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LOL!!!
"Let me quote Kim because he says it best IMO Quote: 'these composite fibers were, on average, tougher than the parental silkworm silk fibers and as tough as native dragline spider silk fibers.' So the National Academy of Sciences says you are wrong."
Really. Kim is a spokesman for the National Academy of Sciences ?
That's too funny.
"THE COMPANY GOT LOANS FROM THE BANK UNDER FALSE NUMBERS TRYING TO MAKE IT LOOK LIKE WE WERE BETTER OFF THAN WE REALLY WERE AND THE BANK LOANED MONEY THEY KNEW SHOULD NOT HAVE BEEN LOANED WITH NOT ENOUGH ASSETS TO BACK THE LOAN?"
I think that's correct... in part... but, it's much worse than JUST that.
I think the business is being under-performed on purpose now (which is fraud) in order to justify the failure that they need to happen... and, they need the failure to occur, to cover up the problems that pre-dated the effort to make loans that shouldn't have been made...
The made the loans they shouldn't have... only in order to facilitate killing the company...
It looks to me like CPI is a perfectly viable business... that is being undermined in its performance by impositions made that INTEND to make the business fail... as the financial operators have determined to destroy the business to "cover their tracks"... and I think they're committing fraud in the effort being made to accomplish that.
That clear enough for you ?
"How in the name of the Holy Grail can you say that the greatest scientists in the world do not understand their markets nor do they have a strategy?"
LOL!!!
Scientists aren't exactly well known for understanding markets or having a proper focus on competitive strategy in a market context. Instead, their focus on the technical facets of problems is legendary for its exclusive nature, and its abject ignorance of markets. And, it almost HAS to be that way... for any useful science to get done.
Most scientists will at least "tend" to recognize the utility of basic honesty in communication... certainly the benefits of being honest with oneself in the internal communications about the issues and obstacles faced in the research...
So, I don't think the problem with dishonesty that is apparent in KBLB's communication effort is something that comes from the science team...
"The AmSilk link has no spider silk fiber listed that I can see? But even if they did it, the 'kits' offered are implicitely state as "research only" kit."
So... what you are telling me you see... is that it appears that AMSilk does have a functional method of approaching the industry to cooperate with others in addressing research ? And, they appear to have found a way to enable others to participate in advancing the research... while getting paid for doing it ? Wow. I wish that KBLB could figure out how to do that.
"Not sure how that could help me with light weight protective gear or even finer feeling sheets."
It's just fact that you need to do the R&D before you can produce anything... and pretending you don't have any work to do to enable production others will care about enough to support... isn't the same thing as actually having a commercial capability. KBLB is lying about being "production ready"... when they still have significant challenges that they're not facing honestly.
"And I'm also not sure what I can make from those 'kits'; even if I could get my hands on them. Or afford them. "
I see opinion touting names like DuPont... while claiming they're likely to be KBLB licensees ? LOL!! Meanwhile... anyone want to bet on whether or not DuPont is ALREADY supporting KBLB's most visible competitor... while buying research material from AMSilk ?
"This topic of conversation has been around on this board often and I'm not sure what new information you are attempting to provide? They have protein goo, not spider silk fiber."
The myopia of KBLB posters... that facilitates the company's dishonesty... isn't particularly useful to me.
If you can't even be honest about what the competition is... and why it is competition... I think you don't have a snowballs chance.
I've pointed out often enough WHAT EXACTLY it is that is OBVIOUSLY wrong with KBLB's focus... ?
The focus problem... becomes MORE obvious when you put it in proper context of the most visible competitive effort...
"Amsilks price is $100K a kilo for fiber. Oh and the fiber is not even as strong as normal silk."
Yet, it seems they've found a couple of niche applications where there is value at that price ? Strange, that. As an investor in what is still an early stage R&D project, I really don't give a rat's ass about the claimed strength of the first generate of fibers... nearly as much as I can about the company succeeding in finding markets for what it produces ? AMSilk appears to HAVE a market... however limited in scope it is, initially. I guess that must mean there is some other value that results purely from their PRODUCTION METHODS... rather than from the inherent strength of natural fibers ? Otherwise, how do you explain AMSilk having a market... when KBLB doesn't ?
The article I linked fully addressed the issues AMSilk has, as well as glancing past SOME of the issues that KBLB is failing to properly address in their own public communication. The difference I see there... shows AMSilk making progress in addressing their limits... while KBLB instead denies that they have any.
KBLB keeps saying "everything's fine"... even when it clearly is not... and, then, we have to read their competitors publications to find out WHY that's not true... and to learn what some of the KNONW issues with recombinant silkworm production are ?
What that says that's most important... isn't that there's anything remarkable or particularly unique in the technical challenges KBLB faces, only that there's something unique in their failure to address the challenges honestly in public.
"So yeah I would say their fiber will be price above the generic fiber market. So far above it that it is not worth using or producing."
Their fiber IS priced far above the generic market. Which doesn't appear to suggest "that it is not worth using or producing" given they ARE producing it, and people ARE using it... That leaves you wondering WHY it is that they are able to price fiber they produce at those outrageous prices... while KBLB can't produce or sell anything ?
That you CAN buy their stuff from their website... isn't evidence that "it is not worth using or producing" rather than evidence that it is, for some reason, worth paying outrageous prices for THEIR stuff, and even while paying those outrageous prices, its worth doing, when it's NOT worth using and producing KBLB's products ?
You asked: "Why do you think they are making goo and foam?"
The answer is... because they appear to know what they're doing in addressing both the technical aspects of production... and the needs the market has that aren't being met by others.
"I hope Amsilk makes it. Right now they are at the same point with their product as KBLB. I wish I could invest in Amsilk too but I cant."
I think you got two of three right in the quote above... but, it is total BS to claim AMSilk is "at the same point with their product as KBLB"... when it is FACT that AMSilk are making and selling products now... and KBLB are instead stuck in denial about their failures... not producing anything... not selling anything to anyone...
I don't know that either AMSilk or KBLB can succeed and survive... given how early they are, and how significant the challenges they face are. But, AMSilk at least has an approach to the challenges that gives them a chance. What I see at KBLB instead is far more effort being spent denying uncomfortable truths when new facts have to be faced, than they spend addressing their shortcomings.
So, I don't know that AMSilk can succeed because of the daunting nature of the challenges...
I do think KBLB will not succeed... not because of the daunting nature of the challenges... but because of their failure to adopt a management approach that CAN enable them to succeed.
"What you posted was a paper with Amsilks problems with Amsilks gene insertions into Amsilks organism."
That's factually incorrect. You should perhaps read the article and know what it says, before claiming, wrongly, that you know what it says ?
"In case you did not know what you posted, the creature that produces Amsilks protein goo is not large enough to produce some of the larger silk genes. They use e. coli. "
I was fully aware of what I posted... and I got it exactly right.
The article ALSO gets it exactly right in noting what the problems are with silk production using a range of methods... including transgenic worms.
I wrote: "The link I posted earlier to a paper from the AMSilk website... addresses some of the challenges inherent in gene insertion."
On page 46, it discusses that EXACTLY in the context of transgenic silkworms, and addresses a few of the known problems associated with them very specifically. If that's not what it addressed, I wouldn't have posted saying that that's what it addressed.
Here it is again...
http://www.amsilk.com/fileadmin/user_upload/SyntheticSpiderSilk_May2012_CEP.pdf
Start reading from "Transgenic silkworms can be used..." which seems it makes it beyond obvious that they're not talking about E.Coli in that section ?
What are the problems they address ?
My point... is that those problems that exist that are discussed in the article... have not even been MENTIONED here... ?
Go figure...
I'd expect any REAL effort in DD would already have the list participants here knowing full well what the problems are... so that they could be addressed, honestly ???
Instead... what I see is the opposite... in a very deliberate effort made to pretend there are no problems...
Otherwise, the same issues that plague EColi as a base for production apply in pretty much every other host, too, including silk worms. Gene insertion is an issue in any host... including that EColi may not have the codons required to support spider silk production beyond some limited length... But, claiming there are issues in EColi and not others ? LOL!!! Spider genes are also not readily made fully functional in other NON-spider hosts... which makes perfect sense... since they're not spiders.
You've even hinted at that issue, recently, in noting that worm diets will tend to dramatically influence the silk qualities ? Worm diet is known to significantly influence the quality of silk worm silk... let alone the quality of a fiber produced by a transgenic organism... which isn't adapted to supporting the production of the various biochemical building blocks required as input components in proper ratios. In silkworms, some of that can perhaps be addressed by a modified diet (at a cost) while its obviously better still to have modified genes in hosts that will enable them to support the high volume output of larger assemblies that don't require special diet or special management.
"I can only say a lack of DD can lead anyone here to think we are making bed sheets or ties. "
The issue is that a lack of DD can lead people into wrongly thinking KBLB is making ANYTHING...
Previous claims that KBLB was making silk by the ton... and was already profitable based on production and sale of spider silk cocoons ?
What happened to those claims ?
And, where's the market for worms and eggs ? Shouldn't they already be licencing critters to some number of the EXISTING silk producers ? If it was as easy as they've claimed... the entire silk production industry should already be using their product ?
But, it's not that easy...
KBLB has an opportunity... but, its one that has some pretty significant limits inherent in it... including an element of timing that means the time they've pissed away doing things that won't move them closer to the market can't be recaptured...and the company's approach to their market is not one that appears to enable them in crafting any transitions to larger market relevance, either in the short term or the long term.
The nature of that opportunity that does exist... is being hugely misrepresented, here...
And, my opinion... is that the management don't really understand their markets well enough to determine a viable strategy...
"LOL please show me ANY product made of spider silk. "
Already did. Here it is again:
http://www.amsilk-shop.com/shop/catalog/browse
It appears that AMSilk's effort VALIDATES the argument that a well conceived product idea, if it is actually executed and brought to market, WILL enable sales of specific technical fiber products that are priced above the "generic" fiber market prices ? If they're actually selling many of those things at those prices... ???
So much for "first mover advantage"...
That makes it pretty clear that, for some reason, what the banks are most afraid of is being sued...
The utility of the extensive "release" from liability is pretty questionable, of course, if there were any reason that any of what the banks did in getting CPI into the situation it is in now, were "problematic". If what they did to create the problem is illegal... then the effort in seeking the release, in itself, seems it becomes an act in furtherance of a criminal act ?
It also appears the document makes it plain that they are taking the view that the Canadian subsidiaries are the only surviving value...
Given the obvious fraud apparent in directing "giving things away" in order to facilitate the accelerating failure of the business... to justify the claims re a lack of value ? Hmmm.
Given that we've drifted on past the termination date of that agreement... without anything replacing it... and without any new filings noting that they've exercised any provisions altering the attachment of value to the shares ?
It looks like the banks are frozen in place... knowing that anything they do will constitute an act that proves an intent to commit fraud... by completing the fraud.
It appears they're trying to use the cooperation of management in agreeing with whatever the banks want... to arrange by contract to obviate the larger requirements of the obligations contained in law.
Some provisions of the release appear to themselves violate the law on their face.
In the end result, it requires the company management to agree to violate their fiduciary duties to anyone other than the banks... which appears it would make the intent of the agreement illegal.
Further, it appears the agreement intends to bind the management to violating the law themselves, in a defense of the banks frauds.
Baring the development of any "material events" that have yet to be reported, the next periodic SEC filing required is the annual report, due the last part of April. Seems pretty unlikely to me that they'll be able to keep from sticking the fork in it for that long. The last filing details the latest revised agreement and "end game" time line... which we've drifted past without any additional SEC reporting, when it appears they'd have to have met the criteria for a "material event" almost by definition of the terms of the agreement...
"5.1.3 Termination Date. The definition of “Termination Date” as set forth in Section 1.1 of the Credit Agreement is hereby amended and restated to mean: the earlier to occur of (a) February 15, 2013, (b) the Extended Forbearance Period Termination Date (as defined in the Third Forbearance Agreement dated as of January 29, 2013, or (c) such other date on which the Commitments terminate pursuant to Section 6 or Section 13.”
6. TERMINATION OF EXTENDED FORBEARANCE PERIOD. The Extended Forbearance Period shall end on the first of the following to occur (the “Extended Forbearance Period Termination Date”):
6.1 February 15, 2013;
6.2 The date on which a petition is filed by or against any Borrower Party under Title 11 of the United States Code (the “Bankruptcy Code”) or under the Canadian Bankruptcy and Insolvency Act, or the Canadian Companies' Creditors Arrangement Act (or any similar act or law); or any Borrower Party makes any assignment for the benefit of creditors; or any Borrower Party voluntarily or involuntarily becomes the subject of any other case or proceeding for the relief or protection of debtors under any other law or statute or under any provision of common or provincial law;
6.3 The date on which (a) any Event of Default, other than any Existing Default existing as of the date of this Third Forbearance Agreement, occurs or is determined to have occurred under any Loan Document, including this Third Forbearance Agreement, (b) any Borrower Party fails to timely perform and observe any of the covenants, agreements, and obligations contained in this Third Forbearance Agreement, or (c) or any of the representations or warranties contained in this Third Forbearance Agreement shall prove to be false or misleading in any material respect; and
6.4 The date on which any Borrower Party initiates any judicial, administrative or arbitration proceeding against Administrative Agent or any Lender.
16. RELEASE. As a material part of the consideration for Administrative Agent entering into this Third Forbearance Agreement, each Borrower Party (collectively “Releasor”) agrees as follows (the “Release Provision”):
16.1 Releasor hereby releases and forever discharges Administrative Agent and each Lender and such parties’ predecessors, successors, assigns, officers, managers, directors, shareholders, employees, agents, attorneys, representatives, parent corporations, subsidiaries, and affiliates (hereinafter all of the above collectively referred to as “Lender Group”) jointly and severally from any and all claims, counterclaims, demands, damages, debts, agreements, covenants, suits, contracts, obligations, liabilities, accounts, offsets, rights, actions, and causes of action of any nature whatsoever, including, without limitation, all claims, demands, and causes of action for contribution and indemnity, whether arising at law or in equity, whether presently possessed or possessed in the future, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, whether presently accrued or to accrue hereafter, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted, which Releasor may have or claim to have against any of the Lender Group, in each case to the extent arising or accruing prior to and including the Effective Date; provided, however, that Administrative Agent and each Lender shall not be released hereby from any obligation to pay to Releasor any amounts that Releasor may have on deposit with Administrative Agent or such Lender, in accordance with applicable law and the terms of the documents establishing any such deposit relationship.
16.2 Releasor agrees not to sue any of the Lender Group or in any way assist any other person or entity in suing any of the Lender Group with respect to any claim released herein. The Release Provision may be pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit, or other proceeding which may be instituted, prosecuted, or attempted in breach of the release contained herein.
11
PX01DOCS\733761.6
CONFIDENTIAL
16.3 Releasor is the sole owner of the claims released by the Release Provision, and Releasor has not heretofore conveyed or assigned any interest in any such claims to any other person or entity.
16.4 Releasor understands that the Release Provision was a material consideration in the agreement of Administrative Agent to enter into this Third Forbearance Agreement on behalf of itself and each Lender.
16.5 It is the express intent of Releasor that the release and discharge set forth in the Release Provision be construed as broadly as possible in favor of the Lender Group so as to foreclose forever the assertion by Releasor of any claims released hereby against any of the Lender Group.
16.6 If any term, provision, covenant, or condition of the Release Provision is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remainder of the provisions shall remain in full force and effect.
Has it been five days yet ?
But, in prior posts... it was claimed we were "there" months ago... and KBLB was already generating profits ?
Was that wrong ?
You mean, now... they've still not convinced that first generation of worms to survive and thrive ? The "tons" of silk production forecast earlier... hasn't managed to produce 5 pounds, yet ?
The link I posted earlier to a paper from the AMSilk website... addresses some of the challenges inherent in gene insertion.
I've still not seen an honest discussion of ANY of that here.
Given sericulture is thousands of years old... ?
It's not like this is THAT NEW of a product... or that there is already obvious demand growth that is forcing the market to generate additional supply.
The theoretically greater utility of spider silk versus silkworm silk... isn't proven yet. It's not a question whether there are technical advantages measurable in the spider silk... but, it's an unanswered question why the similarly advantageous, if lesser, but still well known, properties of silkworm silk haven't been exploited, before now, in the same roles that are being touted as "must have" in the same roles when addressing them with spider silk products ?
That leaves the argument being, "Sure silk could do that... but, it's not expensive enough to induce people to try."
And, that leaves you needing to explain why there will be sudden spikes in demand for silk, sufficient to result in prices increasing by 30% or more... to enable reaching "break even" on any "improved" effort providing additional supply ?
I don't see that happening... anytime soon. Most people will continue buying cotton underwear at Walmart... making their choices based on the lowest prices on the packages.
Any technology that can't produce a comparable or significantly better fiber product for LESS MONEY... is probably DOA.
Most people who want silk sheets and silk clothing... already have the ability to buy them ?
In an era when we're witnessing the rapid emergence of technology that enables conversion of naturally occurring internal biological processes into externally controlled industrial processes... what KBLB is working at doing seems roughly the equivalent of working on creating the highest level of technology it is possible to apply in creating buggy whips... just as the market introduction of autos makes them not useful.
Genetically engineering trees to grow the best possible buggy whips directly, might be another project for them to consider ?
"Monstersilk is the new flubber. "
Exactly.
Hmmm.
http://www.amsilk.com/fileadmin/user_upload/SyntheticSpiderSilk_May2012_CEP.pdf
Even if it were true that KBLB had a "first mover advantage" (which I think is not true) you'd still need to show a reason that having that "first mover" advantage would naturally lead to commercially useful end points. I don't think that's what would result, even if it were true that KBLB had an advantage deriving from "leadership" tied to inserting spider genes in silk worms.
It looks to me like KBLB is instead starting out behind... because they're having to focus their effort on integrating spider genes in worms, instead of focusing on the properties of the spider genes, and the materials that they enable, with a focus on "better" materials, including a focus on improving upon those that are "natural". If KBLB's focus were on introducing new genes into spiders... to improve upon the quality of the materials the spiders are naturally coded to produce ? Then, I think that they'd at least be playing in the right game...
AMSilk still appears to me to be far and away the leaders... both because they have a fully extensible APPROACH to enabling repeatable manufacture of fibers with uniform properties... and because they're not intrinsically limited by the utility of the spiders genes, rather than liberated by them, to explore.
Pair that with what appears to be an already "commercial" focus in how they address the markets and go about their business ?
Hey, lookie there... the other guys have a website... where you can buy products ?
http://www.amsilk-shop.com/shop/catalog/browse?
Maybe they could sell the worms as fish bait ?
I bet those super tough fibers would hold the little buggers on the hooks...
"Answer this, besides today's PR when have we EVER heard of ramping up worm numbers? "
LOL!!!
That's just too funny.
BTW, how many licensing deals have they signed, so far ? And, what are the terms in those deals... that will mean anyone gets anything out of this, other than, you know, the CEO pinning down enough of a deal that it gives him a pay check ?
How's things looking on the dilution front, since I last stopped by to check ?
Seems things have clearly "slipped" a bit in the deliverables ?
Of course, not hard to imagine why there's not a licensing deal done already... when they've proven unable to deliver any of the basics required to produce... anything.
I did enjoy your explanation of how variation in the worms diet will result in huge variations in the fibers... I'm just not sure how that's going to NOT be a problem... in technical fiber markets.
Given the pace these worms ranch developments are moving along... I still think its likely that competitors will be producing uniform artificial fibers LONG before KBLB figures out that Fortune 500 companies don't want to be worm ranchers.
And the explanation you see for that "slippage" in the next, latest crop of deliverables... is the creation of a new three step program plan that has magically already has two of the steps completed ? LOL!!
That's a lot like making a "to do" list composed of things you already did today... just so you can make yourself feel good when you cross them off ? Only, in this case, the purpose is to create the illusion of progress occurring while hoping that it will fool others ?
I think you should expect to see the number of steps in that plan continue to expand... probably until it reaches a Twelve Step Program.
I've been an advocate of FECOF "doing something" with the company other than just waiting for FEP to get a green light.
But, I'm not sure I like the sound of "oil pimping."
How would that work, exactly ?
I really don't understand why I see people here complaining about being asked to walk around the store trying to find people who want their pictures taken.
http://www.peopleofwalmart.com/photos/
US oil imports from Middle East increase
http://www.ft.com/cms/s/0/d792c648-7f46-11e2-89ed-00144feabdc0.html
Is that Irp van Winkle I see dusting himself off, over there ?
It's a chart.
The only serious quibbles I'd have with any of that... is that it presents the potential for doing a JV on Lookout Mountain (or, South Eureka) as a potential "risk" factor for investors, rather than seeing that potential as it is typically considered... as an well earned "reward" for explorers. Deals are valuation events, so the utility will depend on what deal is done.... if there is one. Success on the Butte Highlands... if that means self funding and not having to do a deal ? It looks like that is the assumption that is made, later ? It may not be spelled out... but, the upside in suggested result looks about right.
Lesser quibbles:
I think the opinion shares with the market the incorrect expectation that regulation can only become more burdensome over time, and not less. The point of doing the DD is to determine "what is" as opposed to what others assume. Still, its not much of a quibble... because as long as the market does make that error it is likely there will be an "error" discount applied.
Same issue with the assumptions that an NI43-101 is ever a proper substitute for solid management judgment in conducting mining operations in proven locations. That's particularly true on a smaller scale, where it makes relatively little sense to spend the money available on compliance with foreign standards, rather than on development: at least until mining will be able to pay the costs of what is really more about corporate development justifying market value, rather than about sound management of actual "mining". I'd note, also, that when they have begun producing from Butte Highlands... there are different sets of rules that will apply to them in reporting than will apply now, before they're producing ? In Montana, it will be this http://www.securitieslawyer101.com/guide-7-mining-company-disclosures/ that actually matters...
The discussion of upside in possibly trading at five times future cash flow from Lookout Mountain is a bit puzzling... given the prior discussion shows its currently trading for around one times future cash flow from the Butte Highlands project... which might be generating revenue by August of this year on the basis of investments already made, versus some years into the future, based on investments that have yet to occur...
Otherwise, it's about right in tone, IMO. Mining exploration is risky. I'd still rather buy the right risks now.
Odds are, the ponderous correction in gold and silver will likely come to an end "soon"... within a time frame that's particularly relevant for TLR, and which will have their steady progress begin to matter.
Otherwise, the focus on this property, or that... leaving out others... seems a bit odd. Don't know what to make of that, though...
I do have one other quibble... even with the company, not just the article... which is more about my perspective as an investor in thinking about operations... while considering that your "flagship" should probably be the first one of the fleet you have under construction... that is likely to actually float ? LOL!!
Thanks for finding it and bringing it to our attention.
I think it probably did a better job than I did of addressing the timeline issues on cash flow given the return of capital at Butte Highlands before reaching the 50% payout.
Lessons in Rubble of a Collapsed Deal: If you don’t know who the chump is, then you’re probably it.
http://dealbook.nytimes.com/2013/01/29/lessons-for-entrepreneurs-in-rubble-of-a-collapsed-deal/
Then, removed from insider awareness of the action in deals by a degree of separation or more, you're still left with 99%+ of success in investing... being about avoiding being the chump.
If you can avoid repeatedly signing up for taking the big losses where big returns are being touted (and hoped for) by the terminally optimistic promoters who ALWAYS refuse to acknowledge "the obvious" when that conflicts with what they'd like to be true, then your odds of winning on average are greatly improved.
Investors refer to it as "being the bagholder"... and "avoiding being the bag holder"... which is the reason to bother with "doing the due diligence"... which, note, is the EXACTLY the subject of the linked article ? Hopefully, years of experience will result, not just in an ever expanding level of cynicism about the human condition, but in a better than average awareness of issues, and better than average exercise of judgment...
You still can't "fix" others problems for them... even when you see how easy it would be, and see why its not easy for them...
As an investor, unless you're buying the whole company and will seek to exercise meaningful control over it, that's also not your job. It's the investors job, instead, to put some bit of their money to work where there is a good management who will be able to use it to good effect...
And finding that unfortunately rare situation is a hard enough job in itself...
More often than not what you see, instead, is investors giving up on that task, and hoping more to luck, and skill only in terms of timing, while tying to get their money in and back out, with a profit, before the inevitable result of the opposite case occurs.
I'm not here because I have a need to address the employees' issues rather than investors concerns. But, there is clearly common interest in the origin of problems, and there isn't any conflict between employees interests and those of investors "observing" the events here...
A well managed company... won't be one that is having the sort of "issues" with employees that you see here. Hope, which might have been reasonable more than a year ago, that changes in the management and cooperation from the banks would enable "fixing it"... ?
"Fixing it"... requires a level of honesty in addressing "what's broken"... that you're not going to get from a management whose problems clearly begin with a significant lack of integrity.
I think we're long since and WAY past the point where there is a "fix" that will save investors...
I don't see a level of integrity being demonstrated... that even suggests investors are considered as a part of the equation in anyone's calculus at this point.
If I'm wrong ?
We'll I'm not here observing how things DO unfold, as opposed to how I see them aligning, because I claim to be and have been proven clairvoyant ? I don't need to hang out for the ego gratification with an "I told you so" as things fall apart.
I'd love to be proven wrong...
But, I don't expect to be, given I've done the DD, have good reason to trust my own analysis and judgement, and I'm sure not going to bet my $ guessing that I am wrong... until that's proven.
I've been very clear that the issue here is NOT that there isn't any value in the business, or no potential left. I've made it abundantly clear that I think this is about the easiest business in the world to manage... and should be the easiest to "fix"... and have made it pretty clear, also, what the most obvious problems are... while pointing out those with the responsibility to make the company work... are working to ensure it does not.
There is ZERO doubt CPIC has been and is being grossly mismanaged... however, it's also pretty obvious by now that the management that broke it, aren't trying to fix it.
And, the banks aren't forcing them to fix it, either... ?
Go figure.
That can mean only one thing: Shareholders are getting screwed.
For shareholders, it NEVER matters if "there is value"... it only matters if the value that exists is attached to a share and is realizable, and will remain attached to a share and be realized. Otherwise, all that having value accomplishes is to generate greater motivation for the cadres of thieves to steal it, while the banks and management rank pretty high among the suspects.
http://dealbook.nytimes.com/2013/02/05/reasons-to-be-suspicious-of-management-led-buyouts/
" We should ignore all this..... why? "
Because it's total BS...
The reason we're here is a corrupt, failed management...
The only questions left... are who benefits from fixing it.
The only clear answer seems it is... not shareholders.
"Clearlake's professionals have a history of long-term strategic partnership with management... through such structures as buyouts, corporate divestitures, recapitalizations and reorganizations. Our differentiated strategy relies on partnering with management teams to apply this unique, tailored approach to investing in our focus sectors."
http://www.clearlakecapital.com/overview.html
I've discussed CPIC looking like "a takedown" before...
Maybe putting it in the form of a question will make it clearer ?
Why would the bank say "no" to a deal being done with a management who are trying to destroy their own company in order to try to take it private while reneging on the debt ?
Of course, if there were a management led buyout offer being made... you'd think they'd have a need to report that as a material event ?
I'm noting also that yours contains a number of things we've seen addressed here as rumors... still without having seen any actual information from the company... and that some of the implications of what the rumors are appear to conflict with the prior aspects we've noted, that reveal management cooperating with the banks, rather than opposing them...
If there were an adversarial rather than cooperative approach to addressing the issues with the banks, it should have been an issue being addressed in BK and not in a negotiation outside the court ?
So, how far does the apparent cooperation extend... and what are its natural limits ? It appears the banks and the management agree, at least, on holding CPIC underwater long enough to drown the shareholders they're treating as an infestation of fleas ?
The questions that leaves... are ones about the remaining or potential integrity of whatever's left... after they shed what seems it is the disposable interest of the shareholders.
And, it appears there's an effort being made to misrepresent that.
So, I'd guess that suggests that IF there is a serious deal being discussed... the issue is the negotiation that is occurring over who gets what in the new business. The bank has defined some of that already in filings that proscribe limits that the debt enables them to impose.
The banks are NOT going to give away their $97 million and let management walk away with control of a company that has easily soluble problems... and if the debt gives them defacto control, it has resulted in more than that with management cooperation.
It creates a problem if the negotiation that results, between the bank and the investor's "newco"... pretends there's not an existing requirement to address issues in a way that conforms with the existing public company's fiduciary and reporting responsibilities.
It looks like they're acting as if they've already wrapped up the bankruptcy... and don't have concerns with things like reporting.
So, is CPIC being under-performed on purpose ?
It certainly looks like that's what's happening... even to the degree that there was recently a "test" imposed to try to create an accounting metric of the value being intentionally left on the table... to enable pricing of a deal based on that metric... without enabling that valuation effort to benefit shareholders, or enable any PROPER management effort addressing the fact of their unmet responsibilities to current shareholders.
But, who is responsible for that... with the company voluntarily cooperating with the banks' management dictates ?
I think the management should have been handed their walking papers more than a year ago...
The implied adversarial relationship appears to be another ruse.
The fight that is (?) developing now over ownership of the bones... seems it pits the bank against the management...
The situation AS REPORTED in filings clearly shows that it was the bank and their "restructuring consultants" that have imposed the draconian controls they did... in an effort to purposefully under-perform the business... intending to benefit themselves in their own "take down" ?
Beyond that, we're left speculating because of the lack of information.
What is the nature of the relationship, if any, and the agreements, if any, between the BoA and the Clearlake guys ?
Which "management" is it that Clearlake is involved in a "strategic partnership" with... the shadow management of the banks, or the actual management of the publicly traded entity ?
Of course, it's really not that unusual to see the wolves who've been noted cooperating in a "take down" end up fighting over various scraps of a carcass...
I'd not take that sort of a conflict emerging as a suggestion the lamb carcass it appears they're fighting over is going to hop up and amble off... unscathed...
May be that the band from the Titanic is also the best explanation for the endless trend in the drift ? They're still keeping at doing what they are, now... only because they really don't know what else to do, or how to stop what they're doing, and provide a reasonable explanation for why they did what they did... or why they can't make it stop in a way that makes optimal sense ?
They hired "turn around" consultants ? Why haven't we seen any evidence of a product with a plan for how to turn things around ?
I can look at "the business" and see it should be an easy fix. That's what I saw that attracted my eye here originally.
It's clearly circling the drain now, though, and not being fixed ?
But, I can also look at the business, paired as it is with the $97 million dollar and growing hole formed around it... and think, "why bother" ?
I can't imagine any buyer would ever accept the problems apparent in the business, and assume that scale of a debt, too ?
So, the bad news being avoided is in the fact that someone will have to face up to the recognition of the loss... eventually. They've been kicking the can down the road until now, not opening any cans of worms... probably meaning... they'll put it down when the statute of limitations expires on... whatever it is that's being avoided by stringing this out.
IF they do a deal with a buyer... then perhaps we can tell what the utility to them in the growth in the debt was... ? Until you see the transfer in benefits occur, and see what is transferred and what price was paid, you can't tell to whose benefit it was, that the problem was being created ?
The growth of the debt... might be a purposeful creation of an obstruction...
And, then, it's also worth keeping in mind that CPIC doesn't exist in a vacuum...
It's not like the "competition" are knocking CPIC out of the game... and the competitors all seem to have the same or similar issues, even if in a lesser degree, or only if its less well recognized. I see many very similar employee lawsuits filed against the others, for instance.
There's a lot made apparent in the CPIC experience that is excellent "awareness" stuff... for any one who cares about how businesses are managed. CPIC isn't looking all that unique, to me... and is perhaps only unique in the extreme by being "just" over the line from others in the same space who are hanging on inspite of similar buffoonery in their management... while CPIC's real issue is that the extreme imposed means "too much"... with that being made unsustainable...
The issues with (the lack of) integrity and respect... clearly aren't unique to CPIC... even if CPIC proves a limit exists, beyond which the lack is made not survivable.
The larger culture is "integrity challenged", of course, and Otis wasn't singing about respect back in the days of greater contrast in black and white, because it was ubiquitous. But, all that means is the bar CPIC can't clear... is set pretty low...
Similar "context" issues exist in terms of loyalty... which any retail focused sales management have to be aware of...
A search for "the death of loyalty" gave me:
http://www.retailwire.com/discussion/15032/braintrust-query-the-death-of-loyalty-rewards-as-we-know-them
http://spiritsjournal.klwines.com/klwinescom-spirits-blog/2011/1/18/the-death-of-brand-loyalty.html
http://www.huffingtonpost.com/paul-brady/the-death-of-travel-indus_b_2543298.html
http://www.partialobserver.com/article.cfm?id=110
http://n4g.com/news/409071/sony-the-death-of-consumer-loyalty
In context for CPIC... ?
Management has to deal with the reality the market presents and figure out how to make money from providing the value they can create to willing customers in a way that they value enough to want pay for it... preferably without just giving everything away because customers like getting things for free.
It helps a lot to not shoot yourself in the foot before trying.
Given a culture dominated by post Sandy Hook hysteria...
At CPIC it is the board and the management who are the ones left standing there holding the smoking gun... while the banks, who have provided them with a service in feeding the belt... are still too reluctant to pull the trigger themselves... and it is the investors (or, those who are not hedged against the failure and profiting greatly from it) who are losing everything.
I'm also certain a number of the decisions I'd be likely to make (that I think would probably enable saving the business) would be enormously unpopular. But, given a choice between being popular and digging a hole $97 million deep in debt, or not being popular, I'd go with not being popular.
FWIW, I like the (original) Otis Redding version best.
It took Aretha to make the song over and make it popular.
That's still mostly just a matter of taste, and degree, still, while the CPIC version would be more like a needle dragging across the grooves in the vinyl.
Along with the similarly obvious issues in the lack of integrity, the lack of respect is pretty obviously THE issue at CPIC... or, they're at least obvious as similar issues, both related to the same "problem" in their origins.
I don't think there is any fix possible here, that doesn't depend on killing the culture that spawned the pathology...
And, there's the rub... given the origin in the culture and the myopia in its defense mechanisms.
What you see happening here instead of a "fix", over the last year... is an in depth defense of the pathology and its sources.
You see the problem (the lack of respect) being built into the discussions here. Parallel to the brow beating you see reflected in the employees comments about how the business is managed... you see threats being posted here ?
Unbelievable...
But, you also see it in the way that customers are being addressed, here. I think the business has made some monumentally stupid decisions, but, those problems aren't ones that were CREATED by the customers you see seeking to exploit them. (Even easy to make the case those exploiting the company's give aways and freebie offers are the only ones here who do appear to be acting rationally in self interest.) But, those are all still quite "manageable" issues, addressing concerns that any "sales" based business deals with. The unique factor here is the obvious lack of respect for others apparent in the management... and it doesn't appear to find any limits in the expression that is most apparent here, now... in relation to the management's interactions with the employees.
CPIC has been sweeping dirt under the rug... for a long time.
Some think it will help "fix" things to convince others to just ignore the built up pile of dirt... just pretend it's not there (until they succeed in delivering on the inevitable failure).
But, a layer of dirt that's $97 million dollars thick... can't be hidden that way. It's not going to be ignored. That's obvious.
And, ignoring it won't work... or help solve anything ?
So, why is there such an amazing unwillingness to change anything, or even TRY to "fix" what's broken ? What we see instead is an imposed rigidity that tolerates dismantling it and selling off the pieces that have value... without allowing change in the business.
Why take a failing business, keep it out of Chapter 11, while supporting the effort to dig a $60 million dollar hole deeper by $37 million... without even TRYING to fix the holes in the bottom of the bucket ? Why would BoA think mindlessly pouring more sand in the bucket would "fix" anything... when they could see no effort being made to even IDENTIFY the holes, much less put stoppers in them ?
I think the Occam's Razor test isn't best met by assuming that, yes, most people really ARE that stupid. You do have to accept that the band will continue playing, given that's all they know how to do. You don't have to accept that company management of the shipping line, and the financiers who funded the construction of the boat... couldn't devise a repair plan, given a couple of years to act...
So, instead, I think Occam's Razor is best met by assuming that "someone" with the ability to "fix it"... probably benefits more by enabling the "failure"... and even by expanding the costs of the failure... than they will from "fixing" it...
We are living in an era when GS has been revealed building "financial instruments" they sold to others "in good faith"... in order to bet against them ?
How is CPIC's failure... being made more profitable than success?
It's really not that hard:
"the company is purposfully making terrible decisions and trying to make this company fail"
There's actually a fair amount of evidence accumulated that suggests that is likely...
"No one could be that stupid" is perhaps not the most compelling argument... but, I agree that it appears it is at least a reasonably VALID argument in the case of CPIC.
"Let's quit advertising and give away the products until the economy improves"... ?
Their headquarters aren't in Colorado ?
Hmmm.
I wonder if everyone who is getting a paycheck... actually works at a job, doing something for the company ?
That might explain a lot.
I don't pretend to be an employee... of company's I don't work for.
I also don't threaten people who disagree with me.
But, the last thing I will ever want to see in ANY of the companies I invest in... is a core group of employees who are wholly self interested and otherwise are spineless as jellyfish.
Yes men ARE THE PROBLEM... that enables clearly bad management in doing obviously stupid things and destroying the business without ever even mentioning HOW STUPID THEY ARE... ?
This company is about the worst I've ever seen... in terms of "communications"... which they intend to be "one way"...
Incentives... also have to be considered... but, unless otherwise being paid for the opposite, most people will "root for the home team"... and at least not try to obstruct the process that is required and necessary to have any hope of any improvement.
I think, based on the posts I've seen here... I could probably select five people from among this group of posters... replace the current board with them... and have this company's problems fixed in about a month...
I also see zero evidence management have that sort of ability to find a clue... even if it is rammed up their "noses"...
I see employees who do know how to make the business work... and a core of management who clearly don't... who also, not surprisingly, just happen to be the primary source of the existing problems... ?
That leads me to at least suspect... that the board's ongoing PURPOSE is ensuring the business fails... while trying to manage the failure in a way that might present the least risk (to themselves and those who interest they are concerned about) and, even given that as the goal, they're still not doing an excellent job ?
I've noted it also... and its not the first instance, where you can see that having the open communication channel here has done far more to ENABLE the business in succeeding... than management have done by trying to prevent any and all communication.
That's a fascinating and telling observation, in itself...
The behavior you see from management... looks more and more like "the job" that their new bosses at the banks have put them up to... is mostly about trying to keep the skeletons in their closets.
That would best explain, perhaps, why they've been doing all they have in avoiding a filing ?
When I see people threatening others... that tends to make me think more about the probable influence of organized crime infiltrating management.
Who knows... maybe they'll find a way to "claw back" some of the money that's been taken out of this company over the years ?
FWIW, I'd take any posts directed as responses to you, saying things like "Hope you will get an insurance. You need one." as threats and I would report them to my local law enforcement, and the FBI. It's illegal to use the internet to threaten people.
Given the prior success, maybe they've now decided to pay the employees once per day as a cost cutting measure ?
That VIEW that employees should be kept in the dark like clueless mushrooms rather than being informed participants who are considered as CORE ASSETS of (and investors in) the business... seems remarkably consistent with the VIEW of the company management...
Why do you think its the VIEW that's destructive... rather than the reality that forces the optics to see what they do, when there is an honest look made ?
LOL!!