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SHI- the "folks" that have seen the ETD INLINE had done their math. They know what they can do with ISC's tech. I think they have watched the price go thru the floor in hopes of using that devaluation to account for any possible errors in REAL valuation on their part. THUS...weez getting bought all the way out! IMO! Like Sgt. Schultz, I know nothing, just guessing in the darkness of 29 cents a share.
Right now there is plenty of TSA low hanging fruit ready to buy/replace/add on NEW EDS systems with an automated ETD solution inline with the AIT. This is real, nearby , at hand dollars...dollars that can easily be quadrupled around the world.
BMG used a 1.5B$/3 yr TAM. I think that's low, if the inline is as good as I think.
So would someone want to pay $3/sh plus assumption of debt? NO, but do they want to let .5-.75-.85B$ go to a near competitor? NO. So they argue with out mgt. All the while our mgt. is talking to everyone. Just imagine a super model in a micro mini-skirt and 5 inch heels walks into a party of drunks...that is what is going on.
( ISC= Elle McPherson).
TED- until you know the EXACT # of B-220s shipped in Q ending 12-31 you are just going in circles. The only # you can say that must be at least the # shipped is 99 units. And all the mumbo about the TSA ASP is useless. I totally thought TSA would go out in 3 parcels but I do NOT think that now...more like 5. Again, a wag. But thanks for the calculating, which I totally don't agree with nor care about until the # shipped per TSA delivery is known. You have to account for the install rate starting low and rising or going out in more frequent small parcels.
TED- wrong again. Sorry.
Buffalo- did you miss how angry MCG became when he addressed: single use of inline tech/product via a BUYER vs. ISC "syndicating" inline tech to many buyers?
Very telling moment, IMO, which says: ISC will NOT be bought out but will sell many units to more than a few EDS makers with the first one being the partner that invests into ISC. This is my speculation, of course. MCG is right in terms of "selling to many=widest/fastest distribution of key technology embodied within the inline product".
Again, I am hopeful a partner buys an acre and brings a mule! Remember, mgt. is rolling up options as of Feb.16-- this also predicts a partner and not a buy out, unless the buy out was a 400% premium to our 100 day ave.
TED- the two pontoons to this shabby boat: product line the world wants during a very active buying phase and DM's little money changing operation that pays them hefty dump dividends. Kinda funny, the things that make this so miserable are the same things that guarantee at least MORE OF THE SAME MISERY.
Then you have Liscouski's public statement that big things are in discussion. i would think that Liscouski knows the danger in that statement is significant.
AHOOT-- DM out IF ISC had no future. It certainly does. But to me, the real question is: Does DM have more brains than a wad of flesh eating bacteria?
IF they are simply mindless bacteria, then down we go to 10 cents, with no other actions by the company.
Re: BL--I certainly hope he has a good story ready if the "quiet period black out" does NOT deliver.
Pat- the direction will ride on the EXACT details of the Re-UP, if that is the path.
DM is NOT leaving. But DM has to be a tad brighter than given credit for so if the Re-UP is the path, then I expect the terms to be better due to less risk meets higher return per DM dumped share...but to get it out of the gutter--well that is going to take additional bridges into partners. And those bridges will ope up faster than we think. Why? TSA EDS money is circling, balance of TSA ISC IDIQ money is circling and the world wants what the TSA wants just as much- automated screening.
Today really feels like the dump-king is back...
TED- re: MCG comment--referred to the strategic alternative exploration, NOT the TSA sale.
Re: ongoing TSA deliveries--they are about to make a delivery this March, perhaps May and even one in late June. I had it wrong about 1170/3, its 1170/4 to maybe more than 4...my other sense, the first one was NOT all that large.
Re: 30K- IMO, the TSA tender was slanted toward ISC...S/M could have offered 10K a unit and lost. No real good reason to drop below 30K a unit, which MCG sort of confirmed by saying " ISC was NOT the low bidder"--Dr.J. knew the score. He usually does.
Re: today's price action: last hurrah of the serial diluter OR a return to downward spiral due to a re-UP with DM on same terms...? Don't know but it sure looks like a DM "company overboard" dump-a-thon.
Ah Buffalo--how can you forget the 2M in options at 78 cents that vest over time--this says NO BUY OUT but rather a PARTNER BUY IN. Mgt.'s skin has NOT shown up yet but it will. We just have to get rid of the overdue interest, then the ongoing qtly interest that converts to shares...that is enemy of the people #1 and #2!
TED- all we can say for sure, RE-TSA delivery in Dec.15 was AT LEAST 100- B220s units but likely NOT more than 250-B220 units. THAT is it.
So calculate on from there if you know OTHER B-220 unit sales in the Qtr and expendable rev. and QS150 rev. in same qtr.
IF you are really saying that ISC sold a B-220 for $20,000/unit, you are also saying that Morpho bid UNDER $20,000 and LOST!!! MCG told us that ISC was NOT the low bidder.
Now , I originally pegged a B220 at 34-36K a unit, which does seem high in retro-vision. But no way would I agree that they sold for much under 30K. But fear not, the 162M IDIQ will spend all the way out...the product mix is the key question...and THAT interesting factor is a driver in current strategic outcomes. I dislike last minute deals as they are seldom good for the weaker party ( financially). MCG should have started this process much much much sooner because you can't let a deadline be the driver for the deal points.
IF you add the balance of the ISC IDIQ and the balance of the EDS refresh you can wild guess as to what is up for grabs for a new ETD inline that works with EDS. And this is just TSA...add Euro baggage/cargo to the mix plus ROTW and you get a YUUGE $ #...that's the lever at play. I think the INLINE is ready for prime time right now...
Ted- where did the company state that they delivered 260 some B-220s to the TSA in Q ended 12-31-15? I missed that IF it was announced.
MAINE- good even keeled post. Re: R/D next 6 mons.= $2M CRADA to develop the ISC INLINE ETD ( don't tell TSA this but its kinda already ready for its "close up").
BMG referred to this re a question about the TSA grant and the accompanying paperwork. All in all, extremely good news as the INLINE is ISC's get out of debtor prison card.
It is a new dawn that comes with a heavy chain: debt. Worse, debt that converts to shares, which is a lazy mgt. way to pay for debt. The onus is on mgt. to do something about the ongoing stealth dilution. Solve that and everyone proceeds PAST GO to EXTREMELY GREAT! IMO.
SHI- calling the bottom when a serial diluter is at work on a $15M "woodpile" is dangerous to say the least. DM's dilutions welcome in the short-nickel cutters which compounds the downdraft.But I too called a bottom this week and began buying...smack me with a hockey stick if it was too soon.
HOWEVER...this can change in a wink IF the inline has impressed an AIT maker to the point where they want to be first in line for ISC's INLINE...this could be the switch that reverses the tide. The upside for the AIT maker is clearly available and known thru TSA's goals.
THE BAD HOWEVER...more of the same DM's serial dilution, as in ISC continues the basic same deal,well DM is pulling down the roof on everything...flight out will be crushingly fast.
GUI- I second that emotion-- hardest one ever. But with reasons: new tech. meets gov. actions driven by political turmoil against ever changing world threats.
BUT one thing that all investors got right, along with DM: ISC has the best ETD tech. in the space. Proven. Tested. Purchased over and over again.
GUI- your ave is below the magic mgt. option # of 78! Good for you.
Human nature predicts that MCG/DR.J will work harder to push this above 78 cents so they can cash in on their MILLION share options.
...they are ALL nice men.
SHI- I would NOT say you were an idiot. Facts prior to Bolduc's ouster prove you otherwise. Remember, most of the positive events that Bolduc pointed to came true. And I will guess that he had a debt solution in planning stages and this mgt. tossed him overboard to prevent those events. Why? Look at the change in control events and the reset options and so on. All the while the company does little or nothing to remediate their most significant problem while doing a tad more to highlight their significant accomplishments...more than odd, its just plain wrong as achievements could have been levered to remediate the problems. NOBODY WOULD CHOSE TO OPERATE IN THIS MANNER. NOBODY. BUT MCG AND BL DID...
I know this board almost prayed out loud for a light to go inside ISC, for mgt. to realize how foolish they are, how they wasted all the good things achieved for no good reason.
And that brings us to today...nearing the beginning of the last chapter or the second chapter?
Hum---about 2M shares are ripe for mgt.'s purchase at .78. I think THAT is a meaningful number.
Hum-- you are messing with a smooth turning wheel IF you inject BK or take under or any other event other than ISC becomes a division of XYZ and NOTHING changes in terms of IP, products, production etc.
And do NOT doubt that DM has done the math on what is in it for them. PLENTY of potential upside and far more easier to reep than taking any other path out of this mess.
Its kinda like an IPO delayed: ISC developed, ran up debt, succeeded with products to world-wide embrace and NOW is offering 100% of its stock along w/ debt to the smartest buyer in the space, the one that can turn a 300M potential into 1.25555B$ in 3 years and possibly more. Sure, this is an optimistic look, BUT once again, the fall back position is in place ( RCA+DM renew).
But everyone, including DM, has to assume that " another 2015 for ISC's stock" is not in anyone's interest but if we have to, we will.
Sure, I'll give you 30M$ for ISC--will you take THAT? Hell no. That is the rub.
But one can make a case for $15M almost as easily as $250M. My sense/hope is: ISC is a 350M$ company but willing to look at $250M plus assumption of debt.
Sadly, this entire "discussion" is taking place at 4 year low tide of the SP, which discolors all points of valuation. BUT knowing MCG and Dr.J are in the money above 78 cents sets a real line in the sand, I believe.
It would have been to our advantage to start this process sooner than when it is occurring as we now face the March deadline...so the game of chicken is in progress...which is why Roger is working thru details with DM.
...and Cain killed his brother Able...
Fred is that # at 12-31 or 2-23?
Anita- during the CC, MCG actually got a bit disturbed over the possibility of exclusivity with a single AIT maker. His voice inflections changed, his tempo, his tenor and his emotions were thru the roof ( relative the balance of CC).
Was he negotiating via the CC? Don't know, but it portends an equity sale ( to the AIT maker who directs the workflow for ETD to AIT linkage). He also set the value point for the INLINE very high by targeting linkage to ALL AIT makers.
The only thing that would trump an equity sale to an AIT partner would be a total buy out by the AIT maker AT the specified price. You could also here a market sizing calculation was under way when they pegged "security-screening" sales at 1.5B over the next X # of years.
Here is the nugget of ISC leverage: TSA is sitting on about 250-500M in AIT upgrades, plus a significant opportunity for fill out of ISC's ETD IDIQ of at least another 70-100M. I contend the first AIT maker w/ integrated or integration ready AIT/EDS gets more than the lion's share of the first with all of the IDIQ for ISC being spent very quickly. Conservatively estimating that 350M= 40% of the world wide market, you can now guess what ISC's "Jewel box" of ETD products are worth.
But as usual, TSA uncertainty makes the deal dangerous for a small to mid size player...so who knows which way it goes.
The fall backs are done deals if we want them to be: more DM on slightly better terms and the RCA pay day loan deal to prevent a draw from DM. IF DM's serial dilution formulae is NOT fully stoppered, the SP will stink like rotting fish...
IF all the parties sitting at the table will open their eyes, think outside their "silos" and look at what the world wants, THEN a full on purchase of ISC is very easy to contemplate AT ISC's desired price. This is NOT that hard unless someone wants to make it so...
ODDS
a.- solo DM continuing at current deal pts: 15%
b.- lower interest, DM continuing: 35%
c.- partner buys equity, ISC pays out overdue DM interest, uses balance for R/D: 25%
d.- company bought for > 78 cents/share: 10%
e.- lower DM interest AND partner buys equity: 15%
Except for (a.), all would be positive and move SP out of the sewer.
INSIDERS: canary in a gold mine...they know what the prospects are. We certainly don't KNOW anything, thanks to their attitude toward the OWNERS. They will pile into the stock when things swing to easy layup status. I think everyone knows that. What is galling is they took a year off from supporting the stock. And for NO good reason. Bolduc built a robust shareholder support platform. Tapping into THAT should have been priority #2 behind getting aligned with new TSA thinking. Instead, they let TSA wander down the doggie trail, dither on deployment, gum up prior set processes and generally let TSA go into isolation. Huge mistake.
Joe--buying is buying. And they have the option to buy a share at .78 cents each.
Issuing options is a right, not a transaction. Where and how these came from got past me, but the good side of this is, I doubt MCG sells the company for LESS THAN 78 CENTS/SHARE. Unless of course he is forced to.
Not sure if they still have options at $1.4 but one of the selling points of the last vote was their options are set high, so they will work to put the SP in the money for their $1.4 options--- then they basically treated shareholders like poison and the stock like rotting bologna...and now they lose their tongue when asked why they aren't buying the stock...anyway, 78 cents is within reach. If the stock gets to 90-ish, they may exercise their option to buy at 78 cents, SEC rules would still apply.
Buffalo- they received options---I presume this is part of the reason why they didn't answer the question as to why THEY (mgt./insiders) are not buying a stock they feel is undervalued ( in so many words). Timing of all three of these events seems to be pointing to something: CC= strategic update, PR= material event in progress, OPTION AWARD= explains why NOT buying right now, in the current time frame.
Buffalo- I think you are mis-reading mgt.'s statements;
- they laid out the 4 basic strategic options and even provided some headline status on I believe 3 out of the 4
- MCG said the stock was not fairly valued in so many words. ( key question: when did you KNOW that mc gann?)
- After dissing the "internet" as a wasteland, mgt. could not answer the basic internet complaint about mgt's fresh statement that the stock was not at fair value: if the stock is undervalued and has such great prospects, as you have just laid out on this very call, why are you all not buying? NO ANSWER.
- then BL states in a PR that material events are progressing. Since they just told us that in the CC, that seems likely and REAL ( REALLY!!!)
- shortly thereafter, about 2M options at .78 show up in MCG/DR J's accounts so I guess you can say, should those possible material events really become positive tangible events, McG and Dr. J will join us as shareholders.
I am buying shares! Forget the 20s, only a strategic fail will send us down there. Low 30s w/ mgt options of 2M shares at .78---- hell yes this stock is undervalued!!!!!!
rmeg- I did also, my thinking/ not thinking, was the shareholder vote kept their options at $1.4, not at .78 cents. If this were the case, then why did we bother to vote, besides the added share authorization? i clearly believed that APPROVAL meant their options would stay at $1.4 ( what ever the exact # is ).
Some here pedeled the thought that WHY lower their option price by NOT approving, rather, approve it so their options stay at $1.4
Whatever...but it looks like they will begin better alignment once the SP gets to .78. Very odd that this filing drops after yesterday's PR.
Worst case scenario: MCB and DR J have tangible reasons to get the share price above .78
At the very minimum, there is a NEW alignment with shareholders as mgt. is now "more" motivated to move the SP far above .78...and was likely just co-incidental to yesterday's PR re: ongoing material events.
Take Away: we are going up...but who knows when...MCG and DR J. do.
IGH- I do, this is their way of responding to the key question of why aren't you buying shares...but I still can't find this award in their comp pkgs.
Wick- THAT is for sure. I would guess at least 2Xs but what is odd, it has 3 vesting dates which leads me to believe it is financing related. Could be a partner equity position that is stipulated to relieve debt...Too many other events point to this...
Buffalo: all I know, MCG and DR J had the option incentive to bring at least $15M of NEW financing to ISC...it set at 1% of outstanding at a price at closing BUT to be decided by the BOD at that time.
So yesterday BL tells us something is afoot...today this option notice appears...I can't find anywhere in their comp. pkgs a different option award pkg will be issued in late Feb. of '16...
IF it is NEW financing related, GREAT, we are going up as it takes out at least $30M in debt.
BUT if its NOT new financing related, then why are they getting options right now?
IGH- the old deal pkg. had language that said the price would be set around the financing date but can't see how that works either. But again, did we see anything that said MCG and DR J would get options this time of the year? I haven't seen that in their packages...so I can't really say.
Joe- can't say...it appears to vest over 3 lots...and the size is much larger than 1% of outstanding as well as the price, which would be set by the BOD...what leads me to believe its financing related is Dr. Jones has the same deal, but his amount is less than MCG's. So the BOD did something different there. This would answer the seminal "internet" question posed in the CC. But can't say definitively that its financing related... new guess: we are NOT going up?
Both MCG and DR J were awarded over 1M options at around .78. This means at least 30M of new financing is in the house!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
WE'RE GOING UP!!!!!!!
Joe- from MCG's comp. pkg:
The agreement also provides that within 30 days after the completion of an equity financing, the gross proceeds of which to the Company are not less than $15,000,000, the Company will grant Dr. McGann an incentive stock option to purchase that number of shares of common stock of the Company which, together with all other option and equity awards previously issued by the Company, will equal approximately 1% of the Company’s fully diluted equity.
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Dr.J has one like this. Larger float at a lower price--how did THAT happen...
Z- its helpful today but why NOT say that during the last CC?
IF they would have said THAT, then we would NOT have seen instant SP decay. IF in fact today's statement that "interest" ( positive strategic development) is more solid, GREAT! But why not say that in the CC? IMO, they botched things again. Why do that?
ISC has NOT announced the Qtly TSA shipment. I believe they will in March.
The Q is tracking nicely to deliver between 10 and 13M...the problem is it needs to track above 15M to keep above the interest dilution costs.
The old saying is still in effect: buy when mgt. buys, sell when mgt. sells. IF/WHEN ISC becomes a positive investment I expect mgt. to buy hand over fist. That's a sign everyone here is ready for.
So mgt.'s refusal to buy ISC shares is the catalyst for THIS sell off and that makes NO ONE happy, especially DM...so the goal, what has to be done to clear the obstacles overhead that springs loose mgt. investment?
Selling 50M shares would do wonders if the price was $1, but the price at 35 cents makes it far too toxic. And this is where mgt. has totally lost control by driving the share price downward via their actions/lack of actions. Like a plane diving fast, the only way to pull up and out may take off a wing, the what?
Its an ugly feeling when the best solution is more of the same but in a lower price range and that feeling is growing, not shrinking.
meima--- give mgt. a chance to get the boat out of the harbor. THEY said they are working on it. Talking with DM is smart and a responsible fall back OPTION.
And they presented sort of an attractive LEVER-- what is NEXT in an $1.5B market:
- non-contact ETD in a hand held configuration
- non-contact ETD in a conveyor enabled INLINE configuration
Both are compelling prospects of significant interest and value to gov. buyers of ETD technology. This drives the AIT makers toward ISC.
We'll know by St. Pats which way the company proceeded. I believe that DM would welcome an equity position by an AIT maker that would remove interest and pay down some principal...DM will still retain a slice of the first loan that converts at 8 cents BUT it would be much lower than the current $5M that converts at 8 cents.
IMO, this is a turning point so its worth waiting for.
IDA--Noooo you missed much and remember little.
- Company talking to MORE than DM
-Company layed out 4 courses of strategic action BUT did not specify which is the most likely or where each possibility was at.
- McGann revealed that the INLINE development was proceeding and he even pointed to the largest avenue for marketing it which was across all AIT makers.
Where I lost a good deal of enthusiasm was on insider buying AFTER insiders commented that the stock was undervalued. This means: YOU BUY, WE"LL WATCH. Insiders are just like all investors looking to make a profit on a LONG investment BUT they have passed on this one. THAT is the sell off driver this week.
Thank gawd the serial diluter took the week off or we would be below 20 cents easily if DM was dumping some 45,000 shares a day.
IF I was DM I would ask ISC mgt. the same question: if you really believe the stock is undervalued against either trailing or forward prospects, why are YOU not in the stock?
Mgt. alignment/mis-alignment with OWNERS ( that's YOU dude).
- they will buy shares WHEN they know they will make money on their buy
OR
- McGann or Jones brings in at least 15M in financing, either or both receives shares in the amount of 1% of outstanding AT the SP on close, per the BOD approval.
This predicts that mcGann or Jones WILL do exactly that- land at least $15M in new financing...the good news, it brings an amount of alignment with OWNERS.
But hey, don't mention this to anyone because its just one of those things you hear on the internet...( its also in ISC's filings)