Vero, just a few points of clarification. The face amount of debentures was $40.92 million as of 9/30/13 and in order to completely "get rid of YA" there is also $5.164 million of preferred stock. In the past, conversions to common stock kept the debt number from growing but today no conversions are possible so the accrued interest on debt grows at about $300K per month. Assuming no cash payments by NEOM since 9/30/13, that would be an additional $1.5 million of debt by the end of this month (meaning total debentures of about $42.5 million).
Now for the positive side, IF NEOM had $32 million of cash it could take advantage of the offer from YA to settle the debt and accrued interest for a 25% discount off face value. Better yet, IF NEOM had $37 million of cash it could take out the debentures and the preferred stock and then we could say YA is out of the picture. Note that YA can withdraw its 25% discount offer by giving 90 days' notice.
I also would point out that NEOM's balance sheet has another $4.2 million of liabilities that have nothing to do with the fair value adjustments.
So, what would it take for NEOM's common stock to be worth today's price of about $0.001? The way I see it, it would take a buyer willing to pay about $40 million to take out YA and the other liabilities, plus a premium of $5 million for a total of $45 million. A $45 million buyout would imply a value of the common stock of $0.001 per share ($5 million proceeds available to buyout common holders divided by 5 billion shares). An investor willing to pay $0.001 today is betting that a hypothetical buyer will be willing to pay more than $45 million for NEOM. All I can say is something better happen SOON because that hypothetical buyer has been biding his time for nearly 2 years without a pulse of activity.
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