phone conversation with the VP of IR, Resverlogix has a bit less than $15 million remaining on the loan they took out back in May of 2018. That loan comes due after 12 months, in May of this year...I don't know the exact date.
But the loan has 2 key covenants that are both mentioned in the most recent MD&A filing. Resverlogix is required to maintain a cash balance of $5 million dollars....based on the money they've raised and their burn rate it strikes me that they must be pretty darn close to that $5 million minimum requirement. *It may be over $5 million but that's nitpicking...
The other convenant requires the company to release top-line data by January 31st, by Thursday of next week in other words. Frankly I don't think that's in any way possible. The only way I could see it happening would be if BETonMACE has already hit the required 250 MAC events...and the company simply decided not to share that information. Assuming the trial is still running however, in my opinion that means there's no way they can get Top-Line numbers out by Jan 31st.
That was part of the reason for my phone call to the VP of IR recently...I was basically sure, but I wanted to be 100% certain that if the loan was paid off....that the Jan 31 Top Line requirement would be out of play so to speak. I was assured it would be...if the company pays off the remainder of the obligation the loan is settled and done with.
To my way of thinking that leaves only 2 possibilities, and both are coming up hard and fast against that Jan 31st deadline.
1) A negotiated extension on the convenant requiring top-line data, and possibly even a new loan agreement to refill the company's shrinking coffers....a blend and extend type of arrangement.
2) A cash raise of some kind....another share offering, a licensing deal or CVR....something sufficient to retire the loan with enough left over to at least get BETonMACE to the finish line and the release of top line results.
If no news is out by Jan 31st after the closing bell I'll be making another call to the company....frankly I'd rather not bother, I'd prefer to see an update of some kind and a lifting of the cone of silence we've been in for over a month now.
Peace all
If you want to taste the fruit, you have to go out on a limb. But if you wait for the herd to move out on the limb....the branch tends to snap.
