Without the benefit of current financials it is difficult to understand the full impact of the transactions described in the CEO Letter dated 7/2/19. Here are some of my suppositions:
1. Monetizing the IP portfolio is a smart move. Apple seems to run roughshod over IP owners and the courts have taken notice. Assuming LBAS has a legitimate claim they should be able to obtain a signifcant settlement (battery life is a key performance factor for the iphone, IP that extends battery life should therefore have a high value).
2. The amount and timing of any settlement is very uncertain. While it's encouraging to know that the fight with Apple has begun, our focus as investors should be on operating results and the financial restructuring that has just occurred.
3. It seems the secured creditors group will bear the legal expense of the litigation. This is another big positive, a smart move that limits the burden on management (time, attention, and money).
4. The transactions with the secured creditors took $8.9M of secured debt off the balance sheet ($5.4M plus $3.5M). The letter says $13.5M of debt reduction, but there isn't enough detail for me to get to that number. I also wish I knew how much debt is left, however this is a big positive including a cash flow lift due to lower ongoing debt service expense.
5. LBAS will receive the lion's portion of cash received as a settlement or as royalties on the IP portfolio (I'm assuming both are included in Mr. Morse's description of the cash flow sharing agreement). This is a friendly deal for the LBAS operating company in my opinion. One wonders what revenue streams could be obtained by the full IP portfolio. Also, does "LBT IP I LLC" imply future LLC's like "LBT IP II"?
6. The deal adds 70M common shares of dilution to the LBAS balance sheet ($3.5M/$.05 per share). This is a negative for the current shareholders but it signals two things: the secured creditors group is willing to hold common shares that they purchased for $.05, and the dilution to current common share holders is about 20% if 277.5M shares is the correct current float (https://www.otcmarkets.com/stock/lbas/security). I think these two things show the "smart-money" secured creditors expect to reap a reward on their nickle shares. This tips us off that the folks who know the most expect their shares to go above $.05. And they are willing to put new money and a lot of effort into making that happen. In my opinion a 20% dilution doesn't seem predatory - given the circumstances.
7. The totality of the deal shows that the creditors are willing to put substantial new resources into their investment (lower interest income, and significant legal expenses) in order to make good on their current investment and reap a reward. This seems to align the interests of LBAS, the secured creditor group, and the common stock investors.
8. I too would love to hear more from the CEO regarding financials and operating plans/results. Our long term prospects are tied to operations. I give management very high marks, however, for the creativity and structure of the deal. It portends good things to come.
Market Data 
Markets 
AI
