SiNtx Technologies Inc (SINT)

[CL101]

Continues from previous post:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=136209604

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This is the 2nd example that shows Hercules allowed their borrowers to enter into M&A deals even though they still carried loan balance & the the loan term with M&A prevention covenants:

April 30, 2015 - $25 Mil Loan w/ Hercules:

"On April 30, 2015 (the “closing date”), we entered into a loan and security agreement (the “credit facility”) with our direct and indirect domestic subsidiaries, as co-borrowers, Hercules Technology Growth Capital, Inc. (“Hercules”), as administrative agent, and the lenders party thereto from time to time (the “Lenders”), including Hercules, pursuant to which the Lenders agreed to make a term loan available to us for working capital and general business purposes, in a principal amount of $25 million."

"The negative covenants include, among others, restrictions on our transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets, and suffering a change in control, in each case subject to certain exceptions, as well as financial covenants requiring us to maintain certain minimum levels of revenue and adjusted EBITDA."

https://www.sec.gov/Archives/edgar/data/1297336/000143774915008980/rloc20150505_8k.htm

June 27, 2016 - M&A w/ Gannett Co., Inc.

"On June 27, 2016, ReachLocal, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Gannett Co., Inc., a Delaware corporation (“Parent”), and Raptor Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”), pursuant to which, and on the terms and subject to the conditions thereof, among other things, Purchaser will commence a tender offer (“Offer”) to acquire all of the outstanding shares of common stock of the Company (the “Company Shares”) at a purchase price of $4.60 per Company Share net to the holder thereof in cash, subject to reduction for any applicable withholding taxes, without interest (the “Offer Price”)."

https://www.sec.gov/Archives/edgar/data/1297336/000110465916129546/a16-13992_18k.htm

Loan Paid off on M&A close day (Hercules must have provided the Letter of consent to allow them to proceed on their planned M&A):

"Item 1.02. Termination of a Material Definitive Agreement."

"On August 9, 2016, in connection with the Merger, the Company (i) repaid in full all outstanding indebtedness, including principal, interest, fees and all other amounts due in connection with such repayment under the Loan and Security Agreement, by and among the Company, certain subsidiaries of the Company, the lenders party thereto, and Hercules Capital, Inc., as agent, dated April 30, 2015 (as amended from time to time, the “Loan Agreement”), and (ii) terminated all obligations under the Loan Agreement, except for certain indemnification obligations. In connection with such payoff, the security interests granted pursuant to the Loan Agreement were terminated and released."

https://www.sec.gov/Archives/edgar/data/1297336/000110465916138181/a16-14003_198k.htm

"ReachLocal, Inc. (NASDAQ: RLOC), a leader in powering online marketing, helping local businesses grow and operate their business better with leading technology and expert service, was acquired by Gannett Co., Inc., (NYSE: GCI), a next-generation media company committed to strengthening communities across the company’s network, for $4.60 per share in cash, via a tender offer. The transaction closed on August 9, 2016. Hercules initially committed $25.0 million in venture debt financing to ReachLocal in April 2015. The Company recognized a net realized gain of $610,000 from the transaction, generating a fully realized IRR of approximately 24.1% from its loan repayments and equity/warrant gains."

https://www.sec.gov/Archives/edgar/data/1280784/000119312516758899/d283923dex991.htm

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On their recent 3rd Quarter 10-Q, it clearly shows 9-month total lost in 2017 ($7.07 mil) is even less than 3-month period from July-September in the year of 2016 ($10.62 mil)

https://www.sec.gov/Archives/edgar/data/1269026/000149315217013249/form10q.htm

They try to minimize the impact on the suitor (zimmer)'s proforma EPS

Reading the link below, you will see why they want the EPS to be as close to 0 (break even) as possible:

https://corporatefinanceinstitute.com/resources/knowledge/valuation/proforma-earnings-eps/

To further to control the EPS impact on the suitor (zimmer), i would guess they will try to control the # of shares issue initially:

Shares Swapping (possibly w/ some cash) + Contigent Value Rights (IPR&D milestones = Japan, China, Knees, Hips, Dental, 3D Printing, Metal Brazing, CSC, CSC Lumen, etc...)

AMDA has 2 main & most valuable groups of long-lived assets:

1. 1st & 2nd Gen. Si3N4 Patents (20 years life term in USA) = Finite-lived intangibles assets group = Audit & Measure using ASC 360

2. IPR&D = Infinite-lived intangible assets group = Audit & Measure Fair Value using ASC 350

*** You can dig thru my old posts to see some info I posted on IPR&D auditing ASC 350 ***

Let refresh some memory on "long-lived asset" audits in NT filings:

It has been awhile, everyone is pretty much forgot about this regarding the narrative of their NT 10-K filing back in April:

"When companies file these 8Ks, it’s unusual to reference long-lived assets in particular as the driving factor, and that Amedica was dressing itself up for acquisition would explain this specific reference."

https://insiderfinancial.com/amedica-corporation-nasdaqamda-looks-set-for-revaluation/123437/

AMDA w/ "long-lived asset auditing" language back in May:

https://investors.amedica.com/all-sec-filings/content/0001493152-17-005915/0001493152-17-005915.pdf

150+ tickers (out of 700 tickers w/o M&A event) i have dug thru. with NT filings, I don't even see 1 w/ the language of "long-lived assets audit" in their filings like AMDA's

Boston provided one example w/ "long-lived asset audit" language in their NT filings, then later on the same year they were acquired by another company:

Intermec Inc (ticker = IN)

"Long-lived asset audit" language in this NT Filing:

https://www.sec.gov/Archives/edgar/data/1044590/000119312512231672/d319657dnt10q.htm (2012-05-14)

December 9, 2012 = M&A news:

https://www.sec.gov/Archives/edgar/data/1044590/000119312512496079/0001193125-12-496079-index.htm

*** The value of IPR&D can be subtantial ***

https://www.allergan.com/news/news/thomson-reuters/allergan-to-acquire-tobira-therapeutics-expanding

(over $1 billion on CVRs in the deal, they got acquired after FDA rejected their drug!!!)

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Clean Capital Struture & Controllable Level of Debt:

https://seekingalpha.com/article/4033475-kate-spade-good-takeover-target

Coach acquired Kate Spade:

https://www.forbes.com/sites/greatspeculations/2017/05/09/coachs-acquisition-of-kate-spade-finally-comes-to-fruition/#14050593e269

*** AMDA has low or even i can say 0 debt soon (2 more payments) & clean capital share structure ***

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This is the previous example regarding no annual meeting in M&A year (replaced w/ DEFM14A):

They didn't file DEF 14A for annual meeting in 2016 = the M&A year

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000043350&type=DEF+14A&dateb=&owner=exclude&count=40

They only filed DEFM14A:

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000043350&type=DEFM&dateb=&owner=exclude&count=40

Gas Natural Inc. (EGAS)'s auditing firm before M&A (they used a special auditing firm in Oil & Gas industries to audit their 10-K prior M&A)

http://www.malonebailey.com/Industries/Oil-and-Gas/

Before they announce M&A new, they changed their Certifying Accountant to a very tiny CPA firm:

https://www.sec.gov/Archives/edgar/data/43350/000114420416120338/v447368_8k.htm

Weeks later, they announced the M&A news:

https://www.sec.gov/Archives/edgar/data/43350/000114420416127707/v450334_8k.htm

Similarly, AMDA ended their contracts w/ the M&A auditing firm BDO back in September 2017:

http://secfilings.nasdaq.com/filingFrameset.asp?FilingID=12291693&RcvdDate=9/22/2017&CoName=AMEDICA%20CORP&FormType=8-K&View=html

Someone here said BIG RED FLAG regarding internal control...lmao...not even when you compare AMDA to this BILLION MARKET CAP company (TERP):

https://www.sec.gov/Archives/edgar/data/1599947/000159994717000108/exhibit231auditorconsentle.htm (tons of red flag right? lmao)

Guess what??? They had M&A event as well!!!

Here is the list of their filings, which is very similar to AMDA to...

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001599947&type=&dateb=&owner=exclude&start=0&count=40

NT 10-K 2016-02-29

NT 10-Q 2016-05-11 (Q1)

NT 10-Q 2016-08-10 (Q2)

NT 10-Q 2016-11-10 (Q3)

10-K 2016-12-05 (AMDA Filed on 2017-09-20)

10-Q 2016-12-06 (Q1) (AMDA Filed on 2017-10-31)

10-Q 2017-02-07 (Q2) (AMDA Filed on 2017-10-31)

10-Q 2017-02-24 (Q3) (AMDA Filed on 2017-11-14)

*** They released their 10K & Qs way & way late as compares to AMDA did, even rolled over to early 2017 ***

Guess what they filed next?

M&A 8-K on 2017-03-07, right after all 10-K, Q1, Q2, Q3 filed:

https://www.sec.gov/Archives/edgar/data/1599947/000156761917000392/s001585x1_8k.htm

*** AMDA filed all these filings 11 weeks earlier than they did...Shall we see our M&A 8-K soon? We should ***

What more interesting is....they didn't have annual meeting in 2016 (the year they filed all the NT filings).

They didn't disclose executive compensations as well in 2016!!!

This is a billion market cap company...obviously their books is way more complicated than AMDA's & took them longer to audit their assets.

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Long & Strong until the M&A day

BULLs don't feed the BEARs

Hold tight to your shares.

For me, they push it down, I buy!

At the end of this whole M&A saga,

it's all about X amount of shares i have vs. fully diluted OS = my % of cut on the deal!

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