According to the Company’s 8-K filed on June 23, 2015, Great Basin Scientific amended and restated the terms governing the Series C Warrants and Series E Convertible Preferred Stock issued by the Company. We believe that holders of these warrants and convertible preferred stocks will be able to accelerate their conversion rights.
Great Basin Scientific Amends Financing Terms for Quicker Cash-Based Exercise
The terms of the prospectus have been amended so that the company’s Series C Warrants and Series E Preferred Stock, formerly packaged together as a unit until August 25, 2015, may now be separated and exercised prior to that date. The terms dictate that this is only possible if it is done on a cash basis, with no cashless exercise option available. However, due to the warrants being in the money, we don’t believe this is going to prevent anyone from exercising and may actually speed up Great Basin’s dilution while generating cash for the company.
Based on our calculation, if all the Series C Warrants and Series E Convertible Preferred Stock are exercised and converted, there will be 32.7 million new shares for the company, which will result in a massive dilution for the existing shareholders. For a full summary of the GBSN story, investors can reference our April 8th article, “Is Great Basin Scientific Just Another Pump and Dump?”
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