Advanced Medical Isotope Corp. (OTCMKTS:ADMD) released strategic updates on matters of importance that would positively impact its existing capital structure. The updates started with the revelation that back in November and December 2014, there was a huge error recorded in the calculation of ADMD common shares.
The error occurred during the conversion process of certain convertible debt and exercise of warrants. The miscalculation resulted in increased number of shares released. It is the major problem that now the company intends to rectify in the coming period. The company completed the conversions and exercise process at a price below the par value that resulted in issuance of additional ADMD common stock.
The surplus shares
Advanced Medical confirmed that the transfer agency mistakenly released more than required freely tradable common shares due to defective legal stance given by the respective warrant and convertible note holders. The company will rectify the problem and for that it first needs to inform applicable holders about the mistake that occurred during conversion process.
Advanced Medical has presented two ways to support compliance as per the state and federal securities guidelines. The investors can give back excess shares to transfer agency, and if they wish they can get them offset in the future. In any case, the objective is to mitigate the negative impact of error on company’s balance sheet.
The company stated that as it will settle the excess shares against the left-over debt or will reverse them back, it will have a positive impact on company’s balance sheet. The reversal or settlements is expected to mitigate $800,000 of convertible debt from books. It will reduce a large part of the outstanding warrants and wipe off almost $11 million of derivative liabilities from balance sheet.
In last trading session, the stock price of Advanced Medical Isotope Corp. (OTCMKTS:ADMD) declined more than 5% to close the trading session at $0.00460.