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Agreed, Fiat. After gaining over 700% in two trading days, to be down 22% today is to be expected. If we finish the day strong, we go into the CC with a pps several times higher than last Friday's, plus many new investors.
I am expecting predominately good news from the CC.
BDB
Perhaps the quote of the year: "Meanwhile, Oniyide says Xechem International can no longer raise funds in the United States as investors have suspicions about the company."
Ummmm . . . ya' think?
To answer my own question, perhaps the answer lies in the answer to another question: Who would have a controlling interest in Xechem after the reorganizatioin plan is approved? If stock in the reorganized corp. is awarded to creditors in proportion to the respective debt owed to those creditors, I doubt that the hedge fund would have a controlling interest in the reorganized corporation. (Consider the respective amounts of the debts owed to NEXIM, UPS, Blech, holders of outstanding judgments, etc).
If the hedge does not have a controlling interest in the reorganized corporation, what are the chances that Swift remains "in charge." (About as good as my chances of quarterbacking the Chicago Bears to the Superbowl this season.)
Chapter 11 could be dicey for the hedgies.
Certainly a real possibility, but would that be in the best interests of Basu/Swift? If so, what are they waiting for?
I agree . . . a Chapter 11 filing seems more likely.
Again, I am unfamiliar with all of the rules for a Chapter 11
filing, but my understanding is that the debtor may emerge from Chapter 11 proceedings by proposing a reorganization plan, which must be confirmed by the bankruptcy court. But to be confirmed, must not the debtor's plan be approved by a vote of the creditors? If that is true, the creditors would include NEXIM, UPS (Export-Import Bank), the holders of any outstanding judgments against Xechem, Dr. Pandey, etc. Is it reasonable to expect these creditors to give the Xechem (i.e., Basu/Swift) a sweetheart deal?
Again, if Chapter 11 were a viable alternative, why wouldn't Xechem (i.e., Swift) have filed by now? I.e., why keep paying the attorneys to pursue the various pending lawsuits, when filing for Chapter 11 results in an automatic stay of those proceedings.
It seems that what we have here is a valuable asset -- Nicosan -- shrouded in chaos, controversy and, perhaps, incompetence.
What in the world were Basu/Swift/Burg et al. thinking when they carried out the coup?
And what is the game plan now?
Chapter 7 bankruptcy? I have little experience with chapter 7, but I believe that a chapter 7 filing would result in a bankruptcy trustee gathering and selling Xechem's assets to pay the creditors.
I do not see how the license to sell Nicosan would be exempt from this process. Unless Basu's hedge fund or Swift has a lien in the corporation's rights to Nicosan that would make it/him a secured creditor, I don't understand how Basu/Swift could simply avoid all of the corporate debt while taking its most valuable asset. (I think if this were possible, chapter 7 proceedings would have been commenced by now.)
Moreover, I would assume that the documents relating to the NEXIM loan and the UPS (Export-Import Bank) loan may contain language giving those lenders secured status in the event of default and/or bankruptcy (and remember that those loans preceded the loan to the hedge fund).
Is it possible that the hedge fund paid $7,000,000 without thinking through these problems? Is it possible that Burg was not aware of what Dr. Pandey was doing before the hedge fund loan proceeds were paid?
Perhaps Basu and Swift will ultimately pull a rabbit out of the hat, and thereby jettison the common shareholders and all of the debt, while taking ownership of the corporation's rights to Nicosan. But how would that result be viewed by NIPRD, NAFDAC, NEXIM and the Export-Import Bank? These are serious players, not to be taken lightly (expecially if you are trying to manufacture and sell Nicosan in Nigeria).
Finally, how would a corporate bankruptcy filing absolve any individual from any personal liability?
Reading between the lines, I wonder whether Basu and Swift are in above their heads . . . way above their heads.
BDB
lmf1264: I wonder whether this controversy will impact NAFDAC's upcoming decision in July as to whether to extend the two year temporary approval of Nicosan?
Likewise, I wonder whether this fiasco constitutes a breach of the terms of the original license of Nicosan from NIPRID to Xechem? (Surely, that license contains some requirement that Xechem proceed with the production of Nicosan in "good faith.")
I would not be surprised if Xechem ultimately loses its rights in Nicosan.
And frankly, if present management is hell-bent on screwing the retail investors -- and lacks the competence to effectively provide Nicosan to SCD patients -- I will shed no tears if the Nigerian Government takes back the rights to this drug.
BDB
In the words of the immortal Don Meredith on Monday Night Football: "The party's over, turn out the lights."
Night all.
David Letterman's "Top Ten Things I Have Learned From Owning XKEM."
(1) Never buy a stock if the name "Basu" is mentioned;
(2) Sell any stock you own if the name "Basu" is mentioned;
(3-10) Repeat numbers 1 and 2 four times each.
An opinion.
Assuming the accuracy of your statement, the question then is whether the present state of affairs is the result of current management's abject incompetence, or whether the status quo is the result of a planned strategy?
Or perhaps both?
Is there anyone out there in cyberspace who believes that:
(1) Mr. Basu and his associates did not do their due diligence before investing $7,000,000.00 in Xechem International, Inc. (including a thorough review of all of the corporation's financial records); or
(2)That the PIPE investors were, in fact, "surprised" after the deal was closed to learn of the actions taken by Dr. Pandey; or
(3)That it was the intent of present management (both official and unofficial) -- from day one -- to oust Dr. Pandey, and to take appropriate action to ratchet up the PIPE holders' shares/ownership interest in Xechem (as provided for in the PIPE agreement)?
Thoughts, anyone?
A plausible scenario, in my opinion.
Bankruptcy, however, could be dicey. What if the bankruptcy court orders that all of the assets of the corporation (including any and all interest that it has in Nicosan) be sold to pay the creditors? What impact might bankruptcy have on the upcoming renewal (hopefully) of the NAFDAQ license? Or on the SHESTCO arrangement with the Nigerian government?
Moreover, a discharge of the corporation's liabilities in the bankruptcy court might not eliminate the personal liability that any individual(s) may have to the shareholders.
Once a bankruptcy proceeding were commenced, it might proceed into some unintended areas. If I were management, I would think carefully before filing that bankruptcy petition.
Bingo! Ladies and gentlemen, we have a winner.
With all due respect, this isn't rocket science. FOLLOW THE MONEY:
(1) Who put Swift in his current position of power?
(2) Who benefits monetarily by an ever decreasing share price?
(3) Who has ratchet protection, and has enjoyed an exponential increase in their shares as a result of the drop in the pps?
In my very humble opinion, the pending ltigation in no way explains or justifies the refusal of current management to provide the public any information whatsoever regarding the status of construction at SHESTCO, changes in production methods, current output, current sales, etc. These are not opinions folks, they are simply facts! Moreover, to the extent these facts have some relevance to the litigation, they are discoverable by Dr. Pandey as a matter of right.
So, why has management erected this stone wall of silence, which could only decrease the pps dramatically?
Just ask those who stand to benefit.
BDB
I agree 100% Raven. As individual shareholders, each of us holds little power; acting together, we may have a significant, positive impact on the management of Xechem International, Inc.
BDB
light_the_way2001: It's really good to hear from you! I wish your son the very best in treating his illness.
BDB
Thank you, Fox. Excellent work! As I recall, unlike Nicosan, Xechem Nigeria has no rights to this drug; rather, the rights are held by the parent corporation, Xechem International. If so, this could be an important distinction down the road (i.e., important to shareholders of XKEM).
BDB
light_the_way2001: I do indeed wish you the best of luck, and hope that your test results are positive. BDB
Xechem International's Bylaws do require an annual shareholder meeting.
Good post, DDog! eom
Tex: I share your concern that management is "doing something to jetison the shareholders," or to at least diminish our position.
I have given considerable thought to the failure of current management to communicate ANY good -- or even substantive -- news for over six months, even though there have been positive developments (e.g., substantial construction progress). We know about those positive developments only because of the outstanding research performed and shared by ihub posters.
Why has management/Basu imposed this moratorium on communication? As pointed out by many here, it cannot be justified by the pending litigation. Nor can it be explained by the delinquent reports. Those tired excuses are red herrings.
Management knows that cutting off all positive communication for over six months will adversely affect XKEM's pps, yet the silence continues.
IMHO, this is not by chance. Someone (fill in the name[s]) is implementing a strategy.
Over the next 12 months, that strategy should become clear.
BDB
Don't worry . . . I will be on my best behavior (as long as I get that fourth martini).
Maybe it is time for clrmng to bring back his party picture (updated, of course, because some of the participants are no longer with us).
Clrmng, what do you say?
BDB
As Clint Eastwood observed in "The Unforgiven": "I used to be like that . . . I'm not like that any more."
(He then proceeded to shoot about a dozen people in the local bar.)
Maybe we should have the party if the pps ever reaches one cent again?
C'mon, Shekhar, throw us a bone!
BDB
Hey, I said that lsd673 is ONE of the Ihub posters I would like to meet in person!
You are one of the posters with whom I would like to have a four martini lunch.
Actually, given XKEM's pps, I can do without the food.
BDB
lsd673: The much discussed shareholder "party" now seems as likely as lasting peace in the Middle East. However, if that improbable event should ever take place, you are one of the Ihub posters whom I would truly enjoy meeting.
Have a great holiday!
BDB
Perhaps the pertinent question is: Who would benefit from a decrease in share price.
Follow the money.
My prediction:
If another shareholder meeting of Xechem International is held, it will not take place until each of the following events has occurred:
(1) The pending litigation with Dr. Pandey in India has been resolved;
(2) The pending litigation in the New Jersey State and Federal Courts has been resolved; AND
(3) Whatever corporate action may be needed to maximize the financial position of the hedge fund participants has been achieved.
In my opinion, the pending litigation has been used as a justification for the termination of all meaningful communication between management and shareholders. While it may be inappropriate for management to comment on pending litigation, it does not follow that managment may not provide any information to shareholders.
And there has been some good news to report. For example, management did not provide the updated construction photos featured in the ibox (which show significant progress), and management did not inform shareholders of Mr. Oniyide's recent, important statement to the Nigerian press. That information was provided by IHUB posters, with no assistance from management.
I find most interesting the suggestion that management has terminated all communication with shareholders because the release of any information at the present time would adversely affect share price. Hello????? The share price has fallen approximately 90% since the imposition of the "great wall of silence." Do you really believe that this was done to benefit the retail shareholders?
To be candid, my only hope for recovering all/part of my investment here is that -- at some point in the coming months -- managment will undertake a course of action to benefit the hedge fund participants that will also, incidentally, benefit the retail shareholders. (This hope is premised on the assumption that, regardless of motive, current management has the scientific and corporate expertise required to achieve a favorable outcome for Nicosan and all financially interested parties. This is by no means a given.)
For all of his flaws, when Dr. Pandey was running the show, I at least had the feeling that he was somewhat interested in the shareholders. The performance to date of current management inspires no such feeling.
Please forgive the length of my rambling, which should be regarded only as my opinions and speculation.
BDB
The best argument that I can make in defense of Swift's lack of communication with shareholders is that he has no regard for them. That is, the shareholders simply do not register as a blip on his radar. (Bear in mind that there was virtually no communication between management and shareholders BEFORE Dr. Pandey filed his lawusit.)
Other possible explanations of management's behavior are more troubling.
BDB
Thank you lsd673. Given these remarks by Mr. Oniyide to the Nigerian press, it is difficult, at best, to understand why similar information cannot be disseminated in the US by Xechem International's management.
Mr. Oniyide's remarks to the media were made despite the pending litigation with Dr. Pandey, and notwitstanding the delinquent corporate reports. Certainly, one must assume that Mr. Oniyide's remarks were made with the prior knowledge and approval of the management of Xechem International.
The substantive information provided by Mr. Oniyide to the press demonstrate, to me, beyond any reasonable doubt that the pending litigation is not an excuse for management's failure to provide such important information to the shareholders and public on a timely basis.
To those of you who truly believe that the pending litigation prevents management from communicating with its shareholders, I have a wonderful bridge that I would like to sell to you.
(It's in Brooklyn.)
I base my opinions upon lsd's post -- which speaks for itself -- and over thirty years' experience in civil litigation.
BDB
I asked E*Trade why DPDW cannot be traded online, and the explanation I received was the least comprehesible statement I have heard since my 7th grade health teacher tried to explain the meaning of "sex" to our class.
I had to call in also to get some shares at .90. Finally got it done, but I could have mowed the lawn in the time it took!
I spoke with E*Trade, which had no rational answer as to why I could not buy online. I did not have time to deal with a live representative that day. I would assume that online trading via E*Trade will be possible soon.
I tried to make an online purchase of DPDW this am on ETRADE, but a message said that online purchases of this security are currently not permitted, and that I would have to place the order by telephone. Has anyone else experienced this problem?
TIA
BDB
Good work DD. The side by side photo comparison illustrates the progress that has been made in a relatively short (certainly by Nigerian standards) time.
BDB
Good to see you again, mrcsn. eom
The most positive thing I can say about XKEM is that the pps cannot go much lower.
Zero is the bottom, isn't it?
BDB
The Devil you know is sometimes better than the Devil you don't know.
Based upon my limited knowledge, I have concluded that the shareholders would have been better off if Dr. Pandey had not been ousted.
Compare the following, as of the day Dr. Pandey left, and today:
(1) XKEM's pps;
(2) The "exchange" on which we are trading;
(3) The achievements that could be cited by management; and
(4) The frequency and content of the information we receive from management.
I often criticized Dr. P when he was running the show (and I believe those criticisms were justified), but I have no reason to believe that present management has any concern for the SH's. Indeed, everything I have seen thus far points to the contrary conclusion.
And for those of you who attempt to justify what has happened (or not happened) since the coup by repeating the mantra "the lawyers won't let them talk," I have a wonderful bridge I would like to sell you.
BDB
Dr. Swift meant precisely what he said in the July 12 PR. As of July 12, Swift apparently knew that managment would not be releasing any substantive information until the end of the year.
Question 1: How could Dr. Swift possibly know in July that managment would not be releasing information over a six month period?
Question 2: Could such a statement -- followed by six months of management silence -- benefit the PIPE holders?
Do the math.
BDB
I agree with your opinion Light. eom
Yes, this could be the Mother of all shareholder meetings.
BDB