Our Stocks to Watch today include Muscle Flex Inc. (OTC: MFLI), FutureWorld Energy Inc. (OTC: FWDG), Green Star Alternative Energy Inc. (OTC: GSAE), Sunergy Inc. (OTCBB: SNEY), SGD Holdings Ltd. (OTC: SGDH), Lotta Coal Inc. (OTC: LCOL), Trubion Pharmaceuticals Inc. (Nasdaq: TRBN), Legend Media Inc. (OTCBB: LEGE), Anthracite Capital Inc. (NYSE: AHR), Select Comfort Corp. (Nasdaq: SCSS) and Green Star Products Inc. (OTC: GSPI).
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MUSCLE FLEX INCORPORATED (OTC: MFLI)
Detailed Quote: http://www.otcpicks.com/quotes/MFLI.php
Company Profile: http://www.otcpicks.com/muscle-flex-inc.htm
Muscle Flex Inc. brings new products to market using direct response TV infomercials specializing in the health, fitness, wellness and hygiene sectors. As well, Muscle Flex Inc. develops and creates general television content for network and cable television distribution. Muscle Flex's corporate strategy is to develop new and innovative products for sale and distribution via its proprietary direct response marketing system and the creation of television media and shows for general network and cable broadcast.
MFLI News:
August 28 - Muscle Flex Inc. CEO Danny Alex Invited to Attend WWDMAGIC Fashion Tradeshow in
VATA Brasil Active Wear (www.VataBrasil.com). The invitation to attend WWDMAGIC comes as Muscle Flex Inc. is preparing to add its Muscle Flex® sports and active wear product line as one of its flagship products. Additional details are expected in the coming days.
The WWDMAGIC fashion tradeshow represents the full fashion spectrum where women's wear is concerned. Its unique show within a show platform allows the world's retailers to survey and shop the entire marketplace with ease. Thousands of WWDMAGIC exhibitors represent women's sportswear, junior, contemporary, casual lifestyle, lingerie, swim, accessories and footwear categories and an unrivaled number of buyers across the globe turn out show after show to shop them! The WWDMAGIC tradeshow is one of the biggest of its kind.
"The Muscle Flex sports and active wear product line is going to have an absolutely exciting and inspirational feel," commented Danny Alex, CEO of Muscle Flex Inc. "It has the right mix of sex appeal, comfort and inspirational designs that will really make an impact in the entire sports and active wear industry. We have so many things already planned with the entire Muscle Flex active wear product line and the WWDMAGIC tradeshow is going to be an amazing prelude into launching this product category for us. In the coming days and weeks we are going to let investors know the full breadth of where the Muscle Flex sports and active wear product line is heading and I have no doubt that investors will be incredibly excited as to its potential... this is going to be a HUGE product line for Muscle Flex!!"
If you are in the
FUTUREWORLD ENERGY INCORPORATED (OTC: FWDG)
"Up 26.09% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/FWDG.php
Company Profile: http://www.otcpicks.com/Newsletter/FWDG_eProfile_082709.html
FutureWorld Energy, Inc., a
FWDG News:
August 27 - FutureWorld Energy Announces Proposal to Acquire Position in Biomass Energy Sector
Company Seeks to Become Leading Provider of Biomass Technologies
FutureWorld Energy (OTC: FWDG), a vertically integrated "green" energy holding company, announced the expansion of its footprint into the global biomass industry by acquiring an interest in a world renown private research lab focused on renewable energy sources and biodiesel technology. Based in
"This move represents the second step in our strategic vision to move FutureWorld Energy into full operational status within the biofuels industry, and we are confident that, over time, our acquisition in the sector will deliver considerable value to our shareholders and employees," stated Sam Talari for FutureWorld.
"Our goal, since day one, was to find ways to reduce the causes of global warming and work towards solutions that will enable FutureWorld Energy to position ourselves as true pioneers in the area of biofuels and clean technologies. We believe that clean energy and water best represent those core areas, which need to be addressed on both a national and international level. We plan to attempt to work closer with the Obama Administration, Congress, non-profit groups, and the business community to help reduce
ABOUT BIODIESEL
Biodiesel is a clean and renewable energy source derived from vegetable oil that can be used in unmodified diesel engines. Biodiesel improves overall engine performance, is 100% compatible with existing diesel vehicles and infrastructure, and has proven reliable in over 50 million miles of road testing. Biodiesel significantly reduces harmful exhaust emissions, which contribute to global warming; is non-toxic at any level; and is the first and only fuel to have passed the Clean Air Act. The United Nations expects biofuels to account for a full 25% of world energy needs by 2025.
GREEN STAR ALTERNATIVE ENERGY INCORPORATED (OTC: GSAE)
"Up 9.59% in morning trading"
Detailed Quote: www.otcpicks.com/quotes/GSAE.php
Company Profile: http://www.otcpicks.com/Newsletter/GSAE_eProfile_091708.htm
Green Star Alternative Energy is an environmentally conscious, renewable energy producer. The Company is working to develop more than 300 MW (megawatts) of clean electricity through wind energy. The corporate revenue model is two-fold: the use of a renewable resource allows not only for the creation of environmentally friendly energy, but the granting of carbon (greenhouse gas) emission credits which may be traded and sold. Green Star is pursuing a significant opportunity to provide clean energy to the growing
GSAE News:
August 27 - A New Audio Interview with Mike Andric, CEO of Green Star Alternative Energy, Inc., is Now at SmallCapVoice.com
SmallCapVoice.com, Inc. announced that a new audio interview with Green Star Alternative Energy, Inc. (OTC: GSAE) is now available. The interview can be heard at http://smallcapvoice.com/blog/8-26-09-audio-interview-with-green-star-alternative-energy-inc-otcpk-gsae.
SUNERGY INCORPORATED (OTCBB: SNEY)
Detailed Quote: http://www.otcpicks.com/quotes/SNEY.php
Company Profile: http://www.otcpicks.com/sunergy-inc/sunergy-inc.htm
The Company is an aggressive junior mining exploration and development Company that is production oriented at the earliest possible profitable opportunity. We control 100% of the 150 SQ. Km. Nyinahin mining concession with a full prospecting license. The concession is surrounded by several operating mines and is adjacent to Newmont Mining's property. This concession has the Ofin river flowing through our eastern portion and there are numerous artisan pits ready for testing and evaluation for near term production. The Ofin river is known for good alluvial gold production. Artisans usually recover about 30% of the available gold through primitive hand methods, leaving 60-70% to be recovered by modern mechanical operations.
SNEY News:
August 13 - Sunergy Reports Update on Operations on Its 150 sq. km.
Sunergy Inc. (OTCBB: SNEY) (the "Company") reports the following update on the planning and preparation for operations on our 150 sq. km. Nyinahin mining concession, located in Ghana, West Africa. During Q'4 2009 we plan to test and evaluate the alluvial gold recovery potential along the
The
Karl Baum, Manager of West African Development, said, "Since this concession already has a full prospecting license, permitting is very straight forward and inexpensive. The artisan pits have no overburden and are considered high grade targets by the industry in
Company President Joseph Guerrero said: "This cornerstone project offers both immediate gold recovery opportunities through the numerous abandoned Artisan pits along the
SGD HOLDINGS LIMITED (OTC: SGDH)
Detailed Quote: http://www.otcpicks.com/quotes/SGDH.php
Company Profile: http://www.otcpicks.com/sgd-holdings/sgd-holdings.htm
SGD Holdings, Ltd. is a holding company which owns and operates through its wholly-owned subsidiary, Ecopaper, Inc. (www.ecopaper.com). Its goal is to acquire new technologies which can positively impact the environment either through internal development or by acquisition.
SGDH News:
August 24 - SGD Holdings, Ltd. CEO Harry Johansing Discusses Environmentally Friendly Paper
SGD Holdings, Ltd. (OTC: SGDH) reveals the benefits of Ecopaper, Inc.'s product lines. Many companies and individuals enjoy telling their peers, employers and customers they have "gone green" because they started using recycled paper. However, on closer examination, professed recycled paper products are not always what they claim to be. Harry Johansing, CEO of SGD Holdings, Ltd., is a developer of Banana Paper, which represents one of the first 100% post-consumer paper products, and is an expert in the recycled paper arena.
So, what are the benefits of tree free paper? Ecopaper, Inc.'s tree free paper is 100% post-consumer waste. Waste that would normally wind up in a landfill is being processed into high quality paper products. No trees are used during the process. Furthermore, the energy and water required to manufacture paper are drastically reduced due to the process. Lastly, unlike typical copy paper, no harmful chemicals or toxins are added to the paper.
"Recycled paper is one of the biggest misnomers in the general public. It's incredibly misleading. Most people think that recycled is the same as post-consumer content. Unless it says post-consumer, it means that the product is a virgin pulp, otherwise known as paper made from trees. What consumers should be looking for when they purchase paper is either tree free paper or the highest post-consumer content possible," stated Harry Johansing.
ABOUT ECOPAPER, INC.
Ecopaper, Inc. is the first company in the history of the paper industry to create and market treeless paper of a superior quality. Every page of Ecopaper is smooth, acid-free, durable, chemical-free, and made in
LOTTA COAL (DPOLLUTION) INCORPORATED (OTC: LCOL)
"Up 50.00% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/LCOL.php
Lotta Coal (dpollution) is a publicly traded company that has acquired the manufacturing and distribution rights of a pollution reduction technology. It consists of a series of 3 Patented fuel conditioning devices that improve the combustion efficiency and lower pollution emissions of a gas or diesel engine.
LCOL News:
August 28 - Lotta Coal Launches Its New dpollution Website
Lotta Coal Inc. (OTC: LCOL) (
The launch of the new website comes shortly after the signing of a global exclusive license with Cotren to manufacture and market its patented and revolutionary dpollution technology.
According to independent laboratory tests, the dpollution technology significantly reduces all toxic gases such as 90% reduction in hydrocarbon (HC), 96% in Carbon Monoxide (CO) and also a reduction of 61% in Diatomic Oxygen (O2) making the tested automobile exhaust clean for the environment.
"The dpollution technology is truly revolutionary and it is an affordable solution, which can be implemented immediately to eliminate smog and increase air quality globally," said Bernard Royer, President of Lotta Coal Inc. (dpollution). "Not only can the dpollution product eliminate the deadly gases emitted from automobiles, trucks, and trains, it also increases the efficiency of these engines as well as prolongs their life," further added Mr. Royer.
TRUBION PHARMACEUTICALS INCORPORATED (NASDAQ: TRBN)
"Up 52.74% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/TRBN.php
Trubion is a biopharmaceutical company that is creating a pipeline of novel protein therapeutic product candidates to treat autoimmune and inflammatory diseases and cancer. The Company's mission is to develop a variety of first-in-class and best-in-class product candidates, customized for optimal safety, efficacy and convenience that it believes may offer improved patient experiences. Trubion's current product candidates are novel single-chain protein, or SMIP, therapeutics, and are designed using its custom drug assembly technology. Trubion's product pipeline includes CD20-directed SMIP therapeutics such as TRU-015 and SBI-087 for autoimmune and inflammatory diseases, developed under the Company's Wyeth collaboration. Trubion's product pipeline also includes Trubion's proprietary product candidate, TRU-016, a novel CD37-targeted therapy for the treatment of B-cell malignancies that is currently in Phase 1 clinical evaluation. In addition to Trubion's current clinical stage product pipeline, the Company is also developing its multi-specific SCORPION technology, both for targeting cell-surface molecules like CD79b and HLA-DR, as well as simultaneously neutralizing soluble ligands like TNF and IL-6.
TRBN News:
August 28 - Facet Biotech and Trubion Announce Worldwide Collaboration for the Development and Commercialization of TRU-016
Preliminary clinical data show promise in chronic lymphocytic leukemia; preclinical data support additional indications
Facet Biotech Corporation (Nasdaq: FACT) and Trubion Pharmaceuticals, Inc. (Nasdaq: TRBN) announced an agreement for the joint worldwide development and commercialization of TRU-016, a product candidate in phase 1 clinical development for chronic lymphocytic leukemia (CLL).
TRU-016 is a CD37-directed Small Modular ImmunoPharmaceutical (SMIP™) protein therapeutic. The collaboration agreement includes TRU-016 in all indications and all other CD37-directed protein therapeutics.
"TRU-016 is a promising therapeutic with impressive preclinical and preliminary clinical data for CLL that will greatly enhance our pipeline and support a key strategic objective, which is to build a robust oncology portfolio," said Faheem Hasnain, president and CEO of Facet Biotech. "After a thorough evaluation of a number of programs over the past several months, we concluded that TRU-016 was a particularly compelling program and a great fit with our pipeline and expertise. While the novel approach to protein therapeutics is supported by a solid biological rationale and validated clinical data in CLL, TRU-016 may have broad utility in additional indications, including non-Hodgkin's lymphoma and multiple sclerosis. Through this collaboration, we can leverage and extend our significant expertise in the research and development of protein therapeutics and we look forward to playing a key role in advancing this important program with our partners at Trubion."
"In considering alliance opportunities for TRU-016 we sought to retain meaningful economics in this exciting first-in-class product candidate, while enabling aggressive joint development with a partner who shared our vision and brought complementary experience and resources to the alliance," said Peter Thompson, M.D., FACP, president, CEO and chairman of Trubion. "We are delighted to have Facet as our partner. Coupled with our own strengths in the discovery and development of novel protein therapeutics, their expertise will afford us the opportunity to pursue the clinical development and commercialization of TRU-016 and other CD37-directed therapeutics in the most aggressive manner possible."
Under the terms of the collaboration agreement, Trubion will receive an upfront payment of $20 million and may receive up to $176.5 million in additional contingent payments upon the achievement of certain development, regulatory and sales milestones. The companies will share equally the costs of all development, commercialization and promotional activities and all global operating profits. In addition, Facet will purchase 2,243,649 shares of newly issued Trubion common stock for an aggregate purchase price of $10 million.
ABOUT TRU-016
TRU-016 is a novel CD37-directed therapy for the treatment of B-cell malignancies, such as chronic lymphocytic leukemia, or CLL, as well as certain autoimmune and inflammatory disease indications. TRU-016 uses a different mechanism of action than CD20-directed therapies. As a result, its novel design may provide patients with improved therapeutic options and enhance efficacy when used alone or in combination with chemotherapy and/or CD20-directed therapeutics. In June 2009, positive results following preliminary analysis from the Phase 1 clinical trial of TRU-016 for the treatment of CLL were announced. The objectives of the Phase 1 TRU-016 CLL study were to define safety and tolerability, identify a maximum tolerated dose, evaluate pharmacology and pharmacodynamics, and assess preliminary clinical activity.
ABOUT FACET BIOTECH
Facet Biotech is a biotechnology company dedicated to advancing its pipeline of four clinical-stage products, leveraging its research and development capabilities to identify and develop new oncology drugs and applying its proprietary next-generation protein engineering technologies to potentially improve the clinical performance of protein therapeutics. Facet Biotech Corporation launched in December 2008 as a spin-off from PDL BioPharma, Inc.
LEGEND MEDIA INCORPORATED (OTCBB: LEGE)
"Up 40.91% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/LEGE.php
Legend Media (OTCBB: LEGE) is a leading advertising firm in focused on
LEGE News:
August 12 - Legend Media Signs Full-Year Contract With Beijing SouFun Holdings Limited
Legend Media (OTCBB: LEGE) ("Legend Media" or "the Company"), a Chinese multi-media advertising company, announced that the Company has signed a full year contract of RMB1,176,000 (approximately US $172,182 based on the exchange rate as of the date of this press release) to be delivered from July 1, 2009 to June 30, 2010 with Beijing SouFun Holdings Limited for its website www.soufun.com.
Founded in 1999, SouFun.com is
ANTHRACITE CAPITAL INCORPORATED (NYSE: AHR)
"Up 16.28% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/AHR.php
Anthracite Capital, Inc. is a specialty finance company focused on investments in high yield commercial real estate loans and related securities. Anthracite is externally managed by BlackRock Financial Management, Inc., which is a subsidiary of BlackRock, Inc. (“BlackRock”) (NYSE: BLK), one of the largest publicly traded investment management firms in the United States with approximately $1.307 trillion in global assets under management at December 31, 2008. BlackRock Realty Advisors, Inc., another subsidiary of BlackRock, provides real estate equity and other real estate-related products and services in a variety of strategies to meet the needs of institutional investors.
AHR News:
August 11 - Anthracite Capital Reports GAAP Loss of $1.39 Per Share and Operating Earnings of $0.07 Per Share
Anthracite Capital, Inc. (NYSE: AHR) (the “Company” or “Anthracite”) reported net loss available to common stockholders for the second quarter of 2009 of $1.39 per share, compared to a profit of $0.38 per share for the same three-month period in 2008. (All currency amounts discussed herein are in thousands, except share and per share amounts. All per share information is presented on a diluted basis. Prior year amounts have been restated or reclassified to conform to the 2009 presentation required by the retrospective adoption of FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (''FSP APB 14-1'').)
Operating Earnings (defined below) for the second quarters of 2009 and 2008 were $0.07 and $0.22 per share, respectively. Table 1, provided below, reconciles Operating Earnings per share to diluted net income per share available to common stockholders.
Restructuring of Secured Credit Facilities
During the second quarter of 2009, the Company amended each of its secured credit facilities with Bank of America, Deutsche Bank and Morgan Stanley (the “Secured Creditors”). The facilities have been amended to provide similar terms which, among other things, extend the maturities of all facilities to September 30, 2010 and eliminate all mark-to-market provisions. In addition to eliminating outstanding margin calls and the right to make future margin calls, existing scheduled amortization payments were replaced with cash management requirements as described below. The new interest rate on the facilities is the greater of 30-day LIBOR plus 3.50% or 5.50%.
The Secured Creditors continue to hold the same primary collateral consisting of
In addition, the Secured Creditors received a security interest in all unencumbered assets of the Company as well as a subordinated second lien on each other’s primary collateral. The cash flows generated by the bulk of the formerly unencumbered assets will be deposited monthly into a cash management account that will be available for use by the Company for its operations pursuant to a prescribed budget subject to (i) no defaults under the facilities and (ii) the cure of any outstanding deficiency in the required reductions of the principal balance of any Secured Creditor. In the event of an uncured event of default, the cash management account proceeds must be used to pay down the relevant lender’s debt until the deficiency has been cured.
The existing financial covenants were modified and apply to the Company under each facility as follows:
Tangible net worth (as defined in each applicable facility) cannot fall below $400 million (plus 75% of any equity offering proceeds) at any quarter end, and cannot fall (with certain exclusions) by more than 20% in any one quarter or more than 40% in any four quarter period;
Debt service coverage ratio must (as defined in each applicable facility) be at least 1.40; and
Total recourse debt to tangible net worth ratio may not exceed 2.5.
The Company also agreed to certain other terms which establish (i) certain required quarterly operating earnings, (ii) restrictions or conditions on the incurrence or restructuring of any indebtedness and the payment of fees and other amounts to BlackRock Financial Management, Inc. (the “Manager”) and its affiliates, (iii) limits on acquiring new assets and (iv) required minimum quarterly operating earnings for each quarter of the extended term, commencing with the quarter ended June 30, 2009. In addition, certain definitions, including an event of default, under each facility were made substantially uniform among the facilities.
The maturity date for each facility may be further extended to March 30, 2011 at the discretion of the respective Secured Creditor. However, if certain conditions are met, the decision by a lender to not extend may result in such lender losing the benefit of certain new collateral received under the restructuring.
In addition, the waiver of covenant breach under the Company’s secured credit facility with Holdco 2 related to the failure of the Company to repay certain borrowings due under such facility has been extended through October 22, 2009.
Restructuring of Unsecured Debt
In May and July 2009, the Company restructured a significant portion of its trust preferred securities and junior subordinated notes.
Pursuant to an exchange agreement with certain holders of the Company’s $135 million in trust preferred securities and €50 million junior subordinated notes, the Company issued $168.75 million and €62.5 million principal amount of new junior subordinated notes in exchange for those securities. The exchanges closed on May 29, 2009.
The new notes bear a fixed interest rate of 0.75% per year until the earlier of May 29, 2013 and the date on which the Company’s senior secured credit facilities with Bank of America, Deutsche Bank and Morgan Stanley have all been paid in full (the “Modification Period”). The interest rates on those securities were, as of the date of the exchanges, 7.50%, 7.73% and 7.77% per year on the trust preferred securities and EURIBOR plus 2.60% per year on the junior subordinated notes. After the Modification Period, the new notes bear interest at the same rates as the securities for which they were exchanged. The new notes are contractually senior to the Company’s remaining trust preferred securities. The new notes otherwise generally have the same terms, including maturity dates and capital structure priority, as the securities for which they were exchanged.
The coupons that were due on April 30, 2009 on certain of the securities being exchanged were satisfied by payments at the new lower rate of 0.75% per year on the increased principal amounts.
On July 22, 2009, the Company issued $31,250 aggregate principal amount of junior unsecured subordinated notes (the “Notes”) in exchange for $25,000 aggregate liquidation amount of trust preferred securities of Anthracite Capital Trust I (the "Exchanged Securities").
The Notes bear a fixed interest rate of 0.75% per year until the earlier of (i) July 22, 2013 and (ii) the date on which all of the existing senior secured loans under the Company's senior secured credit facilities with Bank of America, Deutsche Bank and Morgan Stanley are fully amortized, including certain deferred restructuring fees (the "July 22 Modification Period"). After the July 22 Modification Period, the Notes bear interest at the same rate as the Exchanged Securities. Interest payments are payable quarterly, commencing on July 30, 2009. The first interest payment due on July 30, 2009 under the Notes is for the interest period from April 30, 2009. All obligations under the Exchanged Securities, including accrued and unpaid interest thereunder, were accordingly fully discharged and satisfied.
The Notes are contractually senior to the Company's remaining trust preferred securities, and otherwise generally have the same terms, including maturity date, as the Exchanged Securities.
As a result of the restructuring, during the Modification Period and the July 22 Modification Period, the Company is subject to limitations on its ability (i) to pay cash dividends on shares of its common stock or preferred stock, or redeem, purchase or acquire any equity interests and (ii) to create, incur, issue or otherwise become liable for new debt other than trade debt, similar debt incurred in the ordinary course of business or debt in exchange for or to provide the funds necessary to repurchase, redeem, refinance or satisfy the Company's existing secured and senior unsecured debt. In addition, during such periods, the cure period for a default in the payment of interest when due is three days.
On May 27, 2009, in a privately negotiated exchange transaction with a holder of Anthracite’s 11.75% Convertible Senior Notes due 2027, the Company issued 850,000 shares of common stock in exchange for $4 million principal amount of the notes.
On July 1, 2009, in a privately negotiated exchange transaction with a holder of Anthracite’s 11.75% Convertible Senior Notes due 2027, the Company issued 900,000 shares of common stock in exchange for $3 million principal amount of the notes.
On July 29, 2009, the Company issued 1,317,000 shares of its common stock in exchange for $3,951 aggregate principal amount of its 11.75% Convertible Senior Notes due 2027 in a privately negotiated exchange with a holder of such notes.
The Company estimates that the effect of the combined unsecured restructurings and exchanges will result in cash savings of over $13 million per year during the period that the lower coupons are in effect. The Company intends to use cash from these savings for general corporate purposes and to reduce indebtedness under its senior secured credit facilities.
Effect of Market Conditions on the Company's Business & Recent Developments
During 2008 (particularly in the fourth quarter) and 2009, global economic conditions continued to worsen, resulting in ongoing disruptions in the credit and capital markets, significant devaluations of assets and a severe economic downturn globally. Assets linked to the
The recessionary economic conditions and ongoing market disruptions have had, and the Company expects will continue to have, an adverse effect on the Company and the commercial real estate and other assets in which the Company has invested. These effects include:
A) Adverse impact on liquidity and access to capital. The Company's unrestricted cash and cash equivalents decreased to $2,429 at June 30, 2009 from $9,686 at December 31, 2008 due to, among other things, amortization payments under the Company's secured credit facilities and reduced cash flow from investments. As a result of a continued rise in delinquencies in commercial real estate loans and CMBS during the second quarter of 2009, the Company’s cash flow has been materially and adversely affected. This negative trend has continued into the third quarter of 2009 and the Company believes this negative trend will continue into the foreseeable future. The Company is required to make an interest payment of $4,056 on September 1, 2009 related to its senior unsecured convertible notes. In addition, pursuant to the amendments to its secured facilities with Bank of America, Deutsche Bank and Morgan Stanley which closed in May 2009, the Company is required to make quarterly payments to reduce the principal balances under the facilities by certain specified amounts as of the end of each quarter, commencing for the quarter ended September 30, 2009. The Company’s current projections show that the Company will not be able to meet the aforementioned principal paydown requirements for certain secured lenders on September 30, 2009. If the Company does not satisfy these paydown requirements, the Company has 90 days to cure such shortfall or an event of default would occur. However, the Company may not have the liquidity to cure such shortfall, if it were to occur, while meeting the Company’s other obligations after September 30, 2009, and the Company then would not be able to continue as a going concern. The Company continues to seek ways to refinance or restructure its unsecured indebtedness, thereby reducing its interest expense and improving liquidity. These efforts include the debt-for-equity exchange and junior unsecured subordinated debt restructurings described above. The Company will endeavor to complete additional debt-for-equity exchanges to reduce the $4,056 interest payment due on the convertible notes on September 1, 2009, thereby increasing the funds available to meet the secured lenders principal paydowns due by September 30, 2009. No assurance can be given that this endeavor will be successful. In addition, financings through collateralized debt obligations (''CDOs''), which the Company historically utilized, are no longer available.
B) Negative operating results. For the six months ended June 30, 2009 the Company incurred a net loss of $(89,058) driven primarily by significant net realized and unrealized losses, the incurrence of a $104,532 provision for loan losses and a loss from equity investments of $(18,690).
C) Change in business objectives and dividend policy. The Company is currently focused on managing its liquidity and, unless its liquidity position and market conditions significantly improve, anticipates no new investment activity in 2009. In addition, the Company's Board of Directors (the ''Board of Directors'') anticipates that the Company will only pay cash dividends on its preferred and common stock to the extent necessary to maintain its REIT status until the Company's liquidity position has improved subject to the following restrictions. Under the junior subordinated indentures the Company entered into on May 29, 2009 and July 22, 2009 in connection with its exchange agreements with the beneficial owners of certain of the Company’s TruPS and junior unsecured subordinated notes, until the earlier of (i) May 29, 2013 for certain junior unsecured subordinated notes and July 22, 2013 for certain other junior unsecured subordinated notes and (ii) the date on which all of the existing senior secured loans under the Company’s secured credit facilities are fully amortized, including certain deferred restructuring fees, the Company is prohibited from making payments on its capital stock, including its common stock, other than (a) with the consent of a majority of the holders of the notes issued under the indentures or (b) dividends or distributions reasonably necessary to maintain its REIT status; provided that such dividends or distributions, (A) to the extent paid to its common stockholders, are not in excess of $2.5 million in the aggregate and are in the form of its common stock to the maximum extent permissible to maintain its REIT status (the “Permitted Distribution”), and (B) to the extent paid to the preferred stockholders, are in an amount no greater than that required to be distributed to such holders in order to make the Permitted Distribution to its common stockholders.
These effects have led to the following adverse consequences for the Company:
* Substantial doubt about the ability to continue as a going concern. The Company's independent registered public accounting firm issued an opinion on the Company's December 31, 2008 consolidated financial statements that stated the consolidated financial statements were prepared assuming the Company will continue as a going concern and further stated that the Company's liquidity position, current market conditions and the uncertainty relating to the outcome of the Company's then ongoing negotiations with its lenders have raised substantial doubt about the Company's ability to continue as a going concern. As noted above under the bullet captioned “Adverse impact on liquidity and access to capital”, substantial doubt continues to exist about the Company’s current ability to continue as a going concern.
* Reduction or elimination of dividends. The Board of Directors did not declare a dividend on the Company’s common stock and preferred stock for the first and second quarters of 2009. Due to current market conditions and the Company’s liquidity position, the Company’s Board of Directors anticipates the Company will pay cash dividends on its stock only to the extent necessary to maintain its REIT status, subject to the following restrictions. As noted above under the bullet captioned “Change in business objectives and dividend policy”, the Company is subject to limitations on dividends it may pay on its common and preferred stock under certain of its junior subordinated notes indentures. To the extent the Company is required to and permitted to make distributions to maintain its qualification as a REIT in 2009, the Company may rely upon temporary guidance that was issued by the Internal Revenue Service (''IRS''), which allows certain publicly traded REITs to satisfy their net taxable income distribution requirements during 2009 by distributing up to 90% in stock, with the remainder distributed in cash. However, the terms of the Company's preferred stock prohibit the Company from declaring or paying cash dividends on the common stock unless full cumulative dividends have been declared and paid on the preferred stock.
SELECT COMFORT CORPORATION (NASDAQ: SCSS)
"Up 20.85% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/SCSS.php
Founded more than 20 years ago, Select Comfort Corporation is the nation’s leading bed retailer. Based in
SCSS News:
August 21 - Select Comfort Corporation Provides Update about Upcoming Special Meeting of Shareholders
Select Comfort Corporation (Nasdaq: SCSS), one of the nation’s leading bed retailers and creator of the SLEEP NUMBER® bed, today provided updated information in connection with the special meeting of its shareholders scheduled for August 27, 2009. At the special meeting, shareholders are scheduled to vote on the previously announced proposed sale of 50 million shares of the company’s common stock, representing a 52.3 percent controlling interest, to Sterling Partners at a price of $0.70 per share (the “Sterling Transaction”). Details regarding this proposal and related proposals can be found in the Definitive Proxy Statement for the meeting, which was filed with the Securities and Exchange Commission (SEC) July 28, 2009 and mailed to shareholders beginning July 31, 2009.
According to a Schedule 13D filed with the SEC August 18, 2009 by Clinton Group, Inc. (“Clinton”), an affiliate of Clinton entered into a securities purchase agreement with an affiliate of Sterling Partners, which provides, among other things, that Clinton has agreed to co-invest in Select Comfort alongside Sterling Partners through an investment of up to $5.0 million in an affiliate of Sterling Partners, which will fund a portion of the investment in Select Comfort in the Sterling Transaction.
Until immediately prior to the execution of the agreement between an affiliate of Sterling Partners and Clinton, the company was not informed by Sterling Partners of its discussions relating to this agreement with Clinton, nor has the company given its endorsement to the agreement as it is concerned that the agreement appears to advantage one, or a limited number, of the Company’s shareholders over others.
Proxy Advisory Firm Recommendations
The company also announced that two proxy advisory firms, RiskMetrics Group and Glass, Lewis & Co., have each issued reports recommending that its shareholders vote in favor of the proposed Sterling Transaction at the special meeting of shareholders scheduled for August 27, 2009.
The analyses, reports and recommendations of the respective proxy advisory firms are solely the work product of the respective firms and the company expressly disclaims any responsibility for the information in such reports. In particular, Select Comfort notes that it advised the RiskMetrics Group that it had incorrectly characterized the purchase price as a premium to market on the day of signing and had not reported the most current information regarding the company. RiskMetrics Group acknowledged receipt of the information and maintained its recommendation for the Sterling Transaction. Select Comfort does not hereby incorporate by reference any such analyses, reports or recommendations.
GREEN STAR PRODUCTS INCORPORATED (OTC: GSPI)
"Up 14.78% in morning trading"
Detailed Quote: www.otcpicks.com/quotes/GSPI.php
Green Star Products, Inc., through its subsidiaries, engages in the production and sale of renewable clean-burning bio-diesel and other products, including lubricants, additives, and devices that are used in vehicles, machinery, and power plants. It offers SuperBAT total vehicle treatment, an anti-friction metal treatment used in various internal combustion engines, transmissions, power steering, and wheel bearings. The company also offers a lubricant formula of biodegradable cutting oil for machine shops, as well as water soluble AFT cutting oil for CNC machines. In addition, it engages in the development of fuel economy, power improvement, and emission reduction technologies for internal combustion engines and hybrid electric drive systems. Further, the company produces super-ethanol. It markets and sells its products in the
GSPI News:
August 27 - Global Green Cars and Green Star to Showcase New 2010 Electric Vehicles with Free
Green Star Products, Inc. (OTC: GSPI) and Global Green Cars, Inc. (GGCI) announced that they will unveil their 2010 G-3 Electric Delivery Mini-Truck to the public and the media this weekend August 29th and 30th in Utah. The event will take place at the Rocky Mountain Speedway (near Salt Lake City) 6555 W 2100 S, West Valley City, UT 84128, (801) 252-9557, from 1 PM to 6 PM where the G-3 Mini-Truck will be the Pace Car (see www.GlobalGreenCars.com). The event will include free test drives for the general public.
On Friday, Aug. 21, GGCI held a preview unveiling of the 2010 G-3 model vehicle to selected interested parties both at downtown
Mr. Brooks Agnew, President of GGCI, stated, “The G-3 vehicle received unanimous praise on performance, handling and visual acceptance by all who attended the private event.”
Mr. Agnew further stated, “The 2010 vehicle models will be equipped with advanced batteries including nickel-based batteries, which now come as standard equipment on the 2010 G-3 Intra-City Electric Delivery Mini-Truck.” Mr. Agnew stated that these batteries offer a much extended range capability over lead-acid batteries and have superior performance. These nickel-based batteries are also much safer than lithium batteries now being showcased by other vehicle manufacturers.
GGCI plans to showcase this vehicle across the
ABOUT GLOBAL GREEN CARS
Global Green Cars (GGCI) is a private company with an International Automobile Consortium of auto industry partners, part suppliers, and electric vehicle component suppliers that have strategic plans for mass production of high performance electric vehicles in the
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Disclosure: OTCPicks.com has been compensated three thousand five hundred dollars from Dana Alex for MFLI advertising and promotional services. OTCPicks.com has been compensated eight thousand dollars by a third party (Mickey Reno) for FWDG advertising and promotional services. OTCPicks.com has been compensated eight thousand dollars by the company for GSAE advertising and promotional services. OTCPicks.com has recently been compensated five thousand free trading shares from Onyx Consulting for GSAE advertising and promotion. OTCPicks.com is being compensated fifty thousand free trading shares by a non-controlling third party (Onyx Consulting Group) for SNEY advertising and promotional services. OTCPIcks.com is being compensated eight thousand dollars by a third party (Stock Awareness Group) for SGDH advertising and promotional services. OTCPicks.com has been compensated two thousand dollars by a third party (Blue Wave Advisors) for GSPI advertising and promotional services. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. OTCPicks.com is a website partially owned by BlueWave Advisors, LLC, a financial public relations firm. BlueWave Advisors, LLC, its principal and/or its affiliates will hold positions in the company profiled and may buy or sell securities at any time without notice.
