LPTN stock price fell by 12.79% and closed at $0.75 in the last trading session. Trading volume of 2.13 million shares was a record since the stock is traded on the OTC market. That massive sell-off happens on no recent news from the company, though some previous events might give the answer to traders.
Around two weeks ago, Lpath filed a registration statement with the SEC for a total of nearly 11 million shares. After the registration statement becomes effective, the selling shareholders should be able to offer the shares on the open market on a continuous basis. Almost 6.98 million of the registered shares are those issued in the private placement in November this year at a price of $0.7 per share. Lpath raised gross proceeds of $4.9 million, not the planned $5 million, in order to be able to conduct its planned research and development activities over the next year.
Also included in the registration statement were the 3.63 million shares issuable upon exercise of warrants granted to the investors and to the placement agents in connection with the offering. The rest of the new shares represent shares issuable upon exercise of warrants granted pursuant to anti-dilution rights of the investors from former private placements in August 2008 and in April and June 2007.
Although most of the warrants have an exercise price of $1, which is far above the current market price and are unlikely to be exercised soon, it looks like investors anticipated on Friday significant increase in the last known total number of LPTN shares outstanding.
Despite the raised cash, because of an increase in the fair value of the company’s warrant liability, as of end-September 2010 LPTN net tangible value became negative. Lpath had $4.92 million in total assets and $5.90 million in total liabilities.
