Yes...my math tells me they lost $250k in the 4th quarter. Given the outlays for Mexico, not a bad burn rate, and it seems like the convertible debt is meant to bridge them to profitability. PR seems very positive to me...note the comment on the hold period for shares issued on conversion.
I think everyone is over thinking this. The PR said it was for long lead items. You can't park your working capital as deposits/payments for long lead items and hope to operate for the next couple of quarters. They needed money that could be parked for 9+ mos. Equity is the obvious option, notwithstanding how distasteful it is to sell equity at these levels.
I don't criticize your thinking on the stock, but can I ask why you sold down so hard? I would imagine that with a limit order at $.23 you would have sold out your shares in a matter of a week. Instead, you voluntarily took at 20-25% loss. Why? No offense intended, just curious.
Hopeful...first, congratulations! Family is always more important than this investing nonsense.
Second, while nobody likes this type of financing, I do think it was unexpected and necessary. The release said they need it for some long lead items. if that is true, they cannot use their working capital for current inventory build and turnover to park with a supplier for those long lead items. They need additional capital that will unfortunately be tied up. They would only know this if they were actively engaged in procuring long lead items.
I don't think anyone can say they thought the company was cash flush so this is not a big surprise.
Yes...but your assumption is "sell into the market for an immediate profit." Easier said than done. At these levels, the investor would convert into over 3 million shares. There's no indication the shares are registered. At 23k shares traded daily, how long do you think it would take to unload shares even if acquired at a 30% discount to market? We're talking months if not a year.
Agreed, and in a stock that doesn't trade many shares on a daily basis, they have to have significant confidence, because it would be hard to move millions of shares, even at lower prices.
Yep...boxes the liability. Seems like the kind of outcome you get when lawyers are involved....I want this...okay, if you get that, then I want this...yada, yada.
I am curious what the financing is for...bus opps or corp. needs. Big difference..
Yes...I was looking at this portion of the 8K: "The Investor has contractually agreed to restrict its ability to exercise the Warrant and convert the Note such that the number of shares of Common Stock held by the Investor and its affiliates after such conversion and/or exercise does not exceed 9.99% of the Company’s then issued and outstanding shares of Common Stock."
I did not see that language in the release I read...yes, you are right. That, together with the full ratchet reset makes this a dangerous financing for existing holders. I guess the one salve is the 10% cap on ownership but there is a potential for significant dilution with this financing. Let's hope the loan is to fund existing opportunities that will generate immediate revenues.
I looked at the last 100 trades on nasdaq site and by my eyeball estimates, it looks like about 100k traded in varying lots over a short time. Maybe there were more. That looks like a fund liquidating, and perhaps a fund getting in?
If you're talking about the convertible debt offering, basically the Co. got a loan at an okay price, with interest at 6%, and the investor got the right to convert its loan to shares at a $.25 conversion price. It also got warrants at $.50, which only have value if the price doubles from here. Overall, if the company needs money, not a bad financing, particularly as the co. can buy back the debt to avoid conversion.
Wow...you are working hard, but sometimes you have to do so in a riptide. Remember, in a riptide, sometimes it is just smarter to stop fighting against it and get out. Think about it.
Yeah...I saw it. I can imagine you have more immediate information where you are than what I have here, but every energy stock I follow is in the tank and the view of any catalysts for the industries is cloudy, at best. Obama has done a great job of killing fossil fuels, hasn't he (or better put, he's having them kill each other).
Okay...I'll bite. Why are you excited over the energy sector? Seems to me that the short is near over as most of the drop is baked in and now it's about guessing who's going to survive. There is also little visibility on when the sector recovers. With NG glut, coals at historical lows and oil at multi year lows, where is the demand going to come from that drives up prices in any of these sectors?
LOL...you should stop posting while you are ahead. Anabolic has been around Info for nearly 7+ years, after coming over from wirx. B_fr_nk comes and goes as he sees momentum opps. They are definitely not the same person. Stick around for a few years and you'll start to know some of the posters, like Hopeful200, etc. I've conversed with many of them--some off boards--for upwards of 10 years.