I won't even pretend to understand anything related to BZNE transactions
My GUESS is that they just #$%$ away 1.2 million shares of stock for a worthless company. My HOPE is that they did it with the best of intentions, truly believing that the acquisition is a great move. (Actually, I guess my hope is what I just said, AND that they turn out to be correct). My FEAR is that it's all shenanigans to prop up one of Frost's failing investments.
Now they've sold warrants for a company they've already agreed to purchase. How the heck does that work? What would have happened if they DIDN'T sell the warrants? Would they have been part owners, entitled to a share of the 1.2m shares of MSLP stock that represents the purchase price? If so, it would seem that they effectively sold MSLPs stock for $1.5m. If so, how many shares of stock did they effectively sell in exchange for the $1.5m, and to whom did they sell it?
Being a cynic, my guess is the purchasers are Frost and/or MSLP management, and that the effective per share sales price is somewhere south of the current stock price.
The way I take your post is that you are negative on the deal because you feel MSLP share holders got screwed. My take is that if anyone was screwed it was BZNE investors... I personally sold all I had in the company when the deal hit the news. I don't want to be involved with something that is very hard to understand, especially as a BZNE stock holder (now former).
I knew nothing about BZNE prior to MSLP's investment, and I admittedly know next-to-nothing about it now. Based upon a very quick look at its financials, it appears to have been on a fast-track to bankruptcy prior to the sale - losing a ton of cash each qtr, in possession of very little cash, holding lots of debt, selling of assets to retire older debt while simultaneously replacing it with new debt, selling warrants for seemingless endless numbers of shares at $0.50, $0.40, $0.20, etc.
Having said all that, perhaps this is normal for pharma sector companies prior to hitting it big. And perhaps BZNE really is on the cusp of HUGE revenue increases from revolutionary technology it has developed. I'll believe that if/when I see it. And if I DO see it, and current MSLP shareholders rather than former BZNE shareholders reap the benefit, then I'll say BZNE shareholders got screwed.
For now, I'm going to operate on the assumption that MSLP just #$%$ away 1.2 millions shares of stock for a worthless company that was headed for BK. I'll be pleasantly surprised if things turn out otherwise.
I'm guessing that - at best - BZNE was a very speculative play that has/had a small chance of hitting it big weighed against a very high change of BK. Exactly the opposite of MSLP, whose future financial success seems pretty inevitable given its current trajectory. It's kind of like mixing oil and water. If I wanted a huge speculative play, I might have invested in pharma companies in the first place - or gone to a Las Vegas roulette table and put my retirement savings on number 23. So as a MSLP shareholder, yeah, I'm pretty unhappy with the BZNE investment.
MSLP sold the warrants for the shell company of BioZone that was left at $.125 per share. It has nothing to do with the assets that they bought from BioZone. I believe this is a good move. There wasn't any reason to continue with an investment in BioZone since they bought the assets that they wanted from BioZone.