Value Microcaps Motherboard

[Bobwins]

re pytm

They are not paying or accruing interest on 23+ million in debt, which could be triggered at 12 to 14%. That's over 2 million per year. In addition, they are not paying most of the interest due on the rest of their debt. They are a walking/limping bankruptcy waiting for the slightest excuse to tip them over into bk. Next maturity of senior debt is 7/05. Senior lender is not going to send them into bankruptcy. This is a new lender that bought the debt in 12/04, probably for a 75-90% discount.

If pytm.ob can continue current profitability, they could start making interest only pymts. They have no LOC so they can't be too aggressive about making payments but they would have some capacity. Witness increase in cash to 2+million.

Full payments and amortization are out of the question.
I don't know how they ever get out of this unless the senior lender accepts a negotiated settlement on the debt. They would have to orchestrate a global settlement because they also have another 6 or 7 million in other debt. No use reducing the 23 to 12 and still pay all of the other 6 or 7.

Good earnings were released prior to end of today's session and stock still went down so there are some stockholders that want out. I don't know how long that lasts but company has been profitable all year and stock has never risen above .30.

I think threat of bankruptcy is too great to get a big pop here. Maybe if they announce some kind of debt settlement in July, but everything has to work out just right for the stockholders to come out with a positive outcome. Senior lender is going to look out for their rights first and stockholders come last.

Good luck. Interesting case. I remember looking at this before. Another way to look at it is to view the chart. Notice the stair step. Every good qtr has moved stock up another step. Not immediate gratification but could lead to decent gains IF everything holds together and lender doesn't get antsy. Good luck, Bobwins