MBII: Restructured capitalization of warrants reduces potential dilution. Marrone Bio reaffirms path to positive cash flow.

By Ian Gilson, PhD, CFA

NASDAQ:MBII

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Following the recent Form S-1 registration of stock and warrants (outlined below), the major stockholders and Marrone Bio Innovations MBII have signed a warrant exchange agreement.

Under the agreement 46 million existing warrants will be swapped for 29.9 million new warrants with various expiration dates and an exercise price of $0.75 a share. If all the warrants were to be exercised it would generate about $14.4 million in 2020 and $8.1 in 2020 for $22.4 million in total. The net impact would also be a 79% reduction in warrants outstanding by the end of 2020 and close to a complete elimination, either by exercise or expiration, of all the warrants by the end of 2021.

The first tranche was exercised effective May 01, 2020 for $2.5 million.

Marrone Bio Innovations management expect full exercise of all the warrants to take the company to cash flow breakeven (EBITDA) by the end of 2021.

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