October 10, 2012

$PVCT.OB: A Collection Of Thoughts & Non-Thoughts

Thought: PVCTP "IPO" pricing has not yet been established.

Non-Thought: Maxim Rep #6 said (paraphrasing) his earlier comments on the call regarding an "at market conversion ratio" as a definitive deal term was hypothetical and he did not know what the conversion ratio was or would be until it was told to him. I said (paraphrasing) I appreciated these latter comments. He must be new to the financial services industry and the Maxim retail desk.

Non-Thought: This same rep said (paraphrasing) Peter told him the conversion ratio was "at market." When pushed on the veracity of such a claim, he said (paraphrasing) Peter implied it to him. When asked for an e-mail of this be sent to me, none arrived. When he offered to set-up a call first this in the morning with the capital markets/investment banker point person on the deal and I said (paraphrasing) "Please do," no call thus far has materialized.

Non-Thought: According to Maxim, the PVCTP "IPO" appears to have been pushed off to the week of October 15.

 Maxim Rep #4 empathized with me as a common stock shareholder by saying (paraphrasing) he too felt saddened or aggrieved that "others" were suggesting selling the common stock to buy the preferred stock. An important aspect of customer service indeed is to empathize with a prospective client.

Thought: According to several sources, Maxim has secured the necessary 300+ prospective "IPO" buyers for the security to be listed on the NASDAQ. This item is important because, aside from establishing the appropriate deal terms for the PVCTP vehicle, the confirmation enables Peter to know whether Provectus can indeed use this financing approach if the board and management chooses to do so.

Thought: You will recall management has not raised money through common stock or warrant issuances below $1.12 for some time (I should get around to listing such information in a subsequent post in a few days). Raising money at or above this level for philosophical (they have drawn their own line in the sand on this issue) and mechanical (there are several warrant reset provisions for fundraising common stock share prices below $1.12 and other price levels) reasons is important to them. Thus, doing an "at market" conversion ratio, or a ratio utilizing a common share price below $1.12 and/or issuing warrants with exercise prices (when the exercise price of a warrant on a share of PVCTP is translated into a common stock exercise price) below $1.12 would be contrary to management's current position on fund raising, go against recent historical actions and have a significant impact on the overal capital structure of the company.

Thought: In the month of September, Knight Capital (NITE) appears to have been responsible for less than 25% of traded shares. If, as has been speculated on PVCT stock chat rooms and elsewhere, Dr. Adams' shares are transacted through NITE, more than 75% of selling (and buying) was by folks and entities other than Dr. Adams. I am not focusing on the amount of shares, since there is thoughtful commentary that volume statistics for over-the-counter stocks are much higher than commonly reported (perhaps by as much as half), but rather the relative proportion of transactions.

Thought: I previously expressed my thoughts about the "IPO" to management. In communicating my view on its pros and cons, Peter clearly indicated to me he would take a thoughtful approach to a PVCTP "IPO" (if the company were to use it). I take him at his word until and unless his word, in my view, is not worth taking any more.

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