Made Possible By
Twenty-four months ago, CFO Mark Guerin had a pretty clear notion of what he wanted Onconova’s financial footing to look like during the second half of 2019. However, the question that lingered was whether the plan that Guerin and his team were putting into motion had the vigor to overcome the obstacles along the way.
Such speed bumps began with a strongly worded May 2017 message from NASDAQ claiming that Onconova’s stockholder equity was no longer sufficient to meet its listing standards. While Guerin’s plan included two new stock offerings and growing the firm’s stockholder equity, NASDAQ rejected Onconova’s initial response, which triggered a NASDAQ hearing at which Onconova’s plan ultimately received a nod from the stock exchange.
“It was an arduous task all the way through May of 2018 to do two offerings and raise a total of about $40 million in order to have the cash that we needed to get to the end of 2019, and also to have the stockholders’ equity that we needed to retain our NASDAQ listing,” explains Guerin, who says that the plan’s success was all the more impressive in light of the stock’s small market cap. In the end, Onconova’s financial footing–give or take a short stride–was spot-on with the plan.
CFOTL: What comes to mind when we ask for a finance strategic moment?
Guerin: It’s interesting to consider that, because you’re right–I could probably come up with quite a few. The most prominent one in my mind is what I just mentioned a few minutes ago, the two offerings that we did in the beginning of 2018. Those were actually two or three of the last few things that we had to do in a series of things. It started in May of 2017, when we got a notice from NASDAQ that our stockholders’ equity was not sufficient to meet their listing standards. We had to go through a process where we came up with a plan and presented it to NASDAQ. They had to evaluate whether they thought it made sense and we could achieve it. Turns out that initially they didn’t. So we appealed it and then had to go present to the NASDAQ hearing panel what our plan was.
Part of that plan was to do some offerings, because that’s the way you build your stockholders’ equity–by selling stock. The process started in May. It was an arduous task all the way through to the following May to do two offerings and raise a total of about $40 million in order to have the cash that we needed to get to the end of 2019 and also have the stockholders’ equity that we needed to retain our NASDAQ listing. The offerings were really difficult because of the fact that we had a relatively small market cap to raise that much money. We issued a whole bunch of new equity, and that was the capstone event, that last offering in April. That got it all done.
We actually had that plan from a year prior. We knew that we were going to have to do offerings. We knew that we couldn’t do them right away. We knew that it was going to take more than one. The plan that we presented to NASDAQ is actually what we accomplished. We would never have been able to get that done if we had not started back in April/May of 2017 with a plan for how we were going to address all of these issues. Beginning back then with what the end would look like helped us to think about it strategically and then get it done. jb