TapImmune Inc. (OTCMKTS:TPIV) is Growing Again
TapImmune Inc. (OTCMKTS:TPIV) had a positive session yesterday. It logged a dollar volume of about $190 thousand and after surging up nearly 30%, it closed the day with a price of $0.45 per share. Not bad, right?
Tell that to the people who were jumping in at the end of June when the ticker logged its 52-week high of over $1.70 per share. They’re not that impressed with yesterday’s bounce. They are more interested in getting an explanation for the horrifying crash that preceded it. We’ll now try to make things a bit clearer for them.
The press releases aren’t too exciting. It’s not that they are missing. It’s the fact that they talk about upcoming investor conferences and not about results from clinical trials. TPIV is still a pre-revenue company and investors aren’t really keen on it retaining this status for long.
This, in turn, leads us to another issue. TPIV set off some time ago with the idea of creating drugs that help in the battle against cancer. This involves quite a lot of time of developing, testing, and then developing again, and unfortunately, penny stock investors aren’t renowned for their patience. Hype from rogue press releases about clinical trials tends to dissipate quite quickly which, as the people who jumped in on TPIV a couple of months ago know all too well, makes biotech tickers quite unpredictable.
On the bright side, we must note that unlike some of its biotech counterparts, TPIV does have some money in the bank. Here, for example, is a summary of the figures recorded at the end of Q2:
- cash: $3.1 million
- current assets: $3.2 million
- current liabilities: $13 million
- loss from operations: $1.1 million
The liabilities seem a bit intimidating at first, but once you take a closer look, you’ll see that most of them actually consist of derivative liabilities related to some warrants (more about them in a minute). The actual debt is not that much and none of it is convertible which is definitely a good sign. All in all, TPIV managed to improve the balance sheet during the first half of 2015, but unfortunately, the way they did it might present a few worries.
The management team raised about $2.3 million through a private placement during which they sold 12.3 million investment units at $0.20 a piece. Each unit consisted of one common share and several warrants which means that on its own, the placement caused a fairly significant amount of dilution.
Nevertheless, a lot of people reckoned that they can live with it. At least the exercise prices of the millions of warrants were, in the grand scheme of things, quite high and they didn’t suggest that the warrant holders are going to be in a hurry to exercise them. At the end of May, however, the terms of the warrants were changed and they became immediately exercisable at prices ranging from $0.10 to $0.50.
The warrant holders didn’t need a second invitation. Before the end of Q2, they exercised 5 million warrants at $0.50 and in July and August, they turned a further 7.89 million warrants into shares at $0.20 apiece.
Does this mean that the crash we’ve witnessed over the last few months will be repeated again in the future? Not necessarily. If TPIV manage to get through with their clinical trials and if the products prove successful, the ticker will most likely fly sky high. The possibility of a large number of discounted shares hitting the open market, however, should never be taken lightly.
