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but they dont because they can get better prices upon a buyout.
No they don't because they would then get no more 8c convertible (compound) interest in the future, this is a golden chicken laying golden eggs every quarter. This original loan and its interest has been able to be fully converted ever since 2009 but DMRJ only bother to convert enough to cover the loans they give to IMSC every quarter and also to provide liquidity on volume spikes, the scenarios you are dreaming up have no basis in reality, read the actual debt documentation of which I provided a link to the original.
The share price at the time of the original DMRJ loan on Dec 16th 2008 was 27c and the convertible rate was 26c. It was only years later in 2011 when the stock price was much higher at 58c that they were repriced to 8c for which there can be no justification for two years after the stock dipped to 6c.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=109798172
If so, how can DMRJ NOW ('at any time') convert the full $5 million if they don't actually have the money yet?
DMRJ would be exchanging some/all of this debt for the right to buy an IMSC share at 8c which they have already done with a minority of the accrued 8c convertible interest on the principal.
Under the agreements they cannot hold more then 5% of the company at any one time and they can only do so many conversions in a time period so there are physical limitations on volume/time that prevent them holding/dumping 60m shares on the market in one go. Once the re-fi cash then pays off their debt their conversion rights are history.
It's not the talking about refinancing that is the problem for DMRJ but an actual refinancing which the talking about would be their early pre-warning for. We are talking about them bullying the management here to keep the status quo which I agree with buffalo is probably one of the reasons GB went. If IMSC can borrow about $70-80m and pay off DMRJ/BAM in one go then all these 8c converts immediately disappear. The new debt does not need to be convertible initially so to avoid change of control/buyout legal conditions being activated but once DMRJ are gone then perhaps they could be made convertible eventually. As to the recent fall of pps it could be DMRJ selling hard before they are paid off or just just fed-up retail shareholders with a lot of shares getting out, too early to tell.
Is There Any Truth to This Crazy Apple A10 Rumor?
Six cores? Not a chance. Six simultaneous threads? Maybe on the A10X.
http://www.fool.com/investing/general/2015/10/02/is-there-any-truth-to-this-apple-inc-a10-rumor.aspx?source=eogyholnk0000001
Why would DMRJ have a negative view on talking about a refinancing?
Because their $4-5m of 8c convertible debt & interest only gets re-paid at $4-5m rather than at a pps/8c multiple when sold on the open market. At the current 56c every dollar of this debt pays back one dollar of principal and six dollars of profit which is coming out of retail shareholder hide. It's obvious why they don't want this gravy train to ever end. These 8c convertibles were originally created at 26c when the pps was 27c, if they had remained so it would have retained some semblance of fairness.
It's a really tough decision either way. I can understand the dilemma Longs face after finally having got to the promised land of ETD dominance yet the pps is in the toilet. I kind of feared the worst when there was no volume after earnings because if there is no natural volume DMRJ will artificially create volume to get their weekly/monthly money fix.
The only good thing is that TSA orders are still to be booked and they will start turning up Mid-November when the next quarter is reported. If I was a Long after all this time like you guys I would at least wait until then to see how the stock responds on revenue that is much closer to break-even.
After then it is up to you guys to decide how long you can wait for something to turn up like a refinance which is not looking likely but you never know. However if DMRJ now has a controlling interest in reality then that may just never happen. The management again have kicked their retail shareholders by suggesting debt repayment is not important compared to some abstract R&D. This complete indifference to pps reduction is staggering as started by Bolduc and continued by his successors.
If you were feeling optimistic then you could imagine IMSC getting all of the $162m IDIQ eventually giving time i.e. years for dilution to be absorbed but without volume from essentially new buyers the price is just going lower because the existing Longs are tapped out and the voracious DMRJ Dragon is still hungry and feeding. To be honest when I have looked at the debt structure I never could see a price which stood out as a bottom. Maybe temporary bottoms but there is so much latent dilution stored up you would need million+ day trading days for many months to get rid of it all.
Nothing's going to happen until either losses stop or debt is restructured. The interest alone was greater than the gross margin last quarter which is horrendous and should be management's major priority now and not an afterthought for sometime in the future. Now there is a decent backlog is the time to restructure debt because it may not always be that way ...
For the three months ended June 30, 2015, other expense was $2,446,000 as compared with other expense of $1,899,000, for the comparable prior year period, an increase of $547,000. The increase is due to increased interest expense on higher borrowings under our credit facility with DMRJ and our credit facility with BAM, and, to a lesser extent, an increase in the BAM interest rate to 16% per annum from 15% per annum, effective April 1, 2015.
Gross margin for the three months ended June 30, 2015 was $2,361,000 or 41.6% of revenues as compared with a loss of $135,000 or 8.8% of revenues for the comparable prior year period. The increase in gross margin as a percent of revenues is primarily due to increased manufacturing overhead absorption due to increased QS-B220 unit volume and the $160,000 increase in the provision for obsolete inventory in the prior period, partially offset by decreases in the average unit sell price on sales of our QS-B220 units and our QS-H150 units.
I don't think you can draw any inferences either way about Keller's departure. After all Andy Glew's ideas were the inspiration behind Bulldozer and look how that turned out. AMD are making the right noises about Zen as supposedly it's going to be a fat cpu with SMT which is a conventional proven approach now for high performance cpus. It does not have to beat Intel's top sku, just fit in somewhere in Intel's performance/price sku hierarchy so AMD can still be relevant and make a profitable living.
Micron and Intel ready second-gen 3D XPoint, working on all-new memory tech
http://www.kitguru.net/components/memory/anton-shilov/micron-readies-second-gen-3d-xpoint-memory-working-on-all-new-memory-tech/
I may be back but I will want to see a working profitable business model first. The core space business by itself was always profitable every year and could always be relied upon to cover 1stDetect losses in busy quarters to make the stock ASTC recover periodically but there are no such guarantees now.
I have never shorted a stock in my life and never will, morally it does not sit well with me to sell other people's shares that I never bought in the first place for the purpose of damaging their investment. Shorting is a false dilution, dampens rallies/volume and delays true price discovery scaring off new investors whose DD may be right but not self-believed enough for them to wait it out.
Back to ASTC I am out of it for the moment but if they win the NGCD MSID contract or have other sales that are consistently profitable I will probably get back in. Spacehab was profitable when their module flew, Astrotech was profitable when their facilities were busy but 1stDetect IP has yet to prove itself profitable even if it is technically interesting. They have 4 years to prove themselves before dilution starts.
Analyzing DMRJ behavior over the last few years there have been some patterns that I have observed. Primarily they are selling shares to fund their loans to IMSC which works out to about 50K-100K shares a day. If volume is particular high in any month/quarter above their needs they will let the share price appreciate and just satisfy big bid blocks in effect providing liquidity on the buy side. Finally ever since management have given themselves 1.40 options DMRJ have capped any rises to around this level.
So what does this mean for the future ? Well when IMSC's loan needs go down because of greater sales DMRJ should be more sparing in their selling looking to satisfy big bid blocks rather than selling thru them. When good quarters are announced that should increase the volume enough to again make DMRJ more selective in their selling. On either scenario the stock has a good chance of appreciating closer to 1.40 and that's still a double from here which is not to be sneezed at. If no re-finance is done DMRJ will always be around but at least you can play their game with them for profit.
NYMX, CDTI, GBSN, MNGA just to name a few off the top of my head that have done it recently but there are literally hundreds/thousands more.
How about every drug start-up company. It would be much harder to find unprofitable companies that don't do this .
A sizable number of unprofitable companies only exist by selling shares at a discount to lenders who then sell on at a profit to the public.
Convertible debt notes that exchange into shares at a certain price are all the rage in Wall Street land and this company used to have some in its Spacehab days.
4 years of debt-free life (working capital is over $40m) and then it can start selling shares for debt if profit has not arrived by then.
Here's the deal with ASTC share appreciation from under a dollar. It was a combination of the return of profitable quarters combined with both the CEO *and* Institutional investors buying reducing the retail float so that it could bounce back under the right stimulus. The CEO buying in itself around 90c did not move the stock, it dropped back initially, but it importantly removed the biggest selling institution, SMH, who had quashed previous rallies. It may also have been a buy trigger for other Institutions to move in. The stock printed $4 both before and after the Space business sale because at around $3-4 the Space business was being properly valued as was proved by the $60m sale value eventually.
The lesson for IMSC here is not necessarily insider buys but reducing the retail float so the stock can go up and *keep* its gains when good news hits. The company is doing the opposite of that by persisting with DMRJ and its 8c options.
p.s. I am no longer a shareholder of ASTC at the moment as I was primarily in it for the space business which had great margins when the facilities were being utilized at anything over 50% capacity. I may return if I see a profitable business model return with the 1stDetect business but that will probably need a clear NGCD MSID contract win in 2017 from the Army to happen which is not assured at the moment as Chemring is still in the mix there.
Foundry margins are usually in the 40-45% range. Of course in the 14nm follow-on variant Intel won't have to pay this as it will be the foundry and three years of laptop/desktop/server products would have already paid for the 14nm process . The Surface Phone will also be interesting if it is going be a full-on Windows 10 device, unique game-changer in fact for the Wintel ecosystem if all that legacy software capability finally appears in a phone format.
http://www.phonearena.com/news/Rumor-Microsoft-Surface-phone-scheduled-for-early-2016-release-check-out-the-specs_id72773
The Microsoft Surface phone is rumored to feature a Gorilla Glass 4 protected 5.5-inch Clearback AMOLED display, with a 1440 x 2560 resolution. An Intel Atom X3 SoC powers the phone, carrying a quad-core CPU. 4GB of RAM is inside along with 64GB/128GB of internal storage. On back is a 21MP camera. An 8MP snapper adorns the front of the phone, carrying a Zeiss wide angle lens. The handset will have a unibody build made from Aluminum-magnesium, and will offer wireless charging capabilities. According to the rumor, the Surface phone will feature a Pen similar to the S Pen used on the Samsung Galaxy Note series.
The 14nm performance process is relatively mature now, i.e. first appeared on Broadwell Core-M.
Yes, probably invited to leave before being pushed. All the stuff she promoted showed poor ROI.
I think Renee James can have good grounds for calling BK a hypocrite on this one . Enforced diversity for those in lower pay grades but not in his when they don't come up to scratch !
This is not a political/social chatroom, please stay on topic and your post as well as being off-topic also contained (unjustified) ad-hom personal attacks.
Instead of writing off-topic rants just like the guy you are replying to why don't you discuss the actual topic of choosing employees based on race/sex grounds as opposed to other methods which is what the guys you are complaining about have stuck to with their personal experiences. Just because a poster used a historical term is no excuse for these rants as the fact that it is not PC to do so these days is not a (posting) crime, just a modern social norm which older people just may not care for as I can remember a time when it was more insulting to use the term 'black'.
p.s. a history lesson for you to show how these things change from time to time.
https://en.wikipedia.org/wiki/Negro
United States
Negro superseded colored as the most polite word for African Americans at a time when black was considered more offensive. This word was accepted as normal, including by people classified as Negroes, until the later Civil Rights movement in the late 1960s. One well-known example is the identification by Martin Luther King, Jr. of his own race as "Negro" in his famous speech of 1963, I Have a Dream.
The word Negro fell out of favor by the early 1970s in the United States after the Civil Rights movement. However, many older African Americans initially found the term black more offensive than Negro.
It's a good suggestion although I would not bother with Bolduc as he was the King of Indifference on this matter. As I am not a shareholder of this company (for debt, excessive expenses, running costs, otc reasons) it is best if you guys do it but I am more than happy to make comments if you wish. The point is the company already knows the general discontentment on this matter as someone always brings it up in the CCs so apart from some shareholder catharsis I don't know what good it will do.
Something practical you guys can do is look at other borrowing public stocks, note their lenders and compile a list to send to the management because after all they seem to have trouble finding one themselves ! There are literally thousands of lenders out there who have lent money to publicly listed stocks and I suspect a good 10% of them would lend money at a better rate than DMRJ to this company which obviously has now conclusively proved its IP in the ETD market and has a substantial backlog of orders with the TSA and Europeans. Basically shame your management for their lazy indifference on this matter.
Another good reason to refinance debt so that the stock can uplist asap.
However it is in the BOD's interest for the pps to rise past 1.40 as otherwise their options are worthless. Perhaps they are thinking once full quarters are announced that have a semblance of profitability that high trading volume will do this. I am not so sure as DMRJ have shown in the past that they will cap any rise under 1.40 so that only their options are in the money. Eventually the management will realize that there is no way for their options to become profitable with DMRJ still in the picture and do the necessary refinance but I don't expect this to happen until next year as hope springs eternal with these guys.
However even with a refinance there will still be new discount options from the new creditor but there should be less of them if the price is well over 1. I also don't know why they don't just do a giant secondary inviting current shareholders to also take part. The management here have to get less cozy with DMRJ and just treat them as an external creditor who can be replaced with others if the deal is right but they have got used to the current arrangement where DMRJ provide them with endless credit and DMRJ then get that money back from retail shareholders. After all DMRJ did this company no favors when they forced them to reprice their still well in the money 26c options into 8c ones.
I get how McGann would be too busy running the company to investigate potential re-fi's but what is Liscouski and the CFO's excuse ? This is primarily the most important work they have to do in the future not just cheerlead and read prepared accounting statements at CCs because seriously 8c options have no business still being around when the pps is ten times higher. There must be hundreds of lenders who would queue up to undercut that ridiculous DMRJ 10x profit especially as now the company has a business future.
DM is making out here, but they have put up $40M of credit for 6-7 years, right? I know that seems like a small amount, but it is a lot of money.
Indeed but they already have got that money back by the 8c dilution they have already carried out and the principal and most of the interest has not been touched so they are sitting pretty. The repricing of those 26c options into 8c options was fundamentally unfair and unjustified and will be an overhang for this stock for years to come. You really should not be at 80c which is half the peaks when you was close to cargo certification.
They have helped us, but now is the time to get rid of them. We have enough of a track record to most likely get a better deal.
Yes, the management need to step up, stop being tone-deaf and sort out this most egregious issue.
What was the shareprice when they got the .08 shares?
The original DMRJ loan was on Dec 16th 2008 and the initial conversion rate was 26c when the stock price was 27c which was a very fair conversion price. However on April 11th 2011 these 26c options were repriced to 8c even though the stock price had risen to 58c then. That is the moment DMRJ turned from a good creditor into a loan shark and basically acquired 40m+ more options from that original loan. Management's acquiescence in 2011 until this date on that 8c option matter will always be the reason that this will be a poor stock to invest in even if the company business gets much better as DMRJ will just keep unloading these endless 8c options on any good news.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=109798172
Morpho's fall from grace is ironic as it is basically using the descendents of McGann's original IP. That TSA complaint was also a very bad move on Morpho's part as it basically highlighted the current detailed problems with their hardware more than anything else, an own goal if ever I saw one.
3D Xpoint: They need to get capacity up well over 16 GB if they want to replace Flash drives otherwise it looks like a niche performance storage for use in between memory and drives, maybe to hold the o/s in PCs. That o/s example though could be quite a market for high-performance PCs/Servers. It would also make the o/s more resilient vs normal drive failures ... it could just catch on
Probably benefited tangentially as a PC stock from today's memory announcement.