Thanks Bman! You (or anyone else) can help me get another sticky up.
What happened it the link in main stock for one post was lost about convertible debt, and since have more info now, can write it better.
But Admins can only post one sticky of their own, so please copy just the below and post, then I can make a sticky. Thanks!!
GeoDan's Notes speaking with Company AboutConvertibles,Benign
Here are some notes, 11-22-2016:
1. The main part of Convdebs can not be exercises under .01, AND are at market! So if .04 (8 bagger) if they convert they get the stock at cost of .04 not .005, which would bring in 8 times more cash and eliminate interest payments. There are other conv debs that not at market, but if have it right those are maybe 6 million shares worth. Not a big deal. There is no big incentive to convert and if they keep generating cash they way they have been for over a year, they can simply pay off the bonds.
So we are not going to get dilution of significance unless we get a lot of cash at higher prices for the stock.
Even if all converted it will be nothing like GCM.to, looks benign. A push to an extent as interest payments go away.
2. Being "behind" issue. They can pay their bills, its not that, its that they were supposed to have paid off conv debt holders before, that is the behind issue. The behind issue was foremost to me. New Note 11-25-2016 $88,000 of debt to CEO was eliminated at .0088 price after the price rose for 10,000,000 restricted shares, so float stays the same.
3. The cash is high now, but they are very cautious, want to hold a balance for various expenses, production runs etc.
4. Biz is steady,their biggest fear would be a downturn like 2008-9, which did hurt their sales a lot. Basically if we stay out of recession, my opinion, their profit will stay level or go up as they pay down debt. And 2009 was much worse than most recessions.
5. Why are they more profitable? It is cost cutting, they have lowered head count and moved into smaller building, yet sales have stayed about the same. So the improved profitability is sustainable. In fact sales are actually going up 7%,the decrease year over year for 3Q was due to one "high pressure" sale, compressors for filling talks believe they said. Those high pressure sales happen less than once a year. the std product it selling better in 2016 than 2015.
6. New products, they sound most excited about "on demand battery" hookahs, you can dive 1 hour instead of 20 mins on older steady run battery systems, it only runs when you use the air. That is with the same battery.
7. They are cautious and conservative. The prior bad times have made them that way.
I was encouraged by talking with them. Dilution danger seems moderate at worst. The new electric "on demand" pumps offer much better value than the old ones.
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