If they drop below $1.00 for 30 days, they get a 180 day warning, plus an added 180 days just like we saw a few weeks ago, holding $1 isn't important now.
Well either it is dilution for shareholders or bankruptcy for shareholders, so it is the lesser of two evils. Some dilution (820,313 shares) won't happen without the price being high enough; $5.63, for warrants to be exercised. So give CBMX $4.6M and exercise those shares if price is at $6.00, doesn't bother me. CBMX has the right to redeem the Series F preferred stock for a cash payment equal to 120% of the stated value of the Series F preferred stock.
The CEO cancelled his trading plan, so he can start buying shares on the open market in July.
They should have tried to sell the company, yes. Jan 1st 2016, 845,374 shares of common stock issued and outstanding. Assuming exercise in full of all options, warrants and convertible securities outstanding as of December 31, 2015 (not taking into account any price-based or anti-dilution adjustments related to the Series E convertible preferred stock), approximately 1.7 million shares of our common stock would be outstanding (I'm not sure how much cash they would add from those outstanding warrants and at what price they are exercisable, have to look more at 10Q).
Add to that the present convertibles, 1,640,625, which could be bought back. That is 3.34M shares and then the warrants 820,313 which convert at $5.63... They got consent - re: we must obtain the affirmative consent of holders of at least 67% of each series of such outstanding warrants...
So, obviously dilution, but they get much needed cash to run operations. We get diluted and we get financial security. Right now the market cap is $4.5M or so. If the CEO is right and they can squeeze out $1M -$2M per year per sales rep, then you're looking at $17M revenue, the cash situation would be over $10M, so 1x revenue + cash = $27M = $6.75 PPS with about 4M shares.
There can be no more capital raising here, unless the stock is at a place of stability and health, as opposed to raising on weakness. They need to manage their money well, losing $1.5M per Q is not going to cut it. Only managing to eke out 200,000K increases in revenue per Q is not going to cut it either. Get the net loss to $1M or less (or break even) and get revenues up to $500K - 1M per Q, not this 250K per Q slow climb.
CEO said $1-$2M sales per rep, they have 17 or 18 reps, If he is right and they can bring in $25.5M per year, soon, then we won't have to worry about share price, it will be much higher.
This was valued at $4.6M market cap, yet they are raising more capital than it is being valued, that does tell you something, someone likes the ROI here if they are willing to provide more cash than the company is given worth.
They also had to get consent from 67% of the warrant holders for the raise. The owners of the Series Es were amenable to taking a payment to counter the dilutory effect of their convertibles.
8400 series F shares that convert to 1,640,625 shares, which is like an offering of 1.6M shares at $5.12, but the shares aren't added to the float right now, they have to be converted, and Combi can buy them back at a later point if they want. There are also 820,313 shares in warrants at $5.63, so they can't do that until the PPS is over $5.63, so they aren't part of the float now either.
Basically, this should get their cash pile to over $10M now and at a $1.5M per Q burn rate, it should last close to two years of operations. If they start pushing QoQ revenue by $500K-$1M and they reduce cash burn by 50K - 100K per Q, then they should be able to reach cash flow + with this infusion of capital.
The shares aren't added to the tradeable float of shares. They are still considered when you're talking about fully diluted in the case of valuing for a buyout. Outstanding shares/ Tradeable Float
They only put out a registration statement, both in December and now, the S-1 from December was amended of Friday S-1/A due to the reverse split.