Armata Pharmaceuticals, Inc. (ARMP)

[lesgetrich]

Why can't an 'adjustment be sustained BELOW the current market value'? It does a 1-4 to get the share price to $1.30 or so based on todays price. Whats to stop the market from pricing it at a $ after the split?

ALYI's book value after the merger will be $.36/share with today's share structure. At a 1 to 4 split it would be 4 x $.36 or $1.44/share. At the current pps of roughly $.34/share it would convert to $1.36/share. As I said, it may do a psychological post split adjustment to bring the pps down but it should relatively quickly move back to its book value price of $1.44 plus.

Another way to look at it, the current market cap is roughly $10.2 million. After the merger the new market cap will include an additional $10 million (from the prospectus)...

...The pre-financing ownership split was determined by the exchange ratio in the merger agreement, which was based on $28 million valuation for C3J and $12 million valuation for AmpliPhi. This $0.36 per share valuation for AmpliPhi represents an approximate 70% premium to the volume weighted average trading price of AmpliPhi stock for the 30 trading days prior to announcement.

On a proforma basis after giving effect to the contemplated $10 million financing, current C3J security holders are expected to own approximately 76% of the combined company and current AmpliPhi security holders are expected to own approximately 24% of the combined company. At the closing and considering the expected cash balances of each company, plus the new $10 million invested the combined company will have approximately $18 million of cash, allowing us to pursue significant operational milestones during 2019 and 2020.

...The $.36 pps valuation is based on $28 million in book valuation. Add another $10 million investment or roughly 36%, you get

$.36 x 136% = $.49/share

With a 1-4 RS

$.49 x 4 = $1.96/share

With a true book value of $1.96/share, I don't think a retail pps below $1.36/share could be sustained for very long.