Status of our "return of invest" (Updated)
Updates
* Corrected factual mistake. "Attorneys ... offered $2 million cap Friday on future
regular litigation" (Law360.com) - sorry more money lost from our stock.
* Due to the fact, that the EC attorneys used 1 million in 3 month, the estimate of 2 million
allows us to do an educated guess that the attorney calculate at least with another
6 month for litigation, which fits roughly to the offered schedule of the court.
* Added a potential gains sections, however not really much valid facts are available.
Open Questions:
Does anybody disagree with the analysis- and why, facts please?
Do we have an additional mouth to feed, the company has since Jan a high paid CFO,
afaik the company has no income, so it is paid from our money?
Facts:
At the 29th November it was referenced in (A) that there are about 15 million dollar left.
It was also mentioned that administrative expenses and interest cost will eat into this
with 1 million per month (A). This all goes into position 1-4
In (B) the article mentions that until 20th the equity committee activities did cost 1 Million.
Court documents (C) offer a schedule for omnibus hearings until June.
This is why the estimate goes until June.
Accrual of interest was renegotiated according to (D) and is since October 0. This goes into 05.
There are Series H convertibles in document (H), which would be paid first.
(This is currently disputed, but there are no supporting references).
Assumptions for calculation
1. Initial assumption is that ther 80 Million shares. That means 10 Million dollars convert into
a share price of $0.125.(Can anybody convert this into fact?)
2. For Accrual of interest I assume an average of 100.000 per month from October to Jan.
Not sure about this would be happy to find a valid basis. Oct-Jan are 4 months,
so we "earn" 0.4 Million.
3. According to (C) this legal stuff runs another 5 months, so money will be
spent on operations again. therefore we take the same number as in November
and "earn" again a little bit because interest is 0.
4. There is a dispute that the Series H convertibles do not apply. As there
are no facts available, i assume the worst case, it has to be paid.
5. Supporting (C) is the offer of the fee cap of 2 million dollar of the EC attorneys,
which meanch if we use the money burn rate of the EC until January, that they burn
in 3 month 1 million, which allows to calculate, that they estimate another 6 months
for litigation.
Calculation:
* kept everything what was written, deals like the removed interest show up as
earnings here
--------------------------------------------------
# | |Mill
--------------------------------------------------
01|Remaining money on November 29 |+ 15
02|administrative expenses + interest Nov |- 1
03|administrative expenses + interest Dec |- 1
04|administrative expenses + interest Jan |- 1
05|Equity Committee Cost until Jan 20th |- 1
06|Deal of EC (no accrual interest) Jan 19 |+ 0.4
07|Series H Convertibles |- 7
--------------------------------------------------
Money Left on Jan 20th | 4.4
-------------------------------------------------
30|administrative exp.+interest until Jun30|- 5
31|Equity Committee (Fee Cap) until Jun 30 |- 2
32|Deal of EC (no accrual interest) Jan 19 |+ 0.5
--------------------------------------------------
Estimate of Money Left on Jun 30 - 2.1
--------------------------------------------------
Conclusion on a No-Win Scenario by EC-Scenario
If they settle in January, there will be a return of 0,055 per
share. The company will be a chapter 7 bankruptcy case at the
beginning of May. This means no money left for common stock
holders.
Potential Gains
A warning before we begin. This is a potential
gain for common stockholders, which is not supported right
now by some evidence publically available, everything is
based on rumors around another criminal case with Platinum.
The losses described above have some factual basis, so
are more probable than the gains described now
Currently there is a lawsuit prepared by EC, which tries to reduce
debt to Platinum et al. The initial claim of the lawsuit was
50 million dollar, though this is never repeated
in the court documents (to my knowledge).
Current court documents (C) and the the Assumption (5) show
that at the earliest time of payout is June.
We can assume that his will be somewhere in between the
worst and best case scenario.
worst case 0 - 2.1 = -2.1 (bankrupt no money left for stock holders)
base case 50- 2.1 = 47.9 (maximum, optimistic case)
worst case means: share price is 0.0
best case means: share price is 0.59
Decide for yourself.
References:
(A) https://www.law360.com/articles/866723/implant-sciences-equity-holders-get-challenge-extension
(B) https://www.law360.com/articles/883105/imx-equity-panel-offers-fee-cap-for-ch-11-lender-suit
(C) http://www.kccllc.net/imxacquisition/document/1612238170120000000000003
(D) http://www.kccllc.net/imxacquisition/document/1612238170119000000000002
(E) https://www.sec.gov/Archives/edgar/data/1068874/000106887416000139/imsc160930_10q.htm
See page 3 of which shows 7000 shares of Series H preferred stock worth $7 million.
Those would get paid first before common stock.
From page 26: Between August 11, 2016 and August 23, 2016, DMRJ converted $7,000,000 of principal into 7,000 Series H Convertible Preferred Stock shares, of which DMRJ assigned 4,401.54 shares of Series H Convertible Preferred Stock to Platinum Partners Value Arbitrage Fund LP and distributed 1,467.18 shares to ED&F Man Capital Markets Limited and 1,131.28 shares to Prime Capital (Bermuda) Limited.
Contributors:
Thanks to:
* iGrassHopper
* int10a
