The post I am replying to is from February 2013. The seeking alpha writer talks about the potential for a buyout of the company if they are unable to meet their debt obligations. With a rich suite of patents, it is attractive to potential buyers for intergration purposes. (I suggest that everyone re-read it)
The writer was implying that if sales do not materialize, both the company and DMRJ may look for a profitable exit. This was 9 months ago and I think we can all agree, as would Mr. Bolduc, sales have not materialized as all originally thought. That is undeniable.
Rolling up and re-packaging the credit line and debt for IMSC is not something DMRJ is going to do endlessly. Based on Uri's statements back in December 2010 that "IMSC should get TSA approval next year and we should be looking at a $3-$4 stock at that time", the plan has not gone quite according to plan. We are three years beyond that statement at $1.08.
As I wrote previously, there is an inflection point of diminishing return. If sales do not materialize at a rate that support the company's expenditures and pay down debt, then additional funds are required to support operations which makes it more difficult to escape from under the umbrella of debt, while trying to pay for operations as well. I think Mr. Bolduc agrees.
"This is a critical and exciting time for Implant Sciences. The QS-B220 has achieved a string of regulatory successes so far this year, and our systems have built a reputation for being easy-to-use and low-cost to maintain. We believe that an investment in trade shows and exhibitions this fall will help us capitalize on this momentum and increase our market share," stated Implant Sciences' President and CEO, Glenn D. Bolduc.
Indeed this IS a CRITICAL time. Critical means, they have no more excuses now. We are TSA approved and qualified. The equipment either sells to point that supports the company, or it doesn't. IMO, IMSC has to get sales going expeditiously from now until the EOY. After a product is developed, we now know it takes almost 2 years to get approval. That amount of time will not be financed if sales do not explode.
It is also my opinion that this is a critical time for another reason. Maximizing the premium. The writing on the wall may have already been written by DMRJ. (If you can't sell these as promised, you'll have to sell the company). So far, suitors have most likely low balled buyout offers (this is just my opinion). By showing sales, the premium gets higher.
I know there are investors that have their hearts set on $10-$15 a share for a buyout. Based on the record thus far of company and investor predictions, investors would be wise to re-calibrate their lofty expectations.
Management can make a lot of money on a buyout as well with generous stock options in the new company as well as payout of their existing shares in IMSC.
Hope for, and take the buyout.
AI
