On February 6, 2013, the Facility Agreement dated as of March 11, 2011 between Titan Pharmaceuticals, Inc. (the “Company”) and the lender parties thereto (collectively, “Deerfield”) was amended to provide that the exercise price of the 6,000,000 warrants previously issued to Deerfield may be satisfied through a reduction in the principal amount of the Company’s outstanding indebtedness to Deerfield. A copy of the amendment agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Would someone be kind enough to explain the dollars and cents of this transaction? Should Deerfield choose to exercise their $1.25 warrants, aren't those worth more to them now due to current SP and as such why would they be willing to swap warrants for the lessor amount applied against the debt, warrants versus current share price? My brain is absolute mush today. Please pardon me if this is a dumb question. I'm sure it's a simple explanation Nowak could explain in his sleep but I'm missing something and I'd really appreciate an answer if someone's willing.
Try this (amounts are hypotheticals as I wasn't around when these warrants were issued).
Months ago, the stock price was $1.00 and the company needed money. They sold units for $.95 which consisted of one share of common stock and one warrant at an exercise price of $1.25 good until 2015. The warrant gives the buyer the right to buy a share of stock at $1.25 prior to an expiration date.
Today with the stock price at $2.18, the buyer is exercising his warrant by paying the company $1.25 and getting $2.18 of his debt eliminated.
Or something like that.
what makes you think the warrants have been exercised? All the 8k says is that in case the warrants are exercised the debt will be reduced, also the 8k mentions that this applies to partial exercise of the warrants as well
Come to think of it, you have a point. What I read only refers to the method of payment for the shares, not the actual payment for the shares. I can't be sure any warrants have been exercised, from reading this.
Nowak: Am I to infer from your last post that the post prior to that,"Uplisting!" was posted without thought? When I went to the site to read the 8-k I found a reference to an AdCom which in effect said if an AdCom was scheduled,it anticipated that it would be near the end of March.
If you care to share it now that you've given it adequate thought just how do you think the Warrant/Debt Reduction deal with Deerfield affects the status quo?