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Generally, the customer list would be the asset, but the contracts themselves would not be conveyed as part of an asset sale. Any such transfer of direct contractual obligations would be accomplished through a post-sale assignment agreement, or by executing a net new company between the customer and the acquiring company
Exactly. I should have read prior replies before I made a redundant post.
I read that as meaning both, not either/or.
By that I mean that the current stated capacity may assume a single shift; if the facility decides to add one or two shifts, it would adjust upward accordingly.
The non-operational thought is just a gut feeling, based largely on SHMN's cash reserves (or lack thereof) combined with their statement that this will be a cash (ie, no securities) transaction, and the fact that they have not disclosed closing on a financing instrument.
I would agree that it's not necessarily common to wait for EOY (and to be honest, I misspoke - the close date would be on or about 12/31, not 1/1 for tax/fins purposes), I've been party to more than one transaction that has indeed been structured to make a clean break at year's end. I think the driver there would be how entangled finances/books would be if they chose to move forward mid-year.
Bear in mind, accounting generally, and taxes specifically are a hell of a lot easier if you have a 01/01 effective date.
Annual reports are a lot easier as well.
Assuming that the target company is indeed the Santa Ana based company identified earlier (which appears to be non-operational, tho fully licensed), I imagine we won't see any immediate impact to the books beyond potential acquisition costs, and net benefits will be realized over time as production ramps back up. Hopefully, the product portfolio is one that can be distributed quickly (either directly or thru third parties/white label deals).
Took 'em a few days, but it looks like they got it back up and running.
Probably issued restricted, but due to tacking back to the date of the note, was able to have the legend removed more or less immediately.
With that being the case (and with JSJ not listed as a 5% shareholder in any subsequent filings), I'm inclined to say that you're correct - they dumped some/most of their holdings fairly soon after receiving them.
you're probably right on all fronts.
this whole thing is the proverbial riddle, wrapped in a mystery, inside an enigma
Highly unlikely, tho I'm not familiar with Cali corporations law
They're registered in Cali as a domestic corporation. It looks like they did an RM in 2005, at which point there were 2000 shares issued and outstanding. No trace of them currently trading; based on the linkedin profile, my guess is there was a PPM at some point so there are a few non-insider shareholders out there.
April 9, 2018.
My first thought was that they couldn't possibly be selling because the company was dark (you can't use rule 144 if the company isn't current)...I had a bit of an 'ah-ha' about a 4(a)(1) legend removal tacking back to the note date (no clue what that might have been).
The moment the second anniversary of the note funding hit (and assuming the rest of the conditions were met), they could have immediately removed the legend and started selling.
Agreed...But I look for worst case scenarios for a living - it's second nature for me.
Lots of fun a parties, too.
Takes a lot of volume to wash 109 million shares - even if you're just selling into the bid. Between grant date and today, they may have done so, but I wouldn't be surprised if they still have some and are dumping like mad right now.
The company can't sell - they don't have any registered shares, and haven't filed the paperwork to do a private placement.
The insiders can't sell - Baron is the only insider listed right now, and he only has 10k shares.
See my earlier post - we are seeing JSJ investments selling off the 108,766,324 shares they received when they converted their $5,400 note (.00005 conversion price!) in April of 2018.
Restricted shares don't show in the float...
Let's also keep in mind that in April 2018 (while the company was still dark), SHMN issued JSJ Investments 108,766,324 shares when they exercised a convertible note. This is reflected in the 2018 annual, and in the change in cap table between the 2017 (posted 12/18) and 2018 (posted 03/21) annual reports.
As JSJ was not listed as a 5%+ shareholder on the attorney letter that accompanied the 2018 annual report, they likely tacked the holding period back to the date that the company received the loan, and deposited the shares immediately upon issuance using section 4(a)(1) (which allows the restricted legend to be removed from security if certain conditions are met, including a 2 year holding period following issuance of full consideration for the security).
In other words, there is almost certainly a shareholder out there with (at one time, anyway) almost 109MM shares, for which they evidently paid approximately $5,438.32 (see the share issuance table from the 2021 annual).
While I don't doubt that Swati has sold some shares (at least in a private transaction), there is little doubt that JSJ has, and that they truly DGAF about the impact to PPS
I don't think it's legal services - more likely she was "paid" for her stint as CEO with stock.
I agree. I wish they'd do YoY instead of EOY for 2020 in their table; it would make the current numbers pop a bit more, and provide better context.
Fair enough, but based on what we've seen ever since they got current, I don't think this puppy is gonna move on fins alone. Too many home run hitters, not enough willing to hit a little blooper and take a base (and moreover, too many determined sellers who just DGAF about PPS).
ISTR that the BHAT trust is an OG investor, but can't recall. If that is the case, they're probably holding restricted shares. Nowadays, it's really difficult to get the legend removed and start trading sub-penny stock (the broker-dealer I've always used for paper certs won't deposit them anymore). They may be waiting (voluntarily or otherwise) for things to get above .01.
I'd be interested to hear what they have to say.
And to be crystal clear - I'm not bagging on the company. I think it's moving in the right direction and should be trading well above current PPS.
That said, I'm concerned that they are making some missteps that will impact me as an investor - if only by keeping current/potential investors in the dark for no reason and causing unnecessary delay in the realization of gains.
I'm also not afraid to admit that I know they monitor this board, and I'm happy rattle their cage a bit if it helps to keep them engaged and to ensure we don't have a repeat of the 'buyback' scenario.
I struggle with that "or". The one thing I think they might be able to hang their hat on is the fact that the event itself (the "completion" of the acquisition PR) occurred during Q4, and so they are waiting until EOY to report details.
That said, we know they didn't have enough cash on hand to acquire an established company. Any such transaction would almost certainly have some sort of direct or off-balance obligation associated (including a minimal consideration and assumption of debt transaction).
I'd be surprised if their attorney would share any details, but it probably couldn't hurt to ask.
Dude, I'm just looking at what's there. I'm not talking smack for the sake of talking smack...this is legit DD. I think this raises a legitimate question.
He's noted moving from President to VP to CEO and then to Operations (the latter move occurring in 2015). From the look of it, he's been on linkedin within the last few days (he's liked a few posts), so there's been ample opportunity to update it.
Good ol' Linkedin (who knows how current this is):
https://www.linkedin.com/in/shailesh-shah-79b899/
I'm saying they haven't disclosed enough at this juncture.
Disclosure in this context is intended to inform an investor so that they can make investment decisions. As such, it would include material details of the executed agreement. Merely stating that an agreement exists does not help a potential/current investor determine if they should buy/hold/sell.
Think generally of a 'material definitive agreement' 8-k for a fully reporting company; they will typically attach the agreement itself, or at a minimum a description of the material terms of the agreement (parties, consideration, etc.).
Ultimately, it's up to OTC Markets to decide if the disclosure has been sufficient, but I would think that it would be in the Company's best interest to share the details sooner rather than later.
It's also worth noting that Shah still claims he's associated with SOHM (Operations?). If that is true, and if it really is Swati who has been dumping stock for the last several weeks, the following may be an issue:
base hit vs. home run.
Honestly, if the market would move on incremental news, folks would be singing a different tune. Instead, we're stuck waiting for something to break this perpetual churn at .005
Re: disclosure - we've discussed this before, but it bears repeating. By failing to report material details of the acquisition, the Company is arguably in breach of its mandatory reporting requirements. The following is from the OTC Markets guidelines:
uh....what does this mean?
...and no need. Unless the Company is planning on moving to fully reporting/filing a registration statement, the time and expense associated with an audit is wasted.
For an "alternative reporting" company, OTCMarkets accepts a public PR as the equivalent of an 8k as a current report for purposes of adequate public information. Anything material must also be reported in the subsequent quarterly or annual report.
In other words, for a non-SEC reporting company, there is no 8k.
http://www.musclepharmcorp.com (their "investor relations" site) is down.
sounds about right...
Infrastructure and/or expense.
Again, this is IMHO - I could well be mistaken. However, I believe that Marketplace (like much of Amazon) functions almost exclusively as a front end. The back end operations, including shipping to the customer, must be handled by the manufacturer/reseller. That means either paying for a third party logistics firm, or handling logistics internally. Back in the day, I managed IT for the logistics arm of a large US corporation - the expense and complexity is mind boggling.
Even if Wal Mart does last mile shipping, SHMN would still be on the hook for moving product to a multitude of WM distribution centers across the country - again, using a third party logistics firm or handling shipping internally.
If SHMN can white label to a distributor who puts their own logo on the products and handles the complexities associated with distribution, they need only to move product to a single location. They'll potentially miss out on some revenue, but also avoid substantial expense/complexity.
Logistics are usually the barrier there. My understanding is that Marketplace requires the manufacturer to drop ship to the customer, or at a minimum, to the appropriate WM distribution center. White Label would generally entail shipping directly to the distributor, and letting them handle logistics from there.
Further:
Repeating for the people in the back:
I read that as "we can't sell directly to chain stores etc. because they demand a certain scale of production that we can't meet"
followed by:
we work with third parties to distribute our products.
If correct, this is pretty consistent with what they've said publicly for quite awhile now.
I could not agree more.