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Yes the fully audited financials due on or before June 6th should clear all this up.
Yes likely part of the long term debt however remember that a large portion of the purchase funds (I think 3M) for the building were donated by the Kansas city development council. They don't owe the full 7M cost of the building.
Thanks for checking with him looking forward to what he says. Happy Memorial Day and thank you for your family's service.
I'm sure they will apply it to whichever debt carries the highest interest rate. The point is that they may have nearly 10M in tax credit assets with which to clean up the now approximately 27M in debt that everyone was worried about.
Everyone please take a look at this.
MOAngler was discussing the fact that there are filings with Jackson County MO that indicate there are a couple tens of thousands in tax levies against APT. I told him I was not concerned because APT has millions in tax credits and this is likely some procedural issue. He said that some thought they may have already sold these and that got me thinking.
I don't think they have already sold these but I bet they're about to. In the recent interview Troy Covey states that APT is finalizing a deal to sell non-revenue producing assets that will lower expenses by 1/3. I believe that this is likely a portion of the tax credits that APT owns.
According to the Economic Development Corporation of Kansas City, APT was the receipient of 7.7M in tax credits.
http://edckc.com/portfolio/american-performance-technologies/
Combine this with the over 2M that they now own from purchasing FROZ and you're looking at nearly 10M in tax credit assets that they may be able to sell. Since APT is not profitable yet they would only need to retain a small proportion of this amount for property tax purposes. That might leave up to 9M to sell to another business at a somewhat discounted rate.
The recent 10-Q puts current debt at 8M we know that the IR deal and issued convertible notes have taken care of at least 3M of this. Therefore they could easily erase the remaining 5M in short term debt and have several million left over to hold as cash. This would drastically improve the balance sheet situation if it occurred.
I am curious to get people's thoughts on this idea. Thanks to MOAngler for playing Devil's Advocate.
You accidentally made a brilliant point I'm going to make a longer response to this later.
They have already told us why they did it this way. They were already maxed out on traditional lending approaches. They couldn't fill orders in any meaningful way until this was taken care of. They interviewed several companies and IR offered them the best option to accomplish their goals. This deal allowed them to go public completely within two months and remove the debt deal that was strangling their production. This way they now have access to the public markets and won't end up right back in the same situation a year from now. You already know all this as they have explained it several times. Please since you do not like the company and you no longer own shares spend your efforts elsewhere. It's not doing you any good or us any good to have you bringing up the same point over and over and us having to address it for the new people on the board. Go find another stock to make some money on and lift your spirits a bit. Doesn't do you any good to sit here and angrily dwell. Life is too short friend.
Over several years very high. The stock will likely be volatile for the next six months or so but the general trend over the next two years will likely be way up from here.
They have millions in tax credits. This isn't an issue.
Just wanted to point out.
In the interview Troy Covey stated that the non-revenue asset sale would be applied in such a way to reduce Operating Expenses by 1/3. Ignoring professional fees, operating expenses are currently 800k. This would be a reduction of 266k per quarter. If you do not ignore professional fees it would be a reduction of 450k per quarter.
Professional fees should be reduced in the coming quarters as the 10-Q mentioned that they were high due to the merger. Professional fees were 463k so there is likely room for up to 300k reduction which I would expect to see in Q3 not Q2 (just a rough estimate).
The 10-Q also contained expenses from the old FROZ which were at 100k as of the last FROZ filing. The old FROZ had 0 revenues so that will be 100k of expenses that comes off of the books next quarterly report.
All told that could be reductions of 366k to 850k in operating expenses in the next two quarters. Total operating expenses were 1.35M. This reduction should be offset somewhat since the company can now produce at full capacity with the lockbox gone. As a result there will be more people working and more supplies needed meaning higher labor and production costs. However those costs feed directly into sales for which the company has a 42% gross margin! All this means that their goal of becoming profitable in 2015 does not seem so far fetched when you take a closer look.
Have a good one. See you next week.
After our little Irwin freakout I don't blame them.
I'm not expecting until next week. Just the way they phrased it wasn't definitive on the timing.
Whoops!
No they just released the interactive data files to support the 10-Q from the other day.
Knocked out 1.9M in the calculation period the past 3 days. Great dollar volume lately.
Yes this is a big deal that we are on his radar.
If he decides to feature us as a pick on his website it's alot of exposure. I'm sure some new folks found FROZ today just based on the interview mp3.
Haha Looks like Troy Covey named his son "Vox" based on the FB photos. This guy is dedicated.
Find a retailer near you!
Typed in my zipcode and there are 89 retailers within 50 miles of me.
http://www.motovox.com/locate-a-motovox-retailer.php
Just hit ignore Max. There's no point.
So you think the 84 people who believed in the company enough to invest before it was anything. The same people who presumably know the owners, the products and the vision intimately are going to dump their shares because they can get 1/3 of a penny for them?
Will some of those people sell some shares? Yes. How many? It probably depends a lot on where the price is at come October. You are also not considering the fact that demand for the stock will have increased by then while supply will not have. People are starting to hear about this stock, it was just covered in an interview by the #2 IPO analyst on seeking alpha. More and more shares are being tucked away for the long term leaving fewer on the market. You care about October because you want to flip. People who are actually investing don't care if this dips in October. They will buy more and hold them for even longer. They should think of October as a Fall Sale on APT stock.
APT is going to be selling the most fuel efficient motorcycle in the world.
Their SmartCarb reduces emissions by 50-80% in a world obsessed with being green!
Figure it out or don't but many of us have. You're just short sighted. Responding to you is a waste of keystrokes and this is the last time I will do it. You're just here to bash so you can flip more. You don't look at anything objectively and you don't listen to reason. You are now on ignore and I encourage others to do the same as you do not add anything contructive to the dialogue here.
Wrong as usual management can only sell 1% of OS per quarter. That's 45M shares per quarter big whoop.
It's the principle. A man should mow his own lawn or trick his wife into doing it.
Yes they mentioned that the restructuring was resolved at the end of Q1 2014. They started ramping up in March once the merger was rushed through I assume. They also announced that they will move into their own line of lawn products. I promise that as soon as an APT lawnmower is available I'm buying it. I have to use a push mower right now. Bleugh!
They will be profitable in 2015.
Stop and think about this! We have a subpenny stock on our hands that is going to be profitable in a year. Do you understand what I am saying?! The dilution is short term! The share price doesn't matter today. It doesn't matter tomorrow! It only matters on the day that you buy and the day that you sell. Stop thinking about all the other plays you could be flipping here and there because maybe they will work out and maybe they won't.
One thing we know for sure is that if this company is profitable and has revenues in the tens of millions next year it will not be sub penny. Trade your strategy but don't look a gift horse in the mouth if Iron Ridge wants to throw away shares at stupid prices.
If Francis Gaskins actually features this on his website as one of his recommendations it will run much harder than today.
150 MPG
Francis Gaskins is the number 2 IPO analyst on seeking alpha. They are making millions of dollars a year and coming out with the best on road gas mileage vehicle there is! They are valued at 16M... think about that. Forget everything else and just think about a company that sells the most fuel efficient vehicle on the planet being valued at 16M.
Interesting Notes From the Interview
200k - 500k for each SKU brought to market
They addressed 4M in short term debit already
Sale of non-revenue producing assets cash deal to close soon. Will retire a significant portion of the debt and lower their operating costs by 1/3!
Took them until middle of Q1 2014 to get out of the receivable lending issue. Ended Q1 strong in the latter portion.
Selling season is heavy in Q3 and Q4.
Moving to on-road vehicles and moving into lawn and generator products. Get ready for the APT lawnmower!
Emissions reductions of 50-80% for items using the SmartCarb.
Here's the guy doing the interview
http://ipopremium.com/
You might also recognize him from his seeking alpha articles.
http://seekingalpha.com/author/ipodesktop
Maximus!
Sorry no pm so you get my last post of the day. Paul Knopick's email address is PKnopick@eandecommunications.com
The only thing APT could say at this point to make the market cap any cheaper is "We light money on fire and use it to melt the metal for our SmartCarbs".
I don't disagree with any of those numbers but I do think you have to take certain things into account when looking at the filing. FROZ accounts for 100k of the APT net loss since this is a joint filing. That 100k will not be on the next filing. Now we are at 1M. Legal fees for the merger exceeded 400k. These will not be needed in Q3 and beyond although they do have ongoing litigation. This might knock off an additional 300k putting us at a net loss of 700k.
While this is not a profit I did not expect the company to be profitable at this stage. They have outlined their plan to increase margins and grow revenues. They have explained the reason that revenues were reduced this year several times now. When a company is at this stage the decision to invest should be based on their potential to grow into profitability. I believe APT has the products and infrastructure to do that now. The accumulated deficit is the result of their investment to reach this point. Yes it will need to be paid off eventually but you do not have to pay it all at once.
Take a look at the product portfolio and the products forthcoming, the gross margins and the current assets to debts. Keep this in perspective of a company that has only been selling products for three years and make your decision. No it's not Google, but there are plenty of companies on the big boards with balance sheets exactly like this one with less compelling products and growth opportunities that have market caps over 1B.
The OTC is fickle, people get down on a stock and it plummets fast because there are few true longs down here. However that works both ways. Once the company presents its contracts, its prior financials and its projections people can come rushing back just as fast as they ran away. In the end it's about investor sentiment and all the good news is yet to come.
That is a strong gross profit margin and they have mentioned that die casting on the smart carb and upcoming product releases will increase that margin so that is good news. Don't forget to subtract the 100k expenses on the FROZ side from their payroll costs in addition to the legal fees. This is because Schissler and Irwin's salaries were still on the Q1 report but they made zero revenues. This will take us closer to profitability as will their new found ability to produce as many products as they have orders for thanks to the IR deal.
Planning on doing a weekly update of news and DD uncovered. Any thoughts or requests on what people want to see in there? I was thinking just a breakdown of any filings that occurred and mentioning of any relevant dd findings. Sort of a cliffs notes for people who don't check the board obsessively. Could put it out on Saturdays or Sundays.
Thanks but I have to give credit to Paul Knopick and the company. They have been very responsive thus far. If I have a question I just try to pass it along through him in a respectful way and he has gotten me answers very quickly. That's what he is there for folks, if you have a question or issue try sending him an email. As long as you keep it respectful and ask questions that they are actually allowed to answer you might have some luck.
Long story short.
Even once the 6 months is up for the common shares, management can only sell 45M shares per quarter! That's if they even want to max out their shares. We traded 45M in 30 mins today. You do not have to worry about management dumping huge amounts of shares once the six months is up.
Company's response to my share structure question.
My letter:
Hello Mr. Knopick,
I am an investor in APT Group and we have spoken briefly before regarding generator development by the company. I wanted to write today to express my opinion regarding the share structure in the hope that you might share it with management should the chance arise. I understand that many factors are in flux right now as the company works to meet deadlines for various filings. I want to first say that I appreciate all of the hard work that they must be putting in as well as the transparency they have displayed thus far. I think that they have been doing a great job in handling the transition. Much of what I say may already be apparent to you or the company, in which case I appreciate you simply taking the time to read this.
As I am sure you are aware the share price has tumbled in the past few weeks seemingly driven in part by dilution following debt agreements and failing to rise again due to reduced investor confidence. I spend a fair amount of time on the message boards reading people's complaints, suggestions, rants and many other things they choose to share with the internet. My suggestion today is therefore based on my understanding of the sentiments of those who share their opinions on such boards.
Many of the investors understand the need for issuing shares to resolve debt. They think this is a good use of shares and they appreciated the company clarifying the cash flow restriction which prompted the Iron Ridge deal. However the reason the daily volume of shares and likely investor confidence has remained poor is a fear that the shares that have been issued thus far, both to creditors and to company management and early investors, is just the beginning and that there are many more shares that are going to be issued further diluting the value of the stock. There are many instances of companies which trade on the OTC doing something along these lines to pad their own pockets or to pay off debt at the expense of investors. I do not believe that APT is such a company.
Everything that has been issued so far has made sense from a business standpoint and been clearly articulated to the investor community. Again, I really appreciate that. My suggestion to get investor confidence back on track is to restrict the authorized number of common shares. This is an issue that has been stated over and over in the forums. Restricting the authorized shares would allay many of the fears that are being reiterated daily. I understand that this may be difficult to do given the nature of the Iron Ridge agreement. If it is the case that such a move is simply not possible I would humbly suggest that the company consider converting management's common shares to preferred. Restricting those shares for a year would send a clear message to investors that APT is in this for the long haul and that investors interests are important to them.
I understand that there is much at work behind the scenes that I am not aware of. I just wanted the chance to express my opinion on the matter as I am not sure if the company follows the boards closely and would therefore not be privy to investor sentiment. I am personally invested with a much longer time horizon as I believe the product line the company is developing has the chance to make an incredible positive impact globally (SonicFlow and their use as generators especially). I am also a supporter of Troy's goal to have the company make an economic difference in impoverished communities globally. This is a noble cause and we have the innovative products to pull it off.
Thanks for taking the time to read this. I look forward to future communications as well. I am always happy to share my perspective with the company should they be interested in an opinion on what investor sentiment is among the forums that are available.
APT's Response:
Management has very little of the common shares. Our voting power comes from the preferred E, which is already restricted until April 2015.
Of the 2,735,501,972 common shares owned by our 84 legacy shareholders, only 590,168,091 are owned by our 5 executives. That represents 22% of the APT legacy common, but only 13% of the current O/S. All of the APT legacy shares are restricted until October 2014. Management is further restricted in selling those at 1% of the O/S per quarter.
Converting those to preferred doesn’t accomplish a whole lot.
My response, just sent:
Mr. Knopick,
Please thank management for getting back to me. I can appreciate their perspective. I hope that they will still consider reducing the authorized shares as an alternative. I believe some gesture needs to be made to the investor community in order to correct the current sentiment before a stigma of dilution becomes associated with the company preventing future interest by investors. Such a gesture would be most effective in the coming weeks as there are still many eyes on the company.
That wasn't fiscal year 2013. It was one quarter of 2013. My impression is that Q1 would be the slowest quarter. People are going to buy go karts and dirt bikes for Christmas or in the summer.
For those who care.
Paul Knopick confirmed that the 10-Q was both FROZ and APT. What is good to know is that FROZ was losing about 100k per quarter with no revenues. That means that you can go ahead and throw out 100k of the expenses that APT will not be reporting or paying in the future filings. There was another 400k in legal fees to complete the reverse merger. We will likely see some again on the Q2 filing but after that they will be severely reduced as well. In my mind that is potentially 400k to come off the expenses by Q3. Don't forget that APT expects to be profitable in 2015.
Stay strong folks.