and it is moderately positive. The bogus 333,000 sh quote on the ask at 2.93 was posted about 15 to 20 minutes later. Don't know if the institutional short was trying to put a negative spin on the article or just trying to scare additional sellers into selling going into the close. The short interest for 4-30-2015 will come out on Monday. If it is up substantially from the 7,131,931 shs outstanding on 4-15-2015 and after our stk had already fallen almost $1/sh from 4.23 high following the announcement of Sony's 14.5M order, then some of the shorts knew about the financing and were trading on insider knowledge, In which case the CFO should ask the SEC to look into the trading in or stk for the 3 or 4 weeks preceding the ATM announcement.
Spot On best post of the day. No way that the short interest goes up 1M shs in 15 days in the face of the best news in the company's history without the financing having leaked. The American financial markets are a cesspool.
Hi Geo you are right, we did indeed sell 300K shs at an average price of 3.33/sh so it had to be after the 14.5M order was announced.
Kabu we received 1M from the ATM financing in Q1 and that financing was completed in Q1 (ie. prior to 3-31-2015). I suspect that was most likely done early in Q1 while we were still negotiating the licensing terms with Sony and before we knew for sure that we were going to be getting the up front 8M payment.
With regard to Ben Farhi you are right we don't know what he did with the 1M shs he got from exercising his warrants, he could very well have sold them at a good profit. His 2-14-2015 SEC filing says that at 12-31-2014 he still had 755,157 shs left from what his father gave him and what he bought on his own. We will have to wait for his SEC filings in Feb / March next year to see what he actually did with his shs.
In Q1 we received 2.3M from the exercise of warrants to purchase 1.1M shs of stk. If you remember in the 5-22-2012 financing with Shmuel Farhi & Salvatore Pacifico they bought 3,012M shs & 346K shs respectively and they received 3yr warrants to buy 1,000,000 additional shs at 2.125/sh. Those warrants would have expired on 5-22-2015 if they had not been exercised. So 2.125M of the 2.3M came from the exercise of their warrants and 175K came from someone else who most likely exercised 100K warrants for 100K shs at 1.75/sh, probably someone we contracted with for goods or services in prior years. Shmuel gave his shs to his son Ben and I presume his warrants as well. In his 2-17-2015 SC 13G/A Ben said he sold 2M shs on 12-30-2014 at 1.78 and that he still had 755.157 shs at 12-31-2014 So it looks like he bought back 1M of the 2M shs he sold..
On 12-31-2014 the 10K says that in addition to the Farhi / Pacifico 1M warrants at 2.13 we also had additional outstanding warrants of :
2.1M exercisable at 2.24/sh,
2.148 M exercisable at 2.47/sh, and
1.278 M exercisable at 6.24/sh
I haven't tried to go back and see who originally bought the 2.24/sh warrants but the 2.47 warrants were issued in the March 2014 Oppy financing and Capital Ventures International bought 1/2 of that financing. In their 2-13-2015 SC 13G/A they said that they still owned 1,580,813 of those warrants. Their 1/2 of the warrants issued in the 3-18-2014 financing was 1.074M so somewhere along the line they bought some additional warrants from someone else who participated in that financing.
On 3-31-2015 our Q1 10Q says we had 46,177,000 shs outstanding and the Q1 10Q also says that on 4-27-2015 we had 46,591,000 shs outstanding. So an additional 414,000 shs were issued between 3-31-2015 and 4-27-2015. We will have to wait for the Q2 10Q to see if we are having additional warrant conversions or are issuing additional stk for other corporate purposes. GLTA
In the first week of January we hired our Contract Quality Inspection Technician who was going to spend 6 hours per day using high power binocular and med-low power stereo-zoom scopes. He must not have liked what he saw because the 139K inventory write down is greater than our entire 12-31-2014 inventory of 116K. It is however substantially less than our 3-31-2015 inventory of 432K so lets hope he identified & helped us clear up the issues. The charge of 221K for manufacturing overhead related to capacity in excess of production requirements suggests that these initial product sales have not reached anywhere near our base line capacity. We will just have to wait and see what the Q2 & Q3 reports have to say about these matters.
In some CCs last year AT said our baseline capacity was several hundred thousand units and that these initial 3.8M orders from Sony were to exercise our supply chain. Several hundred thousand units per year is certainly more than 100K and less than 400K. So if we take 200K as a reasonable guess that would mean the 3.8M component order to be delivered over Q4 of last year and Q1 & Q2 of this year couldn't have been for more than 150K units (ie. 3/4ths of the full year capacity) or it would have exceeded our baseline capacity. It is hard to say with the skimpy info. we have what the new capacity level required by the new 14.5M order to be filled in Q3, Q4 of this year & Q1 of 2016 (ie. per the Q1 10Q) will be, but I would think it must be at least somewhere in the 800K to 1M level per year.
It certainly looks like some of our large investors who participated in our various financings over the last few years like our prospects. Cont Part 3
is that we publicly disclosed the 8yr life of the license agreement which along with the royalty, the 250K Qtrly amortization of the 8M license fee, and the MVIS supplied components gives a pretty good bare bones outline of the terms in our arrangement with Sony. I have been wondering why we did this and I guess it's because we wanted to plant our flag & let the Apples, Samsungs, Dells, & Amazons of this world know what the price of admission is going to be to our LBS portion of the Pico Projection market. I know a lot of folks think we have a good shot at being in Hololens and maybe we do, but if you remember several years ago when we were ranking the top 5 of the initial 50 potential customers one of them was a software company. Then in a CC several Qtrs later a questioner asked if there had been any changes in the top 5 and AT said yes and that sometimes we unable to come to a fair divying up of the potential revenue and profits and that sometimes large companies try to take advantage of small companies. From Sony's perspective it might be helpful to their potential 3rd party external customers to see that if they buy their engines from Sony they will have time for at least 2 to 3 full product life cycles at a minimum before Sony's license might need to be extended.
The Q1 10Q says our 1st Qtr product sales were 741K, that the COGS was 1.037M, and that we had an inventory write down of 139K plus a charge of 221K for manufacturing overhead associated with production capacity in excess of production requirements. If you back out those 2 items (ie. which hopefully are one time items) that reduces the COGS to 677K. That is still about double what we will need for 741K of product sales so as the CFO stated in the CC we are indeed having some teething pains in connection with our ramp up of capacity. Cont. in Part II
which expire tomorrow, although I am not sure that the 986 open interest justifies a major struggle.
Then on 3-16-2015 (ie. yesterday) we traded 13,200,900 shs at a high of 3.44 & a close of 3.14 as mentioned in Part 1. When we adjusted the 12,915,181 shs that were sold short at 11-3-2011 for the 1 for 8 reverse stk split we showed 1,588,004 shs of outstanding short interest on 12-15-2011. If you subtract those 1,588,004 shs from the total of 3,545,748 shs sold short as of 2-27-2015 we are left with 1,957,744 shs. And even if every one of those additional 1,957,744 shs that were sold short since 12-15-2011 was sold at the high for it's particular trading day it is now seriously under water. During this past 3 yrs and 4 months we mostly traded below 2/sh with only brief excursions into the mid 2s and one intra day high of 3.38 on 2-21-2014 only to close at 2.83 and then quickly retreat over next few days.
There are lots on metrics that can be used to value stks. EPS with an appropriate PE ratio. Maybe some multiple of actual sales or recorded product or order backlog. But in our case I think our trapped shorts are the most immediate and compelling predictor of our likely near term stk price. One more significant announcement like maybe from our fortune 500 customer and they are toast. They have to cover before that happens or they are going to be in bankruptcy court.
There is no honor among thieves and maybe today's Lenovo Yoga 2 Pro tablet screw up was just an oversight. But it is also possible that it was a deliberate mistake sort of like a reverse Liam Neeson curve ball sponsored or fed to the SA author by some hedge fund that thinks our shorts are vulnerable. Today was a real short squeeze and it is the kind of thing that could lead to a much higher stk price much sooner than any of us expected.
The SA article came out at 2:25 Eastern Time when we had traded a little over 3M shs for the day and were trading in the 3.24 to 3.26 range. Around 3PM a few larger trades started to show up in the 10K sh to 17K sh range and there was at least one 100K sh trade several 50K sh trades between 3 PM and 3:30 PM. But around 3:40 PM all hell broke loose. There was probably close to 2M shs traded between 3:40 PM and 4 PM and maybe a 1/3 or more of that was done at 3.48 to 3.52 per #$%$ 15:58: 57 somewhere in the neighborhood of 180K to 200K shs were sold at 3.52 and at 15:59: 03 a little over 50K shs was sold at 3.52. We finished the day with 5,432,230 shs having been traded and closed at 3.53.
Yesterday we traded 13,200,900 shs with the high for the day being 3.44, set a low of 2.88, and we closed at 3.14. We don't know how many shs were shorted yesterday and won't have any inkling until we see the short report coming out in mid April and that might not tell us either because of the heavy covering today. Of the 1,862,423 shs of MVIS traded today on the NASDAQ and the 204,755 shs MVIS traded on the NYSE 869K shs were in the short accounts (ie. lets say 40% to 45% of todays volume). That % probably was comparable at the other trading venues as well. On our last short report for trades settling on 2-27-2015 we had 3,545,748 shs sold short. When we announced the Sony contract signing on 3-5-2015 we traded 2,338,600 K shs with a high of 2.49 and a close of 2.38. On 3-6-2015 we traded 1,200,700 shs with a high of 2.53 and a close of 2.42 and on 3-9-2015 we traded 1,544,204 shs saw a high of 2.63 and a close at 2.52. Then on 3-10-2015 we held the CC and traded 1,419,900 shs with a high of 2.64 and a close of 2.62. On 3-11-2015 it was 1,323,200 shs traded, a high of 2.75 and a close of 2.72. On 3-12-1205 it was 811,300 shs traded at a high of 2.80 & a close of 2.78 and on 3-13-2015 470,100 shs traded with a high of 2.80 and closed at 2.74. Then on 3-16-2015 (ie.
Thanks Trimuphtoo, I am going to have to study it some. I can see lots of choices for charting stk price changes but not so much for the accumulating volume throughout the trading day.
set out the aggregate trading volume on an hourly basis for a stk on any particular trading day. For instance Yahoo says we traded 13,219,748 shs today. Is there an easy way to find out the number of shs traded thru each hour of the (ie. by 9AM, by 10AM, by 11AM, by Noon, etc.). I was out of pocket today but when I checked during lunch it seems to me now looking back at the entire day that the bulk of the trading had already occurred by 1PM. Thanks in advance for any thoughts or suggestions you might have.
In accounting you match, as best you can, you income and expenses into the same periods to which they are applicable. If the 8M of cash we are getting for licensing our technology & IP to Sony for an undisclosed period of time were subject to some future condition then we would have to record it, or note that it was subject to that future condition. Often when you lease a building for a period of years the landlord will require that you put up a CD for a few hundred K to guarantee that you will perform under the terms of that lease. You have to record that CD as "Restricted Cash" on your B/S. Then as the time goes by the landlord will release an ever increasing % of the CD so that you can use some of that cash for whatever purpose you want until by the time entire lease term has expired you will have access to 100% of your CD. There is nothing in our PR to indicate that our 8M of cash is restricted in any way. However that 8M is part of our compensation for allowing Sony to use our technology & IP for the period of the lease agreement. Therefore although we have unfettered access to that 8M of cash and can use it for whatever purpose we want, our accountants will only record a portion of that 8M license fee as actual income for financial statement purposes in each of the Qtrs during which the license agreement with Sony is in effect. That is one of many reasons why there is often a difference between net income for financial statement purposes and net income for tax purposes.
You might be right S2 but at this point Sony has pretty much cast it's lot with MVIS so they can't afford to let MVIS's funding problems slow down Sony's march to market. I think this will most likely be treated as an advance on future revenues from Sony. Sort of a thinly disguised loan if you will.
The 8M initial license fee will not make MVIS profitable in Q1 of 2015. It will booked into income ratably over the lifetime of the multiple year agreement signed with Sony. It will tell us the lifetime of the multiple year agreement, IF AND ONLY IF, no additional license agreements are signed and additional license fees received before this agreement with Sony expires. The agreement could be for 2 years, 5years, 8 years, etc. we don't know and most likely we will never know until it is renewed, and/or extended.
The significance of the 8M is not profitability but cash flow. It guarantees that MVIS is funded well into Q3 of 2015 at a minimum and until Sony's new smaller 50 lumen engine is introduced to the market. Celluon has already guided us that it hopes to introduce a 50 lumen model with hand gesture recognition by the end of this year and take it worldwide. To do that they will have to place new orders by Q3 at the latest and who knows, if PicoAir & PicoPro receive a gangbusters reception from Best Buy & Office Depot, Celluon could very well place some follow on orders for the current Gen2 engine in Q2 of this year. Sony is looking at a similar time frame if it hopes to bring any pico projector equipped product to market by black Friday or Christmas this year. Ditto for UPS if it wants to expand and get ready for the 2015 Xmas rush. These potential, and I would say probable, Q2 & Q3 orders will provide the cash flow to fund the company thru 2015 and into 2016.
Profitability is a discussion for 2016, for the present lets concentrate on achieving cash flow breakeven and an order backlog in the 10M to 15M range so we can reasonably expect to meet our OPEX needs looking out 3 or 4 Qtrs.
Congradulations to all of the Longs, after all of these years we have finally arrived. And for all of you Shorts, I don't see any cheap or easy exits, the sooner you start covering the better it will be for your sanity.