Biotech Values

[DewDiligence]

>PP – The company raised $13.5 million in private placements just before and after the reverse merger. Do you think it might be possible that the investors in the private placement insisted on receiving stock in a public company?<

A $13.5M capital raise is peanuts—even for a drug company that doesn’t have any drugs. Surely you don’t think that PP went to the trouble of executing a reverse merger into a public shell merely to facilitate a $13.5M private placement.

>I don't [Kanzer] made any such statement before the private placements, did he?<

He made such statements four days ago on the 3Q07 CC. Kanzer basically said that PP will not ever need to raise more capital because they expect to be “highly profitable” by the end of 2008.

>The whole thing is just a low rent way to go public…<

That’s what management wants you to think but I beg to differ. There’s no way in hell PP could have gone public via an IPO because no reputable investment banker would have bought into the company’s junk science.

Thus, the rationale for the reverse merger was not to save money relative to an IPO, as you assert; rather, a reverse merger was the only way for this company to obtain a publicly-traded stock.

Caveat emptor!