Ann: Trading Halt, page-111

Hi All,

Second time lucky—just as I was about to post my initial thoughts, HC crashed, erasing all my time and effort. So, a big thank you to the HC platform for that!

Like many of you, I was quite surprised by today’s CR announcement, as it was entirely unexpected. Just last week, David mentioned that "we have been in discussions with multiple companies regarding a partnership over the past six months, and those discussions have ramped up dramatically as we got closer to the release of the 201 study results."

To me, this suggests one of two possibilities:

1. We received lowball offers.
2. We did not receive any offers at all.

Regardless, it seems that the company has decided to move forward independently. What does this mean for us as shareholders?

Firstly, raising $40M at $0.011 translates to a dilution of approximately 3.6 billion shares. Like everyone else, I dislike share dilution. However, in our case, it could mean a significantly larger share of potential future success. I would be more concerned if the company had accepted an unfavorable partnership or, worse, sold itself for a fraction of its true value rather than making the bold decision to go it alone.

I am not privy to the internal discussions, but based on the circumstances, I believe a share consolidation will follow soon. While David has previously stated that the board was undecided on this matter, the additional 3.6 billion shares on the register will likely force their hand. That being said, I’m not overly concerned, provided that we don’t find ourselves in a position where additional capital raises are required down the track.

The worst-case scenario is that we submit for FDA approval, wait 8–10 months, and then learn that the FDA requires a Phase 3 trial, setting us back another 12–24 months.

The best-case scenario is that our clinical endpoint, along with the other compiled data, is sufficient for the FDA, allowing us to proceed with commercialization while conducting a Phase 3 trial in parallel. If this happens, all concerns will be forgotten, and our patience and loyalty will be well rewarded.

It is crucial to remember the significance of our 201 study results—they were excellent. That study was the biggest hurdle we’ve faced so far, and we successfully cleared it. Dr. Claassen and other MSA clinicians, who dedicate their careers to this disease, stand by these results. Had they been poor, our investment would be in jeopardy.

I remain confident that we will secure FDA approval on our first attempt, and I believe Dr. Stamler and his team share this sentiment. We currently have the only proven, safe drug capable of significantly slowing this disease, which will carry substantial weight in the FDA’s assessment.

This CR announcement has certainly raised more questions than answers, and like all of you, I will be looking to management for clarity on their decision. For now, Stamler still has my vote of confidence, and I will reserve full judgment until I hear his explanation.

We also cannot rule out the possibility of a partnership materializing between now and FDA approval. As additional data is released in the coming months, it may attract an organization willing to join our journey under more favorable terms.

Ultimately, we won’t have a clear picture until we hear from management, hopefully in the near term. However, all is not lost, and there is still much to be optimistic about. If we secure FDA approval independently, we will be in a strong position, and any future bids will be significantly higher than what we would receive today. As the saying goes, "Every cloud has a silver lining"—let’s hope that holds true in our case.

As always, this is just my personal opinion, and I could be entirely off the mark. Time will tell whether I am vindicated or proven wrong.

Best regards,
Stockman