imis...(put something here)
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http://www.kccllc.net/imxacquisition/document/1612238161012000000000011 says they would have to file 30 days' notice with the court since they are a substantial shareholder if they were to take any action that would increase or decrease of shares beneficially owned by them. Converting debt to equity might not change that but selling those shares would. It doesn't seem to make sense for them to convert and not sell. Why would they hold onto shares at this point that they converted? Since Chapter 11 the share price has been under 0.19 so only would make sense for them to convert the 0.08 shares.
The court docs show they were trying to arrange DIP financing in May for Chapter 11. So McGann knew then the outcome was going to be Chapter 11. Maybe he meant the acquiring company would be able to be profitable and unencumbered by debt. Otherwise everything he said is obviously not true and he had to have known that. The technology roadmap had to apply to ETD and that was going to be sold.
So the following can only be true about it being profitable after being sold to an acquiring company:
"we are committed to finding a path for this company to grow profitably and unencumbered in the future, because we have a great strategy, we have a great technology roadmap and I think we have a proven theme that can execute that mission."
They shouldn't be able to convert any after Chapter 11. If they converted right before Chapter 11 that would be cause for concern as they had knowledge for a long time the company was going Chapter 11. As early as May the company sought to obtain a DIP loan from them. It would seem if they converted any after that, they had inside knowledge the stock was soon going to drop and took advantage of converting and then selling before Chapter 11 was announced.
However, all we know is the share count as of June 30. There are the other unknowns as you point out with exactly what liabilities L3 is assuming.
The CIC payments based on net proceeds (that is the sale price minus the debt). So they are going to be substantially less than if they were based on the $117.5M sales price which is what that $13M CIC Amount is based on. If based on $117.5M - $84M the CIC might be $3.6M. So that adds in another $9M or so. Whether all the DIP loan gets used up depends on how long this goes, but perhaps there would still be balance on that too.
Perhaps $18M might be left over? Still not a big amount but better than $9M.
The CIC is supposedly defined as:
"In the Amended Plan, Net Proceeds is defined as the aggregate consideration paid in connection with a Change of Control, after payment of (i) all secured indebtedness of the Company and any controlled subsidiary, together with all accrued but unpaid interest thereon and all other obligations related thereto, including without limitation all indebtedness owed to DMRJ Group, LLC, and to the holders of promissory notes issued pursuant to that certain Note Purchase Agreement dated as of March 19, 2014, between the Company and certain other parties thereto, and (ii) all other obligations and liabilities of the Company and any Controlled Subsidiary, including all expenses related to such Change of Control"
The big factor then during appeals would be interest continuing to accrue if the debt is not paid off. Probably the amount not in dispute would get paid right away after the ruling, but if the amount in dispute is large that does not help very much in reducing interest accumulation. Or maybe the amount in dispute gets held in some sort of escrow account. If interest accumulation could be stopped while appeals are in progress that would be a big help, but don't know if that would be how it would work.
Right now the equity committee has until Jan 23 to do their investigation, although the judge did not close the door entirely to an extension beyond that, they would have to show proof of a good reason to continue it further. So Jan 23 is the deadline to file any protest against Platinum. What happens after that is unclear.
That is how I interpret it. Apparently the bidders are notified today about the auction on Monday. Guess they are notified directly and there is no posting on the court document site, unfortunately.
They are deposing Platinum Partner's CFO! Excellent!
Yesterday was the last day to submit bids. Today the qualified bidders are notified. If there are any others qualified the auction is on Monday. Notice of successful bidder is on Tuesday, sale reply deadline is Wednesday, and sale hearing is on Dec 16.
See page 6 of http://www.kccllc.net/imxacquisition/document/1612238161031000000000002s
Glenn Bolduc was the finance guy. The question is why did they get rid of the finance guy just around the time they should have been able to get better financing after winning the TSA IDIQ. It was under protest immediately by Morpho but they should have been working on getting better financing contingent on the protest being unsuccessful (which it was). Perhaps Glenn was working on that, it is one theory but maybe not the correct one.
Liscouski just seemed to be a typical high level gov't bureaucrat. He is not a finance guy either. His knowledge seems to be in the areas of security and counterterrorism and he managed various projects when he was with the TSA.
It seems the company got rid of the one finance guy they had other than the CFO, right around the time they should have been able to arrange better financing. One can argue the CFO should have been doing that too, of course.
I searched and found this where it says they sold some mass spectrometer technology to Horiba but it is not specific, but almost makes it sound for other than ETD. The QS-B220 can detect drugs but for some reason they did not do much to pursue that market.
http://legacy.sandiegouniontribune.com/uniontrib/20080216/news_1b16buyout.html
I think it would be better if they licensed the ETD technology instead of selling it as there are a lot of applications other than ETD. Otherwise without it, and without Zapata there seems to be no path for the company going forward.
I do not think Zapata entered into the bankruptcy court filing at all. It was just to sell to L3 and pay off the creditors, I did not see Zapata even mentioned in the Chapter 11 filing with the court. The main point of the Chapter 11 appeared to be to sell everything to L3 clear and free of liens, claims, etc. and use the proceeds to pay off the creditors. I do not think any reorganization plan had to be submitted to go to Chapter 11 or to get the DIP financing. That seems to come later, and the equity committee is supposed to have input into it. It does seem there can be no plan to keep the company running if the ETD business is sold now that Zapata is gone.
There also is this target net working capital (have not found what that amount is) that if the actual amount is plus or minus that the sale price to L3 is affected accordingly. So that adds some more unpredictability to the equation.
Let's hope the equation gets affected more dramatically by change in amount owed to Platinum.
One other thing to throw into the equation, Chardan gets a success fee of 2% of the total sale price and Noble gets a 0.5% success fee. So there's another $2.5 million.
FYI - They seem to have removed IMSC from their list of covered stocks sometime after that. Here is the current list: http://www.noblelinx.com/x/research/coverage_lists/noble_financial_coverage_universe.pdf . It even says Marc Jordan is their defense stock analyst and shows the stocks he covers.
It is easy to see it is a new user but did not know it was impersonating another poster as had not seen a similar named poster here. Thanks for letting us know.
No, that would be nice but seems a little hard to believe. Where did you hear it?
The company's IR has said they hope to have news soon, which sounded like they are working on something and waiting to complete whatever it is. Would be nice if it were what you say but seems like no one else has heard that rumor.
Aren't the CIC payments based on net proceeds (that is the sale price minus the debt)? I am basing that on the paragraph below from the info on the CIC paymment, so it would be less than you calculate, I think. Not that they deserve it, but at least it's far less than what it would be if it were based on the sale price.
"In the Amended Plan, Net Proceeds is defined as the aggregate consideration paid in connection with a Change of Control, after payment of (i) all secured indebtedness of the Company and any controlled subsidiary, together with all accrued but unpaid interest thereon and all other obligations related thereto, including without limitation all indebtedness owed to DMRJ Group, LLC, and to the holders of promissory notes issued pursuant to that certain Note Purchase Agreement dated as of March 19, 2014, between the Company and certain other parties thereto, and (ii) all other obligations and liabilities of the Company and any Controlled Subsidiary, including all expenses related to such Change of Control"
The whole Zapata deal is just one more poorly executed thing in the company's history. Now it seems there may be a dispute if IMSC owes Zapata the break up fee from the wording in the 8-K. There was some relationship with PP and Zapata and it seemed likely it was PP who got IMSC involved with Zapata. Now the deal is off just as it seemed the equity committee requested all documentation concerning the Zapata deal. That is not in the list of documents to be provided and interestingly the Zapata deal was called off on Nov 21 after the committee filed their motion but before the court hearing. It is just one more suspicious item in a long list of them, and PP being involved makes it even more so. I was interested in Zapata but PP's involvement made me wary of it.
Same here, the potential benefit is huge compared to the cost of extending the investigation. It is good the judge is allowing them to request more time beyond January 23 if they can prove it is needed. Certainly Platinum has woven a complicated web, as the committee digs into it and peels the onion they may need to investigate further to get the proof they need. I do not understand those who want it wrapped up quickly.
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That is all correct, just the DIP loan accrues interest.
While the committee got 30 more days to investigate, the order from the judge shows they can request an additional extension if they prove they need more time. So it isn't a given that they only have until January 23. That may be disappointing to those who want this to be rushed along so they can't dig into the details of Platinum's dealings and contest the Platinum/DMRJ/Montsat debt.
Who says news is almost certain to come out this week? That is the kind of things that should be avoided here, the company has said news is coming soon but that does not mean it is almost certain to come out this week. Unless you have info others do not. If you do have a good reason for saying that it is almost certain to come out this week let us know but otherwise not good to build up false hopes.
Volume is very low, so far today everyone is holding.
Agreed and you are right about getting current with the filings and no one should have to ask them to do that or ask that they put out news. As to news they can only put out news when there is some to put out but it is encouraging that they say they have some they plan to put out soon. They must be waiting for everything necessary to be completed before they can put it out, perhaps relating to some deal in the works. Mainly it seems to have reassured me and those who have talked to IR that they are working hard on getting things into place and unlike other MJ companies they are real with real products and working on updating/expanding their product line. Perhaps I should have said that people who have doubts and have not contacted them should.
Forget the silly seekingalpha article which was very unrealistic. Everyone who has talked to investor relations has been told news is coming and seem to feel confident, me included. The company does have real products and they are expanding their offerings. They said response to their new product was very favorable, so that should start impacting revenues soon. The news coming has to be positive so all we can do is wait until they wrap up whatever it is on it so they can release the news. But call them and urge them that it needs to be soon as I have done, same with SEC filings.
I'm also for taking as much time to do this as needed, as once they get to the bottom of it all it is sure to find a lot of illegal activity. I'm sure they've weaved a fairly tangled web in all of this and attempts to shield DMRJ and Montsat from Platinum, which is clear from their filing they believe there's no action against Platinum because DMRJ and Montsat are "separate entities" and they are not subject to any bankruptcy proceedings, etc. Even though Platinum is the mother company to those two. I don't see how that argument holds any water but it is what they said in their filing.
His separation agreement would be with the company and not with Platinum. However I agree whatever is in it that may prevent him from taking legal action on his own against the company or speaking out against it in public, does not apply if a court subpoeanas him, he would have to testify. He can't be prohibited from testifying in a court of law by some employment termination agreement, that doesn't make any sense. The agreement probably was something to the effect by signing it he gave up his right to sue the company over his termination, and not divulge any confidential information about it in public. They can't prevent him from being called to testify and divulging any information he may have.
Bolduc was let go during the time of the Morpho protest. It seems after the TSA win the company could have gotten better financing. Could it be that Bolduc was in the process of arranging better financing contingent on the Morpho protest being denied, and Platinum exerted pressure to have him dismissed? It is one possible theory. The timing of his being let go after the TSA win but during the Morpho protest seems odd.
I agree Platinum does not deserve anything more, they probably made back the principal converting cheap shares and selling them at far higher prices. They may have done so with insider knowledge which of course is illegal. They may have prevented the company from getting better financing, which they should have been able to get after the TSA IDIQ win. Something along these lines needs to be proven. Even though Platinum is under investigation it seems the judge isn't going to take that into account unless something can be proven against them, and he is not trying the criminal case.
I like your scenario of getting rid of Platinum's debt or at least initially preventing it from accruing further interest while they are properly investigated. Then stopping this sale to L3 at bargain basement price and letting the company show its true value operating free of debt. The trick appears to be to show the judge there is enough evidence of Platinum's wrongdoing. The other problem is L3's breakup fee is steep. It is clear L3 forced this Chapter 11 because of the Platinum situation as they could have just done a normal purchase since there would be enough money to pay the debt. Unless some wrongdoing can be found on L3's part I don't know how you stop the sale to them even though it is for a bargain basement price. Maybe if the Chapter 11 process was stopped it could be demanded the sale be put to a shareholder vote, but there is still the L3 breakup fee to be considered.
That is what I thought who cares what preferred shares PP can convert? I do not think they are even allowed to convert any while the Chapter 11 case is in progress and things may be quite different once exiting bankruptcy depending on how things with PP are resolved. Those preferred shares may be canceled out.
Wonder if he improved anything to make it safer to fly over the ground? Up until now he only flew over water, not because it could not fly over ground, but because safer to fly over water in event of a crash. He must be more confident at the very least, especially to do it at night.
There is a phone number on this page: http://www.deb.uscourts.gov/content/judge-brendan-l-shannon , it is 302-252-2915. That is all there seems to be as far as contact info for him. Other judges have email addresses but he does not seem to.
No question this Chapter 11 was a way to fast track everything, the question is can it be slowed down or stopped. I like your plan to exit Chapter 11, not pay Platinum anymore money, and let Platinum's criminal case play out, allowing the company to function successfully without the burden of the payments on the debt. There is no way their criminal case will be resolved quickly and it is hard to say how much the judge will allow any allegations about Platinum in. I know we all feel they are guilty but I can see the BK judge saying it has not been proven in a court of law, and the question is how far is he going to allow these things to be proven in BK court. That is why exiting Chapter 11 and not paying Platinum anymore money seems like a better plan. But then the question is who can we get to make that happen. The Trustee seems to think he has done his job by allowing the shareholder committee to be formed. Management clearly wants this sale to go through so they are not going to be of any help. Again I like your plan I am just unsure who there is that would be willing to help, as it is definitely not the company management as they want this sale to happen so they can get their jobs with L3.
Your points 1 to 10 sound good to me. The big question is how to make it happen, how to start the process by convincing the company to do this or how to force the company to exit bi and stop making payments to PP, etc. The only ones who have the power to fire the current management would be the BOD and so far it seems they are on managent's side. The trustee is just there for the bankruptcy case, so if you exit BK he no longer is involved. Often the trustee assumes control but that is just to wind down the business and pay off what debt can be paid off, to close out the business as part of a bankruptcy where the business will no longer exist.
I like your plan and am wondering what can be done to achieve it. The company could be profitable and successful without PP and I would like to see it continue on like that. I believe Bolduc would cooperate or maybe is already with the shareholder committee. The problem is getting the initial steps accomplished, finding someone with the authority to make those steps happen, since the company management is not going to cooperate there, and not sure about the BOD.
The relationship between BAM and DMRJ is very strange and I do not think anyone understands it. That is definitely something that needs to be investigated.
Glenn's removal after getting the TSA IDIQ does not make sense and it even says it was done "without cause" which means no wrongdoing. Platinum had to have a hand in it and it would be interesting to see if they converted stock around that time just before his removal. Same with the Morpho protest it should be investigated what trading they did around then. It makes no sense they are not considered as insiders.
As to L3 the deal they just made with that British company is the kind of deal we should have gotten. L3 took advantage of the Platinum situation to get this cheap. It is kind of suspicious they knew they could get away with making the offer they did, compared to the one they made for the British company.
Agreed I am all in favor of taking the time to fully investigate what Platinum was up to and why Glenn Bolduc was let go, etc. There is a lot of odd things with Platinum's dealings and moving money from DMRJ to Montsat and BAM that needs investigating as well as the timing of the stock conversions and when they were dumped on the market. Platinum is resisting efforts to obtain this information which indicates they have something to hide. The equity committee filed to get an extension to end of February to do their investigation and that is definitely needed to get all this out into the open.
You do realize at the current share count $1 gives a market cap of over $400 million. At this point let's see if it gets to 0.05 which is a market cap of around $20 million.
It had a lot less outstanding shares in 2014. I like your enthusiasm but not sure how you can say it can return to 2014 levels or even $1.80. I would like to be proven wrong.
The last paragraph is interesting as Nautic de Paris is an annual boat show, sounds like they are introducing some new product at it. https://www.salonnautiqueparis.com/en/Home/
Of course that is the translation as the post was written in French. Looks like the Facebook translating software does a poor job of rendering easy to read English. The Flyboard Air has to be loud, wonder how often he was flying it. He has a lot of followers on his page, there's 388 replies to that post.