Repros Therapeutics and the 99.6% Discounted Warrants (RPRX fka ZONA)

Repros Therapeutics (RPRX):

Market Cap as of March 2, 2011:       68.55mm
Last 12 months sales:                 0
Accumulated Deficit Since Inception:  178mm

ECTE and NEOP are not the only companies popular with the retail bio-dreck crowd. Another name in fashion among those with poor memories and even poorer search skills is Repros Therapeutics formerly known as Zonagen (RPRX fka ZONA).

And, like those other names RPRX recently did quite an amazing financing.

On February 3, 2011 RPRX, through their longtime low tier banker Ladenburg Thalman, did a HIGHLY unusual unit offering. For each unit that cost an investor $17.15, the investor got the following:

4 shares of common stock
1 Series A warrant to buy 3 shares of common at 1c per share
1 Series B warrant to buy 2.45 shares of common at 2.49 per share

Yes, you read correctly, the Series A warrants are struck at 1 penny. That is a 99.6% discount to the market price of the stock, $2.58, that day.

The minimum value of each unit on February 3rd was:

4 x 2.58 = 10.32 Common Stock Value
3 x (2.58-.01) = 7.71 Series A Warrant Value
2.45 x (2.58-2.49) = 0.22 Series B Warrant Value

Total minimum value of $18.25 on a $17.15 investment immediately.

As of the close of trading on March 2, 2011 that same package is worth at a minimum:

4 x 6.05 = 24.20 Common Stock Value
3 x (6.05 – .01) = 18.12 Series A Warrant Value
2.45 x (6.05 – 2.49) = 8.72 Series B Warrant Value

Giving a total value of $51.04 on a $17.15 investment with just a one month holding period. What a deal! Reminds your author of that recent ECTE financing.

So just what is RPRX up to? And who are the lucky buyers of those units? Stay tuned to learn more. Much more.

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

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