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The Munro and Durfee loans are shown on page 41 of the 10Q (see below for exerp) Durfee is Pascack Rd
Promissory note issued to CamaPlan FBO Mark Munro IRA, 3% interest, maturing on January 1, 2018, unsecured, net of debt discount of $28 and $38, respectively $ 668 $ 658
Promissory note issued to 1112 Third Avenue Corp, 3% interest, maturing on January 1, 2018, unsecured, net of debt discount of $28 and $36, respectively 347 339
Promissory note issued to Mark Munro, 3% interest, maturing on January 1, 2018, unsecured, net of debt discount of $47 and $62, respectively 590 575
Promissory note issued to Pascack Road, LLC, 3% interest, maturing on January 1, 2018, unsecured, net of debt discount of $116 and $152, respectively 2,434 2,398
munimi - I agree with your statement: "Their only way out is, refinancing that massive debt in a non-convertible matter with better terms, then talk about rocketship."
Keep in mind they have options with regard to the October convertible debt...
For instance, maturity dates can be extended, the debt can be exchanged for preferred shares when the time is right, they could sell part of ADEX or other assets in addition to obtaining asset based financing.
I'm not saying any of these will happen, but their is a strong possibility some of this will occur before the next RS IMO
LOL - I just posted the same thing!
It appears dilution has ended. The OS has held steady over the past 3 days. There are 235,527,374 OS as of today per TA. Good move my management to lock OS before the ER.
You are correct, approx. $14M is due in October. They have a few options: extend the loan maturity dates as they have done in the past, re-finance with asset based lending if they can find another lender or simply let the loans go in default. In any case, it is a concern that will need to be addressed.
They wont max out the AS this time and here is why. They just announced that they converted $4.3 million debt to pfd shares. Its not crazy to assume that it was done at the market price of .02 which means that 215 million shares would need to be reserved. That means that the OS maxes out at 285 million. So only 55 million (or less) shares are technically left in the float. That is going to slow the converters or accelerate them. If they accelerate then they are going to have to wait for another reverse split. The note holders best chance is to stop converting now and let the stock recover. The move by management sent notice to the converters work with us or stand in line until MAYBE next year when we have enough shares to issue you after we do another reverse. Keep in mind they can simply repay the senior note in cash. its not that much now.
I considered that they mentioned no dilution in the PR; however, you must also consider the facts and stop giving them the benefit of the doubt. Facts are that they have and continue to destroy shareholder value on an endless quest to use shareholder equity to pay off their enormous debt. And yes, there is no "immediate" dilution from the preferred shares, but it will happen when they use the "special voting rights" to increase the AS or god forbid enact another RS. The only hope here is that there may be a near term pop in the PPS heading up to the ER.
Unfortunately, they would not need a proxy vote to sell shares moving forward. Some preferred shares have special voting rights to approve extraordinary events (such as the issuance of new shares or approval of the acquisition of a company). They will keep diluting to pay off debt since they have no other options.
Reference:
https://en.wikipedia.org/wiki/Preferred_stock
Munimi is partially correct. The exchanging of Munro's and Durfee's loans for preferred shares is bad, but not because they anticipate bankruptcy. If that was true, they'd be better off holding the bonds.
The REAL reason they exchanged the notes for preferred shares is to get the "special voting rights" mentioned in the PR. This will allow them to approve another RS and / or increase the AS. Both of these events would be bad for current shareholders.
Remember when some of the posters on this forum (e.g., Shorsky) argued that RS has no effect on shareholder's equity? LOL!!!
Something seems odd with the timing of the Munro loan conversion to preferred shares. Either he expects a big run up shortly, or he is expecting bankruptcy and wants to preserve his $ since preferred shareholders get paid first. I lean towards he is expecting a big PPS increase since bankruptcy seems far fetched. GLTA
Could also signal Munro and Dunfy know near term dilution is done and a positive ER will be released. There are 2 sides to every coin. The picture will be much clearer soon enough. You might kick yourself for not buying at .02-ish or be grateful for not touching this POS with a 10 foot pole. Personally, I lean towards the later, but may jump in at .01.
Ok, Mark surprised me with this one...
Mark Munro, CEO of InterCloud Systems, stated, “This conversion of personal debt into equity is a further demonstration of my commitment, as well as the Board’s commitment, to InterCloud’s restructuring plan. Board Member Mark Durfee and I have loaned the Company approximately $4.3 million in cash during the past few years. We have decided to exchange this debt for preferred equity with special voting rights as part of our plan to fix our balance sheet and increase shareholder equity. Absent a fundamental transaction, this preferred equity will not dilute our shareholders but will have an immediate positive impact on our balance sheet.”
This could be true CM, but that one entity could still have plans to convert all of the remaining shares to pay the some or all of the debt owed to them. If that is the case it will go lower still.
Yes, I notice the same individual posts on both GALT and ICLD and also writes blogs on Seeking Alpha for he same. I also suspect a pump and dump is in the works here.
Does anyone really believe dilution is done? The note holders sill have the ability to sell 325 million shares. That equates to over $6MM dollars at the current pps. They want their money!
They also had $20MM more in revenue, so the $8M in convertible debt they paid off in Q1 is a wash. If you go to their website most of the links do not work. Even the customer service # is disconnected. Their real business is ADEX which installs telephone cables. What were all of these loans used for really? I'll bet Munro and is shady hedge fund pals all have expensive houses, cars and boats. He offers sketch details about the new X-Barrier network protection product, but it isn't shown anywhere on their website. Why? I really think it is all bullshit, but maybe it will spike briefly like it did in March. If you are going to trade this do not take your eyes off of it for 1 second. You see the sneak attack they did without issuing a PR BEFORE the RS like real companies do. His next big surprise could be the "B" word.
The author also noted that there is approx. $14MM in convertible debt due in October. He is assuming the dilution will stop now that the $1.2MM note is paid off with the recent conversion of 30M shares over the past week. What if the many other convertible note holders that he acknowledges decide to convert all the way up to 500MM shares? If they do decide to convert, then .10 equates to a $50MM market cap and would seem to be overvalued based on recent valuation for ICLD. We will see what happens over the next few weeks.
Calm down Shots! No one is saying ICLD is doing anything illegal...
Is ICLD really a company? Do they really have any customers? What do they really do? Does it really involve cloud computing?
Customer Service : 888-908-1866 not working. Message says unavailable? How can that be if they have so many customers to service?
The only one you should be angry at is your self if you did not expect a massive drop after the RS. It was clear the purpose of the RS was to reduce the OS by 75% to 125M shares to allow lenders to exercise their right to convert shares (yes, that means dilution). Simple math dictates that the value of the shares after the RS would be 25% of what they were before the RS.
Instead of listening to people that spew baseless opinions, why not read the filings:
For example, the last 13G clearly states the 9.9% shares are convertible debt. Also, the last 10Q states there is over $15mil convertible debt maturing in October 2017 (on page 19). Don't take my word for it, read it your self and make your OWN conclusion. I'm not saying you should buy or sell. Stock prices often defy logic, but in the end the FACTS will prevail. The ONLY place you will find the facts are in the SEC filings.
2 of the 3 stickies make sense. You must determine who speaks the truth.
Page 19 of the last 10Q indicates there are (3) convertible loans due in October: http://ir.intercloudsys.com/all-sec-filings/content/0001213900-17-005061/f10q0317_intercloudsystem.htm
8% convertible promissory note, London Bay - VL Holding Company, LLC, unsecured, maturing October 2017 - $7Million
8% convertible promissory note, WV VL Holding Corp., unsecured, maturing October 2017 7,003 - $7Million
8% convertible promissory note, Tim Hannibal, unsecured, maturing October 2017
$1.2 Million
Read page 19 of the 10Q for yourself and you will see that ICLD has over $15 Million coming due in October. IMO this will require another RS and even more dilution.
Based on the last 3 months, munimi nailed it. Others are still trying to distort facts. For example, I read that the Dominion 9.9% is not due to the lender converting shares. Clearly, the 13G states:
* On the day of the filing of this Schedule, the reporting persons have rights under a series of convertible notes to own an aggregate number of shares of the issuer’s common stock in an amount not to exceed 9.9% of shares then outstanding.
http://ir.intercloudsys.com/all-sec-filings#document-39144-0001144204-17-036556