Zalicus will control the timing and amount of any common stock sales: Lincoln Park
Zalicus has the right, at its sole discretion, over a period of two years to sell up to an additional $23.0 million in shares of its common stock to Lincoln Park under the terms set forth in the agreement. Zalicus will control the timing and amount of any common stock sales to Lincoln Park.
In addition, the Company may direct LPC to purchase additional amounts as accelerated purchases if on the date of a regular purchase the closing sale price of the Common Stock is not below $0.50 per share. There is no upper limit on the price per share that LPC could be obligated to pay for Common Stock under the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty
Between July 1, 2013 and August 5, 2013, the Company issued an additional 1,500,000 shares of Common Stock to LPC under the Purchase Agreement for additional gross proceeds of approximately $735. On a cumulative basis, from the effective date of the Purchase Agreement through August 5, 2013, the Company has issued a total of 7,604,147 shares of Common Stock to LPC, including the 800,000 shares of Common Stock issued to LPC as consideration for entering into the Purchase Agreement, for aggregate gross proceeds of $3,900.
This arrangement with Lincoln Park is an attractive financing alternative for Zalicus at this time because it provides us with flexible access to capital on an as-needed basis as we work to obtain the results from the clinical trials of our lead product candidates Z160 and Z944 later this year,” commented Mark H.N. Corrigan, MD, President and CEO of Zalicus.
Scistats, actually that is why I believe they can use them to push this over a dollar. Remember, we are not the only shareholders that can "possibly" lose out on a RS, but the management as well. They would rather not have it, since more is to gain.
People keep bringing up the fact that they voted for the RS, that happens with all companies. Just because they voted, doesn't mean they have to do it....they are not obligated. Management has the sole discretion to direct LPC to purchase shares.
I'm not following just exactly how the agreement with LPC would push the stock over $1. If anything, it would prevent that from happening. Anytime management decides to tap the ATM agreement with LPC, those shares are being added to the market as sells and are diluting the current share count. I understand that the company needs funds so I'm not knocking the agreement, but the logic that this ATM ensures that we get over $1 completely defies sound reasoning. If we get over $1--and we might--it will be because of traders flocking to play the run-up; not because we're selling shares to LPC.
I don't think management will try to avoid RS because there's nothing wrong with it. The pps will stay the same. I've seen many RS and it has barely move the pps. In many cases the pps has even raised following the RS, not sure why everyone is referring to the RS as doomsday when it is a no-event in my opinion.
thing is, LPC has done these kinds of investments all the time. i think it would be a show of good faith for zlcs to release some preliminary data, that alone - assuming it is positive - should maintain zlcs above a dollar. i rather know now than later.