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FINRA deletes ticker symbols upon notification that shares are cancelled.
The impetus to cancel shares does not arise within FINRA.
Yes.
They are also addressing creditors as per the CCAA process. For some reason or another, PwC is not explicitly stating certain information one way or another.
Material information such as share cancellation or any Plan of Arrangement as outlined in the CCAA has not definitively been communicated. Other information, e.g. court motions and orders for Stay Periods, has been communicated definitively.
It is becoming more clear that PwC are experts in what they do not say.
On the one hand, one of their chief purposes is to communicate to shareholders, and yet, right there on their notification page, state they will not answer the many questions from shareholders.
PwC is walking the line.
What is CCAA?
Note: BioAmber Inc., Bioamber Canada Inc. & Bioamber Sarnia Inc. have been filed under: CCAA
PwC Current Insolvency Assignments
There is also no mention of shares being cancelled. Using the same logic we must conclude that is also not happening.
Great question!
The answer is: there are basically no rules in regards to how, when, and why a company chooses to invest their money. Companies are free to be as rational or irrational as the human beings making the decisions behind the scenes. It can be as simple as they do not want to spend more than "X" amount for "X" situation and would rather have "X" venture up and running on its own and, should it fail they do not want it to harm "X" parent company.
But, that's just speculation based on common sense.
Here is what it means:
A company must decide between two of the following hypothetical choices:
1. Pay $100,000 dollars today and go public tomorrow; or
2. Pay $50,000 and go public in a year
Assuming going public is the goal, which is better?
How LCY values "time" will determine what choices they make in regards to spending. If they value time at a premium, they will spend more money today, since they will perceive that to be the better value.
If they do not value time, then they will seek the cheapest way forward, regardless if something takes 1 year or 1,000 years.
Most companies value time.
In the case of LCY, and making the assumption a reverse merger is desired for any number of reasons including going public, investing in BioAmber would save a lot of time versus the path of an IPO.
The reason is time.
A company can have all the money in the world to buy anything they want, but they can't buy time.
Time is value.
Are We Looking At A Reverse Merger?
Visolis/LCY Chemical in their Letter Of Intent stated they will own and operate the plant at Sarnia, thereby making them a strategic buyer. This will also provide the necessary conditions for taking advantage of BioAmber's net operating losses. It's important to step back for a second, set aside what will or will not happen to BioAmber's shareholders, and understand that Visolis/LCY Chemical is going to continue carrying the torch of producing bio-based succinic acid and their derivatives.
Who would want the NOLs?
There are minimum necessary conditions which must be met by any purchaser in order to capture the value of NOLs. This is why certain large companies don't simply appear and buy everything up -- they have no interest in operating the company or meeting whatever annual limitations exist in order to reap those benefits. If they could take advantage of the losses and not be hassled with pesky conditions or operate the thing (i.e. "liquidator"), of course they would do so.
Second, after the SISP failed, PwC was forced to move to the next step, which they titled "Liquidation Process". Now, at some point in all the smoke and dust, the word "Process" was trampled over and left for dead. We can call it a liquidation without the process, but the monitor's reports state that the Liquidation Process still includes a search for and an opportunity for a strategic buyer. So, PWC moved to a Liquidation Process, but that does not mean the Visolis transaction is necessarily materially different than had it arose during the SISP.
Why does it matter?
PWC's primary task in this entire situation is to find the best outcome for as many stakeholders as possible. It would have been great if BioAmber never encountered bankruptcy, but now that it has, PwC is in charge of "navigating the ship" and, if possible keep it from sinking. That would be in the best interest of all stakeholders. Sure, they could throw out the life boats and save the upper class, leave the peasants for dead (Common Shareholders), and let the whole thing crash and burn, but stakeholders never needed PWC for that task -- BioAmber's previous management was doing just fine in that regard.
What about the Seventh Monitor's Report?
You have to hand it to PwC, they are clearly experts in what they do not say. We now have the Seventh Report and the first one post-transaction. There are three areas that are worth attention:
1. UPDATE ON THE VISOLIS TRANSACTION
2. MONITOR'S ACTIVITIES SINCE THE SIXTH REPORT
3. THE "CRANE LETTER"
First, taking things at face value, it appears all of BioAmber's assets sold for US$ 4.3 million. This would mean the redacted "black bar" on the Visolis LOI actually spelled out the word "million", versus using only digits. It would be interesting to see someone revisit that and see if "US$ 4.3 million" is the same as nine digits.
Next, the monitor's activities since the Sixth Report are reported as follows, and it is worth calling attention to 12.4, (although 12.2 and 12.3 are noteworthy as well):
PwC has been specific on nearly every other point, and yet here, where it would matter, they use language that is so vague it is questionable why they would even report it to the court, "...other administrative matters..." There is no reason to waste the court's time reporting "other administrative matters" unless it is of substance. And, wouldn't you know it, they immediately follow that phrase with "pursuant to the Monitor's expanded powers provided in the Third Amended and Restated Initial Order".
Was that language purposely vague? If so, there may be a few possible reasons that point to one of two opposite, yet very significant outcomes:
1. The Monitor, pursuant to their expanded powers granted by the court is in the process of notifying the necessary entities in order to inter alia cancel the shares of common stock; or
2. Pursuant to their expanded powers negotiating plans and approval of a reverse merger.
PwC has simply been too vague to know with certainty one way or the other. Still, either of these outcomes must be considered as possible.
So, the larger question after reading the Seventh Monitor's report still remains, "What will become of the Commons?". PwC is not explicitly stating one way or the other. In regards to the Crane Letter, they merely confirm shareholders will not receive upfront cash. They also (intentionally) did not include their full response back to Crane LLP.
The Crane Letter is significant because Crane LLP asked for a lot of information and they likely now have better insight on what is to come for shareholders than those of us only reading the monitor's reports.
If anyone has access to PwC's full response back to Crane LLP it would be great to read that in full.
Finally, no matter what side of the story a person subscribes to when it comes to BIOAQ, we have yet to hear in all of this commotion a single argument of why bio-based succinic acid is not a viable investment opportunity going forward. Visolis and LCY Chemical certainly think it is, enough to buy, own, and operate the Sarnia plant. Throughout this entire bankruptcy and sales process, the silent elephant-in-the-room is that oil prices have continued to rise, the global population has continued to rise and, global energy and product needs both quality and quantity, are rapidly changing.
TOP VALUE ADDED CHEMICALS FROM BIOMASS
https://www.nrel.gov/docs/fy04osti/35523.pdf
- Koan
Value or No Value, that is the Q.
As far as it seems, those who say BIOAQ will provide no value to shareholders are basing their views on the following points:
1. The assets already sold for a total of 4.3. million.
2. Other "Q" companies have their ticker deleted, therefore BIOAQ will be deleted.
3. It's the law. (insert zero laws specifically related to BIOAQ, and always capitalize "LAW")
4. The company has debt.
5. The Board of Directors resigned.
6. It is a liquidation, not a purchase of the company.
7. PWC warned shareholders many months ago.
I have yet to read or hear anyone articulate in a manner of substance any other thought or view that goes beyond these points, or is not somehow related to any of these points. Additionally, there is almost never a second level argument, or an argument that builds on itself and/or peels back layers. The ideas are so elementary they are almost not even worth a mention, however, since they are repeated endlessly there must be something going on; these ideas are not meant to "help" or provide some altruistic warning to help investors save money.
Two possibilities:
1. They are actually Longs -- shareholders attempting to get people to sell more shares, so they can acquire more.
2. They are "Scared Shorts" (in other words, Longs), who are holding short positions they do not believe in.
In either case, everyone here sounds like a Long -- the calm, lengthy, and in depth due diligence of an actual Long is blatantly obvious. And on the other hand, the desperate, repetitive, "drive-by" elementary-level ideas that do not advance or provide new information along a single point also comes across as a Long, albeit in the guise of an uncertain short. One should always look deeper and question anyone who carries the tone of absolute certainty -- when it comes to investing that is the biggest red flag of all. At present, the future of BIOAQ is not known to anyone on this board.
Therefore, those who speak with total certainty either have inside information or are totally uncertain.
"INVESTMENT"
The evidence is in that pesky word used in the Visolis Letter Of Intent.
It's really hard not to see that word, however, given your opinion (which is also without evidence beyond words on paper), why do you think the Visolis Letter Of Intent used the word "Investment"?
After you figure out how to explain why they used that word, can you additionally explain why in the world they would use the following phrase:
"OWN AND OPERATE"
I would add to that thought the caveat that the amount of purchase agreements in play at this time is related to an individual's willingness to accept or refusal to accept certain information as definitive from any particular source.
For investors who are only accepting information as provided by PWC, there are zero (i.e. unredacted) APA's in play at this time.
For investors who will accept information from this message board, there is either one, or possibly two or more APA's in play at this time.
I value the work PWC is doing so I think it is probably best and most reasonable to check their updates first, before reading anything else anywhere.
At present, the last report was dated September 14th, the last file status September 19th, the last court motion and orders September 18th. The Service List was updated last Thursday, October 4th.
Multiple Asset Purchase Agreements
The following excerpt from the Sixth Monitor's report below suggests multiple asset purchase agreements. I would be zero surprised if there were multiple asset purchase agreements, for any number of oddball reasons, the most likely of which is related to assets being located in different countries.
But who is to say there might not be three, four, or more? Some assets may be intertwined with various licensing agreements that come with expiration dates, and therefore might require a separate agreement. Who knows? And actually, it probably does not matter for shareholders if there is one or one hundred asset purchase agreements, unless of course someone is shorting this stock and leveraging their strategy solely on the idea there is just that one agreement, the APA that was found from Pacer.
It is worth noting PWC has not released any Purchase Price from any agreements.
So again, what we need to know is what nobody here knows, and that is the purchase price that is redacted and currently under seal from The Letter Of Intent from Visolis and LCY Chemical.
And as much as some would like this process to be simple, a quick scan of the Creditor's List as provided by PWC illustrates the enormous complexity and paperwork required to execute even a distribution order, let alone coordinate communication between all stakeholders at all times.
Canadian Sales Agreement or Canadian Sales Order?
There is a Grand Canyon of difference between those two words.
Nope.
In the first place, we do need to know the price. To argue that we don't is not even worth a response. The US Court filing is for the St. Paul assets. This has been beaten into the ground so many times it is also not even worth a response. If people thought 4 million bucks and change was the price for all assets, both Canadian and U.S., and that was even taken seriously, the price per share would certainly be at zero.
Second, the Sixth Monitor's report (and all PWC reports) are written in a generally linear timeline format, meaning that each subsequent line item number expands and develops on the previous line item number, moving from past to present. For example, line item 32. would provide new information over line item 31.
Only reading and drawing conclusions from a single line item while ignoring subsequent line items is unnecessarily starving oneself of critical information.
Any reasonable person who reads the Sixth Monitor's Report will walk away and want to know one single piece of information from APPENDIX D and which is filed under seal:
What is the purchase price?
That is the critical decision for investors at this time. Is that redacted purchase price from the Visolis Letter Of Intent sufficient to accommodate shareholders in some capacity, or is it not? We don't know what that number is, but we need to know.
That's it.
Here is the key difference to this process that you are missing.
When the SISP did not produce results, PWC went into a phase they refer to as a "Call For Bids". Their intentions here were still an attempt to produce a strategic buyer, as evidenced below:
Now, what differentiates a strategic buyer from a liquidator? Someone who will own and operate the Sarnia Plant, which is precisely what Visolis said they are going to do in their Letter Of Intent, complete with a redacted Purchase Price. The Visolis Transacation APA is currently under seal.
Now wait a second!
First this:
Here Janaicajoe,
This is cut and pasted together from Exhibit B, referencing the sections mentioned, and which is an APA for U.S. Assets only. It is a google document that was uploaded by a user some days ago.
The document nobody on this board has seen, and for which we are all waiting, is the separate purchase agreement as referenced in the Sixth Monitor's Report titled, "Visolis Transaction APA", and is currently filed under seal.
You mean, why is the U.S. assets purchase agreement (Exhibit B) found on Pacer not under seal? My assumption is that it has to do with differences in U.S. versus Canadian laws, and PWC is navigating the larger transactions via Canadian courts. Two separate transactions seems likely in such a case, each requiring an agreement.
Here's the APA from the Sixth Monitor's Report that says "Visolis" before the word "Transaction" and "APA".
It's a little difficult to read, but I think it says, "Filed Under Seal":
Yes, and we do not have all of the information from PWC as they have explicitly communicated they will not and cannot provide it (documents under seal), in an effort to generate the best possible outcome.
For those paying attention, this means PWC is also being extremely careful in how they draft their monitor's reports. It is of zero purpose to request documents to be filed under seal while simultaneously writing reports that either provide that critical information explicitly or phrase things that allows a reader to infer the same. Much of the information, however, when taken in aggregate form, appears to point to a reasonable outcome. On the other hand, when information is taken or analyzed in piecemeal fashion, a very different and distorted picture can be painted.
So far, I'd say PWC is doing an excellent job, as evidenced by the vastly different and near opposite conclusions being drawn.
Now turn those same predictive powers towards the intentions of Visolis, Inc. and LCY Chemical Corp. and tell us what is going to happen.
Also this from the Sixth Monitor's Report:
And this:
For those who are not good with geography, St. Paul is in Minnesota. Minnesota is in the United States.
Section 42.4 above from the Sixth Monitor's Report specifically states the "APA" (Asset Purchase Agreement) excludes United States assets.
The APA is defined in Appendix D as "Visolis Transaction APA (unredacted)(Confidential - Filed under seal)"
Incorrect. The buyer is not just buying the plant.
Nope. Nope. Nope.
It is stated explicitly in EXHIBIT R-3A (which you clearly have not read) the following:
"On behalf of Visolis, Inc., ("Visolis") and its partner LCY Chemical Corp. ("LCY" and together with Visolis referred to as the "Buyers"), we are pleased to express our intent to purchase all the assets offered pursuant to your process as follows: "Lot 1 - Building and Land", "Lot 2 - Movable Property" and "Lot 3 - Intangibles" (collectively, the "Assets")...Please note that the Assets would include intangible assets such as trade secrets, patents, and R&D breakthroughs."
Okay, I'm going to respond to this cherry-picked statement one last time, the one highlighted in red:
"Moreover, if an acceptable offer is received, the liquidation of the Company’s assets will almost certainly result in no residual value for non-secured creditors and equity investors."
This statement was pulled from a larger body of text in regards to several possible outcomes, one being liquidation, the other being a strategic buyout. It is a conditional statement, as evidenced by the word "if". If a liquidation were to occur, and if an acceptable offer is received, then this will almost certainly result in no residual value for non-secured creditors and equity investors.
Yes, given that condition, that would be correct.
However, that condition is not occurring. There is currently an offer under seal from Visolis which states explicitly [See EXHIBIT R-3A] that they, (along with LCY and setting up NewCo as a joint venture entity), are agreeing to a purchase agreement whereby they will buy, own, and operate.
That is not a liquidation sale, insofar as the business will not be shut down, but rather to continue to operate.
The sale of assets is far more complicated, as BioAmber Inc. is based in the United States, and the DIP lender and Comerica Syndicate do not have security over such assets.
Therefore, the portion of the purchase price affecting those assets will not be distributed to those creditors and will be allocated directly to BioAmber Inc.
Which is what is owned by shareholders.
From the Court motion for the issuance of an Approval and Vesting Order dated 9.13.2018, EXHIBIT R-3A:
"Visolis and LCY are setting up NewCo as a joint venture entity that will buy the Assets and own and operate the plant at Sarnia and assume all the ongoing responsibilities in connection therewith."
Buy assets, own, and operate.
For those paying attention, the word "and" is a logical conjunction whereby a statement is true if and only if all operands are true.
Buy. Own. Operate.
This statement has been copied and pasted so many times it's almost laughable.
Once again, this statement has been pulled from a larger body of text relating to the entire process which includes the possibility of a strategic buyout, and is not necessarily unique or specific to BioAmber, but rather a general statement relating to the liquidation of a company.
At this point, the outcome is still not clear.
And in any case, if anyone is so certain a liquidation resulting in no value for shareholders is imminent, then by all means sell your shares and move on.
Unless, of course, one were trying to short two pennies, which seems far more irrational than holding a stockpile of shares in a company that at least has a fighting chance to survive with a product that can provide economic value long into the future.
The term "Liquidation Process" includes the possibility of a strategic buyout.
For people who are not privy to basic standards of rhetoric, please know that the current share price would be different if they called it, "Trying To Stay Alive Process", "Buckle Your Seat Belts Process", or "Hold My Beer And Watch This Process".
In any case, the qualifying term "Process" is what needs to be focused on.
The whole entire point of this process is an attempt by a lot of people to try and preserve the business and financial investments of a whole lot of other people.
If the market capitalization was 300 million the price per share would be $2.32
Market Cap/129.45M shares = PPS
This is a cherry-picked sentence pulled out of a larger body of text which also mentions the potential for a strategic buyout. Every time this sentence is quoted it always fails to mention the part about strategic buyers.
It is taken out of context and it is not necessarily a concept that is special or unique to BioAmber, rather it is a very general statement in regards to the liquidation of a business.
"Binding offers from the liquidators or strategic buyers must be received by 9 a.m. on August 21st, 2018, and if acceptable offers are received, the company will seek to obtain court approval of the retained offer on August 28th, 2018 and close the transaction on August 31st, 2018."
The following statement: ...the liquidation of the company's assets will almost certainly result in no residual value for non-secured creditors and equity investors. is a no-brainer in any number of liquidation scenarios and is not special or unique to BioAmber.