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January 16th is the deadline for Oregon's extension to file an appeal. http://www.kccllc.net/documents/0812229/0812229121227000000000001.pdf
Looks like we're not going to see anything important until at least the end of January. And even then, it will probably be another extension.
Two solutions:
1) Ride our 2013 and hope for a payout, or
2) Sell at the top of this year-end hype, wait for it to fall, and jump back in (or cut your losses and go somewhere else).
Someone buy my shares in the next hour! They've been for sale @ market all day.
You can actually write "worthless" on your reporting sheet and file it with your Schedule D as a loss. That's what I'm doing this year.
Just don't forget that shares you buy now are commons and are not the same as having escrow shares. I think people are forgetting this. IMHO, this is a typical penny play (up and down and up and down, all on emotions) until escrow is paid.
We've been saying this kind of stuff since 2008, mate.
Unfortunately, I think you're correct. Unless we see something significant before the New Year (and I'm thinking of tax considerations at the megacorporate level) then it's going to be shot right down in January.
Of course, I tend to be pessimistic so that I'm never disappointed. If this thing does something significant I would be very happy, but also very surprised.
There's a lot more to the value of the shares than just one day of green.
What's clear is that PE had to be used because no bank would finance a loan to a company with that much accumulated deficit.
PE is not a bad thing, but before someone is going to finance your debt-laden company they're going to ensure that they get their money's worth with as little risk as possible. Owning all the preferred shares and the 15% return on all of their investments + the $10k/month consultation fee helps to ensure this.
Again, this is all my own DD. I would like to own shares of an up and coming company that has a product in high demand, but at the end of the day we have to ask ourselves How Much the company is really worth and what long term potential we're looking at.
For what it's worth, a lot of people following SKNY are also all hyped up about BBDA.
You're right, they do need approval. And part of the new financing that will occur BEFORE the amended articles of incorporation is that 65% of common stock is owned by Trim Capital, making them the majority voter.
Because that's how you make money in this game. No matter what happens to the stock, the only thing that can happen is the stakeholders reap a ridiculous profit.
That's why I said you have to read, read, read. Research and learn. As part of the financial agreement the company needs to amend their articles of incorporation. If they fail to do this they owe Trim Capital $750,000 in termination fees + whatever else they decide to tack on. Needless to day, it's going to happen. The amendment will also provide the ability for the board (now with 11+% control by Trim Capital i.e. Dachsund i.e. Marc Cummins) to do a reverse split.
I suggest you learn about what a pump and dump is before you jump into here. It's not that the company is a bad investment, and it's not that you can't make money off of it. It's that everyone who is jumping in here needs to ensure that they are making calculated moves and not just jumping in because they are optimistic.
Here's the thing: Market 99's concept was poised to kill the marketplace. Take a look at the discount stores like Family Dollar and Dollar General during the recession. Parents couldn't afford to take their kids to the big-ticket toy stores, so these discount stores started profiting like crazy.
Five Below is going public this Friday. What we needed here was a growth pattern like Five Below, not some photoshopped pictures of Market 99 logos on semi trucks.
But the market still has room for discount stores. We're worried about the rich ruining the country, class warfare, and rising prices... Well, why wouldn't a discount store be the best investment option for retail investors?
I think the actual shell is frozen though. Can someone do a reverse merger into it?
No, and don't listen to anyone who condenses SKNY's situation into a sentence or two. As an investor you need to do your own due diligence, or at least consider the due diligence of multiple people contributing to this and other boards.
If you're looking for a quick "tell me if I should buy or sell" then you wont get it here. And if you do, I wouldn't recommend taking the advice. Form your own opinion based off of what feels right to you.
The company has solid potential but becomes more in debt as each year goes by. Is this a bad thing? Not for a startup. In fact, for companies like IBM and AAPL, they were in debt when they started, too. But you have to consider the whole picture before you decide when to get in and when to get out.
The company is lining itself up for a reverse split, and I wont be comfortable getting in until after it has settled. This is because my experience with R/Ss is that they will change the face value of the stock, which inspires investor enthusiasm to spike the shares up, Trim Capital, Dachsund, and Cummins all will sell their shares at a 20-50% premium (depending on how high us dogs can run it up), then the stock will fall, fall, fall.
Some call this a necessary cost of doing Pink business. I would agree in some respects, but in others, I think that it's taking advantage of a company that has solid potential.
Just remember: If this Marc Cummins guy is dropping $15M into SKNY, he's planning on making money. And not just from the notes.
IN CONCLUSION, I hope no one here will condense SKNY into a sentence or two. That's your job as an investor. If you let other do your DD then you will lose money, every time, guaranteed. Anyone can speak to you about that. I'm sure of it!
It will have to tank the stock price. Trim Capital will own 65% of commons following the equity restructuring. It was actually a very smart move from an investment banking standpoint. It lines them up to profit regardless of what happens to SKNY.
Looking at the 13D just filed, a few things jump out:
"At the third closing (the “Third Closing”), the Notes sold at the First and Second Closings will convert into additional Equity Units, and, in addition, Trim will purchase $5,000,000 of additional Equity Units such that, after the Third Closing, Trim will own $9,000,000 of Senior Preferred and 65% of the Third Closing Fully Diluted Common Stock."
Trim Capital, LLC, a company that holds shares managed by Dachsund, LLC, a company that manages investments for a Marc Cummins (who is the principal for both companies), will be owning the shares, as will Dachsund and Cummins, but
"Marc Cummins is the sole member of Dachshund, and Dachshund is the sole managing member of Trim. Therefore, Mr. Cummins will have voting and investment control over the shares of Common Stock to be held by Trim, and may be deemed to have beneficial ownership of such shares."
If Cummins is all private equity as the 13D states, then he's positioning himself to make a lot of money off of this. Please note that the multiple entities owned and controlled by one very rich person is not a new concept, so there's technically nothing really fishy here about this.
"The Notes bear interest at a rate of 15% per annum and are secured by a first priority lien on all of the Company’s assets, other than the inventory and receivables of the Company for which Trim’s lien is subordinated to the lien held by the Company’s senior lender. The Initial Note is due and payable on the earlier of June 28, 2013."
The noteS (plural) will bear a 15% interest rate. The initial note of $1M + interest ($150,000) will be due on June 28th of next year.
"Effective as of the First Closing, the Company entered into a consulting agreement (the “Consulting Agreement”) with Mr. Cummins pursuant to which he will receive a monthly consulting fee of $10,000 during a term commencing on June 28, 2012 and continuing in effect until the Notes are paid in full or converted into Equity Units (unless earlier terminated in accordance with their terms)."
For a company that isn't generating enough revenue to keep up with debts, they sure are quick to enter into additional financing and paying a $120k/yr consulting fee to Cummins.
"It is anticipated that Mr. Cummins will be elected as a member of the Board as a nominee of the holders of the Senior Preferred in connection with the Third Closing."
Doesn't sound too bad now, but unless they have a master strategy to get out of debt, adding on additional debt is going to be useless.
"Michael Salaman, the Company’s CEO and a director, is a minority investor in Trim Capital."
Well then.
"The Senior Preferred will carry a cash dividend of 15% of the original issue price per annum,
which will be cumulative, shall compound semi-annually and shall be payable on the earliest of (i) the closing of a qualified public offering, (ii) a liquidation event, (iii) the redemption of the Senior Preferred, or (iv) semi-annually to the extent that funds are legally available therefor. No dividends may be paid on the Common Stock or any series of preferred stock ranking junior to or pari passu with the Senior Preferred unless all accrued but unpaid dividends on the Senior Preferred have been paid in full."
So in addition to the 15% interest on the notes, the $9M in equity financing has a 15% div yield on top of it, paid out "semi-annually to the extent that funds are legally available therefor" (read: semi-annually as long as the company isn't about to declare bankruptcy).
But in accounting class I remember that an investment which states 15% nominal rate and compounding 2 times per year results in an effective rate of 15.562%.
This puts an additional annual liability of $1,400,580 in preferred dividends. And if you're an optimist and think that the first few dividends wont have to get paid out, then please understand the last line from above: "No dividends may be paid on the Common Stock or any series of preferred stock ranking junior to or pari passu with the Senior Preferred unless all accrued but unpaid dividends on the Senior Preferred have been paid in full."
So already we're up to the following:
$15,000,000 in new financing, with an obligation of
New liabilities
$1,400,580 per year, dividends on preferred shares
$1,150,000 once, due on June 28th, 2013
$450,000* per year, interest on second ("Remaining") note
$120,000 per year, consulting fee to Marc Cummins
This totals our new PER ANNUM additional liabilities to:
$1,970,580
Additionally, the securities were sold by Bryant Park Capital for the sum of $400,000, $50,000 of which the CEO is using to pay himself back for a loan he gave to SKNY.
See: this SEC filing.
Also, I just looked at the financial statements again, and see an accumulated deficit of (47,064,577). This is separate from Stockholder's equity (which is negative, so technically it's stockholders' deficit), which is normally reported as shareholder equity i.e. the value of the company's stock.
I was wrong with my initial comments about the company's debt and you were correct. Thank you for pointing that out.
They're still $43M in debt. The financials look weak and taking on more debt (15M financing?) is not the answer.
It looks like the share price fell rights after the split, and coupled with the recent news, I wouldn't be surprised if a lot of people try to short this.
hardasset, agreed. That's why I wont use them here.
That's true. I'm still afraid of setting stop-loss orders at support levels because of the likelihood that any chance of news may have this do a cup and handle breakout.
Can someone remind us what S/O and Market Cap is?
I've had K-Series shares since the start of this, so I'm in it for the long haul.
My KQ shares were converted to common stock.
7,142 KQ shares turned into 3,535 Newco shares. What? Is my brokerage crazy, or is my ratio 2:1?
You got less for your preferreds?
What are we looking at in terms of possible valuations? $75 million seems like such a small amount of net worth, considering the amount of shareholders.
Received K ballots yesterday from USAA.
I've got a ballot for my WAMUQ shares, but not for my WAMKQ.
Is it just me, or is MACD crossover + RSI showing strong support for a trend reversal? That is, am I looking at the potential for a serious upswing or am I crazy?
Well at the end of the day it's still a shell that is on the market.
What impact will this have on the share price?
8.77% of total distributed to commons.
was AFK. What's happening? What's the silence? EOM
Just click on the link in the sticky message. You will be presented with an advertisement, then the audio will load. The screen will remain black.
I always look at price dips in this stock as another opportunity to double down. Dips on these BK plays are a good way for people to shake off the stop-limits, so load up because I don't think they'll be on sale for very much longer.
What will WAMKQ be worth, best case and worst case scenario, after February?
What are your predictions, and how are you coming to them?
How likely is it that Wamkq will receive any money from a settlement?
What do you all think will be the outcome of today's hearing?
Don't let the price smash affect your decision to stay long. You have to remember that before good news comes out there will always be a hit in the price in order to shake down all the worried shareholders. Hold strong, friends!
Anyone who is selling is making a HUGE mistake.
I am holding on to my shares and not trying to flip or anything else BUT hold on to my shares.
I suggest everyone else does the same.
I'm going to stand fast. This seems like it's an attempt to force shareholders into a particular settlement in order for the settlers to figure out who is willing to sell for cheap. Once ballots return with frustrated shareholders' agreement to settle for some magical price that we don't know about yet, they will publish some off-the-wall, way underpriced value and all the shareholders who gave up their shares will be cheated.
On the other hand, the shareholders who hold their stocks are allotted at least a year to determine whether or not the price announced will be worthwhile or not.
Again, I think with the one year timeline allowed AND the verbiage in the ballot that makes it seem like the settlers want all of us to just hurry up and accept a disbursement without even knowing what we will receive,
we are looking at a scared organization who doesn't want to pay full price for the stocks if they don't have to.
Hold strong. Don't give up. We're almost there.
I just recently got a rights offering in the mail for this. Hmm....