Posted On: 08/08/2016 11:19:21 AM
Post# of 30038
It appears from the 8K that the toxics are no longer floorless but may only convert at a fixed price of .05 vs. the previous 25% discount off of the market price. If this is correct, then this is a HUGE step in the right direction. It means the toxics can not sell for less than .05 without losing money. This is probably the best news we have had in a long time. Does anyone else interpret this differently?
My only concern is the next clause- if they raise at least $10 million in a public offering, than all of the notes convert immediately, which would seem to mean they would convert at .05 regardless of what the then current price would be. So if the price was say .50, they would still convert at .05- is this correct? That would be ALOT of dilution if so. Of course, I can't imagine AMBS being able to do any public offering anytime soon anyway so maybe this isn't a realistic. Or they could raise $9.9 million and get around this provision.
My only concern is the next clause- if they raise at least $10 million in a public offering, than all of the notes convert immediately, which would seem to mean they would convert at .05 regardless of what the then current price would be. So if the price was say .50, they would still convert at .05- is this correct? That would be ALOT of dilution if so. Of course, I can't imagine AMBS being able to do any public offering anytime soon anyway so maybe this isn't a realistic. Or they could raise $9.9 million and get around this provision.
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