May 16, 2016 11:54am
Good news is BSTG is not running on fumes anymore … but, the offering strucure is an issue!
BSTG entered into definitive agreements for gross proceeds of approximately $5 M in an at-the-market registered direct offering.
BSTG will issue approximately 2.8 M registered shares of common stock at a purchase price of $1.7625 per share. Concurrently in a private placement, for each share of common stock purchased, investors will receive an unregistered warrant to purchase one-half of a share of common stock.
The warrants have an exercise price of $1.7625 per share, will be exercisable six months from the date of issuance, and will expire five years from the initial exercise date.
The closing of the offering is expected to take place on or about May 19, 2016, subject to the satisfaction of customary closing conditions.
Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC, acted as the exclusive placement agent in connection with this offering.
The Bottom Line: BSTG did what they had to … bypassing shareholder approval.
One issue is another downward share pricing spiral after the previous offering done on 12/29/14 which was priced at $1.75 for 695,857 shares attached with a series B Convertible Preferred stock price of $8.75 per share - as any remaining oxygen gets sucked out of the share price.
The shares of common stock described (but not the warrants or the shares of common stock underlying the warrants) are being offered pursuant to a shelf registration statement.
The factual issue in the structure … the warrants and the shares of common stock underlying the warrants to be issued <in the offering> have … NOT been registered under the Securities Act of 1933. Accordingly, the warrants and underlying shares of common stock underlying the warrants may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.
The offering has left the barn - cutting a few corners … a clean deal?
BSTG closed Friday DOWN -$0.20 at $1.71 and is DOWN -$0.11 or -6.43% to $1.60 in in Monday’s morning trade with 506.2 K shares traded which is almost 2.55X <times> its average daily volume of 198 K