Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Great post! Thanks for the detailed explanation. It would be nice to see the PPS rise to at least .08 - .12 before the RS though to instill some confidence. That would put the market cap at 40 - 60mil.
I'll concede that you have a better understanding of the types of convertible debt than I do. Based on your analysis and the amounts in the 10K and 10Q, how much toxic debt do you think they have left? If it is less than 5M, then I would assume they are trying to sell assets to pay it off and avoid the RS until the PPS is much higher.
See page 51 of the 10K and add up the convertible debt:
http://ir.intercloudsys.com/all-sec-filings/content/0001213900-17-002256/f10k2016_intercloudsys.htm
From 10K:
At December 31, 2016 and 2015, term loans consisted of the following:
December 31,
2016 2015
Former owners of RM Leasing, unsecured, non-interest bearing, due on demand $ 2 $ 3
Promissory note with company under common ownership by former owner of Tropical, 9.75% interest, monthly payments of interest only of $1, unsecured and personally guaranteed by officer, matured in November 2016 106 106
Term loan, White Oak Global Advisors, LLC, originally maturing in February 2019 and paid during February of 2016, interest of 12% with 2% paid-in-kind interest, net of debt discount of $366 - 10,938
8% convertible promissory note, London Bay - VL Holding Company, LLC, unsecured, maturing October 2017 7,408 7,408
8% convertible promissory note, WV VL Holding Corp., unsecured, maturing October 2017 7,003 7,003
8% convertible promissory note, Tim Hannibal, unsecured, maturing October 2017 1,215 1,215
Promissory note, 12% interest, unsecured, Dominion Capital, matured in May 2016, net of debt discount of $9 - 748
12% senior convertible note, unsecured, Dominion Capital, matured in January 2017, net of debt discount of $29 and $507, respectively 1,170 1,599
12% senior convertible note, unsecured, Dominion Capital, matured in November 2016, net of debt discount of $173 - 352
12% senior convertible note tranche 1, unsecured, Dominion Capital, matured in January 2016, net of debt discount of $15 - 235
12% senior convertible note tranche 2, unsecured, Dominion Capital, matured in February 2016, net of debt discount of $80 - 253
12% senior convertible note tranche 3, unsecured, Dominion Capital, matured in March 2016, net of debt discount of $55 - 445
12% convertible note, Richard Smithline, unsecured, matured in January 2017, net of debt discount of $2 and $107, respectively 360 419
Senior secured convertible debenture, JGB (Cayman) Waltham Ltd., bearing interest of 4.67%, maturing in May 2019, net of debt discount of $3,136 and $4,179, respectively 1,900 3,321
Senior secured convertible note, JGB (Cayman) Concord Ltd., bearing interest at 4.67%, maturing in May 2019, net of debt discount of $1,668 2,080 -
Senior secured note, JGB (Cayman) Waltham Ltd., bearing interest at 4.67%, maturing in May 2019, net of debt discount of $234 358 -
12% senior convertible note, unsecured, Dominion Capital, maturing in November 2017, net of debt discount of $65 475 -
Receivables Purchase Agreement with Dominion Capital, net of debt discount of $44 430 -
Promissory note issued to Trinity Hall, 3% interest, unsecured, maturing in January 2018 500 -
23,007 34,045
Less: Current portion of term loans (21,147 ) (3,787 )
Long-term portion term loans, net of debt discount $ 1,860 $ 30,258
It's hard to say si cow the company is so tight lipped. But they had approx 20m convertible debt per 2016 10K
Check the last 10K.
You are assuming the RS will allow them to pay off the toxic debt. But the toxic debt is around 20M, so converting another 375M shares will only yield 8M or less as it did during the last dilution cycle because the lenders will short the F**K out of the stock once the RS is executed, thus driving the price down. That way they make money one converted shares and on their short position. Therefore, the only winners are the debt holders and ICLD. The shareholders will lost 50% of their equity near term. The RS is not a good solution. The better solution is to refinance the toxic debt and then do an RS later for the sole purpose of increasing the PPS for up listing. The lesson here is that an RS for to create shares to pay debt is bad., not good!
You are correct on both counts: 1) RS does not change market cap and 2) the RS is needed to reduce the OS so they can convert more shares. #2 is the reason why this RS is bad. Whenever the market cap is diluted with more shares then each share owned is worth less after the dilution has occurred.
His logic is it will drop to .01 so don't buy it now. Or, even if it does not drop to .01 it will RS and then drop from there. So, either way it will drop based on his predictions. I do not agree.
They need to get the pps to at least .07 pre RS just to be eligible for the OTC QX
http://www.otcmarkets.com/services/companies/otcqx-us/qualifications
Knowing that market cap drops 90% of the time post RS, they will want the pps to be at least .15 pre RS IMO, maybe higher. This is common sense and anyone who suggest otherwise is trying to get in cheaper.
Seems like a reasonable assumption. Doing an RS now would push the market cap even lower and would not bode well for any of their stated goals (e.g., up listing, obtaining traditional asset based financing, etc.).
ICLD Survey Request: https://www.surveymonkey.com/r/5GT8V3P
"they have way too many employees they have been trying to get rid off , but they cant without getting a huge hit"
How would they take a huge hit by reducing costs via employee layoffs? Reducing staff will make them more profitable and allow them to refinance debt.
The fear mongers want all retail out of this stock. I suspect it will run hard once they control the % of shares needed to maximize the next pump. Yes, there is an aspect of pump and dump going on here. It does not mean the company is a bad long term investment. It is just a fact that when the pps is this low, even another 1/2 penny lower would allow MMs and others to make a lot more on the next spike upward.
Optionally, they can sell a portion of ADEX and achieve similar results. Reduced revenue won't matter if they are debt free and cash flow positive moving forward.
What if Munro sells ADEX for $50M and pays off all debt? Then ICLD would focus only on their Juniper SDN solutions. Revenue would be down to $10 or less, but they would be debt free. Anyone ever consider that option. I really think that is what will happen.
The question was merely when will the 1:4 RS occur with the choices May, June, July, August, Will not occur. It did not ask them to explain why. Perhaps you can ask that question to those participating on this message board.
The survey link is below for reference:
https://www.surveymonkey.com/r/5GT8V3P
Most agree with you. Based on a recent survey on when the 1:4 RS will occur?
Out of those who responded: 0% May, 4% June, 10% July, 52% August and 34% believe it will not occur.
The silent majority is with you. The ones making the most noise are in the minority and have an agenda for sure.
I agree the RS will not occur until the pps is much higher than the current level. But, they will need to sell a larger asset and / or refinance the majority of the convertible debt before the pps will move up.
I think the total debt is in the low 30 mils
Sounds like he is trying to convince himself it is dead money and that he will be able to buy lower in the future. I disagree with that premise, but it is my opinion.
Please explain what you mean by "so by taking their time on this, they are damaging their own stock"
That makes no sense at all. The longer they wait the better the odds are they land a big contract, sell more assets to pay down debt, or obtain better financing.
The sooner they do it, the sooner they dilute and the sooner the market cap drops even lower.
You are not fooling anyone here. The only reason to push for the RS is if you are a convertible note holder waiting to place a short hedge when the RS takes place. Then, you make money selling converting shares and you cover the short when it bottoms at .005 and make even more.
Seriously? RS makes absolutely zero sense now with the market cap near all time lows.
ICLD Survey Request: https://www.surveymonkey.com/r/5GT8V3P
What is your cost avg if you don't mind me asking? I'm at 028 and feel we are at rock bottom here.
Any idea how much total debt they have and of that how much is convertible debt?
I don't think BK is in the cards since they do not have traditional bank financing. The types of loans they have result in death spiral dilution. They need to retire their toxic debt either by refinancing with bank loans, asset sales, further dilution or all of the above.
If that is your belief then I assume you do not hold any shares in this issue. Correct?
Or before EOY
I would tend to agree, otherwise it would be the dumbest move ever by the management team.
It can go lower from a market cap perspective when the RS is enacted. But, ICLD management is fully aware of the shorting that will occur after the RS (which, by the way is why so many posting here are hell bent for that to happen, as they are participating in those shorting activities).
ICLD management also knows there will be diminishing returns with each dilution cycle and less and less debt will be retired. It is a losing game for the company and they are trying desperately to retire the toxic debt through other means.
Take the ICLD investor outlook survey here https://investorshub.advfn.com/boards/do_board_survey.asp?board_id=15991&Survey_Num=1
Last I checked it was green!
The problem is the convertible debt. If they are able to replace the toxic debt with traditional term loans and achieve a positive cash flow then the market cap will recover.
Good point. Those focusing on dilution and the RS have ulterior motive and do not want to consider any financing sources other than their toxic debt.
The recent asset sales may seem trivial to some here, but they may be related to cost cutting requirements by the bankers to obtain the financing needed to retire the toxic debt. That is the end game. The debt holders that are posting here are hoping for an RS so they can make $$ from the convertibles and naked short positions IMO