We got several questions about the Tonix (TNXP) filings from yesterday, which we noted were not dilutive, just administrative. We talked with one of our experienced and knowledgeable brethren about the filings, and he had this to say:
Both Post-Effective Amendments today were to register warrants under Form S-3, the first to register the warrants from the IPO, the second to register the warrants from the accredited investor and PIPE deals in the pink sheet days. The effect is that Leland won't have to do an 8K each time unregistered shares are issued pursuant to warrant exercise equal to 5% of outstanding common, because the shares will already be exercised. Most of the $4.25 warrants are held by the insiders, Technology Partners and Broadfin and at least as to the first two aren't going to be exercised soon and even if they were they could have been exercised under the Form S-1 registrations. The rest of the warrants are at $12, $20 and $25 and are not expiring anytime soon, so they are unlikely to be exercised. The only warrants that expired were the $8.00s and only Technology Partners was able to exercise when the stock price justified it because they bought later and even they were constrained by the beneficial ownership limitation. Probably just a formality, one of the many things they've done lately to dot "i"s and cross "t"s, but its remotely possible something is up.
In comparing to the original registrations the remarkable thing is how many individual accredited investors, family trusts and the like, bought into the early offerings in relatively small quantities and while some have sold some shares, most are still completely in. It looks like management and Dawson sold to a lot of friends and family and that typically is an expression of confidence on both sides.
I've been thinking about Technology Partners having gone all in in this deal and I think they have come to the 95% certainty that you did. I think they keyed into the open-label continuation enrollment. Unlikely that significant patient numbers would have agreed to participate if the side-effects were troublesome or if they didn't perceive benefit. Plus the secondary itself removed a huge amount of risk from this deal. I think it's a pretty good bet the deal was agreed to by Technology Partners and the company with or without Roth as an intermediary..
Disclosure: I am long TNXP.