Replies to post #313 on PolyMedix, Inc.(fka PYMXQ)

[gfp927z]

A R/S and/or equity financing is now unlikely because -


1) A R/S won't get the pps high enough to get uplisted on the Nasdaq, and

2) In an equity financing, with or without a R/S, they would lose too much ownership of the company for the amount of money raised.



Here are the numbers -



Current shares outstanding are approx 106 mil (as of year end 2011), so after a 1/6 split there would be be approx 17 mil shares outstanding.

In an equity financing they could only create a maximum of 16 mil new shares and still keep over 50% control of the company. So figure roughly 10 mil shares plus 5 mil warrants would be the biggest they could do.

Based on the current pps of .33, a 1/6 split would put the post-split pps at $1.98/share. If an equity financing was done right after the R/S, at a modest discount, say at $1.75, then PYMX could raise a maximum of approx $17 mil (equity deal for 10 mil shares at $1.75, plus 5 mil warrants).

So Nic could conceivably raise a maximum of $17 mil, but the financing entity would then own just under 50% of the company. To raise less, say $10 mil, the financing entity would still end up owning approx 30% of the company. So the numbers just don't work for an equity financing. The amount of ownership PYMX would have to give up is just unacceptable.

That's why Nic will be highly motivated to do a pharma deal to raise money. He has solid Phase 2 data for PMX-30063, and should be able to get a good deal. As I see it the only questions are whether he partners the ex-US rights or the full global rights, and how many clinical indications are included in the deal (ABBBSI, Bacteremia, Endocarditis, Pneumonia/Lung).