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Message: from CH Bird at Seque /comment on amount of PLRS shares outstanding and more
Comment on the Amount of Pluristem Shares Outstanding
We have fielded numerous questions about the number of shares
outstanding for Pluristem. I don't have the number for what is in
the float. If you look their last quarterly filing, you will see the
issued and outstanding shares are: 275,804,451. Following the
private placement, the number is around 1 billion.
We have received calls as to what our feeling this has with respect
to what that means to other investors. Most important in recent
days, we had a lot of shorting activity and an obvious desire to sell
shares on the part of some. It is important to remember when looking
at the number of total shares outstanding that while there are many
shares out there, the positions that most of the shareholders have
taken are by their very nature, long positions. I can say that
because the recent private placement put so many restrictions on
selling those shares that we can say with confidence, this is not the
issue. If insiders are trading, they must file with the SEC to
notify the public they are doing so.
The company needed to raise money to bring their product to market.
The problem with raising money is that is always dilutes the
investment of other shareholders. To mitigate the effects of
dilution, companies often include anti-dilution measures,
restrictions on the stock offered, and finally trickle out
provisions.
Why is that important? Because most who have invested in Pluristem
believe that, the company's fundamentals are good and their
management team has what it takes to bring their product through
trials and to market. All of which contains as a core assumption
that the PLX-I will both be determined safe and efficacious. The
private placement shareholders implicitly believe this and we believe
that most people that read this post believe this as well.
Let me explain what restrictions are on the shares in the private
placement. First all the shares purchased in the private placement
are restricted 144 shares. They cannot be sold in the first year.
Please read Quote 1 below where you can see this spelled out. The
closing date was May 24, 2007. Therefore, a large piece of the
shares in the total are being held long, by the nature of what was
purchased.
There is one exemption to the May 24 date for an investor who paid in
his money in January. (See Quote 2) You will see that this
particular investor is subject to similar trickle out provisions, as
the other investors will be when his year elapses.
There are reporting requirements that have to do with the sale of the
shares with regard to the private placement. That is to say, private
placement investors can not "sneak the shares out". (See Quote 3)
Last, there are "trickle out" restrictions on the private placement
shares. From Quote 4, "each Subscriber agrees that it and its
Affiliates will not transfer such number of Restricted Instruments in
the first, second and third twelve month period in excess of the
number which could result in gross proceeds to such Subscriber and
its Affiliates in excess of 125%, 150% and 200% respectively of the
amount of Purchase Price paid by the Subscriber for the Shares ("
Restricted Value ")." This means that they cannot sell their shares
beyond 125% of the purchase price that they bought into in the
private placement in the first year. That number goes to 150% the
next year, and so on.
Quote 1: "Compliance with 1933 Act . The Subscriber understands and
agrees that
the Securities have not been registered under the 1933 Act or any
applicable state securities laws, by reason of their issuance in a
transaction that does not require registration under the 1933 Act
(based in part on the accuracy of the representations and warranties
of Subscriber contained herein), and that such Securities must be
held indefinitely unless a subsequent disposition is registered under
the 1933 Act and any applicable state securities laws or is exempt
from such registration. Each Subscriber acknowledges that the holding
period of the Shares and Warrants for purposes of Rule 144 under the
1933 Act shall commence on the Closing Date notwithstanding the date
of delivery of Purchase Price by the Subscriber to the Company except
as set forth on
Schedule 12." (pg. 41/68, PLRS 8K, dated May 24, 2007)
Quote 2: "The holding period of 30,500,000 common stock purchase
warrants (" Honig Warrants ") issued to Barry Honig (" Honig ") as of
January 26 ___, 2007, for purposes of Rule 144 under the 1933 Act
shall be deemed to have commenced as of January 26 ___, 2007 and in
connection with the investment in shares of Common Stock purchased
pursuant to this Subscription Agreement, payment for which was made
to the Company on January 26, 2007. The Honig Warrants constitute a
component of Honig's Restricted Instruments. Honig agrees by his
signature to the Subscription Agreement, for himself and all other
holders of Honig's Restricted Instruments that during the Trickle Out
Period, Honig and Honig's Affiliates will not sell on any Trading Day
an amount of shares of Common Stock in excess of ten percent (10%) of
the trading volume as reported by Bloomberg LP for the Principal
Market for such Trading Day. The Restricted Value applicable to Honig
in connection with the Restricted Instruments shall be $1,250,000."
(pg. 65/68, PLRS 8K, dated May 24, 2007)
Quote 3: "(d) Reporting Requirements . From the date of this
Agreement and until the
sooner of (i) five (5) years after the Closing Date, or (ii) until
all the Shares and Warrant Shares have been resold or transferred by
all the Subscribers or (iii) the date the Subscribers are eligible to
sell their Shares issued on Closing pursuant to Rule 144, without
regard to volume limitations (the " Outstanding Period "), the
Company will (v) cause the Common Stock to continue to be registered
under Section 12(b) or 12(g) of the
1934 Act, (x) comply in all material respects with its reporting and
filing obligations under the 1934 Act, (y) comply , in all material
respects, with all reporting requirements that are applicable to an
issuer with a class of shares registered pursuant to Section 12(b) or
12(g) of the 1934 Act, as applicable, and (z) comply with all
requirements related to any registration statement filed pursuant to
this Agreement. The Company will use its best efforts not to take any
action or file any document (whether or not permitted by the 1933 Act
or the 1934 Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing
obligations under said acts until the end of the Outstanding Period.
During the Outstanding Period, the Company will use its best efforts
to continue the listing or quotation of the Common Stock on the
Principal Market or other market with the reasonable consent of
Subscribers holding a majority of each of the Shares, Warrants and
Warrant Shares, and will comply in all material respects with the
Company's reporting, filing and other obligations under the bylaws or
rules of the Principal Market. The Company agrees to timely file a
Form D with respect to the Securities if required under Regulation D
and to provide a copy thereof to each Subscriber promptly after such
filing." (p. 48-9/68, PLRS 8K, dated May 24, 2007)
Quote 4: "12. Trickle Out . Except as set forth on Schedule 12
hereto, each Subscriber agrees for
itself and each of its Affiliates, that it and its Affiliates will
not sell or transfer any Shares and Warrant Shares (collectively, "
Restricted Instruments ") until the first anniversary of the Closing
Date. During the forty-eight (48) month period immediately following
the Closing Date (" Trickle Out Period "), each Subscriber agrees
that it and its Affiliates will not transfer such number of
Restricted Instruments in the first, second and third twelve month
period in excess of the number which could result in gross proceeds
to such Subscriber and its Affiliates in excess of 125%, 150% and
200% respectively of the amount of Purchase Price paid by the
Subscriber for the Shares (" Restricted Value "). There are no sales
restrictions imposed on Subscriber pursuant to this Section 12 after
the fourth anniversary of the Closing Date. Notwithstanding the
foregoing restrictions on transfer, the Subscriber may, at any time
and from time to time, transfer the Restricted
Instruments (i) as bona fide gifts or transfers by will or intestacy,
(ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the Holder, provided that any
such transfer shall not involve a disposition for value, (iii) to a
partnership which is the general partner of a partnership of which
the Holder is a general partner and (iv) to an Affiliate of the
Subscriber, provided, that, in the case of any such gift or transfer,
each donee or transferee agrees in writing to be bound by the terms
and conditions contained in this Section 12 in the same manner as
such terms and conditions apply to the Subscriber. For purposes
hereof, "immediate family" means any relationship by blood, marriage
or adoption, not more remote than first cousin. The Company may
request certification from the Subscriber and its Affiliates that
Subscriber and its ffiliates
have complied with the provisions of this Section 12. Each Subscriber
and its Affiliates, transferees and assigns will be deemed a single
entity when determining the Restricted Value applicable to such
Subscriber, and its Affiliates, transferees and assigns. The Company
may not release any Subscriber from the restrictions in this Section
12 unless it releases all Subscribers from these restrictions on a
pari passu basis based on the initial
amount of Shares purchased hereunder by all Subscribers. The Company
may not modify or waive the restrictions set forth on Schedule 12
without the consent of 75% of the Subscribers who hold Shares,
Warrants, or Warrant Shares at the effective time of such
modification or waiver." (pg 58/68 PLRS 8K, dated May 24, 2007)
Charlie
<
We have fielded numerous questions about the number of shares
outstanding for Pluristem. I don't have the number for what is in
the float. If you look their last quarterly filing, you will see the
issued and outstanding shares are: 275,804,451. Following the
private placement, the number is around 1 billion.
We have received calls as to what our feeling this has with respect
to what that means to other investors. Most important in recent
days, we had a lot of shorting activity and an obvious desire to sell
shares on the part of some. It is important to remember when looking
at the number of total shares outstanding that while there are many
shares out there, the positions that most of the shareholders have
taken are by their very nature, long positions. I can say that
because the recent private placement put so many restrictions on
selling those shares that we can say with confidence, this is not the
issue. If insiders are trading, they must file with the SEC to
notify the public they are doing so.
The company needed to raise money to bring their product to market.
The problem with raising money is that is always dilutes the
investment of other shareholders. To mitigate the effects of
dilution, companies often include anti-dilution measures,
restrictions on the stock offered, and finally trickle out
provisions.
Why is that important? Because most who have invested in Pluristem
believe that, the company's fundamentals are good and their
management team has what it takes to bring their product through
trials and to market. All of which contains as a core assumption
that the PLX-I will both be determined safe and efficacious. The
private placement shareholders implicitly believe this and we believe
that most people that read this post believe this as well.
Let me explain what restrictions are on the shares in the private
placement. First all the shares purchased in the private placement
are restricted 144 shares. They cannot be sold in the first year.
Please read Quote 1 below where you can see this spelled out. The
closing date was May 24, 2007. Therefore, a large piece of the
shares in the total are being held long, by the nature of what was
purchased.
There is one exemption to the May 24 date for an investor who paid in
his money in January. (See Quote 2) You will see that this
particular investor is subject to similar trickle out provisions, as
the other investors will be when his year elapses.
There are reporting requirements that have to do with the sale of the
shares with regard to the private placement. That is to say, private
placement investors can not "sneak the shares out". (See Quote 3)
Last, there are "trickle out" restrictions on the private placement
shares. From Quote 4, "each Subscriber agrees that it and its
Affiliates will not transfer such number of Restricted Instruments in
the first, second and third twelve month period in excess of the
number which could result in gross proceeds to such Subscriber and
its Affiliates in excess of 125%, 150% and 200% respectively of the
amount of Purchase Price paid by the Subscriber for the Shares ("
Restricted Value ")." This means that they cannot sell their shares
beyond 125% of the purchase price that they bought into in the
private placement in the first year. That number goes to 150% the
next year, and so on.
Quote 1: "Compliance with 1933 Act . The Subscriber understands and
agrees that
the Securities have not been registered under the 1933 Act or any
applicable state securities laws, by reason of their issuance in a
transaction that does not require registration under the 1933 Act
(based in part on the accuracy of the representations and warranties
of Subscriber contained herein), and that such Securities must be
held indefinitely unless a subsequent disposition is registered under
the 1933 Act and any applicable state securities laws or is exempt
from such registration. Each Subscriber acknowledges that the holding
period of the Shares and Warrants for purposes of Rule 144 under the
1933 Act shall commence on the Closing Date notwithstanding the date
of delivery of Purchase Price by the Subscriber to the Company except
as set forth on
Schedule 12." (pg. 41/68, PLRS 8K, dated May 24, 2007)
Quote 2: "The holding period of 30,500,000 common stock purchase
warrants (" Honig Warrants ") issued to Barry Honig (" Honig ") as of
January 26 ___, 2007, for purposes of Rule 144 under the 1933 Act
shall be deemed to have commenced as of January 26 ___, 2007 and in
connection with the investment in shares of Common Stock purchased
pursuant to this Subscription Agreement, payment for which was made
to the Company on January 26, 2007. The Honig Warrants constitute a
component of Honig's Restricted Instruments. Honig agrees by his
signature to the Subscription Agreement, for himself and all other
holders of Honig's Restricted Instruments that during the Trickle Out
Period, Honig and Honig's Affiliates will not sell on any Trading Day
an amount of shares of Common Stock in excess of ten percent (10%) of
the trading volume as reported by Bloomberg LP for the Principal
Market for such Trading Day. The Restricted Value applicable to Honig
in connection with the Restricted Instruments shall be $1,250,000."
(pg. 65/68, PLRS 8K, dated May 24, 2007)
Quote 3: "(d) Reporting Requirements . From the date of this
Agreement and until the
sooner of (i) five (5) years after the Closing Date, or (ii) until
all the Shares and Warrant Shares have been resold or transferred by
all the Subscribers or (iii) the date the Subscribers are eligible to
sell their Shares issued on Closing pursuant to Rule 144, without
regard to volume limitations (the " Outstanding Period "), the
Company will (v) cause the Common Stock to continue to be registered
under Section 12(b) or 12(g) of the
1934 Act, (x) comply in all material respects with its reporting and
filing obligations under the 1934 Act, (y) comply , in all material
respects, with all reporting requirements that are applicable to an
issuer with a class of shares registered pursuant to Section 12(b) or
12(g) of the 1934 Act, as applicable, and (z) comply with all
requirements related to any registration statement filed pursuant to
this Agreement. The Company will use its best efforts not to take any
action or file any document (whether or not permitted by the 1933 Act
or the 1934 Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing
obligations under said acts until the end of the Outstanding Period.
During the Outstanding Period, the Company will use its best efforts
to continue the listing or quotation of the Common Stock on the
Principal Market or other market with the reasonable consent of
Subscribers holding a majority of each of the Shares, Warrants and
Warrant Shares, and will comply in all material respects with the
Company's reporting, filing and other obligations under the bylaws or
rules of the Principal Market. The Company agrees to timely file a
Form D with respect to the Securities if required under Regulation D
and to provide a copy thereof to each Subscriber promptly after such
filing." (p. 48-9/68, PLRS 8K, dated May 24, 2007)
Quote 4: "12. Trickle Out . Except as set forth on Schedule 12
hereto, each Subscriber agrees for
itself and each of its Affiliates, that it and its Affiliates will
not sell or transfer any Shares and Warrant Shares (collectively, "
Restricted Instruments ") until the first anniversary of the Closing
Date. During the forty-eight (48) month period immediately following
the Closing Date (" Trickle Out Period "), each Subscriber agrees
that it and its Affiliates will not transfer such number of
Restricted Instruments in the first, second and third twelve month
period in excess of the number which could result in gross proceeds
to such Subscriber and its Affiliates in excess of 125%, 150% and
200% respectively of the amount of Purchase Price paid by the
Subscriber for the Shares (" Restricted Value "). There are no sales
restrictions imposed on Subscriber pursuant to this Section 12 after
the fourth anniversary of the Closing Date. Notwithstanding the
foregoing restrictions on transfer, the Subscriber may, at any time
and from time to time, transfer the Restricted
Instruments (i) as bona fide gifts or transfers by will or intestacy,
(ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the Holder, provided that any
such transfer shall not involve a disposition for value, (iii) to a
partnership which is the general partner of a partnership of which
the Holder is a general partner and (iv) to an Affiliate of the
Subscriber, provided, that, in the case of any such gift or transfer,
each donee or transferee agrees in writing to be bound by the terms
and conditions contained in this Section 12 in the same manner as
such terms and conditions apply to the Subscriber. For purposes
hereof, "immediate family" means any relationship by blood, marriage
or adoption, not more remote than first cousin. The Company may
request certification from the Subscriber and its Affiliates that
Subscriber and its ffiliates
have complied with the provisions of this Section 12. Each Subscriber
and its Affiliates, transferees and assigns will be deemed a single
entity when determining the Restricted Value applicable to such
Subscriber, and its Affiliates, transferees and assigns. The Company
may not release any Subscriber from the restrictions in this Section
12 unless it releases all Subscribers from these restrictions on a
pari passu basis based on the initial
amount of Shares purchased hereunder by all Subscribers. The Company
may not modify or waive the restrictions set forth on Schedule 12
without the consent of 75% of the Subscribers who hold Shares,
Warrants, or Warrant Shares at the effective time of such
modification or waiver." (pg 58/68 PLRS 8K, dated May 24, 2007)
Charlie
<
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