OK, lets discuss each point separately.
Most OTC companies that put out a lot of fluff PR's, usually combines with a typical OTC "IR" email, newsletter blast, in an effort to pump a stock in order to either raise the PPS, or to cover large note conversions. Not here. And your analysis of toxic debt is pretty much correct, except that toxic lender will continue to provide toxic loans to OTC companies even if they are trading at .02. So we have 2 issues lumped together in your first paragraph. PR's that "suggest" good things. The PR's I see are all consistent with what the company had announced months ago, that it would start undertaking sales initiatives in 2016, it was going out to raise $10M, it was going to announce a deal with a major pharmacy retailer.......what? Not all of that happened yet? If you used the word "yet" I would agree 100% with that first paragraph. Just because it didn't happen yet, its not safe to assume it won't. But we do know that the toxic note conversions have been very limited. Several notes have already been paid off by the company, and there were maybe 2 notes that converted, but are being leaked out, not dumped out. So the effect on the market is softer than what your statements imply. Without much awareness in the market, if those notes were allowed to convert without a leak-out, this would be at .05 again. So its fair to say the company is doing a good job managing its debt until its raise is completed.
The CEO clearly stated that a buy-back would be based on any award from the Kodiak case, to return the money that was lost in the market, back to the market. The "liability hole" you are talking about is not $5.8M, its only about $500K in actual debt, not a huge amount to overcome, even without financing, if you consider the recent $500K purchase order, and its their first one. The insider issues were done for a purpose that the company already explained ad naseum, and most probably, will be used as leverage to secure a better financing deal for the company. If they actually posed a threat, they would be selling instead of agreeing to lock up those shares another year.
I agree, death spiral loans can ruin a company if not managed. And thats the key point, managed. This company is managing its toxic debt as responsibly as it can, while working on a raise that will probably take the remaining toxic debt out. Some companies have been successful, its the scam companies that aren't successful. But if you read the debt docs, its 30-35% discount to market, not 50%, and thats still not good, but again, it looks like its being managed better than most.
Again, the balance sheet does not reflect the real picture. Its an artificial picture required by SOX. The actual total debt against the company is about $550K, not $5.8M. CEO, as well as any PCOAB accountant will tell you those are mostly paper losses attributable Black-Shoals accounting requirements made up by some liberal Senators who have never been in business before.
I agree that the company needs a continuous supply of cash to keep the doors open, and so far it has, albeit crappy initial financings. I think as we watch this progress, you need to match up the PR's with accomplishments, and some of them haven't happened but there is no REAL indicator that they won't......YET.
I too agree with your assessment in looking at the filings, and historically, for a company in full operations that already has products in the market, you are 100% on the mark. But for a start-up or market entry, the metrics are different, and its like a puzzle, you need to know where to find the pieces and how they all fit together. This CEO has been very good at telling shareholders what she is doing, and what she intends to do. I think some over exuberance created accelerated timelines that couldn't possibly be met, but that doesn't mean the company isn't doing what it needs to do to get there. I see the glass half full......my 2 cents.
