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УСУ Message Board

  • david_mikosz david_mikosz Apr 9, 2013 12:29 PM Flag

    Next steps

    So as a bit of a lurker I think the next step is the annual general meeting right? This is when the reverse split will be proposed and voted on ( to stay in compliance)? Last year it was at the end of April i think. Are there any real estimates of what kind of ratio it might be? Then there would be a restructuring proposed that would significantly dilute us but give the company greater market value. Do you think this would be proposed at the annual meeting? Are there any options for good things like an extension of the gas diffusion that could occur or any other possible good events for the company? Just curious and please 'we're going to win so big' or 'they will close the company in (insert random short timeframe)' are not that helpful. Just after some constructive thoughts please.

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    • Rev split should have happened in March. Likely NYSE is doing paper work. Could be any day now. Assuming company stays in business.

    • David, I am sure you have read my thoughts on USU. Luckily, I am on the sideline and have not ridden this back down from my exit point around .90 per share.

      I believe that the letter going out for the shareholders' meeting will include the proxy for the BOD and the proposal for the reverse split. Possibly, only a range will be offered at that time, maybe 1:8 to no more than 1:15. My guess is that 1:10 will put PPS back at around $2.50 a share or so (based on PPS dropping to .25 per share.)

      Next, I believe that a balance sheet restructuring is imminent. Somehow, ownership in ACP will be separated from USU, so that the loan guarantee is injected into a very stable company. There may be a capital raise of $x that will take ownership of ACP. Let's say that this is 2b and the ACP also takes on a certain amount of USU debt. The result is a new company called USUA that owns ACP and has a very clean balance sheet and is owned by the investors that capitalized it. USU shareholders get to shed quite a bit of debt and take an ownership interest in ACP. This interest could be small, maybe only 10%. This would save current equity and investors that have already sunk so much money into the company, but would give the biggest potential benefit from ACP to those making the large investment necessary to procure the loan guarantee.

      Hard to figure what the end result would be for USU equity. My belief is that there is not much upside from here due to the huge amount of money necessary to position USU for the loan guarantee assuming that the ACP RD&D program is successful. Likely, you and I will not be able to get a cut of ACP and will only enjoy the small percentage of ownership at USU which may not amount to much for years and years and years down the road. Personally, I see absolutely no reason to hold USU as I do not see any real upside due to the current state of the company and the need for a HUGE amount of capital.