Toxic Filings

[sludgehound]

Not seeing really bad ones, TXCC

Last one I considered posting was TXCC. But w/ a Proxy saying R/S of 1-2 to 1-20 on plan, the share price has held in the low .40s so hasn't been taken as fully 'toxic'. Not unless being stuck in place reads as toxic. For me it would have needed a plunge by 1/2 to low .20s for that.
Companies has been very creative/sneaky at the way they do these things lately. Anyone knows any tricks be sure to share. The obvious ones are either gone or just so cheap there's hardly any way to game them. Some do a series of offers, rather than tip off with one huge size like in past. The thing is the O/S is smallish at 43M which may have helped keep it afloat.
Example of that is VELT which did big filing early April and only dipped for day or two then ran up. So calling it toxic would have kept one out of a short term bottom. 66M O/S VELT. Very tricky to call these.
One other thing is change in market psychology in low interest environ. Investors seem to think Co. taking on debt now is a plus since costs are low. In high rate environ they see that as dipping the boat over.

03:00 PM EDT, 04/03/2013 (MidnightTrader) -- TranSwitch Corp. (TXCC) is down 4% at 45 cents but above a new 52-week low of 41 cents set after the company reported the completion of its previously announced public offering of 8,300,000 units, consisting of one share of common stock and a warrant to purchase 0.50 of a share of common stock, including 1,245,000 units pursuant to the exercise in full of the over-allotment option granted to the underwriter. After the underwriting discount and estimated offering expenses payable by the company, the company received net proceeds of approximately $3.7 million.
Price: 0.45, Change: -0.02, Percent Change: -4.2
http://www.midnighttrader.com (C) 1999-2013 MT Newswires,
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TranSwitch Prices Secondary Offering - Analyst Blog Zacks

Innovative integrated circuit (IC) and intellectual property (IP) solutions provider, TranSwitch Corporation (TXCC), recently priced an underwritten public offering of over 7 million at $0.50 per share to comply with the listing rules. Maxim Group LLC is acting as the sole manager for the offering. Investors can subscribe for this offering till Apr 3, 2013.

Each unit offered by TranSwitch consists of a share of stock and a warrant to purchase 0.50 of a share. The warrants have an exercise price of $0.58 per share, and thus can only be converted into a share when its stock price exceeds it. The company has also given a 45-day option to the underwriter to purchase additional 1.2 million units to fulfill the over allotments.

This secondary offering by TranSwitch is aimed at bringing its stockholder’s equity in compliance with Nasdaq Listing Rule for continued listing in Nasdaq Capital Market. The rule requires listed companies to maintain its stockholders’ equity of at least $2.5 million. However, the company reported its stockholders’ equity as $1.2 million in its Feb 8, 2013 Form 8-K, filled with the SEC, which fails to comply with the listing norms.

TranSwitch expects to mobilize net proceeds of around $3.7 million (including the full exercise of the over allotment option) from this public offering, after considering underwriting discounts and projected offering expenses. The company expects to utilize the proceeds for product development, general corporate purposes and to meet its working capital needs.

Based in U.S., TranSwitch provides IC and IP solutions. These solutions help the customer and network infrastructure segment in delivering core functionality for video, voice and data communications equipment.

However, with the stock closing down around 8% on Mar 28, 2013, it seems that investors are a little skeptical about the public offer pricing of the company. Some of the other stocks in the same sector that meet the Nasdaq Listing Rule and are worth mentioning include Lattice Semicon (LSCC), Rambus Inc (RMBS), each carrying a Zacks Ranks #1(Strong Buy) and Aeroflex Holding (ARX) that retains a Zacks Rank #2 (Buy).