locks,
That has been the most regularly asked mail question lately..:)
When will the Diluting end
There is nothing on my radar to indicate that dilution will end anytime soon. With the SMD IND possibly going into trials soon, the much larger AMD project to "dovetail" into trials and ACT stating another non eye IND possibility, we are talking MAJOR dollars that will be needed. This does not include the recent news that Myoblast Phase 2 may start next year and Caldwell said in yesterdays Blog post that only partial non-dilutive funding is expected. If all the above take place and are simultaneously in trials we are talking about huge money that would make what we spent in the last 5 years look like peanuts. Does the recent 1.9MM SCRMI and Harvard/McClean received help? Would it help if the NIH approved cell lines and monies were obtained for projects? Absolutely it does and I hope it happens. But to think any of these funding possibilities will cover everything would be a very huge stretch, and imo a dream.
It is important to note that most all companies use shares to finance their business and projects. It is MUCH more noticeabe with ACT because of our pps. For every $1MM dollars we finance right now it translates into approx. 25MM shares. As of June 30th we had approx. $18MM available to us whenever ACT needs to exercise. If we gave notice today we needed it all that would be approx. 450MM shares and we would be back to voting to increase the authorized, AGAIN. For those who say it "doesn't matter" how many shares we have as we will cure the blind and AMD market is $28Billion so we will grow into the shares??....I say baloney...we haven't been approved for trials yet and AMD completion is years off. Remember also the folks receiving all these shares are not investors, they are shrewd funding operations who set up contracts with very little risk to them and their goal is making money, lots of it, any way they can. For companies at $5/share and 15-30% of the float in Institutional investor hands, the dilution is there but almost goes unnoticed.
For a "partner, collaborator, sugar daddy" or whatever you want to call it to step in with 10's or maybe 100's of millions at this unproven stage of the game is possible, but unlikely, imo. If it were to happen, what would they want? It wouldn't be IF they want part of the Company, but what percentage of the Company and what rights would be relinquished? ACT even addresses that in their filings, see below. IMO, a reverse split is inevitable but NOW is not the time given we are not approved for trials so we trudge along. I truly hope the pps goes higher and maintains to reduce the amount of shares that will go out the door when ACT needs to call in some funds..
(last 10Q)
"Additional financing through strategic collaborations, public or private equity financings or other financing sources may not be available on acceptable terms, or at all. Additional equity financing could result in significant dilution to our shareholders. Further, if additional funds are obtained through arrangements with collaborative partners, these arrangements may require us to relinquish rights to some of our technologies, product candidates or products that we would otherwise seek to develop and commercialize on our own."
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