formula for comericas line of credit:
"The advance formula base is 85% of the eligible accounts receivable, plus the lesser of 85% of eligible unbilled accounts or $3,000,000."
This explains why there is an increase in AR lately.
Another important line from the 10Q:
" If an event of default occurs, Comerica Bank may, at its option, accelerate the maturity of the debt and exercise its right to foreclose on the issued and outstanding capital stock of ASI and on all of the assets of Services Borrowers. On December 31, 2011, the interest rate on this line of credit agreement was the bank’s prime rate plus 2.75% (6.0%), and the availability under the line was $0."
The lower they keep the stock price the less comerica can get if bankruptcy is declared 193 mill x .01 = 1.93 mill if they were to drag arcadia into bankrutcy. 1.93 mill out of the 11 mill owed to them. Why would comerica want to do that.
I am telling you kadr mgmt is doing all they can. April 1 is the big day and dont expect anything significant before hand bc the creditors have until april 1 to go back on anything they are in discussion with if the stock price were to go up. The stock price needs to be as low as possible until all agreeemnts are official. Thats why we are in the dark and thats why I think when our PPS started rising, mgmt had to put the hammer down to make sure our pps didnt get too high for creditors to want to exercise their shares. It has to be done this way. Its a double edged sword from now to april. you want the pps to rise for your own sake but that is actually what would be the final nail in the coffin for the company. This is one of the most interesting financial situations I have seen. Very exciting but very sucky as an investor. waiting for april 1... could even take longer than that. I bet we might not hear anything until may 17 we richardson moves on. Thoughts?
