Our recently acquired indebtedness reduces our financial flexibility and could impede our ability to operate.
On June 13, 2016 we issued an aggregate $35 million principal amount of senior secured convertible notes (the “notes”). The notes are payable in equal monthly installments beginning seven (7) months after the original date of issuance. Although the notes are payable through the issuance of shares of our common stock to the noteholders, our ability to issue stock, instead of paying cash, to satisfy our payment obligations under the notes, is limited and subject to various conditions (including trading volume and stock price conditions for these notes) that we may not be able to meet. If we cannot meet these conditions, we could be required to repay some or all of the amounts due under the notes in cash, and we may not have the funds available to make one or more of such payments when due. Even if we do have funds so available, the use of cash to make such payments could adversely affect our ability to fund operations due to the diversion of necessary cash flow to fund operations to utilization for note payments. Furthermore, the notes impose certain restrictive covenants on us which may impede our ability to operate our business or raise further funds in the capital markets. For example, there are restrictions on incurring additional indebtedness, with exceptions, while the notes are outstanding.
Such payments are based upon a formula which uses as a conversion price a discount to market formula with a floor price of $0.05, thus the amount of shares issued can be significantly dilutive to our stockholders
they also mentioned june Equity Financing: "In June we secured $35 million in committed financing with two accredited institutional investors that specialize in biotechnology and medical technology investments. Of the $32.2 million in net proceeds, $3.0 million was unrestricted and immediately available for use. The remaining $29.2 million is held in certain control accounts".
seems reasonable to me, better than other Equity Financing programs I have seen,due it will improve their balance sheet and also to fund their P2/P3.
"As long as O/S increased for a good reason to reduce debt and improve the balance sheet i dont see any problem ( more likely positive than negative imo)". so DCTH did got hurt by June 2016 Equity Financing but we must look forward. please check my post about the stock you have mentioned (and the reply) very similar to DCTH. crazy move today:
Wednesday, 08/24/16 06:11:51 AM Re: THREE-DAY-TRADER post# 2548
Post # of 3118
As long as O/S increased for a good reason to reduce debt and improve the balance sheet i dont see any problem ( more likely positive than negative imo). Right now market cap is very low( about $5m) for FDA approval Co. And financials on better shape w/ more than twice Cash on hand than current cap. I think ETRM is a potential of a buyout. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124729637&txt2find=etrm
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