$PVCT.OB Files A Preferred Share Prospectus

Here is my follow-up to my post on today's prospectus filing.

Management filed a preliminary prospectus supplement for the issuance of:

• Series A 8% convertible preferred stock, and
• Series D Warrants to purchase Series A 8% convertible preferred stock.

Note the above preferred stock is different -- it has a different CUSIP number; that is, it is a different security -- than the convertible preferred stock, which had its own CUSIP number and warrants to purchase common stock, Provectus issued in March 2010.

The filing had blanks for numbers of shares and warrants, warrant exercise price, etc. Basically, the filing was a placeholder. This filing, the specifics such as they are, and the process behind it are a big deal [to me]:

• As I mentioned earlier today, this new preferred stock security will list on the NASDAQ CM (Capital Market) under the symbol PVCTP.
• Note, again, that the other preferred stock security is not related to the new preferred stock security and, thus, will not list.
• PVCTP also is ready to list, if and when the company issues it to fund raise; that is, there is no waiting period. Like an IPO, when the security is issued for money, the "paper" goes live.
• The new preferred stock will be priced above at least $4 per share, and the associated warrants to buy PVCTP will have an exercise price of at least $4. The $4 level is the minimum requirement of NASDAQ to list any new security (e.g., like an IPO).
• Final PVCTP pricing likely would be influenced by the price of the common stock at the time the issuance is finalized or "goes public." If the common stock is below $4 per share, PVCTP would be sold for no less than $4 per share. If the common is higher or much higher than $4 per share, PVCTP could or would be priced above $4.
• The bookrunner or underwriter is Maxim Group (again, note the different language of prospectus supplements and placement agents, versus underwriters and this issuance).
• By approving Provectus to list this new preferred stock security, the NASDAQ undertook a due diligence process that included vetting the security, management, the board of directors and the company.
• While the new preferred stock certainly could be issued to life sciences investors, name or otherwise, I think it is clear the security is targeted at and destined for a Big Pharma company as part of the strategic investment strategy Provectus noted in its second quarter 10Q filing. If I had to, er, guess, the Big Pharma company is Pfizer.

With the mechanics already in place for a minority equity investment from a corporate like Pfizer or J&J or other Big Pharma company, now the focus turns to closing such an investment.

I Saw Mommy Kissing Santa Claus

As a child, did you ever have a not-so-special, frustrating feeling around Christmas time: with presents laid around the Christmas tree with care, you tried your darndest to figure out what exactly was inside those colorfully-wrapped gift boxes, but could not?

You thought you had a pretty good idea. After all, you were nice the entire year. And so you wrote Santa asking for an SPA, a NASDAQ listing, a Pfizer equity investment, a dermatology deal, a mini-oncology deal or two, a double-digit share price, and on and on.

Does it feel like Christmas is coming early? Let's hope so. Eggnog anyone?

The Tip Of The Iceberg

As the dog days of summer get doggier, and we wait for the SPA to be received, much, much more Moffitt data to arrive, a dermatology and/or mini-oncology deal(s) to materialize, and other events to occur, it might be constructive and cooling to think about Pfizer...

If the addition of Dr. Craig Eagle to Provectus' corporate advisory board is the tip of the iceberg, what's below the waterline?

Below-the-waterline items not in chronological order.

What's Going On? In Actuality, Not Much, For Now.

Today's share price drop spooked some shareholders, while continuing to frustrate others.

An intraday low of $0.67 on much heavier than [recent] normal volume (337K v. 70K) suggests either indiscriminate (i.e., a shareholder raising cash for whatever reason) or determined (i.e., one's thesis or reason for buying no longer is there, therefore one sells) selling.

Management thinks Provectus is at an inflection point. It thinks the company has been at this inflection point for some time (i.e., refer to Provectus' corporate presentations since last year). The data and value support "external validation" and, therefore, a meaningful event. The tipping point, then, is when such value actually is recognized, and should occur after the receipt of the SPA, which paves a clear path towards the approval of PV-10 for local (loco-regional) use, and the release of more Moffitt work, which clearly substantiates PV-10's systemic use. PV-10's multi-indication viability goes without saying

Provectus is a broken stock, saddled by having to trade over-the-counter and legacy decisions regarding cash bonuses. An independent board now oversees compensation decision-making.


A familiar mantra remains: The value proposition of the business has never been stronger. The value proposition of the stock in the near-term remains dangerously weak.

With no strong buying interest (thus, a weak bid), indiscriminate or determined selling can easily push the share price lower. With no new news as yet, the fear of a cascade affect on selling remains: Some shareholders sell. The price drops. More shareholders sell. The price drops even further. And so on.


Has anything changed in one day? Five days? One month? Three months? Six months? Year-to-date? Click on this Google Finance chart of PVCT. The share price's period loss ranges from -8% to -13%. Ironically, for the share price, nothing really has changed, save more of the same: stagnation, or more accurately, a painfully slow drift downwards.


For the business, the value proposition has increased dramatically. The SPA is in the bag; however, I cannot foresee when it is received, and can only rely on management's Q3 guidance. More Moffitt data should be very highly anticipated, and put a final nail into the coffin of criticism of or skepticism about PV-10 not being a systemic agent.


So how does the stock become unbroken? A move to the Nasdaq reforms and refreshes the stock, but certain events must be triggered.


Some kind of transaction or related event is in the offing. I cannot divine the timing. What kind of transaction?

• A mini-oncology deal (a geography-specific, indication-specific license transaction). Perhaps two such deals.

• An equity transaction by Big Pharma.

A dermatology deal will occur when prospective partners get full comfortable with the data. There, PH-10 data will drive the time frame and the value (as PV-10 data has for oncology).

My investment thesis remains sound. My analysis, which is constant and continuous, remains positive. The stock price performance, while dismal, remains a non-factor for now.

I Can Feel It Coming In The Air Tonight

I can feel it coming in the air tonight, oh Lord 

Well I've been waiting for this moment for all my life, oh Lord 

I can feel it in the air tonight, oh Lord, oh lord 

Well I've been waiting for this moment for all my life, oh Lord 

I can feel it coming in the air tonight, oh Lord 

And I've been waiting for this moment for all my life, oh Lord 

I can feel it in the air tonight, oh lord, oh lord, oh lord 

Well I've been waiting for this moment for all my life, oh lord, oh lord

I'm on a cross-country road trip with the family. We've turned the bend toward home. A few more days remain before we're sleeping comfortably in our own beds. Recently, we stopped over in Jasper, Indiana visiting close friends and their children.

There was a moment, one afternoon, when: Cows and other animals we encountered looked or appeared to look nervous. Lightning bugs, apparently so prevalent in the evening over your lawn and around your property that the night sky teeming with stars seemed to surround you, were scarce. Thunder in a clear but otherwise noticeably different sky rumbled across the horizon. Intermittent flashes of lightning were visible out of the corner of your eye.

There was a distinct, at times almost unreal (surreal?), quiet over the countryside. Storm clouds gathered. Something was coming. You knew it. You sensed it. You felt it.

It got darker. "I can feel it coming in the air tonight, oh Lord."


And then, after a some time elapsed, without warning, other than what had been building above and around us, rain ferociously hammered the ground. Petrichor, that familiar scent of rain on dry earth, filled our nostrils.


We felt the wind gush over us and heard its howl as it blistered the area, buffeting the house and threatening to displace anything not nailed down. 

Really?

The consensus view, based on discussions with certain Big Pharma executives, biotechnology-focused investment bankers and experienced life sciences investors (who, it seems, all think very similarly), is once Provectus "arrives" (i.e., the tipping point) everyone will want them, and will want them at the same time. The crux of the matter is the need for drugs like PV-10 and PH-10 is very intense for Big Pharma.


When the tipping point occurs, it will appear to have happened very swiftly and ferociously. But, for now, we wait. Something wicked[ly profitable] this way comes?

I can feel it coming in the air tonight, oh Lord 

Well I've been waiting for this moment for all my life, oh Lord