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This could be a surprise turnaround story in the making.
Qualmark Debuts New HALT/HASS Table Technology
May 26, 2010
Qualmark Corporation, the world’s largest provider of HALT/HASS (Highly Accelerated Life Test/Highly Accelerated Stress Screen) products and services, has officially launched its latest innovation in HALT/HASS technology, the xLF2 table. The new technology started shipping with Qualmark's top rated Typhoon series to select customers late last year. The excellent performance reports confirmed Qualmark's decision to move forward with system wide deployment of the xLF2. Extensive R&D led to this design which introduces PSD (Power Spectral Density) table management capabilities to the HALT/HASS marketplace. Maintainable PSD performance provides a powerful asset for maintaining HALT/HASS program consistency.
"The xLF2 release represents another technology milestone for the Accelerated Stress Test (AST) industry with the introduction of PSD management for Qualmark customers", points out Andy Drenick, Qualmark President and CEO. "PSD management is an industry first, enabling consistent and reliable Random Shock vibration performance for Original Equipment Manufacturers' (OEM) HALT program in geographically disparate HASA supply chains."
"Upgrades from xLF to xLF2 completed or in process total over 100 systems worldwide, demonstrating the rapid acceptance of this new technology," points out Ross Atwood, Qualmark's Director of Service. "Feedback has been uniformly positive, particularly the ability to reach higher g’s with less throttle and PSD reliability. Test Engineers have expressed their attraction to the new table and are planning to use higher g’s in their profiles.”
The xLF2 more fully leverages the Typhoon’s advanced control system, executing a more precise response to Typhoon Manager’s vibration and thermal commands. The 14-bit PLC (Programmable Logic Controller) improves granular control fivefold enabling the Typhoon system to maintain ±1°C during soaks and virtually eliminating overshoots.
New capabilities are enabled with the 14-bit controller platform including 3 levels of security (User, Technician, and Administrator), output boost settings, vibration throttle limits, and more. For HALT/HASS systems operating with older controllers, or where test plans call for heavy system use, Qualmark recommends an upgrade to the new xLF2 to enhance performance.
Pacific Safety Products Inc. Announces Offer to Purchase the Company
8:02 AM ET, May 13, 2010
KANATA, ONTARIO, May 13, 2010 (MARKETWIRE via COMTEX) -- Pacific Safety Products Inc. ("PSP") (PSP) today announced that it has received an offer from Revision Eyewear Inc. ("Revision") to purchase all the issued and outstanding shares of PSP at a price of Cdn $0.18 per share in an all-cash transaction.
Revision is a private company with corporate headquarters in Montreal and operational headquarters in Essex Junction, Vermont, USA which develops and delivers purpose-built eye protection solutions for military and tactical clients worldwide.
The purchase price represents a premium of 50% over the weighted average trading price of PSP's common shares on the TSX-V for the 30 trading days prior to March 4, 2010, the date on which the Company announced that it was in discussions with a possible purchaser and a 13 % premium over the weighted average trading price of the Company's shares for the nine month period prior to that announcement. The purchase price represents an aggregate transaction value of approximately $4.6 million, and is subject to downward adjustment in the event that PSP's transaction costs exceed $225,000.
The transaction, which is structured as a plan of arrangement, was unanimously approved by PSP's Board of Directors on May 12, 2010, following receipt of the recommendation of a special committee of the Board and a fairness opinion from Grant Thornton LLP concluding that the consideration under the transaction is fair, from a financial point of view, to shareholders of PSP. The directors and senior officers of PSP (who collectively hold approximately 2 per cent of the outstanding common shares of PSP) have agreed to vote their shares in favour of the transaction.
The transaction is subject to court approval and to the approval of at least two-thirds of the votes cast by PSP shareholders present in person or by proxy approval of shareholders of PSP at a meeting called for June 17, 2010. The transaction, which is also subject to all requisite approvals, third party consents and other conditions precedent, is expected to close on or around June 23, 2010. Following completion of the transaction, the common shares of PSP will be delisted from the TSX-V and no longer traded publicly.
Pursuant to the arrangement agreement, PSP has agreed not to solicit competing transactions, but is not prohibited from responding to unsolicited enquiries or competing offers which the directors of PSP reasonably believe are likely to result in a superior proposal. In the event that PSP terminates the arrangement agreement to endorse a superior proposal, PSP is required to pay a break fee to Revision of $350,000 and to reimburse Revision's transaction costs to a maximum of $150,000.
Details regarding these and other terms of the transaction are set out in the arrangement agreement and in a proxy circular that PSP will mail to holders of common shares in connection with the special meeting of shareholders to be held to approve the transaction. It is expected that these materials will be mailed out at the beginning of June, 2010. The arrangement agreement and the proxy circular will be available at www.sedar.com.
ksuave - Can you recap? I was unable to make the webcast.
Regards, KR
Pacific Safety Products Inc. Announces Fourth Quarter and Fiscal 2009 Results
6:01 AM ET, October 19, 2009
KANATA, ONTARIO, Oct 19, 2009 (MARKETWIRE via COMTEX) -- Pacific Safety Products Inc. (PSP) ("PSP" or "the Company") today announced its consolidated financial results for the three and twelve month period ended June 30, 2009.
FISCAL 2009 SIGNIFICANT EVENTS:
- Announced almost $35 million in new multi-year contract awards.
- Increased sales from U.S. operations by almost 50% as compared to the prior year.
- Generated more than $1.2 million of Normalized Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"); an almost threefold increase as compared to the prior year.
- Increased gross margins by almost 1% as compared to the prior year.
- Decreased selling, general and administrative expenses by $0.5 million or almost 7% as compared to the prior year.
- Established a $1.4 million USD operating line of credit to fund working capital of growing U.S. operations.
- Entered into a contract with the National Research Council Canada with a Contribution Agreement valued at up to $0.5 million to begin development of a next generation Integrated Helmet for soldier modernization.
- A significant and sustained decrease in the market capitalization of the Company led to an $8.5 million non-cash Goodwill impairment charge.
Mr. David Scott, Chief Executive Officer commented, "I am extremely pleased with our progress this year. In spite of the current economic environment and the completion of two significant multi-year military contracts during the year, we were able to achieve a modest sales increase. In addition, operational improvements precipitated an almost 1% improvement in gross margins in spite of increased costs related to the weakness of the Canadian dollar. Management also expects that the restructuring activities during the year will yield an almost $1.0 million reduction in operating costs on an annualized basis."
Mr. Scott also commented, "Notwithstanding the improved operational results, the Company recorded a non-cash Goodwill impairment charge of approximately $8.5 million during the fourth quarter. This action is primarily as a result of a sustained decrease in the market capitalization of the Company. In previous periods, with less favourable operating results, there was no impairment to Goodwill as our market capitalization met the implied value. Unfortunately the new normal for valuation of micro cap stock in the market is significantly less than in earlier times. The non-cash impairment charge does not reflect the current operating performance or potential of the Company. The Company is well within its operating lines of credit and bank covenants, operational improvements continue to yield positive results and cash flow continues to strengthen."
For complete consolidated financial statements with notes and management discussion and analysis please refer to PSP's annual report to shareholders. This report is posted on SEDAR (www.sedar.com) and on our web site.
Summary consolidated financial results for the three and twelve monthperiod ended June 30, 2009, are as follows:SUMMARY CONSOLIDATED BALANCE SHEETS$Thousands JUNE 30, JUNE 30,AS AT 2009 2008---------------------------------------------------------------------------ASSETSCURRENT ASSETS $ 8,799 $ 11,893PROPERTY AND EQUIPMENT 1,711 1,683OTHER ASSETS 1,912 1,138INTANGIBLE ASSETS 3,078 3,462GOODWILL - 8,454---------------------------------------------------------------------------TOTAL ASSETS $ 15,500 $ 26,630------------------------------------------------------------------------------------------------------------------------------------------------------LIABILITIESCURRENT LIABILITIES $ 6,628 $ 9,038OTHER LIABILITIES 59 -LONG-TERM DEBT 1,161 876---------------------------------------------------------------------------TOTAL LIABILITIES 7,848 9,914SHAREHOLDERS' EQUITY 7,652 16,716---------------------------------------------------------------------------TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,500 $ 26,630------------------------------------------------------------------------------------------------------------------------------------------------------SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS$Thousands THREE THREE TWELVE TWELVE MONTHS MONTHS MONTHS MONTHS ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2009 2008 2009 2008---------------------------------------------------------------------------SALES $ 7,188 $ 10,210 $ 35,035 $ 34,798COST OF SALES 5,631 7,941 26,580 26,734---------------------------------------------------------------------------GROSS MARGIN 1,557 2,269 8,455 8,064 21.7% 22.2% 24.1% 23.2%SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,814 1,955 7,318 7,842---------------------------------------------------------------------------OPERATING INCOME / (LOSS) (257) 314 1,137 222AMORTIZATION 195 201 797 852FOREIGN EXCHANGE (GAIN) / LOSS 160 (8) 291 151INTEREST 41 86 207 273---------------------------------------------------------------------------INCOME / (LOSS) BEFORE OTHER ITEMS (653) 35 (158) (1,054)RESTRUCTURING / RELOCATION COSTS 265 160 418 1,140GAIN ON SALE OF BUILDING - (718) - (1,432)GOODWILL IMPAIRMENT CHARGE 8,454 - 8,454 ----------------------------------------------------------------------------INCOME / (LOSS) BEFORE INCOME TAX (9,372) 593 (9,030) (762)INCOME TAX EXPENSE / (RECOVERY) 306 (132) 181 (541)---------------------------------------------------------------------------NET AND COMPREHENSIVE INCOME / (LOSS) ($9,678) $ 725 ($9,211) ($221)------------------------------------------------------------------------------------------------------------------------------------------------------SUPPLEMENTARY DISCLOSURE$ThousandsThe following is a reconciliation of Net and Comprehensive Income (Loss) toNormalized Earnings Before Interest, Taxes, Depreciation and Amortization(EBITDA) THREE THREE TWELVE TWELVE MONTHS MONTHS MONTHS MONTHS ENDED ENDED ENDED ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2009 2008 2009 2008---------------------------------------------------------------------------NET INCOME / (LOSS) ($9,678) $ 725 ($9,211) ($221)INTEREST EXPENSE 41 86 207 273INCOME TAX EXPENSE / (RECOVERY) 306 (132) 181 (541)STOCK BASED COMPENSATION 66 26 168 159AMORTIZATION 251 247 1,019 1,050ONE-TIME GAIN ON SALE OF BUILDING - (718) - (1,432)ONE-TIME RESTRUCTURING COSTS 265 160 418 1,140GOODWILL IMPAIRMENT CHARGE 8,454 - 8,454 ----------------------------------------------------------------------------Normalized EBITDA ($295) $ 394 $ 1,236 $ 428------------------------------------------------------------------------------------------------------------------------------------------------------
Pacific Safety Products Inc. Announces FY2009 Third Quarter Results
6:00 AM ET, May 26, 2009
KANATA, ONTARIO, May 26, 2009 (Marketwire via COMTEX) -- Pacific Safety Products Inc. (PSP) ("PSP" or "the Company") today announced its consolidated financial results for the three-month period ended March 31, 2009.
QUARTER HIGHLIGHTS:
- The Company increased net income during the quarter by almost 40% as compared to the same period of the prior year.
- U.S. sales during the quarter more than doubled as compared the same period of the prior year.
- The Company generated almost $1.0 million of Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") during the quarter, an increase of 11% as compared to the same period of the prior year.
- Operational improvements have increased gross margins by more than 1% on a year to date basis as compared to the same period of the prior year.
- Selling, general and administrative expenses decreased by more than 25% during the quarter as compared to the same period of the prior year.
- The Company entered into a contract with the National Research Council Canada with a Contribution Agreement valued at up to $0.5 million to begin development of a next generation Integrated Helmet for soldier modernization.
Mr. David Scott, Chief Executive Officer commented, "I am extremely pleased with our progress to date. With three quarters of the year complete, sales are up more than 13% and gross margins are up more than 1% over last year. In addition operating expenses decreased by more than 25% during the quarter as compared to the comparable period last year. These results are a function of the operational improvements made over the last 12 months, specifically, the establishment of our manufacturing facility in Arnprior, the re-location of our head office to the Ottawa area, and the integration of the APS acquisition. The Company also generated net income of more than $0.4 million during the quarter, an increase of almost 40% as compared to the comparable period of the prior year. The Company continues to be well within its operating line and bank covenants. Cash flow continues to strengthen as the Company generated almost $1.0 million of EBITDA during the quarter. In addition to our positive financial results, we are excited about the market opportunity related to integrated soldier systems and to that end have secured up to $500,000 in financing through the National Research Council Canada with a Contribution Agreement to begin development of a next generation Integrated Helmet for soldier modernization."
For complete consolidated financial statements with notes and management discussion and analysis please refer to PSP's annual report to shareholders. This report is posted on SEDAR (www.sedar.com) and on our web site.
Summary consolidated financial results for the quarter ended March 31, 2009, are as follows:
SUMMARY CONSOLIDATED BALANCE SHEETS (unaudited)$ThousandsAS AT MARCH 31, 2009 JUNE 30, 2008--------------------------------------------------------------------ASSETSCURRENT ASSETS $12,199 $11,893PROPERTY, PLANT AND EQUIPMENT 1,763 1,683OTHER ASSETS 1,721 1,137INTANGIBLE ASSETS 3,174 3,462GOODWILL 8,454 8,454--------------------------------------------------------------------TOTAL ASSETS $27,311 $26,629----------------------------------------------------------------------------------------------------------------------------------------LIABILITIESCURRENT LIABILITIES $ 8,797 $ 9,038LONG-TERM DEBT 1,213 875--------------------------------------------------------------------TOTAL LIABILITIES 10,010 9,913SHAREHOLDERS' EQUITY 17,301 16,716--------------------------------------------------------------------TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $27,311 $26,629----------------------------------------------------------------------------------------------------------------------------------------SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)$Thousands THREE THREE NINE NINE MONTHS MONTHS MONTHS MONTHS ENDED ENDED ENDED ENDED MARCH 31, MARCH 31, MARCH 31, MARCH 31, 2009 2008 2009 2008---------------------------------------------------------------------------SALES $10,549 $10,639 $27,848 $24,587COST OF SALES 7,934 7,679 20,950 18,792---------------------------------------------------------------------------GROSS MARGIN 2,615 2,960 6,898 5,795 24.8% 27.8% 24.8% 23.6%SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,725 2,260 5,505 5,884---------------------------------------------------------------------------OPERATING INCOME/(LOSS) 890 700 1,393 (89)AMORTIZATION 224 195 602 652FOREIGN EXCHANGE (GAIN)/LOSS (19) 128 131 160INTEREST 51 109 166 187---------------------------------------------------------------------------INCOME/(LOSS) BEFORE OTHER ITEMS 634 268 494 (1,088)RESTRUCTURING/RELOCATION COSTS - - 152 980GAIN ON SALE OF BUILDING - (239) - (714)---------------------------------------------------------------------------LOSS BEFORE INCOME TAX RECOVERY 634 507 342 (1,354)INCOME TAX EXPENSE/(RECOVERY) 217 207 (125) (408)---------------------------------------------------------------------------NET INCOME/(LOSS) $ 417 $ 300 $ 467 $ (946)------------------------------------------------------------------------------------------------------------------------------------------------------SUPPLEMENTARY DISCLOSURE (unaudited)$ThousandsThe following is a reconciliation of net income to Earnings Before Interest,Taxes, Depreciation and Amortization (EBITDA) THREE THREE NINE NINE MONTHS MONTHS MONTHS MONTHS ENDED ENDED ENDED ENDED MARCH 31, MARCH 31, MARCH 31, MARCH 31, 2009 2008 2009 2008---------------------------------------------------------------------------NET INCOME/(LOSS) $ 417 $ 300 $ 467 $ (946)INTEREST 51 109 166 187INCOME TAX EXPENSE/(RECOVERY) 217 207 (125) (408)STOCK BASED COMPENSATION 10 20 102 133AMORTIZATION 287 247 769 806---------------------------------------------------------------------------EBITDA $ 982 $ 883 $1,379 $ (228)------------------------------------------------------------------------------------------------------------------------------------------------------
About PSP
The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely(TM). PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, and protective products against chemical and biological hazards. PSP is the largest armour manufacturer in Canada, directly supplying the Canadian Department of Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company also provides specialized law enforcement and safety products through APS Distributors, a division of PSP that services law enforcement and public safety agencies across the country. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products to U.S. based law enforcement and private security firms. The Company also produces tactical clothing and emergency medical kits. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
PSP.V Pacific Safety Products Inc. Announces Improved 2009 Second Quarter Results
Tuesday February 24, 9:28 am ET
KANATA, ONTARIO--(Marketwire - Feb. 24, 2009) - Pacific Safety Products Inc. (TSX VENTURE:PSP - News; "PSP" or "the Company") today announced consolidated financial results for the three-month period ended December 31, 2008.
Mr. David Scott, Chief Executive Officer commented, "PSP had a very strong quarter. Sales during the quarter were up 32% as compared to the prior year. Gross Margins have significantly improved over last year as a result of consolidating manufacturing into one Canadian location, investing in production equipment and improvements in our quality management processes. I would also note that Sentry Armor Systems, our U.S. operations has doubled sales over last year. This reinforces the Company's decision to enter this large market, and our ability to compete and win market share against existing competitors. The decline in our operating expenses is a reflection of the integration and restructuring activities that occurred during the quarter, and management expects these actions will contribute to improved operating results in the future. The Company continues to be well within its operating line and bank covenants and has commenced repayment of its $1.5 million long-term debt. Cash flow continues to strengthen as the Company has generated almost $0.5 million of EBITDA after 6 months of operations. Overall we have had solid operational performance. The volatility of Canadian/U.S. exchange rates in this quarter had an impact on results. In the month of October alone the Canadian dollar weakened by as much as 20%. The company has taken action to buffer future volatility through improved risk management activities."
QUARTER HIGHLIGHTS:
- Sales increased by 32% or $2.3 million to $9.6 million as compared to the same period of the prior year.
- Gross margin improved by almost 7 percentage points to 25% as compared to the same period of the prior year.
- The Company announced a multi-year contract, with a potential value of up to $14 million with the Canada Border Services Agency.
- U.S. sales during the quarter more than doubled as compared the same period of the prior year.
- The Company's next generation military helmet liner was tested and recommended by the members of the US National Tactical Officers Association as disclosed in the Company's media release of November 24, 2008.
- Operating expenses decreased 6% during the quarter as compared to the same period of the prior year.
For complete consolidated financial statements with notes and management discussion and analysis please refer to PSP's annual report to shareholders. This report is posted on SEDAR (www.sedar.com) and on our web site. Summary consolidated financial results for the quarter ended December 31, 2008 and December 31, 2007, are as follows:
SUMMARY CONSOLIDATED BALANCE SHEETS (unaudited)
$Thousand
AS AT DECEMBER 31, 2008 JUNE 30, 2008
--------------------------------------------------------------------------
ASSETS
CURRENT ASSETS $12,009 $11,236
PROPERTY, PLANT AND EQUIPMENT 1,844 1,683
OTHER ASSETS 1,754 1,137
INTANGIBLE ASSETS 3,272 3,462
GOODWILL 8,454 8,454
--------------------------------------------------------------------------
TOTAL ASSETS $27,333 $25,972
--------------------------------------------------------------------------
--------------------------------------------------------------------------
LIABILITIES
CURRENT LIABILITIES $ 9,192 $ 8,381
LONG-TERM DEBT 1,268 875
--------------------------------------------------------------------------
TOTAL LIABILITIES 10,460 9,256
SHAREHOLDERS' EQUITY 16,873 16,716
--------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $27,333 $25,972
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
$Thousands
THREE THREE SIX SIX
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
DECEMBER DECEMBER DECEMBER DECEMBER
31, 2008 31, 2007 31, 2008 31, 2007
--------------------------------------------------------------------------
SALES 9,593 7,283 17,299 13,948
COST OF SALES 7,183 5,955 13,016 11,114
--------------------------------------------------------------------------
GROSS MARGIN 2,410 1,328 4,283 2,834
25.1% 18.2% 24.8% 20.3%
OPERATING EXPENSES 1,989 2,124 3,781 3,623
--------------------------------------------------------------------------
OPERATING INCOME/(LOSS) 421 (796) 502 (789)
AMORTIZATION 196 273 377 457
FOREIGN EXCHANGE 134 17 150 31
INTEREST 45 53 115 78
--------------------------------------------------------------------------
INCOME /(LOSS) BEFORE
OTHER COSTS 46 (1,139) (140) (1,355)
RESTRUCTURING /
RELOCATION COSTS 152 744 152 505
--------------------------------------------------------------------------
LOSS BEFORE INCOME
TAX RECOVERY (106) (1,883) (292) (1,860)
INCOME TAX RECOVERY (148) (519) (342) (615)
--------------------------------------------------------------------------
NET INCOME / (LOSS) 42 (1,364) 50 (1,245)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SUPPLEMENTARY DISCLOSURE (unaudited)
$Thousands
The following is a reconciliation of net income to Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA)
THREE THREE SIX SIX
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
DECEMBER DECEMBER DECEMBER DECEMBER
31, 2008 31, 2007 31, 2008 31, 2007
--------------------------------------------------------------------------
NET INCOME /(LOSS) 42 (1,364) 50 (1,245)
INTEREST 45 53 115 78
INCOME TAX RECOVERY (148) (519) (342) (615)
STOCK BASED
COMPENSATION 47 40 139 80
AMORTIZATION 251 326 482 551
--------------------------------------------------------------------------
EBITDA 237 (1,464) 444 (1,151
Let's Get Real About Bear
By John Mauldin
This week's Outside the Box is going to be a little different. I am going to write about the extraordinary action by the NY Fed to foster the Bear Stearns deal with JP Morgan, and give you three brief notes from Michael Lewitt of Harch Capital Management and Bob Eisenbeis (former executive vice-president of the Federal Reserve of Atlanta) of Cumberland Advisors.
Let's Get Real About Bear
I already have a slew of emails from people upset about what they see as a bailout of a big bank, decrying the lack of "moral hazard." And I can understand the sentiment, as it appears that tax-payer money may have been used to bail out a big Wall Street bank that acted recklessly in the subprime mortgage markets.
But that is not what has happened. This is not a bailout. The shareholders at Bear have been essentially wiped out. Note that a third of the shares of Bear were owned by Bear employees. Many of them have seen a lifetime of work and savings wiped out, and their jobs may be at risk, even if they had no connection with the actual events which caused the crisis at Bear. Don't tell them there was no moral hazard.
For all intents and purposes, Bear would have been bankrupt this morning. The $2 a share offer is simply to keep Bear from having to declare bankruptcy which would mean a long, drawn out process and would have precipitated a crisis of unimaginable proportions. Cue the lawyers.
As I understand this morning, JP Morgan will take a $6 billion write down, which is essentially what they are paying for Bear. The Fed is taking $30 billion dollars in a variety of assets. They may ultimately take a loss of a few billion dollars over time, although they may actually make a profit. When you look at the assets, much of it is in paper that will likely get close to par over time, and the good paper will pay premiums mitigating the potential loss. The problem is, as the essays below point out, no one is prepared to take that risk today.
If it was 2005, Bear would have been allowed to collapse, as the system back then could deal with it, as it did with REFCO. But it is not 2005. We are in a credit crisis, a perfect storm, which is of unprecedented proportions. If Bear had not been put into sounds hands and provided solvency and liquidity, the credit markets would simply have frozen this morning. As in ground to a halt. Hit the wall. The end of the world, impossible to fathom how to get out of it type of event.
The stock market would have crashed by 20% or more, maybe a lot more. It would have made Black Monday in 1987 look like a picnic. We would have seen tens of trillions of dollars wiped out in equity holdings all over the world.
As I have been writing, the Fed gets it. Their action today is actually re-assuring. I have been writing for a long time that they would do whatever it takes to keep the system intact. As one of the notes below points out, this was the NY Fed stepping in, not the FOMC. The NY Fed is responsible for market integrity, not monetary policy, and they did their job. And you can count on other actions. They are going to change the rules on how assets can be kept on the books of banks. Mortgage bail-outs? Possibly. The list will grow.
Yes, tax-payers may eventually have to cover a few billion here or there on the Bear action. But the time to worry about moral hazard was two years ago when the various authorities allowed institutions to make subprime loans to people with no jobs and no income and no means to repay and then sold them to institutions all over the world as AAA assets. And we can worry in the near future when we will need to do a complete re-write of the rules to prevent this from happening again.
But for now, we need to bail the water out the boat and see if we can plug the leaks. Allowing the boat to sink is not an option. And get this. You are in the boat, whether you realize it or not. You and your friends and neighbors and families. Whether you are in Europe or in Asia, you would have been hurt by a failure to act by the Fed. Everything is connected in a globalized world. Without the actions taken by the Fed, the soft depression that many have thought would be the eventual outcome of the huge build-up of debt would in fact become a reality. And more quickly than you could imagine.
As I have repeatedly said, recessions are part of the business cycle. There is nothing we can do to prevent them. But depressions are caused by massive policy mistakes on the part of central banks and governments. And it would have been a massive failure indeed to let Bear collapse. I should note that this was not just a Fed action. Both President Bush and Secretary Paulson signed off on this.
The Fed risking a few billion here and there to keep the boat afloat is the best trade possible today. Their action saved trillions in losses for investors all over the world. It is a relatively small price. If you want to be outraged, think about the multiple billions in subsidies for ethanol and the hundreds of billions of so-called earmarks over the past few years to build bridges to nowhere. And think of the billions in lost tax revenue that would result from the ensuing crisis. I repeat, this was a good trade from almost any perspective, unless you are from the hair-shirt, cut-your-nose-off-to-spite-your-face camp of economics.
The Fed is to be applauded for taking the actions they did. And they may have to do it again, as there are rumors that another major investment bank is on the ropes. I hope that is not the case, and will not add to the rumors in print, but I am glad the Fed is there if we need them.
It is precisely because the Fed is willing to take such actions that I am modestly optimistic that we will "only" go through a rather longish recession and slow recovery and not the soft depression that would happen otherwise.
I got a very sad letter today from a lady whose husband is in the construction business an hour from Atlanta. He has had no work for four months and they are rapidly going through their savings. The jobs he can get require them to spend more in gas to drive to than he would make. He is sadly part of the construction industry which everyone knows is taking a major hit.
But without the Fed action, that story would have multiplied many times over, as the contagion of the debt crisis would have spread to sectors of the economy that so far have seen only a relatively small impact. Unemployment would have sky-rocketed over the next year and many more families would have been devastated like the family above. It would have touched every corner of the US and the globe.
Bailing out the big guys? No, the Fed does not care about the big guys, and only mildly pays attention to the stock market, despite what conspiracy theorists think. In the last few years, I have had the privilege of meeting at length with a number of Fed economists and those who have their ear. They are far more focused on the economy, their mandates for stable inflation and keeping unemployment as possible.
No one who owned Bear stock was protected. This was to protect the small guys who don't even realize they were at risk. To decry this deal means you just don't get how dire a mess we were almost in. It is all well and good to be rich or a theoretical purist and talk about how the Fed should let the system collapse so that we can have a "cathartic" pricing event. Or that the Fed should just leave well enough alone. But the pain to the little guy in the streets who did nothing wrong would simply be too much. The Fed and other regulatory authorities leaving well enough alone is part of the reason we are where we are. First, get the water out of the boat and fix the leaks, and then make sure we never get here again.
And yes, I know there are lots of implications for the dollar, commodities, markets, interest rates, etc. But we will get into that in later letters.
For now, let's go to the essays from my friends and then a quick note about the stock market.
John Mauldin, Editor
Outside the Box
________________________________________
First, from Michael Lewitt, writing last week before the Fed bailout of Bear:
The Risks of Systemic Collapse
by Michael Lewitt
The failure of a firm of the size and stature of Bear Stearns would be as close to an Extinction Level Event as the world's financial markets have ever seen. Bridgewater Associates, Inc. writes that, "...the counterparty exposures across dealers have grown so exponentially that it is difficult to imagine any one of them failing in isolation." While not the world's largest financial institution, Bear is a major counterparty to virtually every important financial player in the world. Its insolvency would effectively freeze the assets of many hedge funds and other liquidity providers and cause the financial system to seize up. Even an after-the-fact government bailout would do little to prevent such a meltdown scenario since the value of all of Bear's counterparty obligations would be thrown into question for some period of time. The resulting cascade of hedge fund failures and financial institution write-offs in today's mark-to-market world would be nothing less than catastrophic.
The only way to avoid such a scenario would be for the Federal Reserve or the Treasury to step in before the fact and engineer a merger with a larger institution. For that to happen, the firm's management has a responsibility to the markets to work with the authorities sufficiently in advance to arrange a private bailout.
The risks of a systemic collapse have risen to uncomfortable levels. The complete withdrawal of credit from the financial system has led to a series of implosions of hedge funds and other leveraged investment vehicles. At some point - and nobody knows when that point is - the system is not going to be able to withstand further failures. It will not be the sheer volume of failures that brings the system to a standstill; the system is enormous and can sustain huge dollar losses before becoming impaired. The problem is that the global financial system is a case study in chaos theory. This is truly a case where a butterfly flapping its wings in West Africa could lead to a Category Five hurricane thousands of miles away. There are an incalculable number of derivative contracts and counterparty relationships on which the stability of the financial system hinges. All it would take is the collapse of the wrong firm or the wrong derivative contract at the wrong time to throw the wrong financial institution into crisis and force the entire system into a death spiral.
As noted above in the discussion about Bear Stearns, we may not need the largest institution in the world to fail to cause the calamity - it may just be a matter of something bad happening at the wrong firm at the wrong time to trigger a systemic collapse. This is the risk implicit in a highly leveraged financial system financed by unstable financial structures. These scenarios may sound like the ravings of a paranoid, but we will remind our readers that even paranoids have enemies, and the greatest failure that investors, lenders and regulators seem to suffer from in perpetuity is a failure of imagination. They remain incapable of imagining that the worst can happen, and as a result they behave in a manner that keeps that possibility alive. At some point, all of the king's horses and all of the king's men will not be able to put Humpty Dumpty back together again. We are not at that point yet, but we are closer than we've ever been.
The current market collapse was the result of an abject failure to regulate the mortgage and derivatives markets. The extent of this failure cannot be overstated. HCM still sees great opportunities being created in assets being sold for reasons unrelated to their underlying value. But caution must be the byword until the system shows greater signs of stability.
________________________________________
And from Bob Eisenbies of Cumberland Advisors (www.cumber.com). Bob Eisenbeis is Cumberland's Chief Monetary Economist. Before retirement, he was the Executive Vice President of the Federal Reserve Bank of Atlanta. He is a member of the U.S. Shadow Financial Regulatory Committee and a veteran of many FOMC meetings.
The Fed Will Do What It Takes!!
By Bob Eisenbeis, Cumberland Advisors
In a stunning announcement on Sunday the Federal Reserve Board of Governors announced three steps to address the continuation of last week's financial turmoil.
First, the Board approved a recommendation by the Federal Reserve Bank of NY to cut the discount rate by 25 basis points to 3.25%. Presumably it will approve similar recommendations by the other 11 Federal Reserve Banks today.
Secondly, the Board voted to authorize the Federal Reserve Bank of NY to create a temporary 6 month lending facility for the 20 prime broker dealers. This enables them to pledge a wide range of investment grade collateral for loans at the new 25 basis point penalty rate. This takes effect today, March 17, 2008. The first transaction has been done in Asian markets as this commentary is being released.
Finally, the Board also ordered and also approved a $30 billion special financing to facilitate JP Morgan's purchase of Bear Stearns Companies, Inc. Both Morgan and Bear boards have unanimously approved the transactions. A shareholders vote is still needed. Meanwhile, Bear Stearns is operating under the new provisions today.
These actions demonstrate the extreme lengths, if there was ever any doubt, that the Board of Governors are willing to go to. There singular purpose is to prevent the collapse of a prime broker dealer and the potential fall out to counter parties that such a collapse might entail.
The actions are important for several reasons. The new facility trumps the recently announced Term Securities Lending Facility (TSLF) that was to go into effect later this month on March 27th. Yesterday's action provides direct loans to both banks and non-bank primary dealers. It is intended to facilitate their ability to liquefy what might otherwise be relatively illiquid assets. But it also means that the Fed is willing to take on credit risk to broker dealers. Whether there will still be a stigma associated with this borrowing, which would not have accompanied the borrowing of securities through the TSLF is not known.
The new actions also demonstrate that the perceived problems in financial markets were sufficiently critical so as to not warrant waiting for the TSLF to go into effect later in March. Why implementation of the TSLF wasn't accelerated is an interesting question.
The actions also demonstrate that the so-called liquidity problems (which this author has previously suggested may be actually solvency issues) are mainly a problem for the prime brokers who were also the main players in proliferating securitized debt securities based on sub-prime mortgages and other assets. It is still a major question as to what the values of these securities are and how much of an actual liability they represent for the intuitions in question.
Whether those risks were real or imagined may never really be known but we now know that too-big-to fail is still alive and well, even in the US, and despite FDICIA. Federal Deposit Insurance Corporation Improvement Act (FIDICIA) was enacted in 1991. FIDICIA requires that management report annually on the quality of internal controls and that the outside auditors attest to that control evaluation.
Finally, the Fed has also taken the extraordinary step of helping to finance the takeover of a private sector firm by one of the nation's largest banking organizations. The implications of this will be explored in a future Commentaries when more of the details become public.
What may be lost in the excitement of the moment, as markets attempt to digest these latest actions, is that were taken by the Board of Governors through the Federal Reserve Bank of NY to address issues of financial stability. These were NOT actions taken by the Federal Open Market Committee (FOMC). Their main responsibility is the conduct of monetary policy for the country.
In other words, the story will not end today, Monday, March 17, 2008. We will get a separate and important assessment of the implications of these attempts to insulate the real economy from the potential negative feedback effects of these financial disruptions when the FOMC releases its decisions on whether and by how much to cut the Federal Funds rate on Tuesday. Stay tuned, there is more to come.
And one further brief note from Bob written late last week:
It is time to stop pretending.
Since last August the assertions regarding the turmoil in financial markets have been characterized as a temporary liquidity problem. The problems first surfaced last year with BNP Paribas and Bear Sterns' hedge fund collapse. More than 7 months have passed and, once again, another Bear Sterns shoe has dropped today as it has been forced to go to the NY Fed discount window through a JP Morgan conduit. This follows on the heels of the collapse of the Carlyle Group sponsored hedge fund in London. For months institutions, politicians and regulators have been in denial. Witness, for example, the proposals currently being floated by the SEC that would enable institutions to offer alternative "explanations" for how they value their assets. Pundits have been suggesting that uncertainty and loss of confidence are the roots of the problem, but this isn't the way to think about the problem.
It is time to step back and recognize that the current situation isn't a liquidity issue and hasn't been for some time now. Rather there is uncertainty about the underlying quality of assets which is a solvency issue driven by a breakdown in highly leveraged positions. Many of the special purpose entities and vehicles are comprised of pyramids of paper assets supported by leverage whose values are now unknown.
If it were a simple liquidity problem the actions that the Federal Reserve has taken would have dealt with the problems by now. If one doubts this observation, think about what the Federal Reserve has done over the past several months in an attempt to provide liquidity to those who need it. The Federal Funds rates have been cut by 225 basis points. Significant liquidity has been injected into markets by major central banks around the world. The Federal Reserve created the Term Auction Facility and recently announced the Term Security Lending Facility. These actions have had only temporary impacts on both market sentiment and on credit spreads.
This is also not an "animal spirits" problem but rather is the classic example of George Akerloff's "market for lemons." Essentially what Akerloff tells us is that, absent better information, it is rational for potential buyers of assets to assume that the assets offered for sale are "lemons," hence the flight to quality.
Finance theory clearly tells us that in such circumstances, firms facing questions about their assets, which typically are manifested by temporary problems of access to liquidity, will quickly find ways to reveal to the market the true condition of its assets. Smart institutions have ample mechanisms to deal with these problems - simply open up the books and show them to potential investors. At this time there are also several actions that the Fed should take to ease market questions about what has been happening.
First, there is a danger in anointing one institution to be the white knight to deal with the Bear Sterns problem. Second, there is a pressing need to provide more information and details about what the arrangements are with JP Morgan and Bear Sterns. That means being more forthcoming with its communications on what it is doing and why. Third, it is clear that there are many potential buyers for troubled firms, if it is easy to see what they are worth. This means that the Fed and Treasury should take the lead in forcing increased transparency on the part of all institutions that might be experiencing financial difficulties and those that are not. Finally, there needs to be the recognition that the problems at this time are confined to financial firms and have not contaminated the market for securities of firms in the real sector.
And a brief follow up thought from your humble analyst. I know my position today will be somewhat controversial (a small understatement) to many readers, but I have never let fear of being controversial deter me from giving you my thoughts and calls as I see them.
As I write about 2 pm central time, the Dow is flat on a wild up and down ride. I do not see this as a bottom. The Fed move keeps the system together, but it does not do anything to stave off a fall in consumer spending, a fall in home prices, the increased difficulty to get consumers loans, falling construction, etc. which is what normally happens in a recession (unlike the last time when consumers could borrow to maintain spending).
I believe earnings are going to continue to disappoint in a broad swath of companies, which will ultimately translate into lower stock market prices. Be careful out there. There are good trades and deals available, just not in traditional stock market index funds, in my opinion, which I should point out could be quite wrong.
Your breathing sigh of relief analyst,
John F. Mauldin
MKRS: Mikros ADEPT(R) Equipment Considered for Baseline in U.S. Navy Cruiser Modernization Program
Friday February 8, 3:46 pm ET
FORT WASHINGTON, Pa., Feb. 8 /PRNewswire-FirstCall/ -- Mikros Systems Corporation (OTC Bulletin Board: MKRS - News) announced today that its ADEPT Radar Test Set equipment is a candidate for inclusion in the equipment baseline of the United States Navy AEGIS Cruiser (CG) and Destroyer (DDG) Modernization program.
The ADEPT system, developed by Mikros under the Navy's Small Business Innovation Research program, has been extensively tested by the Navy on land and at sea, and has proven to be an invaluable tool in maintaining the most advanced shipboard radar systems. ADEPT has been designed to assure optimum radar performance, improve readiness and reduce equipment down time. Improvements to the mission effectiveness of the AEGIS fleet are particularly timely as these ships will support the Navy's Ballistic Missile Defense (BMD) capability.
In 2007 the Navy ordered ten units of the new lightweight ADEPT model. The Navy recently obtained 2008 funding for additional systems. Up to 84 ships are eligible to be equipped with multiple ADEPT units per ship to test and align the AN/SPY-1 phased array radar.
"This product began as a tool to enhance the readiness of the SPY-1 radar, but it is developing into a much broader set of applications," said Tom Meaney, President of Mikros.
Development work is underway to apply the ADEPT system to other shipboard systems beyond the SPY-1 radar, which could further enhance readiness. ADEPT distance support capabilities will allow remotely-located subject matter experts to perform preventive and corrective maintenance activities, potentially providing significant maintenance cost savings to the fleet.
Mikros is also currently pursuing other ADEPT market opportunities, including aircraft carriers, amphibious ships, submarines, and the allied fleets.
Mikros ADEPT(R) Equipment Considered for Baseline in U.S. Navy Cruiser Modernization Program
Friday February 8, 3:46 pm ET
FORT WASHINGTON, Pa., Feb. 8 /PRNewswire-FirstCall/ -- Mikros Systems Corporation (OTC Bulletin Board: MKRS - News) announced today that its ADEPT Radar Test Set equipment is a candidate for inclusion in the equipment baseline of the United States Navy AEGIS Cruiser (CG) and Destroyer (DDG) Modernization program.
The ADEPT system, developed by Mikros under the Navy's Small Business Innovation Research program, has been extensively tested by the Navy on land and at sea, and has proven to be an invaluable tool in maintaining the most advanced shipboard radar systems. ADEPT has been designed to assure optimum radar performance, improve readiness and reduce equipment down time. Improvements to the mission effectiveness of the AEGIS fleet are particularly timely as these ships will support the Navy's Ballistic Missile Defense (BMD) capability.
In 2007 the Navy ordered ten units of the new lightweight ADEPT model. The Navy recently obtained 2008 funding for additional systems. Up to 84 ships are eligible to be equipped with multiple ADEPT units per ship to test and align the AN/SPY-1 phased array radar.
"This product began as a tool to enhance the readiness of the SPY-1 radar, but it is developing into a much broader set of applications," said Tom Meaney, President of Mikros.
Development work is underway to apply the ADEPT system to other shipboard systems beyond the SPY-1 radar, which could further enhance readiness. ADEPT distance support capabilities will allow remotely-located subject matter experts to perform preventive and corrective maintenance activities, potentially providing significant maintenance cost savings to the fleet.
Mikros is also currently pursuing other ADEPT market opportunities, including aircraft carriers, amphibious ships, submarines, and the allied fleets.
But first you need an HQ.
Pacific Safety Products Inc. Launches 'GH Armor Systems'
KELOWNA, BRITISH COLUMBIA, Feb 7, 2008 (Marketwire via COMTEX News Network) --
Pacific Safety Products (TSX VENTURE:PSP) today announced the launch of its GH Brand of Protective Products for the US Law Enforcement Market. This enhanced product line combines the best of PSP and Gator Hawk designs which will be marketed under the new brand 'GH Armor Systems'.
"Since the initiation of our US based operations we have seen consistently improved sales and financial performance," said David Scott, CEO of PSP. "Eighteen months ago our US sales represented less than 5% of total PSP revenue from the Law Enforcement market. This year our US business represents 35% of our total Law Enforcement Revenue. We continue to plan for future growth in the United States," continued Scott.
r59/SYNL - I added too, but dropped it from PSL8.
Pacific Safety Products Inc. Receives Contract Extension Valued at $660,000
FEB 6, 2008 - 06:00 ET
KELOWNA, BRITISH COLUMBIA--(Marketwire - Feb. 6, 2008) - Pacific Safety Products Inc. (TSX VENTURE:PSP), a leading Canadian manufacturer of armored products, today announced it has been awarded a contract extension for the production of ballistic solutions by a government agency. This new order is in addition to a contract previously announced in 2006. Production and delivery will be spread out over the next 4 months. The revised value of this contract is now over $2.7 million.
"This additional order further strengthens our strong relationship we have developed with this customer. We are encouraged by the continuing demand for Pacific Safety Products' body armor products," stated David Scott, PSP's Chief Executive Officer. Customers of PSP include Defence, Security and Law Enforcement agencies. For reasons associated with the unique role our customers play in protecting citizens, the Company is not always at liberty to disclose their identity.
I agree. Would be surprised if it doesn't.
PDGE - Just what the doctor ordered
PDG Environmental Awarded $17.1 Million in New Contracts
Wednesday February 6, 12:22 pm ET
PITTSBURGH, PA--(MARKET WIRE)--Feb 6, 2008 -- PDG Environmental, Inc. (OTC BB:PDGE.OB - News), a leading provider of environmental remediation and specialty contracting services, today announced that it has recently been awarded contracts valued, in aggregate, at $17.1 million, all of which are scheduled to be completed by October 2008. Of the $17.1 million of new contracts, $11.8 million are for asbestos abatement and the remaining $5.3 million are for reconstruction services. The abatement projects include approximately $4.8 million of contracts with governmental and other non-profit entities and $7.0 million with private commercial entities. The projects include the removal of asbestos in structures such as auditoriums, community centers, museums, airports and retail businesses throughout the country. The reconstruction projects include restoration projects for multi-family complexes in Texas as well as reconstruction work for commercial space in Kansas.
"We are very pleased to begin our new fiscal year with positive strength in our business as demonstrated by this level of new contract awards," said John Regan, chairman and chief executive officer. "We continue to see good demand for our abatement and reconstruction services nationwide as we focus on growing the company while improving margins."
PDG Environmental Awarded $17.1 Million in New Contracts
Wednesday February 6, 12:22 pm ET
PITTSBURGH, PA--(MARKET WIRE)--Feb 6, 2008 -- PDG Environmental, Inc. (OTC BB:PDGE.OB - News), a leading provider of environmental remediation and specialty contracting services, today announced that it has recently been awarded contracts valued, in aggregate, at $17.1 million, all of which are scheduled to be completed by October 2008. Of the $17.1 million of new contracts, $11.8 million are for asbestos abatement and the remaining $5.3 million are for reconstruction services. The abatement projects include approximately $4.8 million of contracts with governmental and other non-profit entities and $7.0 million with private commercial entities. The projects include the removal of asbestos in structures such as auditoriums, community centers, museums, airports and retail businesses throughout the country. The reconstruction projects include restoration projects for multi-family complexes in Texas as well as reconstruction work for commercial space in Kansas.
"We are very pleased to begin our new fiscal year with positive strength in our business as demonstrated by this level of new contract awards," said John Regan, chairman and chief executive officer. "We continue to see good demand for our abatement and reconstruction services nationwide as we focus on growing the company while improving margins."
Rogue/Ignore
Perhaps we need a feature on iHub that allows for "Ignore on this Board". While your articles aren't irrelevant as a whole, I have questioned whether they are relevant on this board.
I would use the above feature in this case.
I understand the doubts creeping in.
We haven't heard from the company since November, but I don't think that is necessarily a bad thing. It could be a sign of something brewing. Even if it's just status quo, however, I think we're fairly valued at these prices. So risk/reward ratio is still compelling at this point.
I know many who would be happy to take those shares off your hands.
Biophage Pharma awarded NRC-IRAP funding to develop next generation Biosensors
Tuesday January 15, 12:24 pm ET
MONTREAL, Jan. 15 /CNW Telbec/ - (TSX.V: BUG). Biophage Pharma Inc. today announced that it has received confirmation of financial support from the National Research Council Industrial Research Assistance Program (NRC-IRAP) for the development of its next generation of PDS(R) Biosensors which will rapidly and specifically detect life threatening pathogens like Methicillin Resistant Staphylococcus Aureus (MRSA), Pseudomonas aeruginosa and E. coli O157.
These first targeted bacteria were chosen based on the urgency to minimize the spread of hospital acquired infections and controlling contamination in our food supplies. Hospital acquired infections are the fourth leading cause of death in North America and within this category, MRSA and Pseudomonas aeruginosa are the two most prevalent bacteria. On the other hand, E. coli O157 is the leading cause of foodborne illness, causing severe bloody diarrhea, and occasionally kidney failure (a life-threatening condition mainly in immunosuppressed patients).
"This financial support represents a cornerstone in our R&D program and will enable us to accelerate the development of our next generation biosensors. Our first generation, the PDS(R)16 biosensor, detects the total bacterial load in a biological sample and the second generation of biosensors will specifically detect MRSA, Pseudomonas and E. coli O157." said Dr. Mandeville, President and CEO of Biophage Pharma Inc. "Presently, almost all diagnostic techniques take between 8 to 16 hours, and our objective is to provide an accurate diagnosis of these infections/contaminations in less than 5 minutes," added Dr Mandeville.
nsomniyak challenge
$CASH$ (under the mattress) - my best recession immune idea.
MKRS.OB - Defense contractor. Had this in PSL7 expecting a commercial product purchase announcement. None yet. However, still expecting one soon. If it happens, the stock could become a 5-bagger overnight.
PDGE.OB - Emergency response and restoration. Beaten down stock. Management intent on turning around a dismal 2007. I expect they will have enough success to get this stock back above $1.
SYNL - Manufacturer of pipe and piping systems. Director Murray Wright bought 25,000 shares in December, an investment exceeding $400,000. I'm betting he knows something I don't.
ZYNX.OB - Medical devices. Joining the herd on this one.
DSCI.OB - Wound care products. Timing isn't great on this one. Recent shelf registration may keep a lid on this one for a bit, but they are getting great press thanks to Lehman Bros involvement.
Don't worry. It's only a temporary jab at me. I doubt he'll be posting here much. He prefers the VMC board.
Rogue - This board might welcome your posts....at least it would garner more traffic.
LOL
Does Rogue have some special membership that allows him to keep posting this irrelevant crap?
Desalination stocks?
I'm interested in any desalination stocks that may fit the VMC mold. Anyone have any recommendations?
Happy New Year!
bbotcs/PDGE - Look quick. A chance to get some at $0.50.
Tom Meaney established stock trading plan, but won't sell any shares below $0.50. That, to me, suggests that he expects the share price to go higher and that he will sell into news.
Form 8-K for MIKROS SYSTEMS CORP
21-Dec-2007
Other Events
Item 8.01 Other Events.
On December 10, 2007, Thomas J. Meaney, Chief Executive Officer of Mikros Systems Corporation (the "Company", "we" or "us"), established a stock trading plan in accordance with the guidelines of Rule 10b5-1 of the Securities and Exchange Act of 1934 and our policy regarding stock transactions by insiders. The transactions under this plan will be disclosed publicly through Form 144 and Form 4 filings with the Securities and Exchange Commission. This trading plan is not meant to reflect a lack of confidence in us or our future by Mr. Meaney, but rather is designed for estate planning purposes and to allow Mr. Meaney to monetize a portion of his equity position in a systematic, nondiscretionary manner with the goal of minimal market impact and compliance with regulations adopted by the Securities and Exchange Commission.
Under Mr. Meaney's 10b5-1 plan, which became effective on December 10, 2007, Mr. Meaney may sell shares of our common stock at prevailing market prices (but not below a predetermined target price of $0.50). The total number of shares subject to Mr. Meaney's plan is 120,000. These sales are expected to take place periodically until November 30, 2008.
Form 8-K for QUALMARK CORP
--------------------------------------------------------------------------------
21-Dec-2007
Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securities,
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
(a)(1) On December 21, 2007, QualMark Corporation (the "Company") entered into a Stock and Warrant Purchase Agreement ("Purchase Agreement") with The Roser Partnership III, SBIC, LP (the "Roser Partnership") and Christopher Roser (the "Purchasers"). The Roser Partnership is the largest shareholder in the Company. Christopher Roser is a member of the Company's board of directors, as is his father, James Roser, both of whom are affiliates of The Roser Partnership.
(a)(2) The terms of the Purchase Agreement authorize the sale and issuance of 781,250 shares of the Company's common stock (the "Stock") and warrants to purchase up to 781,250 shares of the Company's common stock (the "Warrants"). The aggregate purchase price for the Stock and Warrants was $600,000. The Warrants are exercisable at any time on or before December 20, 2012. One half of the shares authorized to be purchased pursuant to the Warrants are exercisable at $1.152 per share and the other half are exercisable at $1.536 per share.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
(a) On December 21, 2007, the Company sold 781,250 shares of its common stock and warrants to purchase up to 781,250 shares of common stock for an aggregate purchase price of $600,000 pursuant to an exemption from registration under
Section 4(6) of the Securities Act of 1933. No underwriting commission or discounts were provided. The terms of the Purchase Agreement provide for unlimited registration rights for the Purchasers. The Warrants are exercisable at any time on or before December 20, 2012. One half of the shares authorized to be purchased pursuant to the Warrants are exercisable at $1.152 per share and the other half are exercisable at $1.536 per share.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
(d)(1) As of December 21, 2007, Andrew Drenick, the Company's President and Chief Executive Officer, was appointed to the Company's board of directors to fill one of two vacancies created by the resignations of William Sanko and Charles Johnston. Mr. Drenick will serve until the next annual meeting of the Company at which directors are elected. Also, as of this date, Christopher Roser was elected as Chairman of the board of directors.
(d)(2)Pursuant to the terms of the Purchase Agreement, as of December 21, 2007, the board of directors was required to elect the Chief Executive Officer of the Company to the board of directors. Accordingly, Mr. Drenick, who became the Company's Chief Executive Officer on December 10, 2007, was appointed to the board. The terms of the Purchase Agreement also required that Christopher Roser be elected as Chairman of the Board.
(d)(3) It is expected that Mr. Drenick will serve on the Compensation Committee, the Corporate Governance Committee, and the Nominating Committee.
(d)(4) See Item 1.01 above ITEM 8.01 OTHER EVENTS Prior to the transaction reported in Item 1.01 above, the Roser Partnership and its affiliates owned 46% of the Company's voting common stock. After the closing of the Purchase Agreement, the Roser Partnership and its affiliates beneficially owned 50.38% of the Company's voting common stock. At the request of the Company's board of directors, the Roser Partnership and its affiliates agreed to give an irrevocable proxy to an independent third party for the number of shares by which their ownership interest exceeds 49.9%. This proxy will remain in effect until the number of shares covered by the proxy is reduced to zero or the second anniversary date of the closing of the Purchase Agreement, or December 21, 2009. Although the proxy states that it is irrevocable it is not coupled with an interest. Therefore, under Section 7-107-203 of the Colorado Revised Statutes, the irrevocable nature of this proxy may not be enforceable.
I have been buying down here. Comparables for next quarter should look good on revs and earnings thanks to that horrible Q4 last year. That alone should bump this back up close to $1.
QMRK: $600,000 Capital raise. If my math is right, it comes to $0.768/share.
Qualmark Corporation Strengthens Balance Sheet Through Capital Raise
Friday December 21, 3:48 pm ET
DENVER, CO--(MARKET WIRE)--Dec 21, 2007 -- Qualmark Corporation (OTC BB:QMRK.OB - News), a world leader in designing, manufacturing and marketing HALT (Highly Accelerated Life Testing), HASS (Highly Accelerated Stress Screening) and electrodynamic systems, announced today that the Company has raised $600,000 in new capital, in a private placement of 781,250 shares of common stock and warrants. The offering was placed with The Roser Partnership III, SBIC, LP and affiliates.
"We are pleased with the confidence shown by The Roser Partnership's continued investment in Qualmark," stated Andy Drenick, the Company's President and CEO. "We continue to see significant opportunities throughout the marketplace. This funding should provide us with the additional capability to further expand our sales and marketing efforts."
Commenting on the investment, Christopher Roser, Manager of the General Partner of The Roser Partnership III, SBIC LP said, "We believe Qualmark's HALT, HASS and electrodynamic systems are second to none and want to support the Company in the execution of their business plan. We welcome Andy Drenick to the Company and regard this investment into the Company as added support for Andy's plans to expand and grow Qualmark."
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Qualmark Corporation, headquartered in Denver, Colorado is the leader in designing, marketing, and manufacturing accelerated life-testing systems (HALT and HASS) providing the world's largest corporations with solutions that improve product reliability and allow them to get to market faster. The Company has installed more than 600 of its proprietary testing systems in 30 countries. The Company operates and partners with ten testing facilities worldwide.
The Company also offers electrodynamic vibration solutions through its subsidiary, Ling Electronics.
Ling Electronics, headquartered in West Haven, Connecticut is the leader in supplying electrodynamic systems, components, and service to the worldwide vibration test equipment market.
The statements included in this press release concerning predictions of economic performance and management's plans and objectives constitute forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, factors detailed in the Company's Securities and Exchange Commission filings; downturns in the Company's primary markets; variability of order flow, future economic conditions; competitive products and pricing; new product development; disruptions in the Company's operations from acts of God or extended maintenance; transportation difficulties; or the delivery of product under existing contracts and other factors.
bbotcs:PDGE - Picked a some more today at $0.55. Comparables for next quarter should look good on revs and earnings thanks to that horrible Q4 last year. That alone should bump this back up close to $1.
bbotcs/PDGE.OB - Bought some today at $0.59. Looks very cheap here. Also bought PCSFF.PK (PSP.V), which is way undervalued at $0.70.
We should see NDA filing for Zolpidem by end of year. Could be a nice catalyst. I picked up shares on Friday at $0.31. Downside is limited. Upside could be dollars.
You can expect some action tomorrow. Just got this in my inbox from Penny Sleuth. He's talking about BigString.
==========
Editor’s Note: Gunner is back with fascinating find. He just stumbled upon one of the most exciting over-the-counter companies that he’s ever seen. It is about to do to e-mail what Microsoft did with MS-DOS…
The E-mail Microsoft Doesn’t Want You to Have
By Greg Guenthner
December 6, 2007
You’ve just received a critical e-mail from your boss regarding your recent performance. Your dedication and work ethic have been called into question, and several company executives were copied on the note, as well.
Naturally, you’re furious and you need to vent your frustration. So in a fit of rage, you decide to forward the e-mail to some sympathetic co-workers, along with some choice language directed toward your less-than-sympathetic boss.
But you didn’t forward the message…
Instead, you accidentally clicked “reply all.” In a flash, your angry e-mail has landed itself in the inbox of every important person at your company. You can bang on your computer screen all you want, but that e-mail still sent. And there’s no way to get it back. That is, until now…
There’s a tiny $11 million company that’s making “e-mail regret” a thing of the past. Its patent-pending technology gives senders total control over their messages. Users can recall, modify or even destroy messages entirely — even after they are sent. And now the company has developed a new application for a popular Internet social network around its popular technology…
The idea for the first truly private e-mail service came about almost accidentally. A couple of years ago, the company was working on anti-spam products, when an executive sent an e-mail with an incorrect attachment. Fearing he would lose the client, he went to his tech support team for help. After it told him there was no way to get back or modify his e-mail, he knew he had stumbled onto something that needed to be fixed. A great idea was born…
Signing up for this technology with your Outlook account costs less than $30 a year. A personal account is free. There are no downloads, just a simple sign-up page. And when it comes to privacy, this revolutionary software is moving beyond e-mail, as well…
There are virtually endless applications — features that every professional can use to improve business. With this software, photographers can e-mail proofs that cannot be printed or saved without authorization. A user can also limit the number of times a client can view an e-mail item before it self-destructs.
The company is getting into other forms of electronic messaging, too. Just this month, it announced a partnership program for social networking and online dating sites to offer the technology for “self-destructing” video, picture and text messages.
Of course, these applications are used to protect user privacy. If you send a video message to friends, you probably don’t want it to be spread all over the Internet.
Facebook, an online social networking site that is incredibly popular among college students and other young people, has already picked up the technology. Facebook users can now send these exploding messages and pictures to their online friends and program them to self-destruct at a designated time. The software allows the e-mail and pictures to be nonforwardable, nonprintable and nonsavable. The message goes only to the intended recipient, no matter what. And it doesn’t matter what e-mail service provider is used — it all goes through this technology.
I can also think of another less social networking group located in Langley, Virginia that may also have a slight interest in this technology…
This tiny company has changed e-mail, as we know it. That’s the most important quality a small over-the-counter company can have. When Microsoft first came out with MS-DOS, it changed the way people used computers. It took the power from the hands of the few and gave it to us, allowing almost anyone to learn how to efficiently operate a personal computer. And it simultaneously helped create one of the most powerful technology companies ever.
The same could be true here. It is also a disrupter. It forces us to rethink e-mail completely. Most importantly, it is making e-mail private in a world where privacy is becoming harder and harder to find.
Until today, you and I had no control whatsoever over our e-mail. With this software, an e-mail is less like a message carved in marble and more like a phone call. You control your information, sensitive or not, and you decide what happens to it. It would be foolish to call this anything less than revolutionary.
The company is an infant in the business world. It’s one of the smallest of the small public companies, with a market cap of around $10 or $11 million, depending on the day of the week.
But with an aggressive PR campaign, I expect that you’ll be reading about the hottest new e-mail application in every major magazine in no time.
Best,
Gunner
P.S.: Unfortunately, I couldn’t give away the name of this infantile company to such a broad audience like the Sleuth’s. However, I’m not going to only tease you with it. There is still a way for me to give you the name of this sweet little company, along with my advice for how to make it work for you.
If you are one of the last 182 people to sign up for my Bulletin Board Elite, you will instantly learn the name of this company and so many others that are set to explode. So before you miss the cut, check out this free report now…
Rogue re responsibility
"I was responsible enough to not 'bite off more than I can chew' as far as home ownership"
Rogue - You make it sound like you expect most people to be smart and responsible. C'mon! A vast majority of the population is dumb and/or irresponsible.
ETFC - Now that the assets with the greatest market risk are off its balance sheet, this could be setting up nicely for a sale. Either way, this has turned out to be my best few trades of the year.
KIK: ROTFLMAO
Oak Ridge Micro-Energy Files PCT Application
Tuesday November 27, 5:03 pm ET
OAK RIDGE, Tenn.--(BUSINESS WIRE)--Oak Ridge Micro-Energy (OTCBB: OKME - News), a developer and manufacturer of thin film rechargeable lithium-ion batteries, announced it has filed a PCT Application to extend protection of its U.S. patents to foreign countries.
Mark Meriwether, President of Oak Ridge Micro-Energy, stated, “This is an important step to protect our patented intellectual property in the countries that have signed the Patent Cooperation Treaty, which include the EU and Japan. As we expand our patent portfolio, our thin film battery technology is generating more attention on a worldwide scale, making international patent protection critical.”
Meriwether further stated, “We continue to search for manufacturing partners and are pleased with the interest shown by several international companies. We currently are discussing potential manufacturing partnerships and joint projects with these companies.”
Oak Ridge Micro-Energy also is pleased to announce that they were featured in a recent article about thin film batteries published by Vacuum Technology and Coating. A link to this article can be found at www.oakridgemicro.com.
About Oak Ridge Micro-Energy Inc.
Oak Ridge Micro-Energy, Inc. develops and produces custom designed thin film lithium and lithium-ion batteries that are ideally suited for a variety of applications where a small power source is needed. These batteries can be fabricated on a variety of substrates as well as onto chips, chip carriers or multi-chip module packages. By using the available space on a ceramic package or a silicon die, the battery can provide the required power while occupying otherwise wasted space and adding negligible mass. The Company's batteries are intended for applications such as wireless sensors that operate in harsh environments, semiconductor diagnostic wafers, radio frequency identification (RFID) tags, semiconductor non-volatile memory chips, and advanced medical devices. The company maintains R&D and manufacturing facilities in Oak Ridge, Tennessee, and additional offices in Salt Lake City, Utah. Detailed information about Oak Ridge Micro-Energy Inc. may be obtained by visiting the company's Web site at http://www.oakridgemicro.com.
Agreed. Definitely the wrong time to sell.
KR