Replies to post #6277 on AEterna Zentaris Inc. (AEZS)

[Maningreen0]

Read the terms of the warrants. As the price goes down, the number of warrants goes up.
For all I care, stay long. Keep losing money. How far are you down so far and how much further down can you afford to go?
I am just trying to help other people from listening to some of the nonsense posted here about how thi sstock is going to shoot to the sky soon.

[chmcnfunds]

AS THE PRICE GOES DOWN WARRANT HOLDERS GET MORE SHARES This has been documented numerous times on this board over the past several weeks. Should be no question.

Quoted with my bold added
_____________________________________________________________
David Dodd - Chairman, President and CEO
We believe that the dilution attributable to warrants issued in the offering during the first quarter is the reason for the pressure on our stock price and that this pressured will continue for the next several months with the warrant impact expected to be completed by year-end.

...

Dennis Turpin - SVP and CFO
Yes. So, just to summarize, we have outstanding number of shares as of June 30 of 140 million shares. As of August 12, the number of shares outstanding is now 182.3 million. So the warrants B that are still outstanding are at the level of $20.9 million as of August 12, 2015. It represents approximately 70% of all of the B warrants that were issued, if we recall on March 11. Now the behavior of the alternative cashless exercise is the decision from the investors, it is based on the price. If the stock price goes down they have the ability to exercise this alternative cashless exercise and it is difficult for the company to comment exactly how they will behave. And what we can tell you is, at the rate of exercise that we see for the last few weeks, it would take approximately, we don’t know maybe, four, five months maximum to see all of the B warrants being exercised. Now how many shares will result from that? It depends on the stock price. If the stock price goes up, there will be a fewer number of shares, than if the price goes down. And I’m sure you can imagine that the company cannot comment on the stock price where the stock price will go. Okay?

Unidentified Analyst

All right, I understand that. But again, what is the worst case scenario?

Dennis Turpin - SVP and CFO
Again on that question, it is difficult to comment. There is a formula that is presented in our financial statement which tells you that if you take the existing stock price, the ratio of conversion is about 10 times the warrant. So, if we calculate at the existing level 20 million comped at warrants would generate 200 million common shares at the existing price. So this is an example. If the stock price goes at the higher level, the ratio will be a lower ratio. It could be five times. It could be four times. It could be two times. It depends on the direction of the stock price. If it goes to a lower level then it is possible that the number of shares could be even higher than what I just mentioned. But its all speculation.

Unidentified Analyst

Well I mean, it’s not necessary that much speculation. But the point is, so you’re at 170 million or 180 million right now?

Dennis Turpin - SVP and CFO
Yes, this is the number which is still outstanding as of …

Unidentified Analyst

Yes. And so, if the stock price stays at say $0.22, let’s suppose that it stays at $0.22. So what is the dilution at this point -- the maximum dilution at this point?

Dennis Turpin - SVP and CFO
That would be approximately nine times the -- or lets say, not more than nine times. The 20 million outstanding warrants. So it’s 180 million additional shares that would be issued.

Unidentified Analyst

So at $0.22 you could end up at 350 million shares outstanding?

Dennis Turpin - SVP and CFO
Yes.

Unidentified Analyst

Okay.

Operator

Mr. Dodd, there are no further questions at this time. I’d turn the call back over to you.
______________________________________

http://seekingalpha.com/article/3440876-aeterna-zentaris-aezs-ceo-david-dodd-on-q2-2015-results-earnings-call-transcript

AEZS