Replies to post #156545 on Anavex Life Sciences Corp (AVXL)

[LakeshoreLeo1953]

There actually is for computation of dilution.

Supplement to the Prospectus:

DILUTION



If you purchase shares of common stock in this offering, your ownership interest in the Company will be diluted to the extent of the difference between the public offering price per share and the as adjusted net tangible book value per share after giving effect to this offering. We calculate net tangible book value per share by dividing the net tangible book value, which is tangible assets less total liabilities, by the number of outstanding shares of common stock. Dilution represents the difference between the portion of the amount per share paid by purchasers of shares in this offering and the as adjusted net tangible book value per share of our common stock immediately after giving effect to this offering. Our net tangible book value as of March 31, 2018 was approximately $22.5 million, or $0.50 per share.



After giving effect to the sale of common stock pursuant to this prospectus supplement and accompanying prospectus in the aggregate amount of $50,000,000 at an assumed offering price of $2.62 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on June 29, 2018, and after deducting commissions and estimated aggregate offering expenses payable by us, our net tangible book value as of March 31, 2018 would have been $70.8 million, or $1.11 per share of common stock. This represents an immediate increase in the net tangible book value of $0.61 per share to our existing stockholders and an immediate dilution in net tangible book value of $1.51 per share to new investors. The following table illustrates this per share dilution:



Assumed public offering price per share $ 2.62
Net tangible book value per share as of March 31, 2018 $ 0.50
Increase per share attributable to new investors $ 0.61
As adjusted net tangible book value per share as of March 31, 2018 after giving effect to this offering $ 1.11
Dilution per share to new investors purchasing shares in this offering $ 1.51


The table above assumes for illustrative purposes that an aggregate of 19,083,969 shares of our common stock are sold pursuant to this prospectus supplement and the accompanying prospectus at a price of $2.62 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on June 29, 2018, for aggregate gross proceeds of $50.0 million. The shares sold in this offering, if any, will be sold from time to time at various prices. An increase of $1.00 per share in the price at which the shares are sold from the assumed offering price of $2.62 per share shown in the table above, assuming all of our common stock in the aggregate amount of $50.0 million is sold at that price, would result in an adjusted net tangible book value per share after the offering of $1.21 per share and would increase the dilution in net tangible book value per share to new investors in this offering to $2.41 per share, after deducting commissions and estimated aggregate offering expenses payable by us. A decrease of $1.00 per share in the price at which the shares are sold from the assumed offering price of $2.62 per share shown in the table above, assuming all of our common stock in the aggregate amount of $50.0 million is sold at that price, would result in an adjusted net tangible book value per share after the offering of $0.94 per share and would decrease the dilution in net tangible book value per share to new investors in this offering to $0.68 per share, after deducting commissions and estimated aggregate offering expenses payable by us.



The above table and discussion are based on 44,573,788 shares of common stock outstanding as of March 31, 2018 and exclude the following, all as of March 31, 2018:



· 5,867,030 shares of common stock issuable upon the exercise of outstanding stock options, vested and unvested, with a weighted-average exercise price of $4.00 per share; and


· 1,609,309 shares of common stock issuable upon the exercise of outstanding warrants with a weighted-average exercise price of $2.66 per share.


To the extent that options or warrants outstanding as of March 31, 2018 have been or are exercised, or other shares are issued, investors purchasing shares in this offering could experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

[Amatuer17]

Read it in prospectus and few have already posted.

It is basis of calculation of dilution