Replies to post #269718 on Innovation Pharmaceuticals Inc (IPIX)

[kfcyahoo]

Can't argue with that.

[loanranger]

"The point is a "big stack of authorized shares" offers no "assurance" that IPIX doesn't have access to funding."
The double negative exposes the strained logic to that point.
A big stack of authorized shares provides ZERO assurance that a Company has access to funding. Some would say that it adds to risk for an investor.

But this is interesting:
"Shares can be used in many ways, such as a condition in a deal."
Are you floating the idea that a suitor might make a licensing agreement contingent on this Company's ability to offer it an equity stake in the Company itself?


The Authorization HAD TO BE INCREASED.
Per the 10-Q filed on 5/10:
"As of April 30, 2019, there were 192,132,420 shares of our common stock outstanding. In addition, as of March 31, 2019 there were outstanding stock options, warrants and a convertible note representing the potential issuance of approximately an additional 66.0 million shares of our common stock."

"On May 9, 2019, the Company entered into a Warrant Restructuring and Additional Issuance Agreement".

That 258M total has obviously increased as a result of the May 9 Agreement and any other issuances since 4/30.

The shares required for outstanding stock options, warrants and Preferred is a number that I don't want to mess with right now...it's complicated...but the latest Agreement says "The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Additional Underlying Shares at least equal to the Required Minimum (in addition to share underlying the New Warrants) on the date hereof" and the original Agreement said "The Company has reserved from its duly authorized capital stock a number of shares of Preferred Stock for the issuance of all of the Warrant Shares and the issuance of all shares of Preferred Stock issuable as dividends under the Certificate of Designation assuming for purposes hereof that the Preferred Stock shall remain outstanding for three years." If the Company stated the number of shares it has reserved for such purposes I haven't seen it anywhere. It's an important piece of the authorized puzzle.


It's easy to see how the existing 300M share authorization could be under pressure even now, so this wasn't a luxury by any means. MAYBE it was done with an eye to new financing or the accommodation of a potential partner (if it was part of the Alfa deal it would have been in that Agreement), but it had to be done. That said, the reasons for doubling the Authorization are far from clear.