Replies to post #232524 on Innovation Pharmaceuticals Inc (IPIX)

[loanranger]

I'm only an 8-k confirmation away from agreeing with you. I'll wait.

It's a little unusual. We regularly see an 8-K issued to formalize the distribution of a press release where the press release appears as an Exhibit under either Section 8 Other Events or Section 9 Financial Statements and Exhibits. Here we see the press release advising of an 8-K, with the 8-K still unfiled. I sure hope they file the agreement as an exhibit and not just the press release.

I'm sure you noticed the coincidental math that worked perfectly with April 1-May 9 $2M and understand why I'm not convinced that it's a new $2M yet. I could be wrong, of course, in which case we're due TWO agreement filings, one of which would be many weeks late.

[scottsmith]

What do you think of this post from the private message board?

“Hmm. Looking things over here.

Previous recent deal was 8M@$0.25 transaction or $2M for 8M shares.
This was $2M for ~5.3M shares

In addition, we can raise up to $5M at based on certain milestones (we still have to sell shares). Aspire agreed to this for the low price of ~2.7M gift shares + 8M warrants @$0.38.

So in summary, we have recently done the following with Aspire:

We Get:
$4M and a guarantee to be able to raise up to $5M if we hit all our milestones

We Gave:
16M shares + 8M warrants (@$0.38 - 5% of the current company for $3M!!) + ?? milestone shares (varies on price of sale)

Here is my take on this at first glance:

The Good: This is hopefully enough money to continue any non-clinical work and fully pay the Prurisol 2B CRO (if not already done). This agreement also gives us a life line, in writing, in the event our share price goes below $0.25 even when meeting these milestones.

The Bad: This was very expensive to do so. The money generated from warrants probably won't be needed or will be unfavorable compared to our existing agreement if Aspire chooses to exercise. We also don't get to choose when they do this so it's not money we can count on.

The Ugly: This agreement appears to be the framework for survival in the event that our share price declines below $0.25. It also illustrates how devastating financing our own phase 3 would be to current shareholders. This agreement hopefully guarantees our survival to a deal but signals considerable financial weakness on our part.

The strategy of just-in-time financing is currently biting us hard this year. It is now causing notable dilution and is delaying trial progress. We would have screamed bloody murder at the time but I wonder what this company would look like if it sold 24M shares at $3 back in 2015.

I think with the warrants that Ehrlich and Menon hold, on top of this deal, our outstanding share count is closing in on 200M should we succeed. That means a $1 billion market cap is only $5/share.

I have no clue how the market will react. I think this agreement significantly reduces the risk of running out of money if we hit milestones. However we have effectively given away 12-15+% of the company this year for $4M-$7M and a contingent guarantee to buy $5M more.

This is all my opinion and if I have misread something please let me know. We need the 8K for details.”