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Plus a 1.5% fee plus $300K prepayment penalty.
Hah, friday night financing announcement. $2M from McFarlane. More debt, this one at a 12.5% interest rate.
Approved a nice new share comp plan, and approval for “blank check” preferreds so they can wipe out baggies on another financing without even going to a shareholder vote.
Going to be a lot more pain.
IMHO....
Don’t even need to leak it. The company runs out of money like clockwork. The company also often keeps the deals “open” for weeks to allow latecomers to get in on the action even after the price has gone up (which doesn’t happen every now and then, temporarily).
This blank cheque pref will allow an an investor to pound the common into the dirt even harder.
I guess the “strategic process” is going well, lol.
From the company:
"The issuance of Preferred Shares could affect the rights of the holders of our common shares. For example, such issuance could result in one or more classes and series of securities outstanding that would have preferential voting, dividend, and liquidation rights over the common shares, and could enjoy all of the rights appurtenant to the common shares. The Board may issue Preferred Shares without shareholder approval and with voting and conversion rights which could adversely affect the voting power of
holders of common shares."
To be fair, they need to do this. Continuing to wipe out the existing bagholders is pretty much the only thing they can do to keep the lights on, IMHO.
Who is going to the AGM next week in San Jose?
Don't forget to vote on Amendment #5: "To consider, and, if deemed advisable, to pass a special resolution to amend the Company's articles to create a new class of "blank cheque" preferred shares."
Do you understand what that means?
It means the Board of ANY can issue preferred shares and set whatever terms they want, including conversion price, liquidation preferences, and so on without any further vote or action by shareholders.
So now they don't even need to issue deeply discounted common shares with warrants (the warrants end up being worthless anyway) - they can issue an instrument that ranks ahead of the common and blows away their economics.
So, for example, let's say they go back to McFarlane begging for cash, say $3M. How about a preferred share that accrues a dividend at 20%, converts at steep discount, and is redeemable for 3X the issue price etc.
It seems the beatings will continue until the morale improves.
IMHO....
You will be happy to know that Kelly, Tassipooulos, Kalbfleisch, and Yeh were granted "performance bonuses for the last two quarters of 2016:
"For the last two quarters of 2016, bonuses were paid at 75% of target bonuses as follows:
Mr. Kelly, $150,000; Mr. Tassiopoulos, $91,752; Mr. Kalbfleisch, $67,500; and Ms. Yeh, $22,500."
Source: November Proxy Circular
Of course, the total return on the stock for 2016 was -80.2%, so I guess those bonuses were well-earned as they were able to salvage 19.8% of the market cap.
If there's a change of control Kelly also gets USD $1.3M, Peter T gets $234K and Kurt gets $373K.
With the stock now at 9.2 cents pre-split I'm sure everyone's feeling great about the bonuses.
Agree.
Really Bruce? The stock is at the pre-RS equivalent of 9 cents.
On Opus specifically, ANY has defaulted on the debt and it is in special loans. Opus is extending because if they don’t they probably won’t even get paid back. Let alone Cyrus.
Never seen someone ride a Stock from $9.00 to $0.09 and claim that has a win.
All IMHO.
Typically they have a vesting period. ANY files registration statements all the time that make most of them tradable on vesting.
The market cap is $10M and they are issuing stock comp at a rate of $8M per year ($2M per Q). Do the math on that alone.
Seriously man why do you keep posting "time and sales" data? Is there something useful in it?
Easy.
1) Go back and read every prediction and promise given by management for the past 5 years. Then go back another 4 years to Overland Storage.
2) Look at what they actually delivered, or did not deliver.
Here's a good place to start:
http://sphere3d.com/sphere-3d-provides-business-update-in-open-letter-to-shareholders/
3) Next, look at the operating cash flow.
4) Now, have a look at the balance sheet and the crushing debt load.
5) Now go and read the 8-Ks and calculate how many times they've defaulted on their bank debt. Don't forget to see who is signing for Opus - the special loans guy.
This company's woes are 100% self-inflicted.
Welcome to the Exoshpere! Lol remember that gem?
This has been in special loans at Opus for a long time. I don't think even Opus would get paid back in a liquidation, let alone Cyrus.
My read of the various docs as well is Opus screwed up royally by not getting security over the foreign subs so they are getting that corrected.
In the meantime they've demanded a sale process and continued equity injections.
I think the equity is a zero once this plays out.
They can't even afford the cash to fire Eric K.
IMHO only.
FYI this is a total fraud. You've been warned.
I just read the statement of claim by Steve V.
Best to just read it yourself if you're interested.
It's hard to really speculate without the facts here.
One item that will be interesting in the next 10-Q is whether or not they paid or accrued a severance payment to Steve V.
Steve did not have an employment agreement with the company per the past 10-K. Most guys like him put in place a golden parachute so they can get one last squirt of milk from the cow they drove into the ditch.
That means his severance would be governed by common law. If he was not fired for CAUSE, he would have a good case to demand 3-4 weeks of salary and bonus for each year of service, so for him that would be upwards of $400-$500K based on my rough math.
If he got paid that it's hard to see how he'd have much of an economic case, and the "defamation" stuff I don't think holds much water as the company hasn't said a thing publicly from what I can tell.
So my gut is that perhaps they tried to fire him for "cause" and not pay him anything, or otherwise stiffed him.
If so the question is in the details - what did he do etc. to deserve the sacking.
My experience is usually these things don't get settled very quickly so we should at least be able to see the company's response to his statement of claim, which is available in B.C. court.
I wouldn't be surprised if he did genuinely get the shaft, and wouldn't be surprised if he totally deserved it too.
Steve really can't sell stock (at 100% of daily volume it would take him 6 years to sell), and I'm not sure how employable he is at the $200K+ USD he was pulling out in cash.
I've been involved in several of these types of things. My guess is the comapny's strategy is to bleed him over a year or two letting him burn his savings on legals.
But to be clear I have none of the facts here and haven't bothered to pull the statement of claim.
From an investor standpoint it shouldn't be much of a distraction now and to be honest my impression of Fred V is fairly positive, so far.
Not sure if that answer's your question.
At the 2015 AGM Eric Kelly announced that "the entire C-suite of Microsoft knows about us".
One day perhaps you'll realize what actually happened here and you can re-direct your angst and rage where it belongs.
True. But the pelt will look nice on my wall.
I still watch it. Until the end, which is close IMHO.
"Ouch , I own 50k shares aver at $1.7, so , will I loose all my money?"
Not all of it, just almost all of it.
My guess is it opens at 5 cents so if you are smart and sell right away you might get $2,500 back of your $85,000.
What were you thinking buying something like this?
The market cap is over $500 million and it has like $300K in assets.
Total fraud.
It will reopen on September 7 at 11:59am and will probably open down 90-95% which would be a great exit price as it will likely go to 1 or 2 cents.
The only reason there will even be a bid at say 5 or 10 cents temporarily is due to some short covering.
Anyone that owns this thing frankly should not be investing - buy an index fund.
"""How long are we going to let the incompetent buffoon EK run this sinking ship?"""
His severance package is massive. The company can't afford it.
"""Hugo, you've been predicting ANY's imminent bankruptcy for how many years at this point?"""
Really? when? Specifically. Find the posts.
It's not true.
The posts you are thinking about are the ones where I was predicting they would run out of cash. I consistently nailed it as the company had to keep doing more and more toxic deals.
Only recently have I been speculating that they are likely to file in the next little while.
For those that bought at $125, $200, or $275, the current $5 price is pretty much indistinguishable from zero.
All I did was point you to a company filing from Friday that tells you they are in default on their bank debt, etc. Those are facts.
I suggest you read the 6-K from Friday night. I'm not talking about the PR about regaining NASDAQ compliance, I'm talking about Exhibit 99.2 that they stapled to the back of that filing.
The company is in default on its bank debt, it is in special loans, the bank added bankruptcy language to its forbearance agreement, is forcing them to move all over their bank accounts and deposits over to the bank and execute control agreements (Google what that means), they were forced to hire a financial advisor to sell assets, etc.
IMHO it will be surprising if they don't file in the next 45-60 days.
Of course there is another $20M+ in debt underneath the bank as well.
ANY was humping this partner a year ago. ERIC Kelly even tweeted it out on his London boondoggle.
PRs like this always seem to crop up right before a bend-over discounted equity + warrant deal.
I expect it imminently.
Also, the company had a June 30 bank deadline and has said jack squat about it.
Call was brief. Main takeaways for me:
- looks like getting rid of Steve and his cronies and/or family members can save $450-500k / yr
- UMG is being represented as strong and stable.
Two huge positives IMHO.
Feels like there is much more to the Steve V story.
"""You've tried that line about the Universal contract quite a few times but you fail to appreciate that PlayMPE is bascally co-created with them, the reporting is integrated and there are network effects as there are quite a few other users. Cutting it loose would probably not be worth their trouble."""
This is true. It's hard for big companies to change. Instead it's usually easier to exert leverage and grind the other party down which seems to have be happening here with each renewal (with Steve bending over for poorer guarantees but "more upside" that never seems to come). The inertia of status quo is pretty powerful though.
"""You've also tried that 17 years of Clipstream failure numerous times. Reality is a little more nuanced."""
For sure.
"""The first Clipstream has little to do with what they're trying now."""
Yes and no. The core concept of "playing video without the need for a plugin" is pretty much as it has been since 2000. The implementation has certainly changed over time (Java to Javascript, codec changes, etc.) The opportunity, to the extent one exists, in my view is with whatever value added features they can come up with for some market that actually wants to pay dollars for them. Steve V clearly couldn't do this and I don't have high hopes that "CFO Fred" is a guru here.
I think DSNY is a "bet the jockey" situation here. And I wouldn't bet on Steve, and most certainly wouldn't bet on CFO Fred as the new CEO. I'm sure he's a competent accountant though.
IMHO what they probably should have done was made Freddy the interim CEO and then gone and found a REAL tech leader, load him with options and see what he can do. Making the CFO the CEO is uninspiring at best in my view.
Remember "Exosphere" lol?
Coming up on 2 years of "Glassware on Azure"
They suspended him (and didn't disclose this), and sacked him 6 days later. They also removed him as Chairman of the Board as that would likely be a board vote.
He's still on the board but my guess is there was no mechanic to remove him as a director as well - the shareholders elect directors so will probably have to wait until the next AGM to remove him from the slate. Or perhaps they wanted him there for some kind of "continuity" nonsense but I doubt that given the abrupt sacking.
If there's one thing I know about founders, and I've known a ton, and Steve V fits the bill perfectly, is that he is probably going bananas right now.
Unless he got caught with his hand in the cookie jar in which case he might be crapping his pants.
If there was any kind of amicable spin to this he would have "resigned". The fact that they "dismissed" him is remarkable.
The upside scenario, IMHO, is that he wanted to turn wasting 17 years on Clipstream into 18 years and the board, for some reason, said enough is enough, he went bananas, and they had no choice.
The downside, IMHO, is that UMG is at risk and the company is going to circle the drain.
All pure speculation on my part. All I know is something stinks.
Bottom line is this:
The company owes its owners an explanation of what the hell happened.
Putting the founder and CEO on "administrative suspension" and then firing him 6 days later with ZERO explanation is awful, IMHO.
Granting him 150K options a week after firing him is also awful, IMHO.
Reverse Split deadline:
If my interpretation of the rules and filings is correct, the company had 180 calendar days from Feb 1 to regain compliance, which is about July 31, 2017. It seems they have to close above $1.00 for 10 consecutive business days (not calendar days) before that.
Looking at the calendar, I believe they have to do the reverse split for close of business this coming monday. So my guess is Friday after the close they announce it, effective Monday the 17th.
That is my analysis, anyway. DYODD.
IMHO.
My guess is they also want the company to survive to preserve its ability to indemnify them.
The bylaws were just amended to force the company to defend current and former directors and officers from legal actions. That guarantee means little from a bankrupt entity.
IMHO.
Susquehanna is a quant shop with a average hold period measured in days of not hours.
Frigate is Anson which was short the stock in size. The company got so desperate they had to beg short sellers to cover cheap w free warrants. Shorts don't need to disclose the short side of their book and this may be from warrants they were given for free.
Lynn Factor is Sheldon's wife. These are not institutions. Sheldon's share count is stale. Factor just dumped huge as well.
There is no credible narrative that "institutions" or "smart money" is investing in ANY in any meaningful way.
Most that have have been destroyed.
You'd be surprised how dumb some of these institutions are. Recall Fidelity plowed into DSNY then panic sold at a big loss when they realized they were dummies.
There is almost no institutional ownership. Almost all of it is their lender (Cyrus) who is a buried bagholder getting free stock in lieu of interest the company can't pay in cash. Another 4.4M shares this week. The other is MF Ventures which is Victor McFarlane who has been selling stock almost daily at prices well below what he paid.
No need to until the last legal second to peg the ratio. Also most firms keep tanking after a R/S so this allows guys like McFarlane to keep dumping stock relentlessly like they have been and higher (IMHO) prices than after the R/S.
My guess is Eric Kelly feels awful for getting his pal Victor involved in such a debacle (IMHO).
The board was given authorization for up to a 1-for-25 reverse split.
not sure what the NASDAQ deadline is but given the two recent puff PRs I'm guessing we are close and they pinch it out Friday night of the long weekend.
Yeah because the company is doing so well and when a CEO is "suspended" and then sacked it is more often than not because everything is just great.
Lol