Q3 is out. I scanned it. There are many good things on the business end, but, honestly, it’s all noise to me at this point. The major takeaways at this point for me are (1) that presentation that @Potse found is not an anomaly. They are clearly looking to do a real IPO at this point and are aiming for a listing on a real exchange (good luck with that, but who knows…), and (2) this is where legacy investors probably get screwed, to be blunt. There is no specific mention in the text, but the balance sheet now shows 500,000,000 authorized shares of common stock rather than the 50,000,000 that has been the case. Unless this is a misprint, it means that they quietly increased the authorized share count by a factor of 10, while of course protecting the recently issued preferred stock. They could only do this through a shareholder vote – not sure if/when that happened, but they need to disclose that if this is not a misprint. If it’s real, then it is, frankly, sleazy of them to slip this in without mentioning it. It would mean that they are officially jettisoning their historical commitment to keeping share count low and protecting legacy investors. Now, “authorized” is not “issued”. If they go through with a real IPO, managed by a real investment bank in NYC, the bank will determine the number of outstanding shares, based on various factors (and I can’t imagine they could come remotely close to issuing half a billion shares while setting a non-laughable share price). But I can assure you, protecting legacy investors will not be a factor in that calculation. In sum, this is no longer Jim Musick’s party. It’s a tiny company transitioning into the big bad world of serious biotech. I’m confident that your legacy shares will not be worthless, but you can probably expect substantial dilution if they return to the market via an IPO rather than simply refiling a Form 10 (there is no longer any discussion of the latter – I assume that is off the table). OTOH, I have no idea how legacy shares might be handled. It could actually turn out to be a golden opportunity for legacy shareholders to divest at highly inflated IPO prices. And I would personally avail myself of any such opportunity the second it became available.
AI
