When the time comes, you'll be judged for your actions.
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the extra shares could be note holders converting and not ATM...just saying
Agreed shady interview towards the funding aspect at the end. Sounds like he's talking about existing notes being converted to shares + ATM. Still not possible to get $65 out with the volume/price we've seen over the last month.
I agree he's a liar and a scum bag. I'm just stating facts that 65mm can't be through dilution in the last month.
Rubbish
There wasn't that much left out of the 150mm ATM to dilute. Plus enough shares haven't been trading and the O/S would be a lot higher if 65mm had been diluted. Go back under your rock or cover your short
16million volume today so far...$250k notional. I very much doubt they are diluting
That's not true
The preferred shares were diluted after the last R/S. They accounted for 20% ish of the vote last time but now only 3-4% so not as important. Hudson also has a limitation of 9.99 % of the float so there will own approx 12% of the vote.
If the R/S goes through Hudson can prepay the notes but only to a max of owning 9.99% of the float at a time. If HMNY don't need the money each time part of the notes are prepaid they can use it to redeem the equivalent amount of the notes. Of course HMNY need to be cash flow positive or have an alternative funding source for this to work.
agreed they need to be reserved buy may never be needed for the existing notes. HMNY has redeemed restricted principal on these notes in the past and there if they have a positive cash flow they can do it again.
The play has always been for Hudson to convert and then short when they sell in the market. They have been doing this for the whole year, however with the share price and trading volume so low I can't see there is much of an opportunity for them.
if the vote to a new R/S is a No I can't see Hudson prepaying any more funds, they will get a better return on the interest on the notes.
I'm staying long with the expectation that HMNY secures new funding, these notes get redeemed and the dilution reduces or stops completely.
I'll post the sec filings later
Same comment applies. The notes have to be prepaid by the investor before they can be converted to shares. Currently the total of $130mm left on the notes is restricted principal which means it can't be converted to shares.
Hudson can only own 9.9% of float. Going to take them a while to prepay $130mm thats outstanding on their notes so they can convert to shares when the companies only valued at $20mm. They may not even prepay any of the remaining $130mm anyway.
As for he ATM for $150mm, 75% utilised 2 months ago. There might be nothing left to dilute there.
As I said- not a certainty
It's not certain
the only remaining $ on the notes hasn't been paid to HMNY yet. Surely they just don't pay it? Appreciate the interest accrued is at risk
What exposure do the note holders have to HMNY apart from accrued interest on the notes?
the preferred shares are worth sh!t now
Taken from the DEF 14
Q: Who can vote at the Special Meeting?
A: Our Board has set September 14, 2018 as the record date (the “record date”) for the Special Meeting. All stockholders who own voting securities at the close of business on the record date may attend and vote at the Special Meeting. For each share of common stock held as of the record date, the holder is entitled to one vote on each proposal to be voted on. For each share of Preferred Stock held as of the record date, the holder will be entitled to 3,205 votes on each proposal to be voted on, representing an aggregate of 4.62% of the combined voting power of the common and preferred stock as of the record d
there is also a conversion limitation of 9.99% which will stop the note being converted all at one
(d) Limitations on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including, without limitation, the November Notes or the January Notes, if any) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 3(d). For purposes of this Section 3(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the conversion of this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives a Conversion Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16A-2(a)(1) of the 1934 Act. No prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(d) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 3(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.
here you go - from the June Notes
Events of Default
The Convertible Notes contain customary events of default including but not limited to: (i) a suspension from trading or a failure to maintain the listing of the Company’s common stock for a period of 5 trading days; (ii) after a conversion by the Buyer, the failure by the Company to deliver the common stock for a period of 5 trading days; (iii) the failure to reserve a number of shares of the Company’s common stock to permit a Buyer to fully convert the principal, interest, late charges, if any, and Make-Whole Amounts under the Convertible Notes, to the extent required by the Convertible Notes; (iv) the failure by the Company or any subsidiary to make payments when due under the Convertible Notes; (v) upon a conversion by the Buyer, the failure by the Company to remove a restrictive legend from shares of the Company’s common stock if permitted by the applicable securities laws; (vi) breaches of covenants; (vii) bankruptcy or insolvency; (viii) the failure to pay indebtedness when due; and (ix) the failure of the grant of the security interest in the Investor Notes to create a first priority lien against the Investor Notes.
As indicated above, following an event of default, the Buyers may require the Company to redeem all or any portion of the Convertible Notes. The redemption amount may be paid in cash or with shares of the Company’s common stock, at the election of the Buyers, at a price equal to the Event of Default Redemption Price (as defined in the Convertible Notes).
The Company must immediately redeem the Convertible Notes in cash upon the occurrence of a Bankruptcy Event of Default (as defined in the Convertible Notes).
The Event of Default Redemption Price will be computed as a price equal to the greater of (i) 125% of the Outstanding Amount to be redeemed and (ii) the product of (X) the Outstanding Amount to be redeemed divided by the Conversion Price multiplied by (Y) the product of (1) 125% multiplied by (2) the greatest closing sale price of the Company’s common stock on any trading day during the period commencing on the date preceding such event of default and ending on the date the Company makes the entire payment required to be made under the Convertible Notes.
In addition, following an event of default, the Buyers will have the right to convert the Convertible Notes at the “Alternate Conversion Event of Default Price” which means, with respect to each such conversion, that price which shall be the lowest of (i) the applicable Conversion Price as in effect on the date of the conversion, and (ii) the greater of (A) the Default Floor Price (which means (i) at any time prior to the Stockholder Approval Date (as defined in the SPA), the Floor Price (as defined in the Convertible Notes) (initially, $1.00) or (ii) at any time on or after the Stockholder Approval Date, $0.0624 (or such lower price as mutually determined by the Company and the Buyers in writing, subject to the prior consent of Nasdaq)), and (B) 75% of the lowest volume weighted average price of the Company’s common stock for each of the 30 consecutive trading days ending and including the trading day of delivery or deemed delivery of the applicable notice of conversion.
generally the reserve for these is 200% which should be enough. It's only the crazy dilution/short selling that has pushed the note conversion price down beyond that reserve
They have already been violated in terms of reserve shares and nothing seems to have happened. If there aren't enough shares available for the investor to convert there notes then I would imagine they simply won't prepay them. This means no funding from the investor notes to HMNY..current 125MM ish outstanding.
The notes aren't in default. The $ left on the notes are currently restricted principal which means they can't be converted to shares until funds are paid to HMNY.
or those that have a e-ticket theater near them and don't have any movie restrictions.
Hi - do you have a link for this, I couldn't find anything. Thanks
The bold statement below suggests the notes can't be converted to shares if (buyer) owns over 4.99% or (affiliates) owns over 9.99%. This statement is on all the investor notes that are outstanding.
Does anyone have experience of these type of notes and if so is this as black and white as it seems. The pre-14 that was released said Hudson owned about 45% of shares but includes shares linked to investor notes that are yet to be converted.
Beneficial Ownership Limitations on Conversion and Issuance
The Convertible Notes may not be converted and shares of the Company’s common stock may not be issued under the Convertible Notes if, after giving effect to the conversion or issuance, the Buyer together with its affiliates would beneficially own more than 4.99% or 9.99%, as elected by the Buyer, of the Company’s outstanding shares of common stock. At the Buyer’s option, the ownership limitation blocker may be raised or lowered to any other percentage not in excess of 4.99% or 9.99%, as elected by the Buyer, except that any raise will only be effective upon 61-days’ prior notice to the Company.
They are only share count deficient if the the notes are converted. I think HMNY will surprise and redeem some of the notes from prepayments and then seek alternative funding. Just my view and why I stay long whilst 99% sell or short. Only time will tell
You're assuming
the share price stays at this level
the investor prepays the notes
the investor converts the shares
HMNY wont redeem some of the notes before they are prepaid.
All value assumptions but not 100% certain
They already have 80mm of funding secured from existing notes
Taken from the latest filing. Amount is blank but the denomination is in billions. I think around 2.5 billion outstanding based on the notes that have been converted.
___________________________________________
Moreover, the total market capitalization of the common stock after the reverse split may be lower than the total market capitalization before the reverse split. On the trading day immediately before the July 2018 Reverse Stock Split, our market capitalization was $37.9 million, with 421,299,736 shares of common stock outstanding. Immediately after giving effect to the July 2018 Reverse Stock Split, we had 1,750,979 shares issued and outstanding. As of the record date, our market capitalization was $[ ], notwithstanding that we had [ ] billion shares outstanding as of the record date.
The 4.2billion reserve shares covers the 120mm restricted principal on the remaining investor notes. (Calculate at a conversion price of approx 0.02)
1) the shares will only be issued if the investors pay the notes down and they want to convert to shares
2) if HMNY doesn't need some or all of the cash from investor notes they can redeem any outstanding balance on the notes or buy back shares.
The long game isn't over just yet
Can anyone recall a company notifying a R/S but never actioning it(and surviving)?
48% of shares owned by Hudson Bay. The R/S will go through if Hudson want it to
Are you shirt? If so what's your entry and target
not my original post, and I can only see max July data there
no dilution today
Such a one sided view. The investor notes might have been redeemed by now allowing them to source new funding.
I'll take your short any day you like
net neutral on subs for the past month - VERY POSITIVE
there is a June 18 note with approx 100mm still of investor notes still outstanding. I suspect this is being partially converted to equity but HMNY can use the cash (if not needed for day to day activities) to redeem the note or buy back shares.
They used some of the June note already to redeem Dec/Jan notes.
I think next sec filing will show under 5mm cash burn, the June note completed finished and a new funding model that doesn't dilute shares
Well said
Not all the 629MM was ATM. 250mm was unrestricted principal on notes being converted to equity. It's in their 10Q if you can be bothered to read it.
.
So now we know. They milked the []= out of shareholders the 629+ million shares (about 1 billion by now) so they could build up cash to about $50 million, and then pay off all annual pass members. Obviously, most people won't be happy, so they will cancel.
they can't dump 200m in a day when 200m is traded