Replies to post #15297 on GTC Biotherapeutics (fka GTCB)

[akone]

Why is using the IP as collateral so bothersome? Am I missing something?

LFB is going to fund GTCB for another $15,000,000. 4,000,000 of that will be placed into a reserve account to cover GE current debt of 8,000,000in case of defult. I supose that means that GE values the pharm at $4,000,000.

LFB has already invested in GTCB by buying 19.5% valued at over $1.20/share at the time. They are funding several programs, put at risk by losing access to the technology. It would be irresponsible of of them to place that much money at risk only to lose access to the technology in backruptcy court. After all, they are not Republicans who are willing to place anyone elses life and livlihood, but certainly not their own, at risk to regain their dogmatic Darwinian Oligarchy.

LFB has the right to convert its loan into shares at $.31 a share and gain control of the company if not paid back by June 2009, but if they don't convert, they will receive 8% interest. I am assuming they will not convert, so as to receive interest, unless there is a proposed sale of the company at which point they will have a good deal of leverage, necesary leverage, to protect their interest in both their investment in the company and their programs.

The lien on the IP doesn't come into play unless the loan with interest is not paid back by sometime in 2012. If GTCB goes into bankruptcy, the courts would dispose of the assets (IP) at the highest possible price and the LFB loan would be paid first. At this point, I would assume that LFB would exercise their option to convert so as to not lose control of IP. As 52% owners of the company they would have about a hundred million reasons to increase the share price.

It seems to me that the LFB loan certainly does validate both GTCB's parnership with LFB and GTCB's platform. At .31 for each converted share, doesn't that place a current value of GTCB assuming zero cash at $54,000,000 and this is before Atryn is approved in the US?

Its seems to me that France just might actually have a finacial system that is actually rational and working and that the US is and has been experiencing markets that are not free and a Capitalism that is broken.

I hope that my understanding the sitution is at least close enough to true as to merit a response. Thanks.