Contract?

How big of a contract are we talking about?

Louis J. Desy Jr.

I agree.

If the 'other' CEO had not been doing all those deals that loaded the company up with debt, SD would be in much better shape. Unless oil prices rise, I think the company is 'terminally ill'. They may stagger around for months, but I don't think they can make it much beyond the end of the year.

I was watching this one and had hope that it would be doing good in a few years.

Louis J. Desy Jr.

Peter J. Solomon Company hired by EC

This is the company that the EC has retained to help with the valuations. I think they will be the ones that will validate a fair value of the mines for the EC.

Document #118, motion to employ:
https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTIzMDA2&id2=0

Their fee is $125,000 per month with a minimum of 6 months, to be paid by wire transfer. They also get a $2,000,000 completion fee at the end of the project. If the work goes over 6 months, the completion fee gets reduced by 50% of the amount over $750,000 but does not go below zero.

They have 70 employees and appear to have work with a number of companies:
http://www.pjsolomon.com/

If there is value in the mining project, this is the company that will show it.

Louis J. Desy Jr.

DRAFT ENVIRONMENTAL IMPACT STATEMENT

I looked at teh summary and a few of the sections. While there is all kinds of information, non of it seems to relate a cost or time that would be meaningful to where things are today. I also read a number of the comment letters, which seemed to be surprisingly positive about the project. Some letters were requests or hope that additional things would get built, like better roads to help the project, plus there was a projection on the number of jobs that would be at the mine.

Louis J. Desy Jr.

It is what it is

It is not what I want, it is what the numbers show at the moment.

The person that could change things is the consultant the EC hired to value the mines. I would be interested to see what his report eventually shows as far as the value of the mine. I have to go find the document and then maybe we can see when he will issue a report.

Louis J. Desy Jr.

Retail can't short at below $5

Most brokerage firms will not allow a short position to be opened if the stock is below $5/share. The last time that would have been possible was March 28 of last year.

I am not short the stock, but I wish I was.

I have never had a position in the stock, but may buy in if the common shares go below $0.04, based on what I see so far.

There are options that look like they are still trading, but they look too high to make any money off of them.

Louis J. Desy Jr.

Waiting for the right price to buy at

If my value is too low, then maybe it would be time to buy if new info shows this, OR, if over time, the stock price drifts lower, then it may go down to a point where it would be profitable to buy.

It also help that if other people look at the information, someone may have information that either confirms my information, or shows that it needs to be changed. Usually some posters will be on other forums and they may find postings of relevant info elsewhere, that can be brought here to look at.

Louis J. Desy Jr.

Not answering questions?

I believe I have answered all of the questions that were asked and tried to provide data and my own, hopefully useful, insight were possible.

What questions have I not answered? What are you talking about?

Louis J. Desy Jr.

Restart problems

I think the 'leach pads' require all kinds of chemicals and lead time to get going again after a shutdown. Plus I expect that if they do a shutdown, they have to do a cleanup on the chemicals used on the leach pads. If that is the case, then shutting down or restarting is not like 'flipping a switch' on a production line.

Louis J. Desy Jr.

Why keep working if losing money?

A reason they would keep working the mines, even if they are still losing money, would be because they would lose even more money if they stopped operations. It is possible that the marginal revenue from mining is lessening the losses they would have.

Another reason to keep the mine in operation is that if they 'mothballed' the entire project, it could make it more expensive to restart operations later and lower the value of the mine.

I do not understand a lot of how the mine operates, but I expect they have all kinds of chemicals in use on the leach pads to extract gold/silver from the ore that would be a lot of work to shutdown and then restart months later.

Louis J. Desy Jr.

How are they going to survive until November or even January

They may need to borrow more money. If that happens, then they would need to expand the DIP financing, which would have to be repaid first before any other class gets anything.

They also may hope that the price of gold/silver and /or production increases so they are at least breaking even.

The other possibility is that they 'hurry up' and get their work done, complete the filings and then can ask to shorten the time needed.

Louis J. Desy Jr.

DIP has super priority

The DIP financing is a special class that has super priority on getting repaid. They get to 'step ahead' of almost every other class to get their money back first.

https://en.wikipedia.org/wiki/Debtor-in-possession_financing
Debtor-in-possession financing or DIP financing is a special form of financing provided for companies in financial distress, typically during restructuring under corporate bankruptcy law (such as Chapter 11 bankruptcy in the US or CCAA in Canada[1]). Usually, this debt is considered senior to all other debt, equity, and any other securities issued by a company[2] — violating any absolute priority rule by placing the new financing ahead of a company's existing debts for payment.[3]

That is why companies are willing to make DIP packages, they get paid back first, ahead of every other class.

Louis J. Desy Jr.

Other gold mines as a comparison

Give me another company as an example to value and I will take a look at it. It may take a few days for me to value it and explain the valuation as to why that company is different from ANVGQ.

Louis J. Desy Jr.

Not trading at 5 cents

The reason I would give is that people do not fully realize the 'extent of the disaster'. If you noticed, it took me a few days and a number of hours, to read all the important documents and going through the numbers to arrive ay my 'best case' stock price.

I also think that one the down side, after the stock dropped a lot, some people thought that 'it can't get any worse' so they stepped in and started buying.

Louis J. Desy Jr.

Operating reports

Initial Operating report with cash flow projections for the first 13 weeks is document #118:
https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=ODg2Mjg=&id2=0

March 2015 operating report is document #318:
https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTE2MTA3&id2=0


April 2015 operating report is document #478:
https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTMxNTUx&id2=0

There should be a May 2015 operating report that will get filed soon. Going forward they are supposed to file monthly operating reports. From those we can see if operations are generating cash or not.

If you get a chance, you might want to sign up for a daily notify email for the documents. I would recommend setting the time to 4:30pm so then you will get a daily email with a summary of the documents each day as they get filed.

Louis J. Desy Jr.

I work for me

I work for myself. I do not understand why you feel that the 'presentation of facts' means that the person is 'working for someone'. No matter who I was/am working for, the numbers are the numbers and would not change.

I think the problem is that the facts, as contained in the documents in the case, are so far from people thought the company was worth that it is a shock to them, which I can understand.

Louis J. Desy Jr.

Not me at $0.165/share

That is too high for me to buy at. From my earlier postings, I calculated the common shares are at best worth $0.055; which of course is still not the price I would buy at since I would want to make a profit on the trade. Discounting for three years with a discount rate of 10% would put the price at $0.041.

The problem even with that is that I do not believe the mines are worth the 'best case' valuation of $500 million that I used to get that share price.

Louis J. Desy Jr.

Motion to extend time, document #632

https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTUwNTA5&id2=0

I expect that they will get the extension of time for filing a plan. The reasons they give are to prepare valuations and change projections.

The new deadlines are:
". . . (the “Proposed Order”): (i) extending the period during which the Debtors have the exclusive right to file a plan or plans of reorganization (the “Exclusive Filing Period”) through and including November 5, 2015 and (ii) extending the period during which the Debtors have the exclusive right to solicit acceptances thereof (the “Exclusive Solicitation Period” and, together with the Exclusive Filing Period, the “Exclusive Periods”) through and including January 4, 2016.

The main effect is that this case will probably continue on into something next year before it is complete.

Louis J. Desy Jr.

Bungie filing reminds me of the GOOG reviews in VRNG v GOOG

That review reminds me of the, what seemed to be, endless, requests for reviews that GOOG made of the USPTO in that case. All of the reviews confirmed the patents but GOOG tried to use them to slow down the case and as a reason that the patents were not valid.

With the current system in place, you do run the interesting possibility that while a case is going on that the USPTO could rule the patent invalid OR the reverse, where the courts rule that patent invalid and the USPTO says it is valid. There are a series of cases on what the courts do when that happens, depending on the timing of the different rulings.

Louis J. Desy Jr.

Valuations will probably go down

I looked at the operating reports for March 2015 and April 2015. Most weeks the company is losing money on an operating basis; i.e. the revenue from the sale of the gold and silver did not cover the cost of operations to mine it. The simple fact is that with gold and silver prices as low as they are, it looks like it is not possible to get the gold and silver out of the ground without losing money on operations.

If it was not for the $25 million from the financing package, the company would have run out of cash by now.

Louis J. Desy Jr.

Document #504 and #554 filed by the EC

Documents 504 and 554 deal with the filings by the equity committee.

504:
https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTMyNDAx&id2=0

554:
https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTQzOTQ0&id2=0


Louis J. Desy Jr.

Document #222, answering objection to #213 document

https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTA1MTc0&id2=0
The company says is ok with the EC taking part in the process. The company also points out that the properties involved in this sale for $17.5 million are not core to the reorganization plus the properties in question have been listed for sale for three years.

All of this implies that the sale price is fair since the company has been trying to sell these properties for a few years and couldn't get any buyers for the then asking price.

Louis J. Desy Jr.

Document #213 EC objections, filed on 04/17/2015

https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTA0NDQ3&id2=0

The Equity Committee did file an objection to the sale of some properties. In the filing they ask the information be provided and say it is not being provided by the company.



Louis J. Desy Jr.

Document #178 revised budget filed 04/14/2015

https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=OTk3NDk=&id2=0
An interesting document I found was a revised budget from April 2015.
The budget shows they expect to lose money most weeks, and at the end of the 13 weeks on Jul 12, 2015; they expect disbursements 76 million to exceed receipts of 60 million; for a lose on operations of $16 million.


Louis J. Desy Jr.

Run without them?

The debt holders should hope that the stock 'jumps up'. The debt holders usually convert into shares at 50% of the average share price from the prior five trading days. If all of a sudden the stock price jumps up, they can convert and make more than 100%!

The only way the stock can run without them is if they do not check the closing share price each day. The minute the stock prices starts to jump in the middle of a day, they can start converting shares as long as they file prior to the end of the day on the day they convert.

Some debt holders are converting and do not even have to select a time. As an example:
http://ih.advfn.com/p.php?pid=nmona&article=67123658
"On May 27, 2015, we issued 133,934,667 shares of common stock to Denali Equity Group, LLC ("Denali") in consideration Denali converting $18,081.18 of debt owed to it by us into the foregoing shares of common stock. The approximate conversion price per share was $0.000135."

On May 27, 2015, the low was $0.0003; so they got more than 100% of the amount for converting into stock.

If we assume they sold the stock the next day at its closing price of $0.0003, then they got $40.180.40; the day before it was $18,081.18, so they more than doubled their money in a few days.

Louis J. Desy Jr.

Not emotional, just shocked

I wonder at times if stuff like this (RSHCQ trading when everyone knows it is going to zero) just shows we should just put our money into index funds and forget about it. I can't imagine the turmoil that some stock analysts go through when they try to warn their firm or clients that a company is 'going bad' and get 'hushed up' or even punished for it.


Louis J. Desy Jr.

Explanations for large drop in equity.

1: Swap contracts:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=114807850

2: Gross profit declining for years:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=114797564

3: The problem with the assets, largest is a receivable from one of its own subsidiaries
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=114782257

4: What assets are carried on balance sheet may not be the market price and market price may be much less:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=114779002

Louis J. Desy Jr.

Why I am surprised

I am surprised because it is certain that the shares are worth zero, and will be canceled. Why would anyone buy something that is worth zero?

Most people are supposed to be rational, but here we have people throwing money away and buying something that is worth nothing. This is in spite of the fact that a number of people have tried to explain the whole process, plus the company also warned everyone that the shares are worth zero, yet people still continue to buy.

Louis J. Desy Jr.

I know

I am still amazed that people put in any bid for the shares, even after people try to explain to them the process and how to value them to understand what is going to happen.

Louis J. Desy Jr.

Primeclerk.com also carries the filing documents

The only good thing about this Chapter 11 case, is that it is being posted on Primeclerk.com, so people do not have to pay to get the filings through Pacer. You can also sign up for daily alert updates to see what documents were filed.

https://cases.primeclerk.com/radioShack/

This is the 'top level' link for the Radio Shack case. It will give you access to all of the documents filed for the case.

Louis J. Desy Jr.

No new ticker symbol

The assets were all sold off. There is NOT going to be any new ticker symbol for RSHCQ. At some point, the shares will be canceled in the Chapter 7 liqudation case, halted, delisted and all the shares cancelled.

Louis J. Desy Jr.

Reasons for R/S

For the current shareholders, you are correct in that there is no reason to do a reverse split. A reverse split does not help current share holders, and probably hurts them because it would allow the stock to sink below a $0.0001 pre split stock price.

The company wants to do (and will do) a reverse split because it is the only way to ensure that the stock will continue to trade so the convertible debt holders can cash out.

Without a reverse split, the convertible debt runs a high risk of being unable to sell off the converted shares. The only reason the convertible debt would get common shares, since the shares have no rights in running the company since the preferred B with super voting rights swamp the common shares, is to cash out with a profit.

Louis J. Desy Jr.

Chap 11 liquidation analysis

https://cases.primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTA5NjEw&id2=0
I did find that in document #252, on page 221 of the PDF file, there is a 'liquidation analysis', as is required by the bankruptcy court when proposing a reorganization plan. The idea is to show how the classes are better off with the proposed reorganization plan instead of liquidating the company to pay off the classes.

The summary of the liquidation analysis shows a low and high value of all of the assets as $336 million to $429 million. The summary also shows an expected payout amount of 0% to 9% for the unsecured claims if the company was liquidated. One of the items in the unsecured claims are the 8.750% bonds, which are in a higher class than the current common shares.

Louis J. Desy Jr.

Percent of Newco and reorg plan

Unless someone does something, like the EC, I do not see anything else even being proposed for a reorganization plan. Unless I have missed something with documents filed, with the reorganization plan, it does not appear the EC has even filed an alternate plan or objections to the 75%/25% plus 10% warrants plan.

https://cases.primeclerk.com/alliednevadagold/Home-DocketInfo?DocAttribute=1351&DocAttrName=PlanDisclosureStatement

The hearing on the plan is scheduled for July 14, 2015 at 2pm.

If the EC is going to do something, they should be at least filing a motion to object and I do not see they filed one yet.

I am not sure, but I think if the EC is going to file objections it needs to be 21 days before the hearing, so that would be 06/23/2015.

Louis J. Desy Jr.

"Yawn. Good luck Louis."

This is a private message that was sent to me after I, along with others, warned people what was going to happen. I and others cited to all of the unbelievable 'risk factors' for the company, like no revenue, no assets to build a sales force with (at one point reported cash was $515 and no other assets), no contracts, only a few hundred downloads of the product, as some examples of the incredible problems this company had. We even had some people comparing HDSI to the early days of FaceBook as justification for someone to buy stock in HDSI!

Some people, including me, even cited to the fact that the share price would someday crash to $0.0001; which it has done by closing at least two days recently at. One did not have to be a fortune teller to know this was going to happen. What has happened with HDSI is a standard playbook that has been played over and over on the pink sheets.

In spite of all these problems, some of you still sound like you are going to hold on through a reverse split of 1:30, plus the tidal wave of shares that are going to be dumped onto the market, and expect that somehow the share price will rise again?

The best you can do, is to dump your shares at $0.0001 (if you can find any takers) and take what money that is left and invest it into something else.

I think the thing that upsets people, such as myself, is that when we brought up facts, that seem to tell with an almost metaphysical certainty what the outcome will be for the company, and its stock, we are then to be personally attacked for it. All the while the attacker holds onto some small positive piece of info like it out weighs every other negative about the company and its prospects.

I think the other aspect that upsets people, such as myself, is that companies that should get financing and investors, can't because people are pouring money into things like HDSI, or OOAG, or BDGR. (OOAG still trades even though the CEO is in jail on unrelated charges to the company and has not filed its annual reports in years). It is as though you have to promote a stock or company with a 'hard sell' in order to get anyone to put money into anything.

I am not happy with what has happened here ( a lot of people have lost a lot of money and it is all gone), but others and I did try to stop it; and in return we were personally attacked for it.

Louis J. Desy Jr.

Something is going on with WORX

I do not know what, but something IS going on with WORX. I got an alert that WORX filed a 10Q. I was not expecting to see anything BUT I do see some signs of activity.

WORX Q1 2015 10Q report:
https://www.google.com/url?rct=j&sa=t&url=http://www.otcmarkets.com/edgar/GetFilingPdf%3FFilingID%3D10770530&ct=ga&cd=CAEYACoTMTY4OTI5ODQ1NjQ4ODE1MTI1MzIaMDljZmNiMjAxNmZjYjRmODpjb206ZW46VVM&usg=AFQjCNEBR6miHPv7cqYaGWTLeYwUg-ildw

OR

http://ih.advfn.com/p.php?pid=nmona&article=67389796


1: They show $96K in revenue. They lost money but someone is selling something.

2: They show 'building and improvements' of $1.3 million, so something got built or remodeled plus $63K in equipment and furniture.

Louis J. Desy Jr.

Something is going on with WORX

I do not know what, but something IS going on with WORX. I got an alert that WORX filed a 10Q. I was not expecting to see anything BUT I do see some signs of activity.
https://www.google.com/url?rct=j&sa=t&url=http://www.otcmarkets.com/edgar/GetFilingPdf%3FFilingID%3D10770530&ct=ga&cd=CAEYACoTMTY4OTI5ODQ1NjQ4ODE1MTI1MzIaMDljZmNiMjAxNmZjYjRmODpjb206ZW46VVM&usg=AFQjCNEBR6miHPv7cqYaGWTLeYwUg-ildw

1: They show $96K in revenue. They lost money but someone is selling something.

2: They show 'building and improvements' of $1.3 million, so something got built or remodeled plus $63K in equipment and furniture.

Louis J. Desy Jr.

Lights out in 2015/2016?

I hate to say it, but I think SD is doomed. The new debt offering ($1.25 billion with 8.75% rate) will buy the company some more time, but I think the company is too far gone and loaded with too much debt. I can't see revenue rising enough, even if we got back to oil at $90, to save the company.

I think the company will 'stagger' for months to come, but it looks 'fatally wounded' to me with all of the debt they got loaded on the balance sheet.

The only positive thing I can say, is that they lasted much longer than I thought they would, especially after the whole set of problems on the the past CEOs loaded onto the company. I had hope once they voted out that guy that the company would be ok after a few years. If it was not for the decline in oil prices, I think SD would have made it.

Louis J. Desy Jr.

50/25/25 verses 75/25 and warrants

The problem with the 50/25/25 is that it probably is not possible to get that value right now, plus it still leaves the $317 million in bonds with a large loss. If the mines could be sold for a $500 million profit today, then I could see a split like that having a better chance of happening.

Louis. J Desy Jr.

Warrant conversion within an IRA

I think the proposed warrants are good for five years, so even if the warrants got issued today, you would have tax years 2015, 2016, 2017, 2018, and 2019 to come up with the cash (more deposits into the account or sell something else in the account) to do the conversion. Plus, I think that for tax year 2019, you are allowed to make contributions to an IRA account all the way to the end of the filing season, so that would be April 15, 2020, as long as you designate the deposit as being for tax year 2019.

Louis J. Desy Jr.