5.25% Convertible Senior Notes
On March 18, 2014, the Company entered into an indenture .. with Wells Fargo Bank, N.A., as trustee, relating to the Company’s issuance of $100 million of 5.25% Convertible Senior Notes. The Notes bear interest at the rate of 5.25% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2014. The Notes will mature on March 1, 2019 unless earlier repurchased by the Company or converted by the holder in accordance with their terms prior to such maturity date.
The Company’s decision to issue the Notes resulted from a deliberative process that considered many factors. The timing of the Notes issuance was determined in part by what the Company was advised and believed to be favorable market conditions. As noted in the Company’s prior public filings, the Company intends to use the net proceeds from the issuance of the Notes for general corporate purposes, which may include potential acquisitions and other strategic business opportunities. The Company believes that the issuance of the Notes provides greater financial flexibility to the Company may enhance our ability to consummate one or several larger and/or more attractive acquisitions and should provide our customers and/or potential customers with greater confidence in the Company’s liquidity.
The Company believes that the consummation of one or more successful acquisitions may result in the utilization over time of a material portion of the Company’s tax net operating loss carry forward (“NOLs”) and generate additional shareholder value. At July 31, 2013, the Company’s federal, state and foreign NOLs totaled approximately $2.0 billion, $450.9 million and $60.1 million, respectively.
Again, assuming they can make successful acquisitions, using the NOLs should result in a higher price per share for MLNK. They are showing $170.5M cash on the balance sheet...
bob, it looks like around half of that loss was from restructuring & impairment charges. The resulting operating loss was better than Q3 last year. They are cutting SG&A costs, and the gross margin is up a bit. That said, I hope to see more improvement going forward. It looks as if their fiscal Q3 may be their lowest due to seasonality - but I haven't checked back to see for sure.
For a possible plus, read my next post.
MLNK is classified by the SEC as an accelerated filer. This is from the SEC website:
Revised Deadlines For Filing Periodic Reports
Accelerated Filer ($75MM or more and less than $700MM)
Form 10-Q Deadline 40 days
MLNKs previous quarter ended Apr30. Today is 40 days from that date, so I expect to see a 10Q filing at some point today.
Just took a look at the stock consultant gizmo on the NAZ site:
BREAKOUT WATCH for possible breakout above 5.45, no resistance in area just above.
Type: Continuation breakout from Single resistance. Target: 6.09
That confirms my feeling, but we don't have a time frame, and as OBHF pointed out there's probably a resistance point at $5.80 (all those longs saying to themselves, "If this stock ever gets back to $5.80-$6.00, I'm selling") . Also note that there isn't any assurance that this will happen just because the technical indicators are pointing to that POSSIBILITY.
I saw somewhere that the script numbers for last week weren't down very badly (something like 2%), and I think that bodes well for us going forward. Hopefully we'll see that $6 mark sooner rather than later.
I think we need to break thru that $5.43-$5.44 intraday high we saw back at the end of May. That might imply a move back to the $6 area. Haven't see any #s for the scripts yet today, but almost all of the other biotech scrip reports I'm seeing are down due to the shortened holiday week.
I'm back from the doctor's office, and upon a closer look at the filing I found, it appears that AVNR is seeking attorney fees (and sanctions) ONLY related to the need for this PARTICULAR filing:
Accordingly, Plaintiffs respectfully request that the Court award sanctions in favor of Plaintiffs and against Defendants in the form of attorneys’ fees incurred in bringing this Motion to Strike.
So it looks as if it's not for the whole case (rats!). I went over to the court site to see if there might be any indication of an appeal, but this was the only filing for June.
B. Plaintiffs Should Be Awarded Attorneys’ Fees
In Connection With Bringing This Motion
Wow! That's interesting! GOT TO GO NOW.
503 REDACTED VERSION of 501 MOTION to Strike and for Sanctions by Avanir Holding Company, Avanir Pharmaceuticals Inc., Center for Neurological Study. (Attachments: # 1 Exhibit A & B)(Noreika, Maryellen) (Entered: 06/04/2014)
I'm running my wife to the oncologist so I haven't got time to copy it here. You're much better at it anyway.
btw, you're right about the overall market direction helping AVNRs pps today. I think of it as a tailwind on up days and a headwind on down days.
sarg, I take your point about the low volume. For whatever reason, the volume in AVNR has dropped over the last few days. Check the trend under the "Historical Prices" link right below the AVNR Pharm. Message Board above:
Date ................ Volume ...... Closing Price
Jun 4, 2014 ...... 1,243,400. .. $5.07
Jun 3, 2014 ........ 1,533,600... $5.08
Jun 2, 2014 ........ 1,953,100... $5.04
May 30, 2014 ...... 3,719,300... $5.28
fed, I think anytime between today and June 9 for the earnings announcement. I haven't been watching this one too closely, but I did see the filing on the CFO that 777cpa mentioned. I'm hoping that he was one of the old guard that they're getting rid of and not because of a problem of some kind.
sarg, one of my investment interests is restaurants, and I had a mess of stock in the one you have in mind. I noticed the other day the stock was over $100 a share. Meanwhile, AVNR is up a dime as we speak.
I'm wondering if the Wei-man will up his estimate after today's tete-a-tete.
He sold 442,212 shares at $5.01 on 5/28. Had he waited a day or two, he could have sold at over $5.40 and netted over $1.75M MORE. Now what's this nonsense about him selling at the top??
"The sales reported on this Form 4 were effected pursuant to a trading plan adopted pursuant to Rule 10b5-1..."
No doubt he could have waited and sold for higher prices just like what has happened on many of the other previous occasions that he sold, but it's easier to #$%$ & moan than to check out the facts.
There are several funds who don't buy stocks trading for less than $5. It will be interesting to see the next institutional reports should AVNRs pps stay above that mark - which seems likely.
For the period ending 05/15/2014, AVNR had short interest of 16,193,060 shares, which is UP over 1M shares from the 15,090,443 reported in the prior period.
So much for that theory.
galaberge, go to the SEC website & search for "Effects of Amendments to Regulation 13D-G"
I posted this a few days ago, but it probably got buried. Long story short, a "qualified institutional investor" would have until mid-February to post the 13G, provided, that is, that their position is LESS than 10%.
If the buyer was indeed an institutional investor, we'll probably see the position reported in a 13F-HR filing, which would appear on or before July 15. It's remotely possible that the holder of a very large short position used the offering to cover their short, and the next report is due out after the market close tomorrow.