If you really think about it, if the company does not need to count the issue of the December 40mill shares in the 15% annual issue without shareholders consent this may actually be a good sign that a deal is close. 15% of the original 350mill shares prior to the December issue is 52.5mill shares. As 40mill shares have already been issued this only leaves 12.5mill shares left for any deal.
If there is a deal where the funder/partner requires some initial equity up front and then say milestone payments or further equity at a set price in the future then the company only has as said 12.5mill shares to play with right now. If the 40mill shares are not counted then there still is 15% of the now 389mill shares which is 58.35mill available for a deal now. If I was big pharma or funder I would insist on well more than 12.5mill shares if I was handing over $100mill + in cash!
Personally I think any big pharma or funder would want a deal where they get equity in the company as part of the deal and prior to any funding announcement as we all anticipate once funding is announced the SP will be rerated well above the current levels and they would in effect underwrite their investment with the much higher share price.
As a back of the napkin calculation if the funder provided 100mill cash with part of the deal being a share purchase of 50million shares at say 30c ($15mill cash) and the balance ($85mill) on other commercial terms, should the share price go up by $1 due to the financing of the P3 and the terms of the deal then the funder would have subsidised their $100mill investment by $50mill due to the increase of their shares. If I was a big pharma or funder I would seek a deal with equity for sure.
If the company needs the shares for a deal I think they should have the ability to have them available for their negotiations. This is just my opinion and yes I realise it would not be good if this is solely to have another capital raise prior to any funding deal.
The thing which gives me confidence/hope is the fact that PAR are continuing with the full set up of the trials and dosing as confirmed today. I cannot see PAR starting P3 without funding in place.
DYOR
PAR Price at posting:
29.5¢ Sentiment: Buy Disclosure: Held
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