The Bear Den

[Spuds McKenz66]

SPCL.........
1) The merger between SPCL and PixelMags (http://www.pixelmags.com/en/ ) is complete (DONE)

2) So far this merger is done 100% by the books – EXACTLY as laid out in the original May 8K

3) The remaining legal entity as of now is the publicly traded stock SPCL which is nothing but the business of PixelMags

4) As per the 8K, NVSOS OS was updated to 217M which will be the OS after the 1:100 RS which is perfectly legal. Nothing wrong with that.

5) New CEO was appointed

6) 3 new Directors appointed

7) The STOP sign was removed recently

8) There is no debt carried from PixelMags.

9) PixelMags was funded by Vert. See here (https://www.crunchbase.com/organization/pixelmags#/entity )

10) The $6M 2019 SPCL note was issued to Vert for that investment which is a standard convertible note in the Startup world. See here (https://www.ycombinator.com/documents/ )

11) The reason it is a SPCL note is because currently the remaining legal entity is SPCL. SPCL is PixelMags. PixelMags shares are no longer relevant

12) Those 2019 notes will be converted to preferred shares at some point in the future which happens all the time.

13) The company will file the finances very soon as they have already mentioned in the recent 8K that the RS will happen before Jan 31

14) Once the finances are filed, the company will apply for a ticker change and RS

15) The plan is to Up-list after the RS.

My Opinion:

16) As a shareholder all that we care about is the pps which in turn depends on the valuation of PixelMags

17) The only question remains is How much is PixelMags worth now. Divide that by OS and you get a pps number

18) No one knows the revenue numbers. But 3 different 3rd parties have mentioned $48M as their last number

19) I work in Startups and pretty familiar with valuation. I am part of the LA Startup community and this is a well-known company.

20) PixelMags is a real Tech company with lots of smart engineers.

21) The number of employees from 3rd party sites mentioned is somewhere between 32 confirmed to 200 not confirmed. This is a solid Tech company in my view

22) These engineers are worth a lot. Google, Apple, Facebook etc. do what is called Acquhire paying hundreds of millions of $$ just to get the engineers.

23) They have tremendous partnership and distribution channel with all the top magazines which is worth a lot.

24) Revenue and profits would be nice but are not that a big deal for valuing a company when it comes to a growing startup. Amazon, Uber, Whatsapp, Snapchat….just look at their early years.

25) The current revenue number is of interest but what I really care about are : traction, User retention, % user conversion to paid customers and PROJECTED GROWTH rate

26) Based on my more than 17 years of work in Startup world and without any numbers to go by, if I have to make a guess, this would be valued way more than $360M at this point.

27) My gut says this may get over $900M valuation if they give good numbers in all metrics.

28) Even $360M translates to $0.20 pps right now. Cut it by half and $0.10 is more than 13X from here

29) But there will be only 18M OS after the RS and a float of below 3-4M shares

30) My guess is that they will go for a secondary offering soon after the up-listing. Vert is also a merchant bank, meaning they must have lined up investors for the secondary by now.

31) There is ZERO evidence to suggest that this is a share selling scam. I mean a big fat ZERO.

32) This is a Tech Startup. Period!

Update: ESO Shares-PixelMags has top notch Engineers with ESO shares same as yours and mine

1) I just found out that PixelMags has top notch Engineers (ex-Google, MySpace)

2) Why It is so Important: All these employees have ESO shares which are original shares of PixelMags. When it is all said and done their shares will be the same common shares as yours and mine.

3) The standard practice is for ESO shares to be vested over 4 years. Since PixelMags was started in 2009, my guess is, if not all, most of these ESO are already 100% vested by now.

4) These guys are not hanging out all these years to get nothing.

5) In fact most of these employees must be expecting millions or tens of millions of $$ from ESO

6) Those who don't know Google and Apple have opened big time offices in LA in recent years and dying for Engineers. And don't forget that SnapChat is in so dire need of engineers that they have people in Silicon Valley only to steal engineers from Facebook, Apple, Google.

7) In other words if they wanted to jump ships, all these PixelMags engineers could have left any day with big paychecks, ESO and sign-in bonus. But they are hanging in with PixelMags

8) Some 3rd party sites suggest that PixelMags has 200 employees, other suggest that they have 70 employees, one site has confirmed 32 employees. My LinkedIn shows at least 16 existing employees in my network.

9) The bottom line is, no matter how you cut it, this is a serious Tech company in business. This is NOT a stinky pinky that some here seems to be suggesting.

P.S: ESO=Employee Stock Option

Good Luck.

Merry Christmas and Happy New Year.

Good Luck all!





On 5/23, we saw an 8k outlining a share swap/Reverse Merger that places PixelMags (pixelmags.com) into the SPCL shell. Pixelmags is a content creation and distribution company that is described in the pixelmags story (https://vimeo.com/53719355), the "world's largest digital distribution company."

What they do is provide print publications (magazines,catalogs, other) reformatting services and a distribution system so those magazines can be read across several platforms--apple, android, PC, and soon the new blackberry. They also allow people to upload and publish their own original content for distribution. The have revenues from content creation, content distribution, ads, and, of course, user data.

This is under the radar by design. From the Share Exhange Agreement:


Quote:
6.1 Publicity. No publicity release or announcement concerning this Agreement, the Transaction Documents or the transactions contemplated hereby and thereby shall be issued without advance approval of the form and substance thereof by Holdings except as may otherwise be required by law (in which case the party making such release or announcement will provide concurrent or, if practicable, prior notice to the other Parties hereto).



This will give some insight into their market: Pixelmags media kit:

http://www.adplayerz.com/wp-content/uploads/2....20121.pdf



Here are two links for insight into the demand for digital magazines and catalogs:

1) "Digital Magazine Publishing to Exceed $35 Billion by 2020"

Here is another source for the digital magazine market projections:

http://www.businesswire.com/news/home/2016022...Exceed-USD

From the article:

According to Soumya Mutsuddi, a lead research analyst at Technavio for publishing and advertising, “The digital magazine platform is expected to grow from 14% in 2015 to 35% in 2020 in the global magazine publishing market. The number of digital magazine subscriptions is anticipated to increase due to the increased preference for digital platforms.”


2) "Digital Editions Gain Market Share"

Considering Pixelmags is the "world's largest digital content distributor" with some of the biggest names in publishing as clients, this article should make longs here smile.


http://blog.realviewdigital.com/digital-publi...s-profile-

The article addresses two areas in which Pixelmags excels: first, that readers want a more immersive experience with added features in the digital versions; and second, that readers want value in addition to those features. Pixelmags provides both the added features and a subscription plan that reduces cost per magazine to less than the print versions.



They are serious about getting this deal right. They intend to uplist, as mentioned in the Share Exchange Agreement:

Quote:
5.2 Boards of Directors. On the Closing Date, Holdings shall have the right to designate three (3) members to the board of directors of Solaris (the “Holdings Designee”) and one member of the board of directors of Solaris shall be designated by the existing management of Solaris (the “Solaris Designee”). Following the Closing Date, Holdings shall select sufficient number of independent directors who shall be persons meeting requirements of independence in accordance with the listing and maintenance rules and regulations of the Nasdaq Capital Markets or the NYSE:Amex relating to the potential uplisting of Solaris Common Stock.


—————

I have watched the officer list closely and have followed Michael Pope's LinkedIn page. He signed the 8k as "president" of Pixelmags and had that title on his Linked in page UNTIL mid July. Adam Levin signed the 8k for Pixel Holdings, Inc. (make sense, since the February VC2 / Vert swap with Pixel Holdings, Inc.)

Michael Pope is managing director of Vert Capital (remember above, Vert / Pixel Holdings, Inc swap. then Pixel Holdings / SPCL swap. He is also president of Boxlight/Mimio.

A Vert Capital Associate (since March 2015), Kip Madden is COO of PixelMags (since April 2015). He was still COO. That is easy to confirm. I called the L.A. office and asked. That Madden remains COO make sense to me--why disrupt daily operations? That Pope no longer lists PixelMags on his linkedIn also makes sense and is, to me, evidence that this is following the plan and in process. See below.

What does this tell us? Well, the Share Exchange Agreement (before the 8k), tells us this:

Quote:
5.8 Resignations. On the Closing Date, the Company shall deliver to Solaris, the resignations of all Persons who held positions as members of the board of directors of the Company and were in office immediately prior to the Closing.


Here is the Share Exchange Agreement:

https://www.lawinsider.com/contracts/4TkCHkeZ...2016-05-23


So, this all seems to be going as planned, and considering the timeline, the increase in bids, and the volume and accumulation, IMO we will know MUCH more VERY soon..





Links to information, including 8k:

Pixelmags website

http://www.pixelmags.com/en/


Watch the Pixelmags story here:

https://vimeo.com/53719355


Pixelmags media kit:

http://www.adplayerz.com/wp-content/uploads/2....20121.pdf


Pixelmags Readr page and video (scroll down for the video)

http://readrapp.com/