Sembiosys Genetics Inc. SBIYF

To understand the bondholders

[RE38]

You have to think like the bondholders. These guys aren't daytraders or small time investors like us. When SBS goes up on the Tasly news they don't think "Yes I can sell for 100% or whatever short term profits there are and go onto the next one". They think "Let's see how this goes and when is the correct time to take majority ownership". They couldn't possibly dump 69M shares at 100% profit anyways. This is not Citigroup where someone can dump 69M shares just like that. 

 

The bondholders are going to think like Buffett or Trump. One day you will see a news release stating that the bondholders have exercised all their warrants, forgave the debt and now own majority control of a $1+ stock. They aren't going to exercise the warrants in little bits and pieces 100K at a time at little piddly 11 cent prices. The Joe Dwek type of snakes who do these types of thing are few and far between. And this isn't a mining company.

 

The only way they'll exercise their warrants at these prices is if in 5 years or so the Tasly agreement is somehow an absolute disaster and the stock is stuck at 5-10 cents. Then they'll think about how to get their investment back.

[767pilot]

As I said.....you couldn't explain how it fixes the balance sheet...you just ramble on and postulate what the bondholder might be thinking

[resourcehorse]

Interest rate of 7% is something they gain per annum as well. But hey do what you want, this is an underated play right now that many will wish they had bought so cheap. The bonds issued in the transaction bear interest at a rate of 7 per cent per annum, compounded annually, have a maturity date of 10 years from the date of issuance and are secured by certain intellectual property assets of

[RE38]

Geez I rambled on instead of answering your question first because it should be obvious to anyone that if they choose to exercise warrants in lieu of payment on the face value of their debt, the debt decreases and improves the balance sheet. Also if they choose to take an equity stake in the company, they are more likely to be forgiving on the remainder of the debt.    I'm trying to

[767pilot]

Now we are getting warm........call provision at 120% of face value.   If the price of the stock goes up the warrant goes deeper in the money and the value of the bond goes up. Obviously SBS does not currently have the cash to pay out the bond so they won't call it just yet, however, if the Tasly people commit to some sort of 'friendly' financing and give SBS $10 million and gain

[motherearth]

This post has been removed in accordance with Community Policy

[Vanhope]

Dah ! OK. Think  like  the  bondholders. They  have  66M  to  exercise  at  .06  or  .05  (special  clause) For  sure  they  are  not  exercising  all  of  them  at  these  levels. That's  stupid  and  the  market 

[Magnum]

767Pilot,Vanhope, and RE38, What am I missing here....to me if I'm understanding this "debt", the other party holding that debt has all the options available to them, is that correct? Their options are as you say 120% of face value + interest, or take shares via exercising 5 or 6 cent warrants...the warrant option increases their equity position the longer they hold the debt,as I

[Magnum]

 I  would  not  be  interested  taking  over  of  the  company  and  running  it  on  the  daily  basis. I  would  be  on  this  just  for  the  money.   Vanhope, I agree the debt holders are after money, but if they control the option(s

[767pilot]

The debtholder does not have all the options you listed.........the 120% + interest is NOT at their discretion but rather at the discretion of the company which therein lies the risk for the debtholder.   The percentages you liseted in terms of ownership are roughly correct as of now but the longer term number is irrelevant because that piece of debt will either be redeemed against their will

[RE38]

Motherearth - have a look at my posting history on this board for everything I can say about why I think this company is good value.