Joe, can you help me out here with ADAT please? From the PR:
At closing, Authentidate issued 3,400,000 shares of common stock and warrants to purchase up to 3,400,000 additional shares of common stock to a select group of institutional and accredited investors. The warrants will be exercisable for a 90 day period beginning on the closing date at an exercise price of $1.00 per share.
Sooooo, the investors have the 3.4 million shares in their pockets at 1.00 PPS. They also have warrants to buy 3.4 million more at 1.00 per share. Let's say this hits 1.20 a share within the next 3 months.....and they exercise and dump for a 20% profit. The investors pocket $680,000 and still hold their original 3.4 million shares....
The article made this financing out to be extraordinarily generous terms for the company (even after they paid better than 10% to arrange it).
Would you concur, based on other warrant issues within this industry?
TIA
