Opportunity stated: "I do feel he should have shown shareholders his blueprints for the deployment of capital."
If you had done your due diligence and read the latest S-1, you would know exactly what he proposes to spend money on and how much. An investor should not expect someone to hold their hand and spoon feed information but I will attempt to help you.
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USE OF PROCEEDS
Based on an assumed public offering price of $5.00 per unit, we estimate that the net proceeds from this offering will be approximately $4.8 million, after deducting the underwriting discounts and commissions ($0.50 per unit, or $600,000 in the aggregate), the representative’s non-accountable expense allowance (approximately $180,000) and estimated offering expenses (approximately $420,000), or approximately $5.6 million if the underwriters’ over-allotment option is exercised in full. If the public warrants are exercised, we will receive an additional $9.0 million in gross proceeds ($10.35 million if the public warrants underlying the underwriters’ over-allotment option are exercised). We have agreed to pay Paulson a warrant solicitation fee equal to 5% of the exercise price of each warrant exercised more than one year after the date of the prospectus if Paulson solicited the exercise.
We currently expect to use our net proceeds from this offering as follows:
$1.0 million to develop and obtain marketing approval of our POC test format;
$960,000 to the holders of our amended secured notes in the principal amount of $1.95 million to reduce the principal amount of those notes;
$450,000 to various holders of our 10% unsecured notes due and payable out of the proceeds of this offering in full repayment of those notes;
$200,000 to fund ongoing research and development activities relating to the RECAF marker;
$150,000 for marketing expenses relating to commercializing the manual format of our serum testing technology;
$100,000 for marketing expenses relating to the veterinary applications of our serum testing technology; and
the remainder to fund working capital and other general corporate purposes, including interest on our outstanding indebtedness, accounting and legal expenses, facilities expenses and personnel expenses.
The amounts and timing of our actual expenditures will depend on numerous factors, including current global economic conditions and internal cash flows. We will have broad discretion in the application of the net proceeds. Pending the uses described above, we intend to invest the net proceeds in short-term, interest-bearing, investment-grade securities.
We anticipate that the net proceeds from this offering together with our existing cash balances and our anticipated cash flow from operations will allow us to sufficiently manage our cash flow needs for the next twelve months. Our existing cash balances include the net proceeds from the sale of our 10% unsecured promissory notes in the original aggregate principal amount of $575,000 ($512,000 after the payment of placement agent fees), which were used to pay the expenses related to that offering and some expenses related to this offering and for working capital and general corporate purposes.
AI
