Agree, BK is in the works. Buyers will emerge. We'll see if Boston Scientific will make a play. They already have the Thermatrx from BSD Medical through their acquisition of the urology portfolio of American Medical Systems in August. May go for the MTX-180 to round out their portfolio. They don't have a microwave offering as far as I can tell.
Yes, they had $5M at their disposal, and a Chapter 7 BK would remove the warrants overhang as well as the lawsuit, so no doubt they are lying in wait. However, Angiodynamics, Boston Scientific, and Stryker may also be kicking the tires, so it would be a bit of a gamble for them since the 3 are much larger players.
yep, and the stock was trading at .28 cents when I was buying. I also recommended to brjj selling at .85 and getting back in after the deal falls through. He sold at .82. I still believe Chapter 7 BK is a better option than Galil was for the simple reason that the warrant overhang will be removed in BK. It will bring out the suitors who couldn't make a play for the company because of the severe dilution from warrants plus the exclusive agreement with Galil and the poison pill the company has in place.
I've been saying the company was in a death spiral for almost 2 years. I was mocked by Bill Barth when I tried to point that out in the charts. I even e-mailed a full assessment of the company and its competitive position to everyone on my distribution list last February. I've never been keen on the company's prospects as a business given the management team and critical need for capital, only on the technology. I had been pushing for a partnership with a major player for nearly 3 years, had a means to get there too, but management botched the opportunity. Had even developed a financial model that predicted to the day when they'd need to reverse split 1:10 and raise capital, that even with the capital raising, they'd run out of money in January 2016. Also proposed a means to Clint on how to avoid dilution but never heard back from him or the board. So I haven't just awakened. I've been there for 2 years.
Yes, please do. Everything I predicted is going according to expectations. I predicted 1:10 reverse split, company out of money in January, $1 offer for the company, failure of tender offering specifically due to inability to raise capital. Next on the agenda is Chapter 7 BK within 2 weeks. I do have a plan, but you have to e-mail me and I'll fill you in.
Nailed it. We'll see what Boston Scientific, Angiodynamics, Stryker, and the good Dr. Sennewald do in Chapter 7 BK which I expect to be filed within 2 weeks.
I believe they also need $26M in reserve to up the ante to $2 per share should they not get a majority of shares. Whether that is offered to all shareholders or just the large ones they need to win over in private transactions remains to be seen.
Correct, 8.6M but the rest of the numbers are right. Insiders and funds hold 7.42M plus the 4.09M from Maxim and 1.725M in the overallotment, which is well more than 8.6M.
No takers at what Clint wanted, but at fire sale prices typically you'll find a bidding war ensues. In real estate, this is often the tact that's taken. Even on eBay, you'll find the items that are started off priced at fair value being overtaken by the ones that start at $1. The idea is to bring out the bidders. If this company can't bring out bidders when the Pyrexar stake alone is worth $2M in a liquidation of that company, then there is something seriously wrong. But I know the product exists and works. Just watch Dr. Dupuy in action on one of the videos. Boston Scientific has a hole in their ablation lineup w.r.t. microwave plus they have the Thermatrx, a BSD developed product, so they are comfortable with the technology Perseon has to offer. And deep pockets, which is what the company desperately needs.
As near as I can tell, the downside is that the deal falls apart, the company files Chapter 7, and the shares plunge to the .20's. But a Chapter 7 may attract more suitors like Boston Scientific, who bought the Thermatrx business, a former product of BSD Medical (now Perseon), through their recent acquisition of American Medical System's male urology portfolio. It would be pocket change for them. As it stands now, they are precluded from making a bid, unless it were hostile and that would invoke a poison pill provision. So a Chapter 7 would actually be a better option than what Galil is proposing.
I'm not saying Galil will get the company, because I do believe the money will be hard to come by. To pull this off, they will need close to $20M, and then some on top of that to fund the rollout of the product. That's why the deal is contingent upon them raising $26M. $26M will be hard to come by even though they have a deep-pocketed VC behind them. VC's do not like to invest more than $5M in early stage companies and even Neuwave, with a more advanced product than Perseon, needed 38 investors to raise $25M back in June. Neuwave is a late stage pre-IPO company.
So the reality is still a Chapter 7 BK which would happen not due to whether we tender our shares or not, but because of financing of the deal. In a sense, a Chapter 7 BK may work to shareholder advantage in that it too will jettison the warrants, but it will also allow other suitors into the game, which could drive the price up. Right now, Perseon is prohibited from soliciting other offers, and if you look at how this deal came about, it was Galil approaching Perseon at a trade show in Atlanta, apparently not through their SunTrust connection. Perhaps, other potential suitors took a pass on it because of the warrant overhang.
Reading the proxy, it looks like what Galil is trying to do is remove the warrant overhang. They can do this if they get 65% of the 13.225M warrants,or 6.87M. By my estimates, Maxim has 1.725M they acquired from the overallotment option, and 4.09M from the 2.045M shares they had to eat in the firm commitment share offering. So if they tender those, Galil would only need to 2.71M to be tendered. Now insiders and funds who bought in hold 3.71M units from the offering or 7.42M warrants they will likely tender. So I think we can say, this is a done deal as far as the warrants go.
Taking a majority stake is a different matter. There were 5,750,000 offered in July, and those will not go for the $1 tender offer as they paid .90 and probably won't settle for a 10% gain. Most of the existing shareholders are probably underwater, so they may not budge as well. I think we will see a couple more rounds and maybe even some private deals to sweeten the pot, and they may well end up paying more for the additional rounds or private deals.
Here's where it gets interesting. If you tender by December 7th, you get locked in. But if they don't get a majority of the shares, and you hold out, they may come after you to sweeten the deal. If they do get the majority by then, you still get $1 for your shares. I think I'm holding out for a better deal. Especially since I bought so many shares between .27 and .32.