Here are my observations. 1. The LOIs with the
Post# of 30028
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Posted On: 03/29/2017 2:26:17 PM
Here are my observations.
1. The LOIs with the toxic debt and preferred shareholders are binding.
2. The binding LOIs contain a standstill provision that prevents them from converting and selling (i.e., no more dilution).
3. All of the senior convertible debt of the company is being paid off at 80% of the principal amount only AND they are surrendering all related warrants. That is a nice discount.
4. As of the last Q, the principal amount owed on the senior convertible debt was $5,352,000. 80% of that is $4,281,600. So AMBS will have to give them 13,380,000 shares of Avant (assuming $0.16 a share) plus a new non-interest bearing note for $2,140,800.
5. Almost all of the preferred equity of the company (94%) is being paid off at 75% of the stated value AND they are surrendering all related warrants. That is a nicer discount. The stated value of the Series E and H is $1,000 a share.
6. Per the 8K, there were 8,791 shares of Series E issued and outstanding and 6,085 shares of Series H outstanding. So the stated value of the Series E and H is $14,876,000. 75% of that is $11,157,000. So AMBS will have to give them 34,865,625 shares of Avant (assuming a $0.16 a share) plus a new non-interest bearing note for $5,578,500.
8. The new notes are convertible at a minimum of $3 or $4 a share and may only be converted after AMBS up-lists to NASDAQ or the NYSE. (Doesn't say this conversion price is post-reverse split, but I assume it is.)
9. In addition, AMBS is giving 35% of the ESS subsidiary (Cutanogen) to the senior debt and preferred shareholders. However, AMBS can buy that 35% back for $50M anytime within 3 years.
10. The Series E and H no longer have the right to vote on a reverse split. And the holders of the approximately 6% of the Series E and 6% of the Series H may now only convert after AMBS up-lists at a price equal to the average price for the previous 12 days.
11. AMBS has until June 25 to do 2 out of the following 3 capital raises:
a) AMBS raises at least $1.5 million in financing;
b) Avant Diagnostics, Inc. raises at least $1.5 million in financing; or
c) Cutanogen Corporation raises at least $2.5 million in financing.
12. The investments in either AMBS or Avant must be accompanied by a fairness opinion.
13. Avant was considering a merger with PHDx Inc. but is no longer considering that merger.
14. Cutanogen will be managed by Alliqua Biomedical. That's probably the "commercial stage wound company" mentioned as a potential JV.
15. Chan Heng Fai bought voting control via the purchase of shares of Series F. Although the 8K says that such shares are not convertible (twice), if you review what was filed in Nevada, they are absolutely convertible at a conversion price of $0.03 a share.
16. AMBS now owes Memory DX 5 million shares of Avant and $75,000.
17. The Army kicked AMBS and ESS to the curb.
18. Jack Brewer is part of the group of preferred stock holdouts and is suing AMBS. Part of their request is injunctive relief - i.e., asking for a court order to put a stop to the above actions. Generally, injunctive relief is only granted when the plaintiff cannot be made whole via monetary damages.
Wow - a lot going on. This is a complex deal with a lot left to go. But given that Chan Heng Fai now controls the company, I don't see meeting the financing goals as a challenge.
We gave away most of our Avant shares, but we will get rid of almost all of the toxics at a discount.
I know some have posted that they are disappointed that we didn't get a large cash infusion. I think it is too early for that. For example, if we raised $30M while trading at $0.06 a share, we would have to issue 500 million shares. Large capital infusions can come in the future - when our shares are trading at a level that accurately reflects the value of the company.
1. The LOIs with the toxic debt and preferred shareholders are binding.
2. The binding LOIs contain a standstill provision that prevents them from converting and selling (i.e., no more dilution).
3. All of the senior convertible debt of the company is being paid off at 80% of the principal amount only AND they are surrendering all related warrants. That is a nice discount.
4. As of the last Q, the principal amount owed on the senior convertible debt was $5,352,000. 80% of that is $4,281,600. So AMBS will have to give them 13,380,000 shares of Avant (assuming $0.16 a share) plus a new non-interest bearing note for $2,140,800.
5. Almost all of the preferred equity of the company (94%) is being paid off at 75% of the stated value AND they are surrendering all related warrants. That is a nicer discount. The stated value of the Series E and H is $1,000 a share.
6. Per the 8K, there were 8,791 shares of Series E issued and outstanding and 6,085 shares of Series H outstanding. So the stated value of the Series E and H is $14,876,000. 75% of that is $11,157,000. So AMBS will have to give them 34,865,625 shares of Avant (assuming a $0.16 a share) plus a new non-interest bearing note for $5,578,500.
8. The new notes are convertible at a minimum of $3 or $4 a share and may only be converted after AMBS up-lists to NASDAQ or the NYSE. (Doesn't say this conversion price is post-reverse split, but I assume it is.)
9. In addition, AMBS is giving 35% of the ESS subsidiary (Cutanogen) to the senior debt and preferred shareholders. However, AMBS can buy that 35% back for $50M anytime within 3 years.
10. The Series E and H no longer have the right to vote on a reverse split. And the holders of the approximately 6% of the Series E and 6% of the Series H may now only convert after AMBS up-lists at a price equal to the average price for the previous 12 days.
11. AMBS has until June 25 to do 2 out of the following 3 capital raises:
a) AMBS raises at least $1.5 million in financing;
b) Avant Diagnostics, Inc. raises at least $1.5 million in financing; or
c) Cutanogen Corporation raises at least $2.5 million in financing.
12. The investments in either AMBS or Avant must be accompanied by a fairness opinion.
13. Avant was considering a merger with PHDx Inc. but is no longer considering that merger.
14. Cutanogen will be managed by Alliqua Biomedical. That's probably the "commercial stage wound company" mentioned as a potential JV.
15. Chan Heng Fai bought voting control via the purchase of shares of Series F. Although the 8K says that such shares are not convertible (twice), if you review what was filed in Nevada, they are absolutely convertible at a conversion price of $0.03 a share.
16. AMBS now owes Memory DX 5 million shares of Avant and $75,000.
17. The Army kicked AMBS and ESS to the curb.
18. Jack Brewer is part of the group of preferred stock holdouts and is suing AMBS. Part of their request is injunctive relief - i.e., asking for a court order to put a stop to the above actions. Generally, injunctive relief is only granted when the plaintiff cannot be made whole via monetary damages.
Wow - a lot going on. This is a complex deal with a lot left to go. But given that Chan Heng Fai now controls the company, I don't see meeting the financing goals as a challenge.
We gave away most of our Avant shares, but we will get rid of almost all of the toxics at a discount.
I know some have posted that they are disappointed that we didn't get a large cash infusion. I think it is too early for that. For example, if we raised $30M while trading at $0.06 a share, we would have to issue 500 million shares. Large capital infusions can come in the future - when our shares are trading at a level that accurately reflects the value of the company.
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