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  • Initial Thoughts On Unilife's New Debt Financing [View article]
    Invariably, stock prices are mean reverting and fundamentals are THE only thing that will matter. The co is going to have to do well over $50mm in revenue this year (being conservative, likely >$60mm) just to have an ice cube's chance in hell of breaking even. While the probability of break-even this year is non-zero, it is, for all practical purposes, zero, absent some sort of miracle or accounting chicanery.
    Mar 21, 2014. 12:38 AM | 2 Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    Read the disclosure again friend. Neither I nor anyone with Stone Street Advisors LLC has any stake in UNIS, long or short. Company policy, we do not hold single names, only passive investments. What our clients choose to do is entirely up to them.
    Mar 21, 2014. 12:32 AM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    We are long-term, not short, so we could generally care less about what the stock does in a day, week, month or several months. I've made this clear several times, yet many seem to be unable to comprehend this very simple point.
    Mar 20, 2014. 09:46 AM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    Quite the contrary. If you look at my last piece I gave the company A LOT of credit for previous and as yet announced/completed deals. I gave them a LOT of credit for managing their SG&A spend as well, so I'm not sure where you get off saying that I'm not giving the company any credit. By ignoring the points I've made and just chalking it up to being a paid shill you're only doing yourself a disservice.
    Mar 20, 2014. 09:44 AM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    Based purely on drawing lines on a chart. There is zero fundamental basis for the current let alone those estimated future prices.
    Mar 19, 2014. 11:40 PM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    I think it's better - or at least instructive - to look at it from Orbimed's point of view (assuming flat yield curve/rates stay flat over tenor of the loan).

    Bear case: They're at the top of the capital structure (most likely), have senior, secured 1st lien on substantially all of UNIS' assets including IP. If UNIS goes under in the next few years, Orbimed gets a pretty good cash stream in the interim from interest and royalty payments and can either go after the assets or own UNIS at the negotiating table before default/own a substantial part of the company if they go the bk route.

    Bull case: The company slowly takes off and Orbimed collects substantial royalty payments AND gets a great yield on an improving credit risk for the entirety of the loan.

    Either way (and anywhere in between), Orbimed is in a pretty good spot, with limited downside and a lot of upside. Look at their website, they do royalty deals with little dilution fairly regularly.
    Mar 19, 2014. 11:16 PM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    Warren Buffet, Carl Ichan, George Soros, etc, etc, would you like me to continue?
    Mar 19, 2014. 11:04 PM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    How many more years are you going to believe Shortall's promises and the timing thereof? 10yrs and they're still nowhere close to profitable...

    I obviously am not going to convince you about anything as your mind is already made up so no point in responding further. I wish you luck and hope if you're so convinced UNIS is a winner, you keep your sell stops/limits tight.
    Mar 19, 2014. 11:04 PM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    Yes, which further advances my point. I literally have never seen that before in a filing or press release.
    Mar 19, 2014. 12:25 PM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    1. Re-read what I wrote. Pro Forma they'll be in the 96th percentile. Not pre-financing.

    2. The new debt decreases the value of the equity substantially, increases the firm's weighted average cost of capital (if you use CAPM at least), etc, etc. $60mm is entirely too much debt, as is $40mm + the royalties. Unless UNIS gets one or more very large contracts with upfront payments in the next 12-18 months I wouldn't be surprised if they end up having to raise even more money, at best. Frankly, a convert would have been far better for them, however, in doing straight term loan + royalty, I doubt anyone would do a convert deal with them. Whether this is different than any other small cap firms is irrelevant; UNIS has been around for a long time and has yet to achieve anything even remotely approaching commercial success. How much longer are investors going to pay such a huge premium for that?
    Mar 19, 2014. 11:45 AM | 1 Like Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    The fact is that well-run companies have succession plans for C-level executives and those executives communicate with the rest of management and the board when they are considering leaving the company to ensure a smooth transition. They also provide an explanation of some sort when an executive departs e.g. "...is leaving to spend more time with his family," which UNIS did not provide at all.

    Ceteris Paribus, this is very uncommon and does in no way, shape or form indicate anything positive about how UNIS is run.
    Mar 19, 2014. 11:38 AM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    2.75% on 1st 50mm, 1% on 2nd 50mm, 0.25% on anything over 100mm = 2.75+1+0.25 if they do over 100mm in revenue = 4% blended rate. This is no rocket science nor am I trying to distort anything. Shortall has done a good enough job of doing that on his own. You can believe the guy who's made millions while diluting shareholders 10x over the past several years, or you can consider the possibility that this company is run like crap, has largely failed to reach milestones and promised goals, and screwed shareholders all along the way. Your call.
    Mar 19, 2014. 11:35 AM | Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    No. I was not paid to write this. We are paid as a consultant to conduct research for clients. When we are able to publish some of our research, we like to do so as long as we have our clients' permission.

    You can keep assuming that our goal is to push the price of the stock down, OR you can read, consider, and respond to the research we share. The former is a cop-out and intellectually lazy. Any reasonable investor must consider all possibilities, positive and negative, which we have.
    Mar 19, 2014. 11:32 AM | 2 Likes Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    The reason I say that is because I like to consider all possibilities; while I'm confident this company is massively overvalued, there is always a chance that they pull off a miracle and it ends up being a great, sustainable company, however infinitely small that possibility is, it's non-zero.
    Mar 19, 2014. 11:29 AM | 1 Like Like |Link to Comment
  • Initial Thoughts On Unilife's New Debt Financing [View article]
    I'm just pulling out what the 8-k said, perhaps I'm interpreting it wrong but it seems to clearly say it's tiered and additive. Maybe I'm wrong, but that's how I read it.
    Mar 18, 2014. 10:32 AM | Likes Like |Link to Comment
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