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Acquire Interest in Wattenberg Development Program?
Press release on project
http://ih.advfn.com/p.php?pid=nmona&article=71908701
10Q report for period ending March 31, 2016:
http://ih.advfn.com/p.php?pid=nmona&article=71496070
I do not think the company will be able to complete the project or make the purchase.
The development program is slated to begin later this year and drill into mid 2017. The Company’s commitment will cost approximately $9.6 million for drilling and completing the wells
Operating report for May 31, 2016
The operating report for April 13, 2016 through May 31, 2016 was filed on June 20, 2016. It is document number 806:
www.kccllc.net/peabody/document/1642529160620000000000097
From looking at this report, there MAY be something left over for the common shares, PROVIDING the assets are worth what they are being carried for on the books.
I am expecting as asset sales take place, there will be large losses that will result in write downs that will wipe out the equity.
The operating report shows operating losses of $40 million with a total of $120 million lost for the April 13 to May 31 time period.
It looks like the company will lose $30 to $40 million per month, with more loses from the sale of any assets as time goes on.
Louis J. Desy Jr.
Disclosure: I have no position at this moment but may open one if the common shares fall enough and it looks like the common will retain some value; but I do not consider this likely.
There is no way the common shares survive
The problem is that once the classes are setup for the reorg, the common shares will be at the bottom of the list in priority when the assets or rights to the assets are distributed to the classes. The problem is that to even get to the point where the existing common shares would be entitled to anything, the company needs another $4.5 billion in value for that to happen.
Even if coal prices recovered today, the gap is too large to get filled; plus coal prices are not going to recover for months and the reorg will be all over by then.
At best, and I would consider it a miracle, the existing common shares might get some warrants in the reorg plan, with a strike price set so that all of the other classes would have to be made whole at 100% before they had any real value, otherwise I am expecting the common shares will be wiped out in the reorg plan.
I did make a large percentage on the first day of trading after the company filed Chap 11 on $2 and $1.50 put options positions that I closed when the stock was in the $0.70s, so I will still be way up on the position if the $0.50 puts expire worthless; but anyone buying the shares at these levels with the hope that there will be value in the reorg plan is making a big mistake since the numbers are just not there.
Louis J. Desy Jr.
Peabody Energy schedules posted, common is dead
Document # 749, statement of financial affairs for Peabody Energy, the parent company:
www.kccllc.net/peabody/document/1642529160613000000000109
The schedules for the parent company have been posted as document 749. On page 328 of the PDF, is the summary of the parent company, which would include all of the subsidiaries of Peabody Energy.
In total, including amounts owned by, owed to, or loaned from or by Peabody Energy and all of its subsidiaries are as follows:
Assets: $60,284,284,790
Liabilities: $64,783,217,476
Net balance available for the common shares, negative $4,499,032,686 .
In other words, the parent company and the common shares, are 'in the hole' by almost $4.5 billion. It also looks like all of the unsecured liabilities to vendors will be wiped out also, plus a few of the bond more junior series are going to get zero in the order of priority.
Louis J. Desy Jr.
Disclosure: I own June 2016 $0.50 put options.
Today is the day
We should be able to see something later today, or before the opening tomorrow, what the company looks like since all of the schedules are due today.
I am predicting that the liabilities will exceed assets, meaning that the common shares will be worthless. I am also expecting that most, if not all, of the unsecured debt will get written off also.
Louis J. Desy Jr.
Disclosure: I own $0.50 June 2016 put options.
Going concern language in 10Q
10Q for period ending April 30, 2016:
http://ih.advfn.com/p.php?pid=nmona&article=71681687
Although the Company is continuing to minimize its capital expenditures, reduce costs and maximize cash flows from operations, continued low commodity prices are expected to result in significantly lower levels of cash flow from operating activities in the future and have limited the Company’s ability to access capital markets. These factors and the TUSA and RockPile covenant compliance issues discussed below raise substantial doubt about the Company’s ability to continue as a going concern.
Comments on Q1 for 2016
10Q report for period ending April 30, 2016:
http://ih.advfn.com/p.php?pid=nmona&article=71681687
It looks like they lost almost another $100 million with the write downs.
An alarming sign is that there are two sets of notes that the company is now, or will be, in violation of the terms, TUSA and Rockpile.
I think this is the end for the company. I do not see how they can possibly get back into compliance with any of the notes and stay that way for the rest of the year.
I think a chapter 11 filing is the only hope of resolving the situation. With stockholders equity negative by $356 million, I expect the common shares will be canceled and wiped out in the upcoming chapter 11 filing.
Louis J. Desy Jr.
P.S. As a side note, I thought that this company was large enough to make it through this period of low oil prices. Prior to the fall in oil prices, I had expected and hope that someday American Eagle Energy would grow and become something like TPLM, instead American Eagle is dead and this one looks like it is only a matter of time before it joins American Eagle in a Chap 11 wiping out of the common shares.
Waiting for schedules
The deadline for the filing of the schedules is June 13, 2016.
When that is finally done, then everyone will be able to see how much, if any, equity the company has for the common shares.
Document #116, Motion to extend time to file schedules granted:
www.kccllc.net/peabody/document/1642529160415000000000007
Louis J. Desy Jr.
Letting the common shares trade
Until the reorganization plan is confirmed, and the 8 or 10 day time for appeals has passed, the common shares are still one of the classes in the order of priority. There is always a possibility that the common shares might end up with something, even warrants that will probably never be worth anything of real value.
Once the plan is confirmed by the court and the to to appeal passes, then the shares will probably be wiped out and stopped trading. I have seen this happen in the middle of a trading day a few times.
Louis J. Desy Jr.
Equity is almost zero now
I took a look to see why the stock was dropping over the last few weeks. I was not expecting a big drop until they filed all of their schedules, which has had its timeline extended until mid June 2016.
The two recent released items that show equity almost at zero are:
1: 10Q report for period ending March 31, 2016.
http://ih.advfn.com/p.php?pid=nmona&article=71391349
This report shows equity as $811 million and the company lost $109 million in the quarter.
2: DIP financing was approved in May 2016 for $800 million.
http://ih.advfn.com/p.php?pid=nmona&article=71509207
Taken together, these two filings show that the equity is all wiped out by going through these steps.
Start with the equity listed in the 10Q report of $811 million. Then subtract the DIP financing $800 million, that has super priority over all classes in the BK, that leaves equity of $11 million for the common shares. After that the company is losing at least $30 million per month, so for two months of BK that is another $60 million in equity gone, that leaves equity negative by at least $49 million. Equity is also getting worse by $30 million per month, but at this point it does not matter since it is all wiped out anyways.
Louis J. Desy Jr.
Disclosure: I own BTUUQ June 2016 $0.50 put options.
Recent drop
The thing I am wondering about, is there something else going on, that is not apparent, and Sears is only weeks away from BK?
I took a look at the one month chart. It was as high as 17 or 18, and now is near 10 or 11. I just seems that kind of drop would only be taking place if the company was 'dead' and everyone who knew, or had an inkling that BK was only weeks away, was bailing out.
I did not expect such a movement in the stock to take place until sometime in 2017, but maybe all of retail is far worse off than I had ever expected.
Louis J. Desy Jr.
Disclosure: I own Jan 2018 $5 put options.
Any idea why at 52 week lows?
I am baffled why the stock is doing so poorly. While I DO expect at some point the company will go BK, I am not expecting that until sometime in 2017. I am surprised that the stock seems to be 'falling apart' so early in 2016. Is there 'something else' going on that is causing the stock to fall?
Louis J. Desy Jr.
Disclosure: I own $5 SHLD Jan 2018 put options.
Voting on plan and classes
The way the voting works, is that all of the equity and liabilities get ordered into classes. Those classes get arranged in an order of priority, with highest being secured debt and lowest being common equity. In between will be the preferred shares, unsecured debt that may be ordered higher than others (junior debt, senior debt), and the trade payables that would be unsecured.
Any class that is going to be repaid in full will be considered to vote in favor of the plan and would not need to vote. Any class that would not recover in full would be considered 'impaired' and consider to vote against the plan. The other classes get to vote to accept or not accept the plan.
Since the preferred and common are probably going to be proposed to get nothing in the plan, it will be presumed for the voting that those classes vote 100% against the plan. You will see a summary of that when the proposed plan is filed in a few months.
Louis J. Desy Jr.
Assets greater than liabilities, error maybe?
I think the Wall Street Story is partly in error. I did looked at the last 10Q/10K filed and then the WSJ story. While the story does say assets greater than liabilities, plus the filing on Prime Clerk shows the same thing, I think there is 'something missing' from the story and the filings.
I think the problem is that the assets may include amounts from their 100% owned subsidiaries, that are not going to repaid to the parent. That would explain why the 10Q/10K show loses and the filings do not, so far.
Louis J. Desy Jr.
Date of vote not set yet
It all depends on the timetable to vote on the reorg plan. I would not expect any vote until the Fall 2016 at the earliest, and that is if there is no 'fighting' over the proposed plan.
It is also possible that the common shares will not even need to vote, since if the plan wipes them out, they will be expected to have voted to reject the plan. (This may not matter if there is nothing left over in the allocation of assets in the priority of the classes, which is what I expect will happen.)
Louis J. Desy Jr.
Common shares are dead
There is no way the common shares are going to recover anything. I just took a quick look at what yahoo has for the Dec 31, 2015 balance sheet. ( https://finance.yahoo.com/q/bs?s=SDOC+Balance+Sheet&annual ) It has stockholders equity at negative 1.6 billion.
It also looks like all of the payables will get wiped out. The assets are about 3 billion, in total, against 4.6 billion in liabilities.
Going up the order of priority, payables of $437 million get wiped out, and there is still another $1.2 billion in liabilities that are probably going to get nothing (or not much).
On top of that, if there is an DIP financing (Debtor in Possession), that will have super priority in the order and 'push' more liabilities into collecting zero.
Louis J. Desy Jr.
That was early
I saw the jump early in the day, but it looks like everyone is in a panic now with the shares down 25%.
I had hope the company is ok, but until the 10 Q/K reports are filed , there is no way to tell.
It also seemed strange that it was taking so long to compile a list of residual oil rights and cash in the bank, assuming those are really still there.
Louis J. Desy Jr.
There was something wrong
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120272041
In a prior post, I questioned why it was taking so long to issue the 10K report, since there was only supposed to be just a few residual oil interests plus cash in the bank.
From the just release 8K report, it does look like there were all kinds of unreported problems in that Holms was paid for things that he was not owed money on, plus years of reports that may need to be looked at or restated.
It also calls into question if anything reported was true or not. One particular item is how much cash is really in the bank or was that misreported.
There was discussion on an earlier situation that he was involved in (late 1980s/early 1990s as I seem to remember) where he arranged for drilling and personally guaranteed the costs, only to have it turn out there was no oil on the land and he had nothing to pay the drilling costs with. (From my reading of the case, it looks like to me that he expected to finish the well and find oil fast enough before he would be called on to pay for anything. If oil had been found it all might have worked out. The problem was that the well was dry and the driller sued to get paid.)
While there must be some money there, since all kinds of money appears to have been paid to Holms that he was not due, the question is what was left over for the company in the bank.
Another fear I would have, is if Holms was willing to take the sums he did take, why would he bother to leave anything in the bank for the company? i.e. Why not just clear out the bank accounts to almost nothing and continue to report that the cash is still in the bank on the reports? This scenario would explain why the company seemed to be doing nothing with the cash on hand since the truth would be that there was not enough left to do anything with. It would also explain the delays in the filings since no one can find or 'understand where the cash is'.
Hopefully, except for what is in the 8K report, those are the only sums that are missing from the company and the 10Q and 10K reports will all be brought up to date.
Louis J. Desy Jr.
Activision "partnership"
I am not sure what HDSI means exactly when they say they have a 'partnership' with Activision since there seems to be no details on it from HDSI.
Activision does not seem to discuss this at all in any sources that i have come across, only HDSI/CMGO seems to talk with the relationship in terms of being a 'partnership', but I think that it is a mistake to use that word, at best; and at worst intentionally misleading by HDSI.
A 'partnership' implies that someones money and/or revenue is flowing from Activision to Good Gaming.
No where do the terms of said 'partnership' seemed to be spelled out or the exact and entire details provided of what are the terms of the partnership.
Other and earlier postings online use the word 'licensed' to describe the arrangement between Blizzard Entertainment (parent company Activision) and Good Gaming. ( http://www.dailydot.com/esports/good-gaming-tournament-mess/ "With an official license from Blizzard" ) The word 'licensed' implies that Good Gaming is paying Activision for the right to use the games, and that anyone who is willing and able to pay the money could get the same arrangement; i.e. There is nothing special or particular about Good Gaming having a license with Activision for the games and there will be no payments from Activision to Good Gaming. In fact, Good Gaming probably has to pay and keep paying Activision every time it runs a tournament. There is also the additional threat that if Good Gaming doesn't run things properly that Activision could refuse to allow the use of any of its games.
One consideration is that if Activision became aware of the full extent of the people involved in the running of CMGO and HDSI and the financial mess they are, that Activision could pull or refuse to renew any license with CMGO/HDSI/Good Gaming.
Louis J. Desy Jr.
Super Preferred A created
8K report filed May 6, 2016:
http://ih.advfn.com/p.php?pid=nmona&article=71427812
The company is creating a preferred series A that will have control of the company. The series A will be 1,000,000 shares that each will have 100 votes. There are only 56 million common shares, so the 'super' preferred A, once issued, will have total control of the company.
I do not view this as a good sign for the common shares, plus it has been over a year since any 10Q or 10K reports were filed so there is no telling what the company look like or what is going on.
Louis J. Desy Jr.
Time? Time to do what?
Yes, and what (and who?) were they working on all that time?
There were press releases about 'roll outs', but except for only about 1,000 downloads of 'something', it appears that nothing was worked on and nothing was done.
If the whole thing was really not working, don't you think it would have been obvious after spending under $100K, instead of over $1 million and having nothing to show for it?
Plus, with a track record like that (hundreds of thousands spent on a failed product that does nothing), why would anyone expect anything except a replay with Good Gaming?
Louis J. Desy Jr.
Business expense for WHAT?
Business expenses, Ok, but what was the business?
A business expense usually means a company that has a product or service that has revenue or assets to show the development of a product or service.
Here, an incredible amount of money was spent on something that was supposed to be an already working product; yet after spending hundreds of thousands of dollars there are ZERO assets.
Your own posts, multiple times, over a course of a period of months, claim the product was great and going to make all kinds of money.
Yet, after a while, after hundreds of thousands of dollars where taken in by the company, and allegedly spent on development and a sales team; there is nothing to show. Where did the money do?
It isn't just that the product 'didn't work' or 'needed more work', there is absolutely ZERO on the asset side of the balance sheet.
Where did all of the money go? What did it get spent on?
HDSI never showed any assets, except one time of $515 in something other than cash, on the balance sheet.
Louis J. Desy Jr.
Examples showing the same routine being run again and that I think you get overly enthusiastic about all products:
Wednesday, 03/25/15 10:08:30 PM
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=112107057
Who cares? That has no relevance, since SirenGPS took over the shell. The recent 8Ks are relevant. The next 10K showing the balance sheet clean up; relevant.
I like this part, from today's PR:
'It took longer than we had hoped, but the results exceeded our expectations and we are ready to take our solutions to market.'
HDSI, LQQKs promising!
Agree. HDSI has genuine potential & I ain't pumping.
HDSI taking it step by step!
Potentially Precious Assets of
SirenGPS, RM'd into HDSI!
Tremendously Undervalued!
HDSI
#OTHERpeopleDOcare
Yes they do.
Louis J. Desy Jr.
The point is they spent money for nothing!
The main point is that they spent hundreds of thousands of dollars and produced ZERO revenue, plus somehow managed to have absolutely nothing of value afterwards.
It takes a special kind of ability to produce results that bad!
And now we are to suppose that they are marketing and internet geniuses that are going to produce all kinds of revenue with the Good Gaming product that is being managed by someone that appears to have no computer or business background (Lakken's wife?)? Give me a break!
Even the worst business disasters usually have something to show afterwards, even if it is old worthless office furniture that no one wants.
Here, HDSI had nothing to show after spending hundreds of thousands of dollars.
How does that happen?
Louis J. Desy Jr.
Not good for the common shares
Yes, it is true that the company reduced liabilities by $1.1 million from Dec 2015 to Sept 2015 BUT there is a big problem with how the company did it, and it is not good.
10Q report for period ending Sept 30, 2016:
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=11355692-949-74827&type=sect&TabIndex=2&dcn=0001346655-16-000012&nav=1&src=Yahoo
The big problem is that the company issued 1.4 billion common shares, for $1.4 million, to the retail market in order to 'reduce' the liabilities. This left the retail market with common shares in a company that has ZERO assets, still owing all kinds of money and no control over the company because there are super preferred series with voting rights that control the company.
There is also a question as to how legitimate the debt was, since one would have to believe that the company spent $272,119 over nine months with nothing to show for it. There were no sales and assets to show for any of the money that was 'borrowed' by the company.
Louis J. Desy Jr.
It does matter.
What good is buying the stock if the price skyrockets when you buy and crashes when you sell?
It does matter if you ever hope to be able to make a profit on the trade.
This stock is so weak that it can't even handle an order for one hundred or two hundred dollars worth of shares. I can't imaging what would happen if someone tried to sell of $1,000 worth of shares.
Louis J. Desy Jr.
Shares getting nuked!
I looks like the stock is falling apart. On volume of 150,000 shares, the stock is down 15%.
Are you guys really sure you want to keep buying this?
Louis J. Desy Jr.
Yes, and they are all dead companies, just like this one.
The only reason to keep the company going is because they can issue some convertible debt and then unload a bunch of worthless common shares onto the public market.
There is no other reason for the company to stay open, losing about $100K per quarter, and owning people all kinds of money that it can never repay.
Louis J. Desy Jr.
How can it be a winner with nothing?
How can the company run anything if there is ZERO cash to pay for anything?
Since when, in the history of finance, has any company, country or person ever been considered to be a 'good investment' if they had ZERO cash plus owed all kinds of money?
Louis J. Desy Jr.
Down on $66 trade! (20,000 shares)
This stock trades so poorly that it fell on volume of only 20,000 shares, for a total of $66!
Even the trader that usually shows up at 3:59:30pm to put it up for the day with a 1,000 shares to hit the ask, was not around.
How would anyone ever be able to sell their shares if the stock starts falling on less than $100 traded!
Louis J. Desy Jr.
ZERO assets!
The company's own SEC reports show ZERO assets.
Louis J. Desy Jr.
It is NOT clean!
There were hundreds of thousands of dollars in liabilities still on the books, with ZERO assets.
IF there is anything to Good Gaming, there are all kinds of amounts owed on payables by the company. Putting any asset into something as debt ridden as HDSI was not a good idea.
Louis J. Desy Jr.
Turn around? The company is dead!
The company has a 'going concern' language in the latest 10Q report:
10Q for period ending June 30, 2015:
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=10963880-1057-83289&type=sect&TabIndex=2&dcn=0001213900-15-007861&nav=1&src=Yahoo
The company has gone through over $16 million in capital raised, and only has $170K in assets to show for it. In addition, the company loses over $100K per quarter and owes over $600K in accounts payables, not to mention all of the other liabilities.
I am surprised the company is even still operating. There is nothing left here.
They would be better off selling the assets to a new company and filing for a Chapter 7 bankruptcy liquidation on this company.
Louis J. Desy Jr.
Pay for a shell?
No they didn't have to get another shell. They could have just done a private placement and then gotten a listing on OTCBB, PLUS Good Gaming came from CMGO which was already trading. The only reason to move it between virtually dead penny stock companies is because CMGO is weaker than HDSI for doing anything.
The only reason to move Good Gaming from CMGO to HDSI is that Lakken can't issue any more stock based on it over at CMGO, so they move the 'fairy tale story' over to HDSI and try to run the same story again.
Louis J. Desy Jr.
There is no money to spend!
The company has ZERO cash to spend and will never have anything to spend.
Louis J. Desy Jr.
You do understand the history is a disaster
Those financials DO show what a disaster everything the company has touched or ever been involved in.
The insiders cash out the convertible debt at a 50% discount to the current market price, and got well over 100% on their money for allegedly 'loaning' money to the company for only a few months at most, that they then converted in decorative worthless common shares and dumped onto the retail market.
How else could anyone explain why the lender got an interest rate on the order of something like over 1000% when annualized!
Louis J. Desy Jr.
E-sports and Good Gaming
Yes, someday, MAYBE, esports will being earnings all kinds of revenue, but it will NOT be a company with no money, like HDSI, to spend that gets any part of that.
If eSports is going to be so great, and the web site such a wonder, why has nothing happened for months, and revenue is still ZERO?
My answer is that the product hardly works, can probably at best only support a few thousand people, if even that many, and is nothing more than a 'prop' in the fairy tale being pushed onto the retail market that the company is going to make it big someday.
That belief and the muppets wanting to believe that they are somehow being given the chance of a lifetime to get in on the ground floor of something big, is all the insiders will need to begin issuing all kinds of additional common shares and cash out at their expense.
Louis J. Desy Jr.
How do you see it?
That somehow, almost like magic, the company will develop a product with no cash to spend, that and thousands of people will pay all kinds of money on a product developed from zero dollars?
And that something as valuable as Good Gaming was just given to the company because they did so well with SirenGPS, where after they issued about 1.5 billion shares, had ZERO assets and wrote off the product.
Lakken and CMGO came along and said, 'that is just what Good Gaming needs to be successful', a group of people that had ZERO revenue after issuing hundreds of millions of shares with nothing to show for all of it!
Louis J. Desy Jr.
P.S. You do understand the whole ZERO assets thing? The company literally shows nothing in the latest filed SEC reports with tens of thousands owed to others.
How is the company finding operations?
None of the financials released show any assets. Assets are zero. In addition, there are tens of thousands of dollars in liabilities.
The company has not issued more common shares, yet, because the state of Nevada does not show any increase in the authorized share counts, yet.
The only other way for the company to have gotten money for operations would be to issue more debt.
Now, assuming the company raised the money for operations and the expenses for its SEC filings from debt, how will the debt holders get paid back?
The only way for the debt to get paid back is that the debt will be convertible debt, that will convert as soon as possible into common shares which will be sold off into the retail market within a matter of weeks. The debt holders will want to get repaid, not hold decorative worthless common shares that will crash to zero soon. It is the only reasonable way any debt would be ever able to be repaid, since there is no revenue to repay debt with. One can expect that by the time it shows in a 10Q or 10K report, it will be to late for the retail market, since the shares will all have been issued and sold off.
The only warning there will be to anyone, will be 8K reports listing the increased in the authorized shares, and then follow up filings, probably one per week like like when the CD converted to shares with the SirenGPS product, weekly with 8K reports detailing the conversions of CD to common shares. The conversions will go as fast as the retail market can absorb the common shares without crashing the price.
After the CD issues all of the shares the market will take, the stock will crash to $0.0001 on the ask with hundreds of millions of shares for sale and the bid will stop as no one will buy. That is what happened last year with the SirenGPS product. It also takes time for the retail market to realize that the common shares are 'decorative' and worthless and have no say in the operation of the company since all of the voting control is with the super preferred plus the company will show none or minimal assets. With SirentGPS the company only showed $515 in assets, that was in spite of promises to raise all kinds of cash for operations and a sales staff.
The only people that buy the decorative common shares are either traders that know what is going on, stock up on shares pre pump, and then dump them into the retail market when they are pumped up; or the muppets that get a cold call from PR/marketing/boiler room operation and get convinced about 'the story' and how great the company is going to do in the future and loaded up with the worthless, decorative, shares.
Louis J. Desy Jr.
Don't need much!
This is like the commercial, "I've fallen and can't get up".
If a lousy 20,000 share block drives it into a loss of the day, how is this supposed to rise?
Louis J. Desy Jr.