Well I did not expect that they would dilute al $3/share and hoped that the previous warrant holders exercised their options at $4.90. However, they did the refinancing, which should get them to the end of 2026 at the current cash burn. Overall not an ideal situation but one that was reasonable and was contemplated in the thesis. I also think this offering reinforces the idea that the company will be sold after drug approval
All very fair points. Was also Russell rebalance today, with ACHV being a large delete, which exacerbated the move down I think, and was responsible of some of the recent weakness I think. Was told was lot of participation by existing holders, not sure why it traded the way it did, I guess maybe the amount of dilution spooked some people. "I also think this offering reinforces the idea that the company will be sold after drug approval". What aspect of this leads to you that thought?
Well with an extra $45M in cash that gets them to the end of 2026 as I said. That is a few months after the expected tiem of the drug approval, so timeline makes sense. Although it could be them just not wanting to dilute more at these levels. They still need more cash if they are going to commercialize and it is also possible that they are just waiting for higher share prices to dilute more. Who knows.
True, $5M upon NDA submission and acceptance and another $5M at the lender's discretion (both at $7/share, but depending on the timing could be $5/share). That should put the net cash at $44M, meaning they would run out of cash by the end of Q1 2026.
Any view on the offering here?
I'm open for any further discussion if you'd like.
Well I did not expect that they would dilute al $3/share and hoped that the previous warrant holders exercised their options at $4.90. However, they did the refinancing, which should get them to the end of 2026 at the current cash burn. Overall not an ideal situation but one that was reasonable and was contemplated in the thesis. I also think this offering reinforces the idea that the company will be sold after drug approval
All very fair points. Was also Russell rebalance today, with ACHV being a large delete, which exacerbated the move down I think, and was responsible of some of the recent weakness I think. Was told was lot of participation by existing holders, not sure why it traded the way it did, I guess maybe the amount of dilution spooked some people. "I also think this offering reinforces the idea that the company will be sold after drug approval". What aspect of this leads to you that thought?
Well with an extra $45M in cash that gets them to the end of 2026 as I said. That is a few months after the expected tiem of the drug approval, so timeline makes sense. Although it could be them just not wanting to dilute more at these levels. They still need more cash if they are going to commercialize and it is also possible that they are just waiting for higher share prices to dilute more. Who knows.
Interesting thesis, looking forward to seeing how this investment plays out.
Yeah, things should start to get clearer when the funding gets completed.
They also have an agreement with SVB that converts $10 million at $7/share.
True, $5M upon NDA submission and acceptance and another $5M at the lender's discretion (both at $7/share, but depending on the timing could be $5/share). That should put the net cash at $44M, meaning they would run out of cash by the end of Q1 2026.
Upon NDA submission