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  • Axion Power Concentrator 361 August 28 '14: 10-Q For Q1 2014; S-1 For $15MM Share Issuance; Changed Loan, IP-Secured MDA; David DiGiacinto Appointed Chairman And CEO [View instapost]
    Since selling my entire position in AXPW four weeks ago, I continue to watch it very closely, looking for an optimal time to potentially re-invest. I’ve been considering whether the upcoming financing might be a good opportunity to buy in at a discount to pps, with the added value of warrants being attached. — So I called Aidan O'Leary at Maxim yesterday (212-895-3609) to try to get a better understanding of it all. I had a number of questions for him, many of which I correctly guessed he’d be unable to answer at this time. But I did come away with a handful of new insights and perspectives, so thought I’d share them here.

    The main takeaways: — 1) The offering could begin as early as next week, and retail investors have to set up an account with Maxim if they want to participate (I had thought I could use my current account). 2) The pricing will be determined just prior to (I believe the day before) the offering. 3) Aiden wasn’t sure how long the offering would be available, saying it could be open for a few days, or perhaps as long as a few weeks. — He assured me he wouldn’t call me the morning of the offering and say I had to make an immediate decision. 4) He also assured me there would be NO Lock-Up provisions that would apply to me as a retail shareholder. IOW, immediate liquidity upon purchase of shares.

    I was a bit surprised by this, and checked the S-1 under “Lock-UP Agreements”, which seems to confirm what he said. — It starts out with, “We and each of our officers, directors, and certain existing stockholders aggregating at least ___% of our outstanding shares, assuming the issuance of ______ shares to warrant holders in exchange for warrants, have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 12 months after the effective date of the registration statement of which this prospectus is a part without the prior written consent of Maxim Group LLC.” — Here’s a link to the S-1, with the Lock-Up section on p. 71 [http://is.gd/DbCsZb]. — Though it’s nice retail investors are exempt from any lockups, it does inject an element of uncertainty of what percentage of the offering will be locked up.

    We touched on a number of other topics. — I told him how JP has described a PIPE deal as the bottom of the financing food chain, while a straight underwritten deal currently being offered by Maxim is at the top of the chain. So I asked him straight up, “What has changed SO materially in the past year that Axion went from struggling at the bottom of the financing ladder and now find themselves at the very top?

    Surprisingly to me (and a bit disconcerting), he said he wasn’t familiar with how the PIPE deal came about last year, and knew hardly anything about it. He did say PIPE deals are normally reserved for companies with relatively little transparency. He expounded by saying that OTC stocks generally fit in that category (I believe because of less stringent reporting requirements). He assumed (guessed?) Maxim was doing the current underwritten deal because of Axion’s efforts to uplist to the NASDAQ, which as I understood, would force and/or deliver the transparency they desired. IIRC, he also mentioned anticipated sales ramp can be a factor in the type of financing made available.

    I then asked him about the possible ramifications of a Reverse Split, specifically how it often seems to precipitate a decline in the pps post-RS. He quickly said that’s not always the case, and cited an example of a client of their’s (RiceBran — RIBT) which he said had done a successful R-S and uplisting to the NASDAQ, and how their warrants were now close to the exercise price. Upon doing a bit of research, I discovered RIBT did a 1:200 R-S last November, going from ~.06xx to ~$12-$14. It traded about $4.xx, or approximately 2/3 lower about a month later.

    I don’t recall whether he said they did a financing for them at that time, but I did find out RIBT did do a financing this past June 26, which included warrants to purchase additional shares. The strike price for the warrants was the pps ending a week earlier, June 19, 2014, which was $5.87. The share issuance price was a 10% discount to that same $5.87, or $5.27. [http://is.gd/atN3yA] Its pps rallied today from $5.44 to $5.76. — I was surprised to discover these results about RIBT, and don’t know why he held this up as an example of a successful R-S, uplisting and financing. He tends to talk fairly fast, and it’s possible I may have misunderstood some nuances he may have interspersed in this particular discussion. From his example however, I assumed the share issuance would probably go off at a 10% discount to market.

    I also noticed that in our approximately 15-20 minute conversation, he often used the term, “when/if” when referring to the upcoming financing. When I asked him about this, he said there’s always the possibility an offering could be postponed or delayed, based on the current market environment. He didn’t in anyway imply this was likely, and I assumed this is just prudent standard practice for him when talking to clients. But it did remind me that there are always elements of risk at critical junctures like the one Axion again finds itself in.

    Unfortunately, a lot of our discussion reminded me of ZBB’s recent experience. When they did an R-S last October, their stock lost about 60% within a month (~1.00 to ~.40) before beginning to recover. They also did a financing this past week, which went off at a 10% discount to the pps (which was determined just a couple of days earlier). The pps had risen from 1.23 to 1.44 the day before the financing (I assume because of a favorable article on SA — http://is.gd/CRnjGQ), but the pps on the day of the financing closed at the issuance price of 1.10. So whoever bought the day before at $1.44 unfortunately found themselves down >20% the following morning.

    Thinking about this again brought a degree of clarity for me on the risks of owning these kinds of stocks, and how there are so many things shareholders and potential investors just don’t know and/or can’t anticipate. Even when things seem to be going right, the seemingly constant need to shore up finances, and the necessity to take it when it becomes available, can keep pps volatility high. I understand this is all part of what’s considered to be a high risk/high reward enterprise, and I was fine with this when Axion had only 113M shares outstanding, and some estimates less than a year ago were that they could escape the PIPE financing with about 165M shares total. But since then the share count has ballooned and is poised to climb inexorably upward.

    I speculated as recently as this past May when the pps was hovering around .17, that an NS rollout and/or a significant sale could propel the pps to .20+, and allow for a successful financing, with an accompanying share issuance price at a minimal discount. IOW, <100M new shares. But since then, the PIPE warrants have swelled the total shares to 250M, and the new shares that will be issued for the new financing, likely at a discount to the current .08xx, will seemingly lead to another 200M shares or so, or ~450M total.

    If the reasonably stable Mkt. Cap. of $30M remains intact, that translates to a pps of of about .066. If some good news were to happen (after the financing) which say increases the Mkt. Cap to about $45M (and a corresponding pps of ~.10) the warrants could be exercised, adding another ~150M shares (though the warrant strike price has not yet been determined). If good news doesn’t happen, and the warrants aren’t exercised, then it seems likely Axion will be facing major financing uncertainties again next year.

    We all know the only thing that will change Axion’s current financing dynamics is a series of good news events. That becomes more and more difficult for me to realistically envision, though I still believe it could happen. But whether or not it happens, ISTM the stock dilution and the potential for more has taken this venture from a high risk/high reward category, to more of a high risk/medium reward category. — This isn’t the conclusion I had expected to reach before calling Aiden, but it’s one that I’m left with. That said, I’ll continue to be vigilant, and still have hopes of getting back in at some point and riding this for a mult-bagger we all hope for.

    That hope might seem contradictory to much of what I’ve just written, but I’ve developed a little short-hand formula for myself over the past 2-3 years that I continue to believe in. — I’ve long assumed Axion could realistically achieve a Mkt. Cap of $500M-$1B+. When there were 113M shares outstanding, the corresponding pps would have been ~$5-$10. When the share count doubled after the PIPE deal, I lowered my potential pps range in half to $2.50-$5.00. With another anticipated almost doubling of shares from the current financing, the corresponding pps range now translates to about $1.25-$2.50.

    If there was an almost complete exercise of the warrants being attached to the current financing, that could add another ~150M, or ~1/3 more shares (~600M total) with a corresponding pps range of ~.80-$1.60 (not necessarily bad as it would mean a far more lengthy runway). — A more modest Mkt. Cap. of $250M would still leave a pps range of .40-.80, which is ~5-10x current pps, to me an attractive multi-bagger. And I continue to believe the odds of that happening are quite good. — If, and this is a big IF, further major dilution can be halted.

    After my conversation with Aiden, and quite a bit of reflection afterwards, I currently view the downside risks associated with the financing and R-S as being greater than the potential upside benefits of buying in at a discount to market and the warrants that would go with it (though it’s hard to quantify because we don’t yet know what the share offering price or the warrant strike price is). — I’m also mindful that a significant good news announcement before the financing could potentially be a HUGE boon to current shareholders, and change the current financing dynamics dramatically.

    Most of what I’ve written above actually obscures a bigger question mark for me, and that’s DDG. Can he execute (as in create his own luck, which is what I believe successful leaders do) and lead Axion to steady revenues and out of these ongoing major dilution episodes? If I had a better sense of what he plans to do with the company, and whether he’s enthusiastically looking forward to personally being heavily invested in a multi-year effort to have Axion succeed, I could put aside a lot of my ongoing lesser concerns. But we’ve yet to hear from him and so don’t really know what his intentions are (not to be construed in any way as a criticism).

    Well, I guess that’s it for now (I hope it wasn't tooo long). Would very much appreciate hearing from others who are also seriously thinking of participating in this new offering, and what some of your primary considerations are. — Thanks in advance.

    Best to All...
    Aug 27 11:37 PM | 40 Likes Like |Link to Comment
  • Axion Power Concentrator 355 August 3 '14: Changed Loan, IP-Secured MDA; David DiGiacinto Appointed Chairman And CEO; Share Reverse Split And Authorized Share Reduction Approved [View instapost]
    I thought a lot about selling out my Axion holdings over the past two months after tenaciously holding on over a mighty bumpy road over the past several years. (In anticipation of the NS rollout and imminent significant sales, I even added 25% to my holdings as recently as early May, 2014). — As a bit of courtesy, I thought I would make the disclosure that I finally (very reluctantly) did sell out this past week (125K). Given my own circumstances, the risk/reward ratio was no longer compelling for me, and I no longer felt it worked in my favor.

    My decision was influenced by some of our resident bears/critics, Stefan, Mayascribe, Rick, NGS, Amouna, LT, etc. The pragmatic posts of more neutral to bullish parties such as Mr I, APMarshall, RA and others also played a role. I also appreciated Ranma’a and Patrick’s posts for their consistently upbeat perspectives. These combined posts helped me balance many differing viewpoints, and I’m grateful to have had them all. I was also influenced by one our most vocal bulls, JP. Here’s a couple of snippets he posted recently, with his notable words in triple quotes:

    — The reverse split and market upgrade proposal tell me that management is serious about dealing with a better class of investor. “”“There's simply no way to tell whether their efforts will be successful.”“”

    — Axion has buyers, but many have suffered from battered stockholders syndrome and painful experience is “”“enough to make anyone cautious when another financing appears on the horizon with no clear business development timeline.”“”
    ---
    There were many factors involved in my decision, with none being more important than my own unique risk tolerance at this particular time. A primary consideration that eventually brought clarity to my decision came from none other than TG himself. His words from just after the PIPE deal in May, 2013 went something like, “It’s a tough market out there; we feel fortunate to have secured this financing.”

    If TG felt grateful for getting the PIPE deal, it should be clear just how close Axion came to closing up shop back then. In other words, they barely survived. I now agree with Mayascribe, who wrote in a recent post, “Axion is in a perilous situation”. (http://is.gd/sJyFPm) — I have no idea whether I’m correct in my assessment, but I don’t think the odds of Axion securing a favorable financing are particularly good. I also don’t like the odds that they can secure any financing at all.

    It became clear to me that there’s way too much I don’t know about too many important things. This insufficient information eventually made it too difficult for me to justify staying invested in this high risk/high reward adventure (at this time). My main concern: Will there be ANY kind of financing available when there are no recurring sales, no permanent CFO, and a recent CEO change? How will the venture capital markets look at all this? I’ve determined I’m just not a sophisticated enough investor to discern how to evaluate what the true risks are at this critical juncture. Hearing nothing from DDG left me with nothing tangible enough to hang my hat on.
    ---
    Of course, this uncertain scenario could change in the blink of an eye with a nod from a major partner, and/or some significant sales that had a lot of potential to be recurring, and more. I no longer believe however that a single sale, such as the BySolar one which increased the pps by 30%, would be significant enough to avoid a less than optimal financing.

    I had a hope at one point that DDG could successfully negotiate some kind of strategic partnership, but we don’t even know if he’s trying. I do think there’s good potential in a couple weeks if DDG comes across well at the August 15 quarterly meeting. I had initially decided to wait until then before making a selling decision, but given how quickly things deteriorated these past two weeks, which made me think the NASDAQ uplisting is now in jeopardy, that just became too late for me.

    Though I sold out completely, I may reinvest some available monies after the financing takes place, unless the terms are so onerous that it will (like the PIPE) weigh on the pps for a long time to come. I’m currently inclined to re-purchase at least 25K shares or so, and hope for a miracle that will take the pps to a dollar in the coming years, at which point I could come close to break even (and perhaps salvage a little dignity as well).
    ---
    Though my experience as an Axion shareholder has been fairly disastrous, I’ll sign off here with an assurance. I will not turn into some kind of rabid posting Johnny Rambo II, occasionally spewing forth bitter, sarcastic invective. I absolutely hope I’m wrong in my fairly dour appraisal of Axion’s prospects, and I will be wishing the very best for Axion, its top management, and its remaining legacy shareholders. — But my own circumstances compel me to become less focused on Axion, and more fully focused on my challenging Lyme situation. Doing this will likely have the additional benefit of allowing me to sleep a bit better at night as well (already has).

    I hope this note doesn’t come across as too moribund. There may even be a bright side to this. Now that I’ve sold all of my shares, the pps will more than likely rebound. There’s still lots of good reasons to believe that could happen at any time, with DDG’s resume and formidable skills perhaps being the most important factor. And in spite of the risk/reward profile currently not working for me, I do believe the odds favor Axion’s eventual success.

    Not sure how much I’ll be hanging out here going forward, so perhaps this is a farewell of sorts (for the time being). Perhaps I’ll see you again down the road if DDG performs up to his salary, the pps has adjusted to the new share count, significant orders are right around the corner, and the risk/reward ratio again becomes compelling (lots of if’s). — For now, I wish everybody the best, and leave with a variation on that infamous Vulcan blessing, “May all Axionistas (past, present, and future) live long and prosper. :-)
    Aug 3 12:03 AM | 40 Likes Like |Link to Comment
  • Axion Power Concentrator 381: Nov. 16, 2014 [View instapost]
    Please note, VERY long post and compilation.

    Amouna posted on Friday that he was so angry at TG, he was going to go out and get “smash drunk” and “forget this whole episode” (did ‘ja?) :-). Since I’m a teetotaler, I myself normally write things out when I feel a need to vent or try to resolve things for myself. This post is the result, since Friday’s CC was a major turning point for myself. In short, I’ve now given up on the potential of Axion to ever make up the losses I’ve incurred over the past 3-4 years.

    For those who may be interested, this lengthy narrative contains a compilation of a few of what I consider to be some of the best (and somewhat prophetic) posts I’ve read on the APC. It also contains somewhat cathartic musings on how I think they relate to the overall “Axion story”. I would characterize it as frequently historical, so if your intent is on looking forward as opposed to looking to, or trying to glean insights from the past, then this post may not be for you.

    Before I get to those posts however, I want to mention that I made a post regarding some of TG’s lack of execution [http://is.gd/84Ncfb] a couple weeks ago that prompted some interesting PM exchanges. Here’s the gist of that post: [WiO 11-2-14 — “I think it’s important to keep TG and top management’s track record in mind... Here’s a partial time line that may be relevant....— I consider RBrun’s post to be an extraordinarily revealing report.] – [Link to Rbrun’s post here: — http://bit.ly/1tAl9Rs].

    I received some PMs from some Axionistas after making that post, and was given information I hadn’t been aware of. Apparently, at the time Rosewater severed their ties with Axion, they communicated to some on this board how unhappy they were with the way they were treated and been lied to, not only by TG, but by the entire upper management. RW had apparently gotten similar feedback from other prospective clients who’d had dealings with Axion, and they all pretty much concluded Axion’s business practices were highly unprofessional. If true, I have to again wonder where the BoD was during this time.

    But is it true, and/or accurate? Sour grapes from a tattered relationship? I didn’t accept this report at face value, but it did prompt me to make a direct inquiry to Rosewater, not to re-hash old issues, but to ask them about their current assessment of the PbC. — From RW’s website: “... creating, delivering and servicing the next generation of energy storage products.” – [http://is.gd/8VblqV]. Given the focus of their business, the most important question I had was whether they could foresee ever incorporating the PbC into their business plans.

    I discovered they don’t expect Axion to be in business a year from now, so why do business with somebody who won’t be around to service the warranty? They also mentioned the PbC price point, which was about the most expensive battery they were working with. They said Toshiba’s Lithium Titanate battery was slightly more expensive, but they consider it the best battery you can buy and the Toshiba name has value for them. The also feel becoming battery agnostic was the best thing they could have done because not many people in the industry know of or care about the PbC. Working with the Toshiba battery was apparently a big boost for them because they are a credible company and their name has cache.

    I don’t know whether this information is all that relevant going forward, but thought I’d share it anyway. One thing that I do find notable, is that William Gotts, who worked for several years at Axion, is the current CEO of RW. From their website: — “He is passionate about environmental sustainability and has made the energy sector, specifically advanced battery storage, his sole focus for the past five years.” — Given all those years with Axion, he’s obviously intimately familiar with the PbC and its capabilities, which makes it all the more puzzling and a bit disconcerting that he’s not chosen to incorporate the PbC into “ANY” of their projects.

    To get back to some of the historical posts I mentioned earlier that I recently reviewed by some past and current posters on the APC. The primary reason I made the effort to compile them is because I believe there’s priceless investment wisdom to be gleaned from reading them (note the dates). They square with some of my own perspectives, and paint a picture that may not have been given the consideration at the time they likely deserved.

    [Mercy Jiminez 6-13-12 — In my continuing spirit of full disclosure -- wanted to let folks here know that I have been liquidating my position in AXPW over the past few weeks and have now sold completely out of my position at a small loss (I bought my first bloc @31cents.) — Here are my personal reasons for selling -- for anyone interested -- and if not interested just click on to the next comment LOL: 1) I still believe theoretically in the value of the technology but technology does not sell itself and business plans do not execute themselves. After the last conference call, my confidence deteriorated in the leadership team's ability to commit and be held accountable for minimum/general milestones to measure performance success.

    My best unsolicited advice to all is listen to your own head, gut, (and other body parts :-)) and do what is right for you irrespective of what I have said above or what others have to say. I never feel like I lose -- when I am true to myself first.] – [http://is.gd/DvZGCY] — Note: I consider Mercy’s post a “must read”, as it contains a treasure trove of good investment principles. If you like it, you may want to check this shorter post a day later [http://is.gd/pqA7dq]

    [EBuiel 7-7-13 — “I don't think that you need a scientific opinion on what is going on with senior management at Axion. I can't understand given the number of opportunities for batteries that exist today that Axion can continue to do so poorly with sales. I've pretty much given up hope that this will change after waiting so long and sold all of my shares...” — [http://is.gd/fFlaJX]

    The following two posts by Mayascribe still “haunt” me a bit to this day. I had decided that if there were no “significant sales” by the first day of summer (2014), I was going to sell at least a portion of my holdings. But I foolishly continued to believe TG’s assurances from a month or so earlier that the sales were coming, that NS was rolling out soon, and... and... So I hesitated—then DDG came aboard and I thought I would wait until the mid-August CC so I could “assess” DDG before making any “hasty” decisions. Anyway, these two posts are ones I wish I had acted on.

    [Mayascribe 6-18-14 — “But what he wrote [48], is pretty close to what I foresee that will go down, and that includes Axion's share price following the RS. There are others of the old guard that have written disheartening stuff, and many, don't, or rarely even comment anymore. — The new guard, those who are still buying, are the ones wearing the rose tinted glasses now, like I was 4 years ago. Kudos to them, and I hope they realize fantastic gains. – [http://is.gd/PvtTPV]

    [Mayascribe 6-25-14 — “I flat lined my brokerage account with two trades of 20,000 at .151, and 55,000 at .150. ... I took a negligible loss. — My Wells broker agreed... he figured pretty much the same scenario would come to pass, and added that he wouldn't be looking to get back into Axion for at least two months following the placement.” – [http://is.gd/blb29h]

    So now, some of my musings. I read once that one of the differences between good basketball players and great ones, is that great ones “always know where the basket is”, and where they are in relation to it. They also usually have a knack for “putting the ball in the hole”, as you don’t win unless you do! I was a pretty fair BB player myself, and assumed players were ALWAYS cognizant of those principles, but apparently that’s not the case. To make an analogy, in business, I view the basket as sales and revenue.

    What I take away from all the above posts, and my own observations, is that for years, Axion management demonstrated an extraordinary complacency and/or incompetency when it came to the bread and butter issues of near-term sales and revenue. It seems some management teams have a knack for bringing in sales and revenue, and others just don’t—again, you don’t win unless you do! — ISTM some of the more astute investors on this board were noting this complacency, along with management’s refusal to take responsibility for not meeting their own metrics, and for not recognizing the alarming deteriorating state of affairs. Their assessments prompted them to sell their stakes in Axion, and it can hardly be argued they were off the mark.

    Other Axion investors and APC contributors took heed, wised up, and sold out, some quite a long time ago. — Unbelievably to me (and outlandishly), it continues to be inferred on this board that they were “quitters” who in some manner succumbed to some kind of “inner timidity”. I would ask again that these kinds of aspersions please stop. I believe it would be far more accurate to say they finally succumbed to their better judgment, and decided to, as Mercy put it, “... listen to your own head, gut, (and other body parts :-))?

    If the lack of sales and poor execution wasn’t bad enough, TG also demonstrated a deplorable lack of willingness to communicate with shareholders. IIRC, their “poor PR” was often chalked up by some with words that went something like, “Yeah, well, you know, uh, unfortunately... they have poor PR...” or some similar facsimile. Poor PR? I just can’t buy it. It seems they could blow their trumpets quite loudly when it came to painting rosey scenarios.

    But when it came to describing the real status of their business prospects, and potential sales and revenues, it appears they deliberately obfuscated on critical matters as a matter of course. My cynical side tells me their “poor PR: was hardly more than a strategy to keep investors coming back year after year with one capital raise after another—keeping them relatively misinformed so they would keep ponying up, and should do so, because “the sales and revenue are right around the corner”. ISTM they knew exactly what they were doing. And unfortunately, there were always those gullible enough (like myself) to believe it.

    One of the PMs I alluded to earlier mentioned that DDG apparently felt the “significant sales” TG was referring to were so doubtful, he personally would have never been chasing them. Might this tie in with TG’s assertion about what a success the road show was, all while the weeks kept ticking by, with more and more onerous terms being negotiated, while the amount of money being able to be raised kept declining? — Much of what I just related makes me think Axion and its shareholders might well be better served if current “consulting” positions were eliminated, and a new CFO and head of sales were brought in to better complement DDG and his new strategic direction.

    Much of what I just related also reminds me of some recent comments by MrI. He was having a discussion a couple weeks back with 48 about the notion of writing a book about the “Axion story”. He listed what he thought were some of the investment mistakes made by some Axion investors—most of whom have lost a considerable amount of money (including myself). His list seems to correlate with some of the posts I linked to earlier.

    [Mr Investor 10-30-14 — ... I think by far the most important theme is the psychological aspects of this story. The timeless allure of easy money. Made hobbyists think they're investment experts. Made gamblers gamble. People doubled down, lost, and doubled again. "I know the gold is in here somewhere, just let me dig another two weeks." Folks wanted to boast to their friends about how smart they are. Rubbing shoulders with the former CEO made people feel important. This blog community made them feel comfortable. All the while their money kept bleeding away. tick, Tick, TICK... the heart of the matter is the classic battle between emotion and logic.] – [http://is.gd/coLRtT]

    Lots of food for fodder in the above posts and links (thanks to those who wrote them). To summarize how I view things going forward, I’ve given up on the notion, at least for now, that I’ll ever be able to recoup my earlier losses, much less make a profit on my Axion venture. I’m encouraged that TG has been replaced, and a whole new focus and sense of urgency is taking hold. — But is it in time to salvage the viability of the company and its re-oriented business vision? Who’s to say, but I think the odds of DDG accomplishing this are somewhere between the odds of a successful onside kick (about 1 in 5), and a successful Hail Mary pass. It could happen, but IMO, not likely. My own thinking is reflected in this somewhat brutally honest assessment that was posted this past week:

    [RuggedDC 11-10-14 — =MY= new assessment is that the company has (financially and in scale) collapsed to such an extent that it is nonviable as an operating company going forward... — Sales and partnerships just haven't developed at any scale over the last year(s) under former management (TG), which time reveals to have misdirected the company's efforts, if not having been cynically - or worse -, thoroughly SELF-serving and willfully deceitful. ...] – [http://is.gd/OgyjeW] — Thanks for that great post RDC.

    Re: the greatest threat (as I see it) to Axion’s viability as an operating company—otherwise known as the “B warrants”—my cynical side would have me believe DDG cut off the CC questions early so he wouldn’t have to answer any questions about them. In a way, I couldn’t blame him, because I think those last minute cashless version changes turned an already problematic capital raise into a potential disaster. Even if that isn’t the case, as argued by some, it’s a broadly held perspective, and so it matters. In that light, I thought I would take a moment and recap some of the following details.

    The cashless conversion terms of the B warrants were agreed to and inserted into the pre-prospectus during a 2:00 pm meeting at Maxim on Wed., 10-22-14, a mere two days before the Friday, 10-24 kickoff. — In a phone call with Lenny at Maxim immediately after that meeting [http://bit.ly/1tkDvE8], he never mentioned those conversion terms, but emphasized the B warrants several times as “an internal hedge”. He also referred to them as containing an “anti-dilution clause” and that retail investors had the good fortune of being able to “piggyback on the institutional muscle” which secured them.

    I did a bit of research, and discovered the cashless exercise “time period” was changed from an original nine months in the 10-22 pre-prospectus, to only four months less than two days later in a FORM 424B3, which was sent to me via email at 2:09 pm, 10-24-14. — I’ve come to believe this last minute wording change from nine months to four months was possibly as material as the original cashless conversion language itself. I’ve also since wondered if it was technically legal, given the offering had kicked off earlier that morning before this material change was made public. Anyway, I thought I’d post this in case anybody might find these specifics noteworthy.

    Perhaps a passing thought... TG has often been given credit (and deference) to being a “survivor” who navigated Axion through very tough times and treacherous waters. This may very well be appropriate, but in somewhat of a nod to Nakedjaybird, I would ask, to what end? More than $100M has been invested in Axion to date, and the Mkt. Cap is now about 10% of that. ISTM the other $90M has been lost by investors who were handicapped in being able to fully grasp what was or wasn’t going on behind the scenes.

    I can’t really think of anybody on this board who’s benefitted or profited from the Axion story. The only ones I can think of who profited are Axion’s upper management who gave themselves generous salaries and dubious bonuses. It goes without saying that Maxim and the PIPRs also benefitted handsomely. Perhaps this was some of what Nakedjaybird was referring to when he raised the rhetorical question (as I recall) of whether it might have been better for all of us had Axion failed long ago, before costing so many Axionistas so much money.

    To the continuing optimists out there, you have my utmost respect, so please, feel free to counter any of my points I’ve raised in this post with your own optimistic resilience. :-) If there’s one thing I’ve learned from my Axion experience is that I don’t have particularly good investment skills, so please take anything I’ve said here with a healthy grain of salt. Having said that and FWIW, I currently think the best prospects for Axion to succeed is to have something very big break out very soon.

    I think the greatest probability for that to happen would be for ePower to begin to succeed far earlier than might otherwise be realistically expected, and the word and enthusiasm somehow began to spread like a wildfire in the trucking community. It could set up a chain reaction that could reap huge rewards for Axion and its many beleaguered retail investors. I don’t know if I’ll be one of them, but I’ll continue to watch the story closely if that begins to look more likely. — For anybody so inclined, please, if you would, spare me any “gaming” comments.

    [BTW, for those who may have wondered about my penchant for making long posts, such as my reports concerning the latest financing, I have a fairly extensive background in publishing. I’ve done considerable work on long and/or detailed documents—as a proof-reader, copy editor, and more. So it’s a natural for me. — I firmly believe in the power of communicating effectively, and have actually thought about offering my services to DDG, as Axion’s ability to communicate effectively during this critical time may be as important as anything else they do. To quickly add, I think several excellent writers on the APC, who are far more knowledgeable on the many business issues Axion faces, could do a much better job than me.]

    The past couple of months have been somewhat of a detour from my intention to focus more on my Lyme situation, and less on day to day Axion gyrations and discussions. Those plans got somewhat derailed when I decided to thoroughly explore whether or not to participate in the recent cap raise, and then tried to post what I considered relevant information so others here might glean what they could from my endeavors.

    I’ll continue to keep an eye on things, and will post if my investment thesis changes. But now that this financing is behind us, it feels like it’s time for me to once again put more focus and attention on my health endeavors, so my posts here will likely be less frequent, at least for a while. As in my Aug. 3rd post [http://is.gd/3Gm3x2], it feels like it’s time to again bid a temporary adieu to some of my friends and comrades here on the APC. I wish everybody the best, and again leave with that variation on the infamous Vulcan blessing, “May all Axionistas (past, present, and future) live long and prosper! – ... ~Happy Holidays~ :-)
    Nov 16 11:03 AM | 37 Likes Like |Link to Comment
  • Axion Power Concentrator 374 Oct. 18 '14: NS-999 In Testing; Axion Nasdaq SPO Page Up; BOD Approves 50:1 Rev. Split; EPower & Axion Present At The Battery Show [View instapost]
    Nick called right after he got out of their 2:00 p.m. meeting. He fairly quickly transferred me over to Lenny to fill me in on the latest–with our conversation lasting 15-20 minutes. As you read my report, keep in mind Lenny’s a sales guy. — The words I use are mostly mine to try to succinctly (yet accurately) summarize what he generally takes many words to expound on. Words below in quotes however, are Lenny’s words almost verbatim.

    He started out by saying (and several times afterwards), “All good news”. — “Thursday night pricing” would be followed by the Friday morning offering, at which time I could expect a call from Nick–I assumed to confirm my prior indication of interest. — I believe he said (or inferred) the A Warrants would begin trading at that time.

    He quickly addressed the change in the B Warrants, which he indicated was at Axion’s behest. He said several times, “If you read between the lines...”. The primary point he seemed to want to make was that this was good news because he believes Axion has become more confident about near-term sales, and decided to forgo some potential earlier revenue for a higher strike price.

    He mentioned the warrants several times in our conversation as “an internal hedge”. IIRC, he also referred to them as an “anti-dilution clause”. He mentioned retail investors had the good fortune of being able to “Piggyback on the institutional muscle” which negotiated the warrants. In referencing the warrants, he at one point said, “Even if it takes five years to get to $10, at this valuation, that’s a very attractive return for his clients.”

    He mentioned institutions would be making up 75%, or $4.5M of the offering. He himself was heading up the retail offering, with Nick, Aiden, and four others assisting him. I asked him whether the “lockup period” for institutional investors was 6 months or 12 months. He said as far as he knew, there was no lockup period whatsoever, with the exact same deal going to both institutional and retail investors. He also said he had no recollection that consideration was ever given for an institutional lockup period. I feel pretty sure there was, but didn’t pursue this.

    He also mentioned (in a somewhat humorous manner) institutional investors were now “married to”, or “pregnant with” Axion (he often uses colorful metaphors). He stressed these institutions are in a long-term investment and are well aware of that. Regarding his ongoing commitment to Axion and his own clients, he said he expects to continue working with Axion as their capital needs arise in the coming years, and will be in an ongoing “road show” mode, making sure they get “proper exposure”.

    I asked him what makes him so confident about Axion that he’s willing to recommend it to his clients. — He immediately stressed VALUATION, and mentioned it several more times as he outlined his reasoning. — He said he’s worked with and recommended many companies over the years, and that most of his calls have been accurate, which is why he’s gotten to where he is today. In the case of Axion, he felt it was a company that was, “on the cusp”.

    He then cited three things that drew him to it: – 1) Valuation; 2) A number of “potential catalysts”; and 3) “Already vetted”. At the current $15M valuation, he didn’t feel it would take much for it to “hiccup’ to a $50M-$100M Mkt. Cap. He said even if it got to $150M, it still wouldn’t even qualify for the Russell Index. He also mentioned he would probably not touch it if it already had a $50-$150M valuation, but at its current valuation, he considered it a relatively “low-risk micro-cap stock”.

    I asked about any changes in Axion’s cash burn rate and/or prospects for potential sales. He said he didn’t have any direct knowledge, but expected both of these front and center issues would be addressed pretty directly by DDG at the next conference call. — Which led me to ask him for his impressions of DDG (I had asked Nick the same in an earlier call).

    He described DDG as, 1) A good guy, a straight shooter, someone who looks you straight in the eye; and 2) passionate about successfully bringing the PbC to market. He said he wasn’t “slick” or anything like that (which he said in a complimentary way), and that he had met plenty of slick people who turned out to be peddling nothing but snake oil.

    As I mentioned earlier, Lenny is a salesman. My own strategy with salesmen is to get them talking, so I can get a better sense of their true beliefs and forthrightness. Do gaps show up in their logic, do they nervously stumble at times, especially over inconsistencies? — Though not necessarily meaningful, I was surprised by his response to my lockup period question. I’m also still not sure why he doesn’t know more about potential sales and/or cash burn rate, a couple of factors I would think institutional investors would want to know more about.

    But I did end up with the impression Lenny has more than likely walked away from plenty of deals that didn’t meet his own professional criteria, whether for himself or his clients. I was also left with the clear impression he truly believes in Axion’s potential, and has a positive to high regard for DDG–and his ability and commitment to expeditiously move things forward.
    Oct 22 04:50 PM | 32 Likes Like |Link to Comment
  • Axion Power Concentrator 292: Dec. 27 '13: Q3 '13 Results; Sale Of PowerCube™ ESS; John Petersen Joins EPower [View instapost]
    How about another poll. I've been wondering whether this end of year selling will also be the end of -.10 pps within the first couple weeks or so of the new year. My inclination is to believe we'll be above .10 at least by January 15, so add one like to this post:

    YES, I believe pps will be above .10 by January 15.
    Dec 27 02:08 PM | 32 Likes Like |Link to Comment
  • Axion Power Concentrator 372 Oct. 08 '14: Axion Nasdaq SPO Page Up; BOD Approves 50:1 Rev. Split; EPower & Axion Present At The Battery Show; 10-Q For Q1 2014 [View instapost]
    Just got off the phone with Nick at Axion. He introduced me to Len, a senior executive whose been at Maxim for 16 years. Talking at an east coast clip, he described his background, and then right away stated he has no idea what’s going on with the recent price action. The only plausible explanation he could think of was there was enough interested generated from the road show that some were already buying in at what they consider to be good prices. He then went on to say the details of the offering have not changed as a result, and they expect it to go off early next week, though he was non-committal about Tuesday.

    He then excused himself and let Nick and I go over any questions I may have. I asked Nick whether he thought the price action might be from some shorts covering their positions. I said I was interested because I would like to know whether Maxim, with many clients holding large amounts of Axion stock, will make that stock available to traders wanting to short the stock. I mentioned some on the board had expressed concern about this happening once AXPW began listing on the NASDAQ. — He said he didn’t know if Maxim made these shares available or not, but doubted it. He said Maxim’s only interests are for their clients’ stock to go up.

    I asked him whether reducing the total offering to $6M from the original $12-$15M was something DDG had initiated from strength (anticipating imminent sales), or that he reluctantly had to accept. — He gave a long meandering reply, essentially not answering my question, and at the end attempting to persuade me it was a better deal for new investors. I interpreted his somewhat rambling reply as a type of non-reply a politician might make to a question they don’t really want to answer.

    I then mentioned Dan’s comments to Mayascribe, and read them to him verbatim. I asked whether the potential sales numbers Dan stated might have come from DDG during his road show. — He said he had no idea where Dan got these numbers, but would ask him, as he works only 30 feet away from him.

    I then reminded him he had said a month ago that when the offering deal was set, he would be able to share more information about the road show, and what DDG was saying to potential investors—while current shareholders were kept out of the loop during the quiet period. He said he really couldn’t think of anything to add at this time (hmmm). So I asked him if DDG had talked about their reorganization and how this might affect their cost structure. I mentioned I was specifically interested in whether their cash burn rate of ~$2M/Qtr for the past few years had been altered in any meaningful way. — He said he didn’t have any knowledge or details on that.

    I then asked him about the possible effect of new PIPE shares hitting the market in November, and another traunch in January. He didn’t seem to be aware this was in the offing, and didn’t attempt to answer my question, but it did initiate a bit of conversation about the PIPE deal. He acknowledged a lot of disdain had been expressed to him by current Axion shareholders about it, but he emphasized Axion knew exactly what they were getting into when they signed on. I politely, but firmly, told him that whereas DDG might have if he had been CEO, I don’t believe TG did. He then tried to sort of pass it off as something he’s not involved with, and essentially outside his purview.

    I really didn’t want to let him off that easily however. I mentioned JP’s background as a lawyer and his extensive experience with micro-cap financing, and how he had posted that the PIPE deal Maxim facilitated contained perhaps the most draconian terms he had ever seen. I mentioned how the pps at the time of the deal was in the upper .20's, and was still weighing on the stock to this day (which he acknowledged). I also mentioned that Axion ended up netting barely $8M from the PIPERs, at a cost of issuing 137M shares, or less than .06 per share.

    I told him I wasn’t trying to hold him personally responsible, but wanted to make these points known to him as a member of the Maxim group. My hope was he would at least file this away in the back of his mind, and if he ever had a chance to influence future PIPE deals, that their client be given a lot better consideration than what Axion was given. — He didn’t appear to take it personally, and the whole exchange was quite cordial. He even thanked me for bringing it to his attention, and felt it was indeed something he was interested in knowing about.

    I thanked him for his time, and he said he would call me back the day before the closing of the deal. When I asked if that would be Monday, he said somewhere between Mon-Wed. — This post confirms the offering details, but all in all, may be more about what Nick didn’t know or couldn’t (or wouldn’t) answer than anything else.
    Oct 10 02:19 PM | 31 Likes Like |Link to Comment
  • Axion Power Concentrator 354 July 31 '14: David DiGiacinto Appointed Chairman And CEO; Share Reverse Split And Authorized Share Reduction Approved; Q1 '1 CC Transcript & MP3 Available [View instapost]
    Bob Averill> — “Axion's management needs our full support at this point in time and they have mine.”
    ---
    Hi Bob, thanks so much for checking in. As you can see, there’s a lot of fear and paranoia within the shareholder ranks. Many of us long-term shareholders are very concerned at this time, especially about the uncertainty surrounding the upcoming financing. In short, I feel we need a bit of support from Axion management as much as they need ours.

    A fair amount has been written here about the lack of communication from our new CEO. I think a very effective gesture that could alleviate much of shareholders’ angst would be to hear from DDG directly. I wonder if you would be willing to suggest to him he pen a thoughtful letter to shareholders, introducing himself, setting out a realistic vision, and address (at least in part) some of the major concerns we have.

    I think such a letter could go a long way toward settling down some frayed nerves, and help us focus on the positives at a time when many are focused on the potential negatives. I think your posting here as already had that same effect. Thanks again for checking in. Much appreciated.
    Aug 1 12:41 AM | 30 Likes Like |Link to Comment
  • Axion Power Concentrator 362 Sep. 01 '14: EPower & Axion Present At The Battery Show; 10-Q For Q1 2014; S-1 For $15MM Share Issuance; Changed Loan, IP-Secured MDA [View instapost]
    I called Maxim again today, and left a message with Nick Hall (212-895-3803) to call me back, which he did a couple hours later. He right away wanted to cover his bases, and asked if I had talked to anybody else at Maxim regarding the Axion offering. I told him I had talked with Aiden last week, and decided to call him (Nick) today because Aiden had been unable to answer a key question for me; — why Axion was “forced” to settle with a PIPE deal last year, but this year was able to do a straight underwritten deal.

    My question seemed to catch him a little off guard, and he said something to the effect that the PIPE deal is probably what Axion filed and/or applied for. He then fairly quickly pivoted to how the new underwritten financing has many advantages. In short, it seemed that just like Aiden, he also doesn’t really know how the PIPE deal came about. My cynical side made me suspect his brief answer about Axion getting the PIPE deal they applied for was indeed accurate (which felt fairly disconcerting). — My best guess however is he really didn’t know, one way or another.

    Since I had already talked to Aiden, Nick said he would let him know I called, and one of them would get back to me to answer any further questions. I had noticed right away how his demeanor was almost diametrically opposite to that of Aiden. Whereas Aiden talks fairly fast, Nick is quite deliberative (and cautious) in conversation, and his slower pace was one I was more comfortable with.

    So I decided to try to engage with him a bit more before hanging up, and we were able to touch on other topics. I told him I was quite familiar with Axion, but was interested in what kind of story, and/or “pitch” they were making to would be investors to generate interest in this offering. He seemed somewhat incredulous that I would think they were talking to clients at all before the details of the offering were known.

    I was in turn a bit incredulous at hearing that, and asked him whether they solicit “indications of interest” before they make an offering, not wanting to do one that wasn’t going to be successful. It was now his turn to again be incredulous (but very patiently so). He repeated they don’t solicit “indications of interest” before they have a product to offer, again stressing they just don’t talk to clients until they have the specifics of what they are offering.

    This confounded me, as it seems clear they’ve been contacting current AXPW shareholders. Perhaps he was referring to other potential investors unfamiliar with Axion. — Regardless, this information seemed to indicate this whole process may take longer than we might have anticipated. Aiden had previously told me he wouldn’t call me the morning of the offering, and tell me I had to make an immediate decision. He had also told me that this offering could be open for several weeks. Nick’s comments seemed to confirm this appraisal.

    We then moved onto a discussion about warrants. He began by saying it’s not certain whether or not there will be warrants. He said that even though warrants may be mentioned in an S-1, that doesn’t always guarantee they will be in the offering, although if they’re in the S-1, they usually are included. He said there are essentially two types; those attached to shares, and those that are sold separately. He didn’t yet know what kind would be in the Axion offering (if any), but said either way, they would most likely trade in a secondary market, though he didn’t give specifics on how that takes place. — What I wish I would have asked is if the secondary market would open up immediately upon the offering, or if it might not be available until the offering was completed.

    I took from this that I may not want to go through the hassle of opening a Maxim account to participate in the initial offering, but instead explore my options in the secondary market. I suspect however, that I may get a call from Maxim on the morning of the offering, filling me in on a number of details, and what my options are. My current take is a strategy of waiting for the secondary market to open up “may” allow me to mitigate the risk of going through a post-RS pps decline. — I then asked him about the RIBT financing they recently did that went off at a 10% discount, and whether he expects a 10% discount to Axion’s pps. He said sometimes the offering goes off at a discount, sometimes it doesn’t.

    I then decided to pivot away from specifics of the offering, and onto the new CEO. I asked him if he was aware that DDG had only taken the helm in July. He said he was, even knowing the exact date: — 7/1/14. I asked him if the “quiet period” he was in would keep him from writing a short introductory letter to shareholders, letting them know what his intentions for the company were. His reply was somewhat oblique, saying that when a new CEO comes into a troubled company, the first thing they will try to do is focus on developing new business plans to turn things around.

    I then mentioned that there’s a bit of angst on the blog, not only about not hearing from DDG, but that he continues to hold a part-time job as controller for the City of Bethlehem; I asked him if he was aware of him holding a second job. He didn’t answer directly, but speaking quite deliberately, acknowledged that it was a very legitimate question. My sense was that he hadn’t known that. — As we wrapped up, he assured me they do the best possible due diligence to do right by their customers. Though he seems to hold his cards pretty close to his vest (wisely so), by this time I found my comfort level with him to be such that I believed he was sincere, and I would recommend Nick Hall as a good contact person at Maxim.

    What continues to perplex me however, and perhaps vex me a bit, is why Axion had to settle for such a poor financing option with the PIPE deal last year. From the extraordinary due diligence that’s continually posted on this blog, I just don’t see how things are so materially different from last May, 2013. And Maxim, who was/is involved in both placements, can’t seem to come up with a remotely satisfactory answer. I can only surmise there’s dual blame to go around to both Axion and Maxim for the PIPE disaster, which doesn’t reflect well on the competency of either. — I’m left with the impression the whole PIPE could have and should have been avoided. That they're currently executing a straight underwritten deal is almost assuredly primarily due to the influence of DDG.

    In finishing up, I’ll just mention that I don’t feel I’m particularly well qualified to try to glean information from Maxim about this upcoming offering. I’m doing it because I have the time and interest. I’m sure others far more knowledgeable than myself could come up with better/more relevant questions, and end up with far better insights than I’ve been able to garner. And please take any of my own perspectives and/or conclusions, clearly expressed, or vaguely implied, with a healthy grain of salt. — How’s that for a slightly obtuse disclaimer? :-)
    Sep 3 10:33 PM | 29 Likes Like |Link to Comment
  • Axion Power Concentrator 376 Oct. 26 '14: Axion Up-List Completed; S-1 10/22 Revision;NS-999 In Testing; Axion Nasdaq SPO Page Up; EPower & Axion Present At The Battery Show [View instapost]
    The post below was written by RA in reply to ggrogers. Anticipating his post would be deleted (and RA's along with it), I copied and saved it if that happened. With permission from RA, I'm now re-posting it. -- For those who have already read it, I just re-read it myself, and was happy to have had the opportunity to do so. I took the liberty of shortening it somewhat, and high-lighting (using ***) what I thought was particularly relevant for those who follow the APC.
    .........................
    Originally posted by RA, on Friday, October 24, 2014

    The justification/decision whether to buy Axion stock now should be completely divorced from the market action. It's not that hard to do. Pretend that today's IPO was a true IPO as if Axion had been private and never traded a share until today. Your choice then with the offering was to buy the future of PbC technology as if it is worth $2 x 6.8M shares, or less than $14 million (assuming the 2 warrants are worth $1.25 to make $3.25). Less than $14 million!! Heck, ePower with never a dollar of revenue, a couple of used trucks for assets, and a staff of I think 4 (no offense John) is valued at $32 million with several seasoned venture capital firms mulling over taking stakes at that figure.

    Axion in the past when the battery was not as good, less vetted by testing (ePower, PJM, etc), customer relationships were fewer and less far along, with no customer testimonials, more uncertainty hanging over production viability, no regulatory tailwind such as California's 1325MW mandate for storage, more uncertainty whether lithium might be as good (it's not for certain things), no published Cube ROI (compelling!), and fewer known applications (no heavy trucks, street lights, solar car charging stations) was valued by professional institutional investors with their own cash on the line at as high as $100 million in past capital raises.

    The prospects are vastly improved since then -- no major problem has emerged with the batteries and they perform better than expected, yet you can buy a stake now at a valuation of $16 million, and that's with a fresh $5.3 million of cash infused! (6.8M shares @ $2.40 market).

    On top of that, today we get a rare gem in the world of stock picking. Ken Fisher, who I don't particularly admire as a money manager or author, wrote a book on stock picking with one great idea:

    ***the central theme of asking yourself what do you know that the market doesn't? It's rare to have certain knowledge that the market doesn't have (unless you're an insider).***

    Because APC Axionistas are such tireless sleuths we know an announcement is coming soon of a win in a 9MW solar project along with a testimonial from a seasoned solar installer. It's probably Axion's largest sale ever and a great vote of confidence. When do you ever get to know in advance the nature and (rough) timing of a major press release of probably a market moving nature? The market doesn't know about CSI yet, folks, and we do. Highly doubtful even the 75% institutional offering participants know about CSI yet. This is not the end of Cube sales. We are near the beginning. Everything is lining up for AXPW's decline to turn around.
    Oct 26 12:11 PM | 28 Likes Like |Link to Comment
  • Axion Power Concentrator 366 Sep. 18 '14: BOD Approves 50:1 Rev. Split; EPower & Axion Present At The Battery Show; 10-Q For Q1 2014; S-1 For $15MM Share Issuance [View instapost]
    Nick Hall from Maxim called this afternoon with the latest details. He said the raise will be $12M, and he was pleased by two things: 1) the warrants will be 1:1, instead of a 1:2, and 2) they will be tradable separately. Stock will trade as AXPW, warrants will trade as AXPW-W. He said both of these provisions make for a more attractive offering. — Warrants are executable within 60 months, and will be at 120% of the share pricing. So if the pricing goes off at 4.00, the warrant strike price will be 4.80.

    He briefly touched on meeting with DDG and other top management this morning, so I asked him for his impressions of DDG. He said he comes across as an accomplished businessman, and is focused on selling the product, as opposed to managing an R&D firm. I asked him if DDG had given any indications how long it would take for sales to come through. He said the impression he got from him was the next 1-2 quarters.

    I asked him about potential PC sales, upon which they seem to be pinning their near-term hopes. He said DDG listed three potential sources of revenue, listing the PC as the likely near-term driver in sales. Hybrid trucks (ePower) were second in line, and NS and other OEM-type sales were considered longer-term projects, out as long as 1-2 years+. — It was about this time he commented that he considered Axion to have essentially moved from an “R&D technology risk” to more of an “executional risk”.

    Which prompted me to ask a pretty obvious Axionista question: “What ever happened to those significant PC sales TG indicated over a year ago that he expected to materialize within three months—adding this was a dominant concern amongst current shareholders. He said he hadn’t been aware of that, but would look into it. It sounds like he’s up to his eyeballs in all things Axion at this time, yet he seemed to think this particular question was important enough for him to follow up on. — He added that he has never met TG, and that he was not involved in their negotiations with Axion management.

    I asked him if the ending of the toll contract was ever discussed, and what this might mean for their revenues. Also, whether that loss of revenue could impact their efforts to get a NASDAQ uplisting. Without going into details, he said neither DDG nor himself were overly concerned about the NASDAQ uplisting, with both assuming it will happen. — In hindsight, I wish I would have asked a followup question or two on that loss of revenue, and what it might portend for the company.

    He said that given how things have progressed, the offering would normally have gone off next week sometime. But because of a Jewish holiday next week, it most likely won’t go off until the following week (last week of September).

    Pricing and Indications of Interest: — The pricing will apparently be based on the share price the day preceding the offering. Whether the pricing will be the “exact” closing pps from the day before, or will just be “based” on it was unclear to me. — It sounded like commitments will be solicited before the final pricing determination is made. So level of interest may play a part in the scheme of things. Though this wasn’t altogether clear to me, I didn’t press for details, thinking things will most likely be far clearer and more easily discussed once the offering is made.

    Final thought: — May our intrepid painter(s) be extra vigilant around the time of the offering! — I may consider picking up a painter’s brush myself.
    Sep 17 08:36 PM | 23 Likes Like |Link to Comment
  • Axion Power Concentrator 375 Oct. 23 '14: S-1 10/22 Revision;NS-999 In Testing; Axion Nasdaq SPO Page Up; EPower & Axion Present At The Battery Show [View instapost]
    RuggedDC, I just so happen to have an interesting little story to tell:

    Both my wife and I received emails from Lenny this morning saying, “I got you the full indication of the deal”. I was a bit taken aback, as Nick and I had gone over this at least 2-3 times several weeks ago, saying I would give an initial indication, and he would then contact me the day before the offering to get a “commitment”, either on my initial indication, or to change it if I cared to. — During the intervening time, I had decided to lower my initial indication somewhat.

    I was surprised I hadn’t heard from Nick on Thursday, as this was what we had discussed. When I heard Lenny was telling prospective participants they could sell their shares from the offering right away and keep the warrants, I became concerned what the pps might do on Friday morning if they chose to do this, seeing a good possibility of a pretty steep decline. — I decided I would go down to maybe 2.75 or so, but would be hesitant to go much lower than that.

    Lenny called about an hour after his email, and I mentioned what my understanding had been, and was surprised we hadn’t discussed this before those shares were put in my account. He said if I was getting cold feet, he could easily “yank” them out of my account, and transfer them to other clients who hadn’t gotten a full allotment. He said it would actually be a favor to him and his clients if I chose to do so, and that I should feel free to make whatever decision was right for us. He asked me to get back to him within a half hour.

    I very much appreciated the freedom he was giving me to make changes if I wanted. About 20 minutes later, he called back as I was sitting with my wife discussing this. By this time she had decided to go with her full allotment, but I anticipated cutting mine in half. When I told him my wife would go with it, but I wanted to reduce mine, he quickly indicated he wanted both of us to go with the full allotment, and that doing otherwise would somehow feel “wishy washy” to him.

    My wife was watching me as he said this, and quickly sensed there was some kind of problem. She then motioned for me if there was, then she would be fine not participating. So I mentioned this to Lenny, and he said something like, “you’re misunderstanding me”. And then in his very fast east coast clip, said a few things, again interjecting “wishy washy”. When I heard this term a second time, I realized this no longer felt like a good fit. So I told him it would probably be best for him to go ahead and transfer those shares to his clients who wanted them. — It all transpired so fast, and I don’t think it was what he expected. But he quickly agreed, and we hung up.

    Looking back, I think he was probably caught a bit off-guard by the pps declining so sharply, and began to have second thoughts about his offer for me to change things that would suit us better. I was surprised by his “all or nothing” approach, and couldn’t really understand why he wouldn’t be OK with getting 80% of our original indication. I’m now feeling relieved how it unexpectedly played out, as I much prefer having an account where I can do my own trading, and not have to call Maxim to make future trades that would be much more expensive.

    Both my wife and I had been keeping money in our checking accounts to cover our allotments at Maxim, and now have to wait three days before we can do an equivalent amount of trading in our Charles Schwab accounts. We did purchase a few warrants today however, but would have purchased more if the funds had been available in our CS accounts.

    I agree with those who believe we’re at or very close to a bottom. The anxiety taken off the table about whether the financing was ever going to come through, along with the potentially huge prospects for the new solar farm in PA using PbC batteries has me pretty optimistic. With the huge volume today, I also have much less concern about how much effect the PIPE shares will have when they begin hitting the market in (now) relatively small numbers in November.
    Oct 24 03:41 PM | 22 Likes Like |Link to Comment
  • Axion Power Concentrator 349 July 13 '14: David DiGiacinto Appointed Chairman And CEO; Share Reverse Split And Authorized Share Reduction Approved; Definitive Reverse Split Consent Solicitation; Q1 '1 CC Transcript & MP3 Available [View instapost]
    My brother is an accomplished musician (hammered dulcimer) who successfully worked the craft show circuit for a number years selling CDs. One day I was at a show with him, a day when there were lots of people out and about, with most of them in a buying mood. As I talked with vendors, it seemed almost unanimous that they were having a “good” day.

    I then ran into a vendor who looked a bit glum, and upon asking him how he did, replied that he didn’t do very well. As we walked along, we came upon his booth. Prominently displayed were pictures of politicians from one of the major political parties (it was election season). It was immediately clear to me (though not to him) why he didn’t do well. He offended the political sensibilities of approx. half the people who walked by his booth.

    From this experience, I realized even more how important it is to not discuss politics, unless I’m with like-minded people, or I have an interest in “mixing things up” (which is not my nature). It seems clear that no matter what political comment is made within a disparate group of people, roughly half will agree, the other half will likely be rather offended. I’m a bit of a political junkie, and am sometimes tempted to make a little political commentary here and there. But the realization it’s going to be at least somewhat offensive to half the readers here makes me think the better of it.
    Jul 14 04:34 PM | 21 Likes Like |Link to Comment
  • Axion Power Concentrator 255: July 27: Two Axion Forbes Articles By Tom Konrad; John Petersen On The PIPE Mechanics And Incentives [View instapost]
    I want to take a few moments to extend a special thank you to John P. for his invaluable [and timely] contribution with his article published this past week on the PIPE financing. It seemed clear he had given the subject material a lot of thought and consideration, not only from a factual perspective, but also on how to take complex financial and contract jargon, and present it in a clear and concise manner, so as to make it as understandable as possible.

    I watched a movie once where Denzel Washington played a lawyer, and sprinkled throughout the movie, he made the comment, “Explain it to me as if I’m a six year old”. It was never in the context of “dumbing down” a message, but to have it presented it in a way that’s readily understandable to another person. I’ve since always appreciated what a skill it is to do just that.

    I also watched an interview recently that Charlie Rose did with David McCullough, a prolific and highly successful history author/writer. In that interview, he said something like, “Clear writing is about thinking clearly, and that’s why it’s so hard; and that’s why I love it!” — His comments drove home the point for me that the act of writing literally forces us to think clearly. And if that clarity can come across to readers, it allows the reader to think more clearly as well.

    These points are especially relevant for me (us?) at this time because of the two articles that were released by Tom Konrad this week. In my own estimation, TK did not pause long enough before putting out some rather provocative comments, which in turn caused a certain amount of consternation for Axion shareholders. A couple of his comments even left me with the impulse to head for the exits before the PIPE investors could do me more harm. [And I consider myself to be one of the more stalwart and loyal of Axion shareholders]. In short, some of TK’s comments left me a bit confused, a bit angry, and a bit more despondent about what a difficult situation this PIPE financing has brought us to.

    It wasn’t until after I read JP’s article that I realized my reactions to TK’s articles had mostly to do with a lack of clarity on his part on some key points. It just seemed his provocative comments were made without making the case in a methodical and thorough manner. JP’s article on the other hand, struck me as thorough, reasoned, and rational, and expressed in a way my brain could easily assimilate. This being the case even though I am in the same boat as DRich, when he opined, “I'm more than a little financially ignorant and micro-cap challenged.” — Nice line Drich! In short, whereas TK’s article left me feeling a bit edgy, JP’s article helped me to relax, A LOT!

    A key point that I took away from both TK and JP’s articles is they seem to agree that the PIPE investors would not have lent money to Axion in the first place had they not had confidence it was a strong company and worth investing in. It would not make financial sense to invest in a failing business, or to try to do anything to cause it to fail. They only want to make as much money as possible. TK seems to think that in order to do this, they may want to pressure the pps for another 3-4 months or so to maximize their profits. JP believes we may have already seen the worst, and made a persuasive case they could maximize their profits by easing off on the pressure in the near term. For me as an Axion shareholder, EITHER of these two scenarios makes it appear that a floor is in sight.

    Another thing that came out of my musings this past week (and there were a lot of them!) is that this PIPE financing has only magnified what seems to be the current dynamic of Axion being a coiled stock. Never has its pps been so battered, and never has its intrinsic value been so high. Yes, the pps could slide even further in the coming weeks or months, but when good news announcements start coming in [and I’m confident they will], then that spring will uncoil. And the pps has the potential to double, and perhaps double again, in literally the blink of an eye. There’s just no way I’m going to try to time that one, and am sitting tight. I believe the odds are overwhelmingly on our sides.

    Thanks again JP. I think you did a great job on your article, and provided a much needed boost for some of us beleaguered Axionistas.
    Jul 27 04:07 PM | 21 Likes Like |Link to Comment
  • Axion Power Concentrator 249: July 8: Axion Power Receives Additional Purchase Order From EPower Engine Systems To Supply PbC® Batteries And Battery Management Systems For (10) Class 8 Heavy-Duty Trucks [View instapost]
    I sat down with my wife last night to discuss what’s been happening with Axion and its pps since June 1. She’s been aware of its falling price, but has not been overly concerned because she considers it to be a long-term investment, and has put it in the “stick it in the sock drawer” category. But I wanted to fill her in on what’s been happening the past few weeks, and how I’ve come to believe the risk/reward ratio I described to her over the previous 12 months [as she gradually increased her position] has changed fairly dramatically since the completed financing on May 8.

    I highlighted three main points. 1) The financing deal that was reached in May has turned out to be far more deleterious than most everybody on this board could have imagined at the time, even to its most vociferous critics. 2) The financing company [Maxim] is now viewed by most on this board as a “vulture” financing company [similar to a loan shark]. 3) Faith in management, already fairly low to begin with, has plummeted since that time, exacerbated by the fact their investor communications are so poor.

    Regarding Maxim, I explained how they are trying to maximize their profits in whatever way they can. And that contrary to TG’s numerous assertions he was negotiating financing with entities that were in alignment with Axion’s strategic interests, that this did not turn out to be the case. I then described some of the tactics companies like Maxim often use to manipulate the pps of vulnerable companies downward so as to accumulate more shares, and how this appeared to be what’s happening at this time.

    Her first response was something like, “Well, isn’t that illegal?” [She’s can be so practical in a lot of ways]. I explained that what they were doing was likely legal, or close enough to it so as to preclude any kind of legal action that might be considered. She then asked if there was any way to get out of this toxic financing arrangement. I told her there really wasn’t, and that it looked like we’re going to have to endure having many more diluted shares being dumped on the market than we had originally anticipated. And the more shares that were issued, the more power it gave to Maxim.

    I mentioned that despite this, Axion had enough money to survive at its current levels of operations for at least another 15 months, with a likelihood extra income during this time would extend that date outwards. And hopefully, if they ever did need more financing, there would be enough positive developments to preclude ever having to consider such a similar toxic financing arrangement again. I also mentioned that it’s now widely perceived on this board there is now a greater risk to Axion surviving the most recent financing debacle, and it’s believed to be fairly doubtful they could survive another one of such magnitude.

    I then explained how many on this board felt Axion had gotten into this predicament in the first place. I primarily focused on how Axion, for some reason, doesn’t seem to know how to put its best foot forward, having stumbled badly in two major regards. 1) How they failed miserably for many years to effectively market an impressive product to many businesses that could fairly easily find innovative applications for it, if they only knew about it. And 2) How they somehow failed to convince prospective strategic investors [those whose interests were TRULY aligned with Axion’s] just how compelling Axion’s prospects are at this time.

    I mentioned how Ed Buiel, a highly respected person in the battery business, had worked for Axion for a number of years, and had long been perplexed as to why Axion couldn’t effectively market such a fabulous product. And how he eventually became discouraged to the point where he didn’t feel their sales performance was ever going to improve, and decided to sell all his shares years ago. [Ed, if you read this, I hope I’ve described your take on things at least fairly accurately].

    I also shared my own analogy of how I viewed Axion. I compared it to a seedling that has the potential to turn into a mighty oak tree. But similar to a seedling that needs adequate water at a critical time to survive, a small micro-cap company like Axion needs adequate money to survive fragile times, and everything should be done to preserve every last dollar. Which brought me to recent bonuses paid to management, which continues to rankle me [I am open to comments about whether it should or not].

    I told her my own personal beef with management was that I didn’t believe it was appropriate for them to be accepting bonuses at a time Axion was desperately trying to survive, and especially not at a time they were negotiating a financing arrangement that essentially put Axion at greater risk of survival. I know some here would say they did what they had to do to keep the doors open. Well, if they had marketed the PbC and negotiated necessary financing with even average competency, I don’t believe they would have ever found themselves in such a difficult position. — Poor grades to them for execution on both these counts, and certainly not a performance worthy of bonuses.

    I concluded our roughly 20-minute conversation by expounding a bit more on what Axion could do to get out from under the negative consequences of the toxic financing. And that it mostly had to do with positive developments happening and being announced in the near term. I mentioned the ePower announcement, the SBIR grant, BMW / NS possibilities, and more. And I told her that despite some of my grievances with management, I thought the odds were very good that some very positive things could develop soon to push the price back upwards toward .3106, and that I had no intention of selling my own shares. I explained that at this price, Maxim would likely find it advantageous to push the stock price higher, not being concerned whether pushing the stock price up or down was what it took to make themselves money.

    I hope this post doesn’t come across as overly negative. Others on this board have been critical of management performance, but I generally held to the belief that whoever was managing the company would bring their own strengths and weaknesses to bear. And I’ve felt it was only fair to be as tolerant as I could surrounding issues I didn’t have all the details on. But resorting to this latest to financing, and accepting concurrent bonuses at a time Axion was trying to survive has turned out to be just a bit too much for me. — Perhaps future performance will eventually show they deserved these bonuses. But being a fiscally conservative German, I’ve long held to the adage that one in the hand is worth two in the bush [or perhaps 5-6 in the bush]. And until you have that one in the hand, you don’t act as if you do.

    I guess in finishing up, I would say one last thing. If I had my druthers, I wish Axion management, if they’re monitoring this blog as I’ve heard they are, would show a little consideration and somehow acknowledge some of the incredibly insightful comments and valuable ideas that are posted here. And I don’t think it’s asking too much they then communicate in some way their appreciation for these suggestions. AND for the loyal Axion shareholders who post them.
    Jul 9 02:14 PM | 21 Likes Like |Link to Comment
  • Axion Power Concentrator 229: April 20: Axion Power On Panel At Energy Storage Economics 2.0 For New York City And Beyond [View instapost]
    I want to thank Mr Investor for coming back here and filling us in on his current sentiments. Without going back and reviewing all his posts, it seems he had some similar concerns to what Mercy had about a year ago. Loved the product and the prospects, but is not convinced [or willing to bet his money] that management can execute, with lack of actual sales being a top concern. I’ve been mulling this over, and remembered a post I made right after the last cc in which I transcribed some of TG’s and Chuck Trego’s comments. It starts out with an investor question:

    Okay, what can you tell us about the unusually high finished goods inventory of $1.677 million at year-end? — This is Chuck speaking. Actually that's a good question, and I appreciate you opening the comment on our inventory composition at the end of 2012 compared to the end of 2011. We have worked very hard this year not only to spend our cash wisely but also to rebalance our inventory to PREPARE IT FOR THE STRONG GROWTH that we anticipate going forward in PbC products.

    TG — We feel the success we’ve had in deploying our onsite cube into the PGM utility network, and the success of our net zero energy cube in the Washington Naval Yard, are partially responsible for the huge increase in quotation requests we’ve been receiving for projects in the U.S, and for projects in many countries outside of the U.S. Our sales force has been hard pressed to keep up with these requests, and to properly service the opportunities. As you might suspect, we have already made plans to staff up in this important segment of our company.
    .........................

    So, the inventory has been rebalanced to prepare for the strong growth anticipated for the PbC products, and they’re increasing their sales force. — Various comments from yesterday about TG reflect most here admire his skills [such as being a wise penny pincher], and what he’s accomplished thus far, but generally speaking, a poor salesman. If it’s true TG is a wise penny pincher [which I concur with], then the question for me is, “Would he be making plans to invest more heavily into the sales force if there were not some very promising prospects of this investment delivering?” I don’t think so..

    As far as whether TG is a good salesman or not, somebody at Axion apparently persuaded BMW and NS to invest millions into PbC research, which apparently continues to draw more research dollars by other OEMs. No small “sales” accomplishment in my mind. — All this indicates to me sales will likely start picking up this year, and when that happens, the pps will improve. And since I’m not smart enough to know when to get in and out and try to time it all, I’ll continue to sit tight.
    Apr 20 10:02 AM | 21 Likes Like |Link to Comment
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