Capital structure

You talked NASDAQ, get back to that in a moment, but you did talk about a little bit on cap structure and management skin in the game.

Why don't we talk general and administrative for just a moment? Give us an update on the capital structure.

You guys did do a financing earlier in the year.

Where do we stand on cash currently to what you can say maybe as of last filing? And then also how far you see current funds carrying with the plans and budget? And then update us on the shares outstanding, Terry, as well as key shareholders on the roster because that has changed a bit.

That's salesforce.com slash CFO.

Just when it comes to capital structure, whether that path to a billion, are there milestones related to the capital structure and how it might have to evolve? Will your mindset when it comes to accepting investors evolve? Or no, there's such a cultural cornerstone there.

Maybe not.

Never say never.

So our mandate is global and flexible.

So this allows us to constantly compare relative value across geographies, strategies, asset classes, and the capital structure.

We believe our crossover credit capability is a real competitive advantage.

We can invest across public and private markets, credit and equity, and really the liquidity spectrum gives us a wider aperture to find attractive risk-adjusted returns.

And of course, all this is happening against the backdrop of a vastly different market than we were facing 20 years ago.

So investors are making different decisions, but market mechanics themselves have changed.

Davidson Kempner's described today's environment as being the early innings of a broader capital structure reset as rates remain elevated.

How do you expect this shift to influence investors' asset allocation decisions and the overall portfolio construction that they're considering?

And I'd say, look, the top 20 owns about 60% of the company.

So again, like you said, it's ultra tight capital structure.

The board has skinned in the game with over 15%.

And at GTE, it's our biggest shareholder with over 15%, just over 15% of the register as well.

There are two sides to this.

A company that uses a lot of debt in its capital structure, and I'll define that in a minute, will have a magnification of returns to the equity.

Let me get another term here on the board.

Um, capital structure.

Capital structure.

When I say capital structure, that's the combination of debt and equity.

[writing] And debt and equity that comprises total...

That comprises total assets.

That's the point at which you stop.

So every one of the capital structure problems builds off that premise.

And of course, the follow-up to that is just as messy because if you're going to move to that debt ratio, you have to change the way you capitalize your company, which means you're either borrowing money and buying back stock or raising equity and retiring debt.

And that's the nightmarish part of these problems, is working out what exactly happens in terms of the mechanics.

Apparently, the founder was not happy that it was leaked, but, you know, they are fundraising now, and that's shocked a lot of people because for the longest time, they didn't want to take any external capital.

Jing, do you wanna take that first and just talk about, you know, their, their capital structure, their fundraising, how unique it was, and then maybe we'll pass it to Juro to talk about, you know, his recent findings about the money they're making?

Sure.

Um, yeah, so, um, both Juro and I and, and our colleague Chen as well, we've been reporting DeepSeek very closely since, um, the beginning of last year.

So, you know, investors will be looking at those, you know, this progress very, very closely.

And it's really interesting-

And, and the group you have earlier about the capital structure-

Mm-hmm.

No warrants outstanding.

So we've been really judicious with regards to how we've managed the capital structure of the company over the last three or four years.

And I think on that basis, we've been really careful about how we financed.

We've had really good support from...

So the dollars go a long ways in Kazakhstan.

That's a big advantage for us.

And we've been very judicious and I think careful about how we've managed the capital structure.

Yeah, you guys got a tight structure.

At the end of the period, reflective of that combination of strong operating cash flow and those strategic items of spend, net debt totaled $517 million and the cash balance was $206 million.

As we move towards the acquisition of the strategic acquisition in Malaysia, of course, it's really important to reflect on our capital structure.

That capital structure is the foundation from which we deliver our company.

And our focus in the last two years has been on simplifying the capital structure and building strong liquidity in order to deliver a transformational transactional step change in our operations.

You'll remember that in the fourth quarter of last year, we refinanced our RBL.

And then the acquisition of the Magnus Contingent Consideration was a strongly credit enhancing transaction which unlocked a 38% increase in the borrowing capacity on our existing assets within the portfolio.

And we reduced our borrowing costs by 175 basis points.

We also took the opportunity there to redeem our sterling denominated bonds.

right? Yeah.

So in terms of the capital structure, again, it's quite simple.

BioXcel stock is publicly traded on NASDAQ.

All three debtors are obligors and grantors under a pre-petition secure credit agreement.