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Magic Software Enterprises Ltd. Message Board

tanto_man 9 posts  |  Last Activity: Apr 14, 2016 11:36 PM Member since: Aug 28, 1999
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  • tanto_man by tanto_man Apr 14, 2016 11:36 PM Flag

    Will they maintain the dividend, if so shares supported at current price, if not, potentially more down side. Current yield at 9.3%.

  • Reply to

    Convertible Loan Dilution

    by tanto_man Apr 6, 2016 10:00 PM
    tanto_man tanto_man Apr 7, 2016 12:51 AM Flag

    They talked about this at the last CC but did not disclose the reset of the convertible to $1.09 and waited until the 10K to let shareholders know. Very deceiving and not being upfront with the owners of the business.

  • I suggest people read the recent 10K (pg. 57) to understand that the $25m convertible loan just had its conversion price changed from $4.35 per share to $1.09 per share. Basically it is the same as issuing over 20m new shares, even more with the warrants. A major dilution and one that the management an BOD did not disclose to shareholders at the time of issuance or on the last CC. The should have been explained to all shareholders so they could make an informed decision around purchase of the shares. This could be an SEC violation. SO instead of 8+M fully diluted shares, its now close to 30M, I think, but its all very confusing and the company has not been upfront with the shareholders.

    From 10K:
    The Notes are payable in monthly installments, accrue interest at a rate of 7.0% per annum from the date of issuance and will mature 24 months after the First Closing (defined below), unless converted or redeemed earlier. The Notes may be repaid, at our election, in either cash or shares of our common stock at a discount to the then-current market price. The Notes are also convertible from time to time, at the election of the holders, into shares of our common stock at an initial conversion price of $4.35 per share. The conversion price was adjusted to $1.09 per share on January 29, 2016, the 16th trading day following the Reverse Stock Split, per the terms of the Notes.

  • Reply to

    Note Holders Positioned to Take Control

    by tanto_man Feb 20, 2016 6:57 AM
    tanto_man tanto_man Feb 20, 2016 1:35 PM Flag

    That would be a good thing if they get a good price.

  • The one area they seem to be very vague on is the share count as the new convertible loan converts into new shares. Does anybody know the terms of the note and what triggers conversion and at what price? The last analyst on the cc was trying to get info about this but got a very vague response. Lea stated they would be amortizing this each quarter. So if the $25m converts at a $1 they will add another 25m shares in the next 24 months. So I think they are being vague to buy time to get the business operating in a way to increase the price of the stock before providing the information that allows investors to understand 2016/2017 dilution as the note matures.

    On one hand they tell us about expiring warrants but on the other they say nothing about dilution related to note maturity.

    This is my take but maybe some one else has more information that could provide clarity to shareholders on the impact of note conversion to dilution. One thing is for sure, in 24 months they will not be paying back the note in $ but rather in shares the question will be how many shares it will be.

    Sentiment: Strong Buy

  • Reply to

    I think this company is a very good buy here.

    by panalta2000 Feb 10, 2016 1:00 AM
    tanto_man tanto_man Feb 10, 2016 5:44 PM Flag

    That's not a good sign. CC should be open to shareholders asking questions.

  • Reply to

    I think this company is a very good buy here.

    by panalta2000 Feb 10, 2016 1:00 AM
    tanto_man tanto_man Feb 10, 2016 1:47 AM Flag

    The next conference call should be very telling as to what the full dilution is for shareholders after the 3 tranches of debt offering. Also, we need to understand the number of implants per year that would result in a breakeven financial performance. Unfortunately I will be on an airplane during the cc so hopefully one of this boards members can step up and ask the question.

    Sentiment: Strong Buy

  • Dan Gladney is a very successful business person that would not have come to the company had he not seen something of great value. I'm betting on him to take the steps required to increase shareholder value. With a market cap under $10m and an approved implantable device, which seems to work and has patent coverage the downside seems limited. This assumes they can start to generate profitable revenue to reduce the cash burn. I assume they will find a partner for the commercialization of the product and if they accomplish that the shares should move up quite significantly.

    Sentiment: Strong Buy

  • tanto_man tanto_man Feb 9, 2016 6:40 AM Flag

    From SEC filing:
    ST. PAUL, Minnesota, January 13, 2016 – EnteroMedics Inc. (NASDAQ: ETRM), the developer of medical devices using neuroblocking technology to treat obesity, metabolic diseases and other gastrointestinal disorders, today announced that the second tranche of the $25 million Senior Amortizing Convertible Notes (the “Notes”) offering announced on November 5, 2015, has closed, for proceeds of $11 million. EnteroMedics received $1.5 million at the initial closing on November 9, 2015. The third and final tranche, for proceeds of $12.5 million, is scheduled to fund in approximately 45 days. The Company intends to use the net proceeds from this offering to continue its commercialization efforts for the Maestro Rechargeable System, for clinical and product development activities and for other working capital and general corporate purposes.
    The Notes are payable in monthly installments, accrue interest at a rate of 7.0% per annum from the date of issuance and will mature 24 months after the initial closing. At each monthly installment date, the Notes may be repaid, at the Company’s election, in either cash or shares of the Company’s common stock at a discount to the then-current market price. The Notes are also convertible from time to time, at the election of the holders, into shares of the Company’s common stock at an initial conversion price of $4.35 per share (split adjusted). Additionally, in connection with each issuance of the Notes, the Company will also issue to the investors warrants to purchase a certain number of shares of common stock equal to approximately 30% of the number of shares that would be issued if the principal were converted. The warrants are callable under certain circumstances.

    Sentiment: Strong Buy

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