$PVCT: Form 4 Filing -- Insider Buying

Peter filed a Form 4 today in which he bought another 133,333 of common stock, a cash expenditure of $100K.

This purchased related to Eric and Peter's prior purchases of common stock at $0.75 per share in the October raise for which Form D filings by each of them previously were made. Investors in this fund raising placement were issued one 5-year warrant for each common stock share purchased (i.e., 1-to-1). The warrants have a $1.00 strike price.

$PVCT: 地理许可证

Provectus' share price has bounced above, below and around the 60-cent level following last month's terminated PVCTP "IPO." The SPA process has taken a toll on the stock in 2012. The market and life science investors' "certain" view the company will be forced to undergo substantial dilution to raise the necessary money for key and pivotal clinical trials (MM Phase 3, HCC expanded Phase 1 and Phase 2/3, pancreas Phase 1) weighs heavily on the share price too.

While management explored the opportunity to execute an "IPO," quarterly filings for Q2 and Q3 2012 indicated other avenues for seeking cash, such as from outlying geographic licenses (e.g., Australia, China, Japan,   MENA).

2Q12 10-Q Filing -- Click on the figure to enlarge it.

3Q12 10-Q Filing -- Click on the figure to enlarge it.

The horse race, which previously had a dermatology transaction and geographic-specific oncology deal in the lead (unless a company-friendly "IPO" could have been had to overtake them; in hindsight, it could not), now might see (for now at least) an outlying geography deal for oncology assume the lead. I am not sure if Provectus is in the homestretch in this regard, but we could shortly see if it is.

$PVCT: Form 4 Filings -- Insider Buying

Eric and Peter filed Form 4s today in which:

• Eric bought 666,666 shares, and
• Peter bought 133,333.

It appears they were two of five investors who bought common stock at $0.75 per share in the October raise for which the Form D filing previously was made. Investors in this fund raising placement were issued one 5-year warrant for each common stock share purchased (i.e., 1-to-1). The warrants have a $1.00 strike price.

Since the raise had to take place after the PVCTP "IPO" was terminated, the premium to the then current closing share price probably was in the range of 15-25%, and 30%+ from today's closing share price.

UPDATE (correction): I misread the filing, and have since updated this post. My apologies.

$PVCT.OB: The First Anniversary of This Blog

I wrote my first blog post on November 16, 2011. At the time of that post: "The share price is $0.88. 14,700 shares have traded." Today, it closed at approximately $0.53, down about 40%, and traded about 54,000 shares.

Click on the figure to enlarge it.

In the past 12 months, Provectus' notable PRs included:

• October 29, 2012: Provectus Presents Nonclinical Data on Antitumor Immune Response to PV-10 Immuno-Chemoablation (very key),
• October 17, 2012: Provectus Pharmaceuticals Terminates Proposed Convertible Preferred Stock Offering (the failed IPO),
• October 2, 2012: Provectus Pharmaceuticals Presents Final Phase 2 Melanoma Data at ESMO 2012 (key),
• September 28, 2012: Provectus Pharmaceuticals' Patent Application Published for Combining Local and Systemic Therapies for Enhanced Treatment of Cancer (the joint Pfizer-Provectus patent app),
• September 27, 2012: Provectus Expands Protocol for Phase 1 Liver Cancer Study (important),
• June 26, 2012: Provectus Pharmaceuticals Presents Final Phase 2 on PV-10 At 2nd European Post-Chicago Melanoma Meeting 2012 on June 22, 2012 (visibility),
• May 30, 2012: Doug Ulman, National Cancer Survivorship Advocate, Joins Provectus Pharmaceuticals' Corporate Advisory Board (a great get),
• May 14, 2012: Provectus Pharmaceuticals Forms Independent Board to Meet Corporate Governance Requirements (an important corporate governance advance),
• April 10, 2012: Phase 2 Data on Provectus's PV-10 to Be Presented at the HemOnc Today - Melanoma and Cutaneous Malignancies Conference on April 13, 2012 (visibility),
• March 26, 2012: Intralesional PV-10 Treatment Leads to the Induction of Anti-Tumor Immunity  (very key),
• March 23, 2012: Mechanism of Action Data On PV-10 Demonstrates Therapy Induces Immunologic Response (very key),
• March 19, 2012: Provectus Announces Top Line Phase 2 Data For PH-10 in Its First Randomized Controlled Psoriasis Study (important), and
• January 18, 2012: Provectus Receives Guidance From FDA On Pathway to Approval for Phase 3 Trial of PV-10 For Metastatic Melanoma (important regulatory step).

As for the blog itself, readership has steadily grown.

Click on the figure to enlarge it.

Thank you for visiting and reading!

$PVCT.OB: Did Some Shareholders Sabotage the $PVCTP "IPO," and Other Stories Stranger Than Fiction

As the events of the week of October 15 fade into memory, do we know more than less?

Peter's sense of value. I was gratified to confirm Peter's valuation expectations during his discussions with prospective financial leads investors like Aisling Capital and OrbiMed Advisors. You will recall I blogged about my thoughts about PVCTP "IPO" terms on September 23rd. I characterize them as "my thoughts," but I think of them as what Peter may have thought/did think at the time. My expectation of the PVCTP share price was too high (he was at $4, while I thought $5-6). I met expectations with the conversion ratio (he was at 1-to-1, and I thought the same) and the warrant coverage range of 40-60%. These parameters suggest a pre-money valuation of $614MM (using a fully diluted share base of 152MM as at June 30) vs. a $96MM pre-money figure using Friday's $0.63 common stock closing price.

Are we clear? Yes sir. Are we clear? Crystal. Peter was clear as crystal about his pricing expectations for the PVCTP "IPO," were he to utilize it for Provectus. That one other person with whom I interacted during that period of time had a good handle on this suggested Peter kept his cards very close to his vest about his discussions with prospective lead investors (other than to repeatedly say he would not do a bad or dumb deal) and angered or frustrated shareholders who could not or did not successfully read or believe him.

Greedy or sabotage? Did certain shareholders try to sink the PVCTP "IPO" purposefully or inadvertently? Earlier this year I wrote a blog post where I calculated (very roughly) Provectus' pre-money valuation before several investment rounds it consummated with institutional and accredited investors, going back several years. My intent was to highlight how I thought management approached fund raising, which was to raise the amount of money they needed for various reasons and ensure there was some cushion of cash available, and no more. The PVCTP "IPO" was, in my view, a much more of a formal raise, where the process of fund raising was as visible and awareness generating as the ticker symbol was to have been. There is no doubt Maxim Group made mistakes and Network 1's Keith Testaverde did Provectus no favor with his e-mail, but did certain shareholders actively push down the stock either to get a more favorable deal (thinking Peter indeed would do a dumb or bad "IPO") or simply kill the vehicle to which they were vehemently opposed for philosophical (?) reasons?

Value is as value does. I think I learned my/a lesson about trying to have a constructive e-mail dialogue with angry longtime Provectus shareholders. Next time, I won't give out my first name. I jest, and I digress. One such shareholder (angry, "long suffering" and, in my view, intellectually inconsistent) thought I must have been smoking something green, white or otherwise pharmaceutical if Provectus would be sold for $50-60 per share. I draw inspiration and cogency from a large shareholder who frames his view on valuation this way (paraphrasing):

• If I am dead wrong about PV-10 (i.e., it is "only" a loco-regional treatment), the stock is worth $5.
• If I am wrong (i.e., it's got systemic treatment "potential"), the stock is worth $10.
• If I am right (i.e., it is a systemic treatment), well then...

While $50-60 per share is the price for which Craig would sell the company, I think he is a pragmatic individual about valuation. He does not strike me as idealogical about this topic. I am sure he, together with Provectus' board of directors and well-heeled financial advisers (Bank of America/Merrill Lynch, not Network 1), will evaluate bids from Big Pharma companies and make the right decision for shareholders and management.

At the same time, the man understands what he has created. And day by day, the world of Big Pharma is catching on to it.

In my head exist many different kinds of trading and investing personalities, because different situations demand different approaches. Those personalities need data and information to inform their decisions. I cannot say with conviction, yet, what I think Provectus is truly worth and for what others would pay. I need more information. I am, however, guided by management's views on the topic, which are informed by others.

Former Justice Potter Stewart of the Supreme Court of the United States, in attempting to classify what material constituted exactly "what is obscene," infamously wrote, "I shall not today attempt further to define the kinds of material I understand to be embraced…[b]ut I know it when I see it…"

I will know what Provectus is worth when I see it; that is, the valuation that reflects what it is worth. 

The momentum trader in my head is whistling "Rocket Man" now.

$PVCT.OB: Blog Reader Questions

Why didn't you mention a dermatology deal as a financing option? Do you think that the company, having embarrassed themselves and backed themselves into a corner, will be inclined to quickly ink a deal of some sort? Also, if the drug is so helpful to cancer patients, why don't they sell it to a big pharmaceutical company and get it in more clinical trials?

I previously mentioned a dermatology license deal as a financing option here.

According to management, Provectus does not need money for the foreseeable future (i.e., into August 2013), save to conduct pivotal, key and other clinical trials. Proof of this should be available to confirm or refute around early-November when the 10-Q is filed and available. As such, I do not think management views themselves as backed into a corner. They are keenly aware of what PV-10 and PH-10 are worth, and will strike deals accordingly. The PVCTP "IPO" was primarily about securing a NASDAQ listing, and obtaining money only at the right price and terms.

Management certainly wants to get the drug into the hands and bloodstreams of as many cancer patients as they can. An acquirer like Pfizer would very likely immediately commence multiple clinical trials to expand the number of indications to which PV-10 would be applied. At the same time, however, management understands the next several quarters are about further demonstrating the size and scope of PV-10's applicability to secure the $7-10 billion they believe the company is worth and the $3-4 billion they expect as an upfront payment in the end-game.

$PVCT.OB: The Morning After

So, what might tomorrow hold after management terminated the PVCTP "IPO," the proposed convertible preferred stock offering?

After discussing this with a large shareholder whose opinion I respect and often seek, I think the share price should move at least into the $0.70s tomorrow and perhaps as high as the $0.80s. The latter price level is where the stock resided in late-spring and early-summer.

We should see short covering specifically related to the driving down of the share price in anticipation of an at market conversion ratio for the "IPO." I do not think short interest is as high as many folks think when adjusted for historical shorts positons related to market makers and a temporary or structural short in September that should go away in October. Short interest related to the "IPO" likely is in the 500K to 1MM share range.

There also may be some sellers remorse (i.e., those who sold because of the share decline might buy back some or all of their holdings).

There's got to be a morning after

If we can hold on through the night

We have a chance to find the sunshine

Let's keep on lookin' for the light

$PVCT.OB: A Quick Post-Mortem On An Aborted $PVCTP "IPO"

There is much to which to look forward. Looking back:

• The finance industry can be the valuable grease that enables the gears of the global economy to operate more efficiently and effectively. A piece of the industry also is a cesspool. Investment banks, white shoe, boutique and, er, other, have bet against their clients since time immemorial (okay, that is hyperbole, but you get the idea). The "good" banks are not obvious about it. If you are going to bank Provectus (i.e., if you are going to provide, in this case, investment banking services like IPO underwriting and equity research coverage), could you not be more discrete about  the other part of your bank trying to drive down the share price (for the betterment of prospective "IPO" buyers)? Allegedly, of course.

• I have asked the company to open an investigation into the illegal solicitation (i.e., sell recommendations or "suggestions") and shorting of Provectus common stock: Claims of illegal recommendations by certain Maxim executives and retail reps to existing and prospective clients to (a) sell their common stock and/or (b) short the common stock in order to (c) profit from the subsequent share price decline and (d) ultimately benefit from their participation in the "IPO" from enjoying a better conversion ratio resulting from the premeditated driving down of the share price. There are undoubtedly much more productive uses of company time, resources and dollars; however, at a minimum, I hope FINRA knocks on a few Maxim doors.

• The PVCTP "IPO" process hurt management's credibility.

• Management's decision to terminate the offering helped its credibility.

• Bidirectional bridges between shareholders and management should be redesigned and then rebuilt.

Oh, I forgot. One more thing: Dear Maxim, yippee ki-yay, motherf@$#er!

$PVCT.OB/$PVCTP: Provectus Pharmaceuticals Terminates Proposed Convertible Preferred Stock Offering

Provectus terminated the PVCTP IPO after the market close today. The PR is here.

Perhaps, now, Thursday morning cannot come soon enough. Eh, Shorty?

$PVCT/$PVCT.OB: Update

More confirmation coming in from non-company sources: An "IPO" will not be done at these share prices, if one is done at all.

$PVCT/$PVCT.OB: Update

Over the course of my many discussions with shareholders today, I have encouraged all of them to share their views about the PVCTP "IPO" and, what appears to me to be, an attack on the common share price with Peter. I have shared my own thoughts with Peter multiple times today, as well as many times prior to today.

I have heard from multiple non-company sources that an "IPO" will not be done at these share prices, if one is done at all.

$PVCT/$PVCT.OB: Rumors

Look at all these rumors surroundin' me every day 

I just need some time, some time to get away from 

From all these rumors, I can't take it no more 

My best friend said there's one out now about me and the girl next door

There are lots of rumors flying around. What is fact, and what is fiction? Data drives decision-making.

$PVCT.OB's PVCTP "IPO:" Update on Maxim

There has been the feeling by some (experienced Wall Street veterans) that either or both of Maxim Group and Network 1 Financial have been "double dealing:" working with Provectus in appropriate, necessary ways to facilitate the "PVCTP" IPO, while at the same time (in other areas of the respective firms) contributing to driving the PVCT.OB share price down for the benefit of firm clients (the math here is simple: if these firms assume Pete will agree to an "at market" conversion ratio, the lower the common stock share price at "IPO" pricing [if the "IPO" goes off], the better the value proposition for the preferred stock).

In the case of Maxim, as lead underwriter of the PVCTP "IPO," Paul LaRosa, Executive Managing Director - Capital Markets, works with Pete in this regard. See my previous comments here.

At the same time, Maxim's retail side appears to have been tasked to seek 300+ prospective buyers (since the key NASDAQ listing requirements are a $15MM raise, minimum $4 per share price and 300+ round lot holders). There have been no pricing or other details for the "IPO," because, according to Peter, these parameters continue to be worked out between prospective investors and him. Maxim retail reps have been telling folks, allegedly, the "actual details" of the IPO, which appears to have contributed to the downward pressure on the common stock.

Have other parts of Maxim been talking down the stock down or facilitating its drop? Communications from Leonard Greenbaum, Maxim's Managing Director - Equity Derivatives, to Dr. Adams appear to indicate such activity or behavior:

Beginning last week, Mr. Greenbaum appears to have advised the initial sale of common stock (of an existing position) as soon as possible to avoid further losses because the share price was falling rapidly. It appears he also suggested taking an aggressive short position concurrently to take advantage of the greater share price decline Mr. Greenbaum believed was to come because the lower the price of PVCT, the greater the benefit to the eventual holders of PVCTP. It appears he also concluded all existing shareholders had the opportunity to participate in the "IPO," so this was fair.

Share your Maxim stories with Pete at pete@pvct.com. Please be accurate, and document as many details as you can.

$PVCT.OB/$PVCTP: Friday Can't Come Soon Enough

One of my most vivid capital markets memories was of my first introduction to market expectations. It was a Friday morning during late autumn, and I was sitting on the T-bill desk of a bank trade floor. As an apprenticing trader for this bank, I went through rotations on different product desks. It was non-farm payroll Friday. Chatter quieted to murmuring and then became silence as the clock approached 8:30 am EDT. At the designated time, non-farm payroll data burst across the newswire. The number greatly exceeded the consensus figure by (I think) several hundred thousand. As far as I can recall, the number caught nearly everyone by surprise. Traders and salespeople on a floor that housed hundreds of employees reacted differently (much more, more or less animated, or not at all) depending on how their respective books were positioned in advance of the number in accordance with their belief of whether market expectations were going to be exceeded, met or not met. The traders on the interest rate derivatives desk, where my eyes were fixed at the time, were jumping up and down, high fiving one another and slapping each other on the back.

Friday, ironically, cannot come soon enough. The negativity or negative energy I have experienced and felt since the beginning of the PVCTP "IPO" process is unproductive. There is so much to the science of and patient benefit from rose bengal and PV-10, and to the stock and its eventual purchase by Big Pharma that I wish to blog more about. The last several weeks seemingly have stolen attention (understandably) from more interesting, more substantive topics.

The market anticipates, generally speaking, a PVCTP "IPO" at company unfriendly terms (i.e., expectations). Potential outcomes for Friday essentially include:

1. A PVCTP "IPO" at company friendly terms (e.g., $15-20MM raise, a 2-to-1 or lower conversion ratio, 50% warrant coverage). The market does not expect this;
2. A PVCTP "IPO" at company unfriendly terms (e.g., $15-20MM raise, an at or near at market conversion ratio [i.e., 6- to 8-to-1], 50% warrant coverage). The market expects this and is pricing some or most of it into the current share price; or
3. The PVCTP "IPO" is killed. The market does not expect this.

Should #1 or #3 occur, the common stock share price would jump higher to varying degrees (#1 > #3) on Friday, and ascend next week.

If #2 were to occur, I think any initial sell-off of the common stock (presumably or likely by retail investors) eventually should turn into an upward move later (J-curve effect) because the presumption of the "IPO" is a steady stream of news and media awareness following its launch (and the spectre of the punitive effect of the "IPO" on the common stock will have disappeared).

While it is possible we may repeat whatever this is one more week, this Friday cannot come soon enough.

$PVCT.OB/$PVCTP: Moment Of "Truth?"

We may have a much better perspective on the "IPO" and others things Provectus sooner rather than later. There seems to be a convergence by the folks who make-up the PVCTP book running group -- American Trust Investment Services, Maxim Group, Network 1 -- pointing to the end of this week for the "IPO," if it happens: Thursday afternoon pricing, Friday morning trading.

Update (via Maxim): Terms would be released, if a deal is consummated, after 4 pm EDT on Thursday.

We know what the market anticipates the terms to be. The question is: what will they actually be?

67th Annual Alfred E. Smith Memorial Foundation Dinner

The 67th Annual Alfred E. Smith Memorial Foundation Dinner will be held Thursday evening at The Waldorf Astoria in New York. The keynote speakers will be President Obama and Governor Mitt Romney.

Al Smith, IV is a Provectus board member.

$PVCT.OB: What we do in life echoes in eternity.

Fratres! Three weeks from now, I will be harvesting my crops. Imagine where you will be, and it will be so. Hold the line! Stay with me! If you find yourself alone, riding in the green fields with the sun on your face, do not be troubled. For you are in Elysium, and you're already dead! Brothers, what we do in life... echoes in eternity. -- Maximus Decimus Meridus in Gladiator

I want to:

1. Share my speculation about what I think happened towards the end of the third quarter and how it relates to the temporal nature of the PVCTP "IPO,"
2. Explain why I will invest a token amount of money in the "IPO" if it happens, and
3. Write about management's poker hand, the hand they have dealt shareholders, and how both of them might be played.

1. Speculation, Will Robinson. Speculation.

I think management was convinced the SPA would arrive by the end of Q3 and the PVCTP "IPO," which was supposed to have been in the right place at the right time, was being teed up to follow it.

As we know, Provectus and Peter have been working several financing options:

• The "IPO,"
• A dermatology license deal,
• One or more geography-specific oncology license deals, and
• A strategic investment from a Big Pharma entity like Pfizer as the sale of common stock at a premium to the share price (or, as mentioned above, an "IPO" led or co-led by a Big Pharma company).

Each of these has its own value proposition (i.e., pros and cons), but the propositions are temporal, having greater or lesser value as a function of time.

For example, the best option today for shareholders would be an optimally valued (i.e., net present value) and structured (i.e., upfront, milestone and royalty payments) dermatology or geographic-specific oncology license deal yielding an upfront payment sufficient to at least pay for the pivotal MM Phase 3 trial. Optimality, however, might be more likely to be achieved later rather than sooner, in November or December.

A sale of common stock to a Big Pharma company would be "more optimal" if the price at which these shares would be sold was much, much higher than Friday's close of $0.59, like at least $4. But why approach or ask a Big Pharma company like Pfizer for this kind of strategic investment unless you have or need to ask? In my view you ask after the SPA is in hand and if you determine (a) the PVCTP "IPO" is not feasible and (b) dermatology or mini-oncology optimality is later rather than sooner.

Up next is the PVCTP "IPO," which, for a certain period of time, provides attractive and pragmatic ways to begin driving company valuation dramatically upwards:

• Attractively: A NASDAQ listing would facilitate new buyers, who could not buy the common while it remained an over-the-counter stock, and more national media attention from major journalists and reporters, who would not cover Provectus until it traded on a major stock exchange and was in Phase 3 trials.

• Attractively: A smart IPO, led by Pfizer (and J&J or a life sciences investor like OrbiMed) and with a conversion ratio and warrant coverage good for existing common shareholders, would draw many more new buyers to the preferred stock listing itself over time.

• Pragmatically: A $15-20MM raise at an acceptably high valuation, while creating dilution that a dermatology or a so-called mini-oncology license deal would not, fully funds the pivotal MM Phase 3 trial. There would be no need to force or rush dermatology or oncology deals, nor completely rely on them to commence the MM trial. The trial could start within 30 days of the SPA PR and move Provectus and its shareholders closer to the interim analysis of at least the first half of the trial's patient population.

A smart PVCTP "IPO" is a better temporal option in October than a dermatology or mini-oncology license. In November, it might not be.

Back to the SPA PR. It was the first domino to have fallen in a hoped for series of them, whether the next temporally best one was a license deal or the "IPO."



But the SPA did not arrive by the end of September, despite very ernest and serious expectations set to the contrary by folks directly interacting with the FDA. It is coming, but it was not nor is not here yet.

To compound these missed expectations were:

• Shorting of the stock (end-of-September short interest was nearly 100% greater than the end-of-August figure) for whatever reason(s),
• Selling of shares (September's monthly amount of traded shares was nearly double that of August's) for whatever reason(s), and
• The PVCTP "IPO" process, and particularly the aspect undertaken by Maxim Group's retail banking side.

Th "alleged" sloppy "IPO" process was made much more so by "alleged" disgusting behavior by some Maxim retails reps spreading baseless "facts" about the "IPO's" details. I used "alleged" because, while Paul LaRosa from Maxim's capital markets part of business agreed Maxim reps should not have been saying what they were saying, the reps themselves probably would say they were doing nothing wrong. "Alleged?" I crack myself up.

The rep revenue model is predicated on the number of transactions they encourage and facilitate. The revenue model is not based on asset appreciation.

I now have what I think is a better handle on the increase in short interest, and will wait until October reporting dates to confirm this. In the interim, am I concerned? No. Am I annoyed and irritated? Yes.

There is the thought one very determined seller has been and is getting out of the stock. Could he/she/it have thrown in the towel for whatever reason(s)? Most likely yes. Does he/she/it know something we do not? I am betting my share ownership (note: no sales of any shares bought) the answer is "no."

Funds holding Provectus preferred and/or common shares have much different pressures than entities and individuals. The quarter-to-quarter reporting to investors and limited partners funds in this group (as opposed to a venture capital or private equity fund) are required to provide make it difficult to hold to an investment thesis because of complaints of poor performance by these very investors and LPs. Such theses turn into trading ones, if they did not start out as such. Did someone's patience runout? Probably.

So, here we are today, observing an IPO that keeps getting pushed out, from the week of:

• October 1st to
• October 8th to
• October 15th to, likely,
• October 22nd.

While the preferential path to financing might be a dermatology deal, the "IPO," for the reasons I presented above and others, is temporally better. I think, however, it needs an SPA PR to launch it, and I do not see the "IPO" occurring until after an SPA PR is issued. As such, if the "IPO" does not occur in October, management will probably pull the plug on it because other financing options would have become temporally better.

2. I got your initial public offering RIGHT HERE! (w/gesture)

If the PVCTP "IPO" goes off, I will participate in a very small way. I prefer buying common stock.

I work hard to maintain an objectively dispassionate investment case to buy and hold Provectus stock, but I am not always successful as emotion does creep in from time to time. I have an emotional attachment to this situation. Seriously folks, who blogs this much about one company or stock if they are not part of it? Participating in a token way in the "IPO" is something to add to "the box" that holds the collection of my life memories.

Emotion aside, however, the ROI from buying common stock should exceed the ROI of buying preferred stock (when compared together and presented as a choice of whether to buy the "IPO" or spend the equivalent amount of money buying the common stock), irrespective of what a Maxim retail rep tells you. Of course, you could always trust Chris Varick.

Let us make some assumptions to frame this analysis -- and please let me know if you disagree with my work below (as I am open to feedback and being corrected). I will toggle these later under certain circumstances to make some illustrative points. Nevertheless, the key assumption underlying my belief of a better common share ROI is that Provectus will not do a dumb IPO.

Let us assume you have $100,000 to either spend on the "IPO" or just buy common stock. In this analysis, you cannot buy both. Furthermore, since you do not know if and when the "IPO" goes off, you have to make a reasonably timely decision: wait for the "IPO" to happen or buy common stock before the SPA PR is issued. The SPA, which management surely knows they now have, should not affect the terms of the "IPO" but should increase the price of the common stock post-announcement.

Do you buy the "IPO" whenever it goes off, or do you buy common stock, say, starting Monday?

I assume about 150MM fully diluted number of shares of non-listed preferred and common stock, stock options and warrants. PVCTP deal terms then suggest some more shares. "As converted" means I used the conversion ratio above (i.e., 1) to convert the PVCTP shares and warrants on PVCTP shares into the appropriate but requisite number of common shares.

On an as converted basis, your $100,000 gets you (a) 35,000 PVCTP-derived common shares or (b) 166,500 common shares.

Let us assume the company is acquired for, among other things, a $1B upfront payment (i.e., the preferred shares you bought when converted into common stock or your common shares you bought are exchanged for your pro rata share of $1B) on December 17, 2013. Let us also assume the IPO still happens: you either participated in it, or you bought common shares and did not. I make this assumption only to simplify the analysis in some ways. If you buy common stock and the IPO does not go off (i.e., it is November and Provectus completes a license deal), the fully diluted shares outstanding figures remains at $150MM and your common stock ROI is higher.

Let us also assume you convert & exercise/sell your preferred shares and warrants, or your common stock, when the acquisition transaction occurs.

The outcome makes sense. A smart IPO implies a healthy valuation at which PVCTP "IPO" shares were sold and, thus, a substantial uptick (about an order of magnitude) from today's market capitalization. Under this scenario, one should of course buy the common stock, say, starting Monday, then wait and buy the IPO.

Hold on a second! Didn't your stock broker, er, Maxim retail rep "allegedly" tell you to flip the preferred shares and hold onto the warrants as "a lottery ticket?"

The flipping-your-preferred-shares ROI is less than the hold-your-preferred-shares ROI, which should be much less than the buy-common-stock ROI.

Maxim's "alleged" story only works -- that is, you make out like a bandit by indeed cashing in a lottery ticket -- if the conversion ratio and, to a lesser extent, warrant coverage is very punitive to existing common stock shareholders, such as 6- or 7- or 8-to-1 and 60%, respectively. That is, the "IPO" is a dumb "IPO."

A 2-to-1 conversion ratio (and, say, 50% warrant coverage), worse than my initial example above but far from punitive more than doubles your return from buying the "IPO;" however, one makes more money, again, by just buying common stock soon.

To be fair, a dumb IPO produces a result where buying PVCTP and eschewing the common stock is the better course of action.

3. "Poker is not a game of cards played with other people, it is a game of people played with cards."

Right now, Provectus only needs money to literally keep the lights on and the water running (note: hyperbole). Fixed costs are low. The burn rate can be turned down and compensation deferred, with a focus on those activities, and whatever variable costs are associated with them, that drive value (e.g., the end-of-phase 2 meeting with the FDA for psoriasis, remaining toxicity study parameter elucidation, etc.) until money targeted for key, pivotal and other trial work is raised or obtained.

In this game of poker, management will play the hand they think they have the way they see fit. I think:

• The company's hand is very strong,
• Management thinks the hand is a royal flush (I think the hand is a royal flush, too),
• Provectus has enough chips (cash on hand, and temporal cash needs) to play it well, and
• Management will play it well (i.e., not raise money in a dumb way).

I am betting my share ownership on this. Of course, I could be quite wrong (note: the usual economist's conviction of "on the one hand, ..." but "on the other hand, ...," which is why we need more one-armed economists).

Now, what kind of poker hand do you think it is: a straight flush, four of a kind, a full house, worse or one that can be beaten? Which hand you have is up to you to determine. How you play it also is up to you.

There is no doubt of the battering the share price has taken since the beginning of September, let alone this year or over the last several years. I see it. I feel it. I understand it.

You got to know when to hold 'em, know when to fold 'em,
Know when to walk away and know when to run. 
You never count your money when you're sittin' at the table.
There'll be time enough for countin' when the dealin's done.

The company needs money, but not in the way the markets and most observers think Provectus does. Management has indicated they will do a smart IPO if they do one at all, and that raising money below $1.12 is not in the cards (pardon the pun). Anonymous wrote "[p]oker is not a game of cards played with other people, it is a game of people played with cards."

Playing your poker hand requires you to ask yourself how management will play their hand.

Disclaimer: This blog is neither intended to be nor is investment advice. The author of this blog (the "Author") is not a registered investment advisor. Under no circumstances should any content from this blog be used or interpreted as a recommendation of a trade or investment in Provectus Pharmaceuticals, Inc. Trading and investing can be hazardous to your wealth, health or both. Any investment decision must, in all cases and without exception, be made by the reader or by his or her registered investment advisor. This blog is only and strictly for educational and informational purposes. The Author may have a position in Provectus Pharmaceuticals, Inc. at any given time that is not disclosed at the time of publication. All opinions expressed by the Author are subject to change without notice. You, the reader, should always obtain current information and perform the appropriate due diligence before making any investment or trading decision. All efforts are made to ensure the information contained in the blog and/or a blog post is factual and accurate; however, the Author does not guarantee its accuracy under any circumstances.

$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.

Non-Thought: 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.

$PVCT.OB: Taking Stock

A PVCTP "IPO" offering done in the right way – led by strategic and/or financial investors at company friendly terms and conditions closer to or approaching my September 23rd blog – can be a very constructive way of increasing shareholder value in the near-, medium- and long-term. No pricing has been established yet, so there is no likelihood of a closing this week until management determines if and how it would price and utilize the preferred stock offering. Disregard Maxim retail reps for the time being.

I have been gathering data, developing information and gaining knowledge on several items, which I will blog about after the PVCTP hubbub either has been resolved or dies down.

$PVCT.OB: Didn't See That Coming

I have been blogging a lot this month. There has been a lot about which to write. Month-over-month blog readership is up 30-60% across all major metrics (e.g., visits +46%, unique visitors +31%, pageviews +57%, average visit duration +41%, etc.). There will be as much or more to write about next month.

I think this there is an outcome much of the market currently does not see coming. I wrote yesterday about the market confusion regarding the PVCTP "IPO" and the current depression of the share price. At this point in time the market is about expectations. And those expectations, unfortunately, are not high going into ESMO 2012 and October.

We await regulatory clarity of the path to approval of PV-10 for metastatic melanoma (i.e., the SPA PR). We know the company requires money to conduct pivotal, key and other trial work (e.g., MM Phase 3, expanded liver Phase 1, liver Phase 2/3, pancreas Phase 1, psoriasis Phase 3, etc.). $15-30MM certainly substantially or fully covers this work. The market is unsure of the timing of the SPA PR. It also thinks the company will incur substantial dilution to achieve this fund raising.

What happens to market expectations of the company and common stock share price if the SPA PR is followed by a license deal announcement, whether dermatology or geographic-specific oncology, that provides most or all of the money above? This outcome causes a complete and utter upside surprise to the market, given what it thinks right now. The share price should blow upward because Provectus not only would have exceeded expectations but destroyed them through a non-dilutive "financing" event.

Below is my current take of the horse race of financing and "financing" options to secure monies for more trial work. I hope to update this more frequently as facts change and events transpire.