Advanced Medical Isotope Corp. (OTCMKTS:ADMD) a late stage development company of brachytherapy devices released an update on matters that will simplify company’s capital structure and have a positive impact on its balance sheet.
The problem
Advanced Medical reported that in last two months of 2014, there was an error in the calculation of issued common shares. It was related with the conversion of a convertible debt and exercise of warrants. Due to the error in calculation, the company issued excess common stock against the debt and warrants. The error happened due to the establishment of erroneous conversion and exercise price that was below the determined par value of $0.001. Following the miscalculations, the transfer agent erroneously issued more than required freely tradable common shares.
The solution
Advanced Medical stated that the problem has been reported to all applicable warrant and convertible note holders that have received excess shares. The release of information is the first step towards rectification of solution. The company has also designed set of solutions to facilitate compliance with the Federal and State laws. As per the designed solutions, the investors will have two choices. Either they can deliver excess shares to the transfer agent or they may offset any leftover warrants or remaining convertible debt to meet established guidelines of the regulatory bodies.
The impact
Advanced Medical Isotope Corp. (OTCMKTS:ADMD) stated that the rectification measures will have a positive impact on the balance sheet. The convertible debt of $800,000 will dissipate from balance sheet. The measures will eliminate almost $11 million of derivative liabilities reflected in balance sheet. All the changes will be reflected in the second quarter 10-Q filing. The CEO James C. Katzaroff called it as another step in normalizing capital structure.
In last trading session, the stock price of Advanced Medical surged more than 2% to close the trading session at $0.00430. The gains came at a share volume of 14.17 million compared to average share volume of 29.28 million.
