InVivo Therapeutics Holdings Corp (NVIVQ)

[rru2s]

"Redemption" is when a warrant holder decides to execute on an agreement by which he pays a certain amount (the strike price) to the company (thereby the company collecting revenue) and in return receives one share of stock. The holder of the stock may then elect to hold the stock or sell it.

And with the stock price expected to go up very substantially over the next few days/weeks as investors realize clinical trials are finally going to start, no warrant holder in his right mind would want to sell that newly received share of stock at $2.80 when the price will be worth twice that when the slightest good news hits the press to update the public on the 30-, 60-, or 90-day interim evaluations of patients undergoing clinical trials.

The SEC filing prospectus dated 4/30/12 stated there were 12M stock warrants that can be redeemed at $1.40 per share and 350,000 bridge warrants that can be redeemed at $1.00 per share. With a daily volume of 505,000 on 4/5/2013 when the IDE approval was announced, and an average daily volume over 10 days of 178,000 shares/day, if warrant holders all rushed to sell their shares, of course price would be depressed. However, given the virtual certainty that more good news will be released and larger investors will be piling in, only a very small portion of warrant holders who redeem will elect to cash out right away, since there is much more good news to occur over as clinical trials get underway. The total diluted sharecount is 65M.