UPDATED: 05.26.2017 @ 11:30 AM EDT — We are awaiting some outstanding due diligence / fact-checking requests we’ve made this morning, of the company’s CFO (who is also a full board member, and larger investor), and we’ve made the same request, at the regular investor relations desk — so we cannot update this item in full, just yet. [In the mean time, Bob’s model on projected back-half 2017 additional dilution is at right. Click to enlarge.]
We have asked about whether as a public company, it is even possible to calculate the Hercules covenant compliance tests, since (it would seem) starting in 2017, those numbers are driven off of projections the company provides only to Hercules. We don’t want to jump the gun here, but it would, under applicable SEC disclosure rules, be highly questionable if it turned out that the investors at any given 17 year public company could not calculate, from the public records, whether the company is in compliance (or… in default) with its single largest lender — and whether that lender will thus be obliged to make additional loans in July and September of 2017 (or be relieved, from that same obligation, due to a covenant default). But so far, that particularly bizarre state of affairs… seems to be the case…. Never a dull moment with these folks, indeed.
At day’s end, on Friday, the company hadn’t responded or commented. So — we will now allow our readership to ponder — over the long holiday weekend, whether any public company should be allowed under SEC rules — to play “hide the ball” with respect to the continued availability of the only financing source it has as “dry powder” at the moment.
That’s some $7.5 million, from Hercules — still undrawn, if memory serves. And the company is quite quickly burning through the $16 million cash it raised in the highly dilutive equity market down round, of just this past February. We could see that from the sEC Form 10-Q trendlines.
[End, updated portion — more to come later on Tuesday.]
I’ll just let the image speak for itself (but do compare it to Bob’s, above — his may be more accurate, in fact, than mine).
Tomorrow, I’ll explain how (I’ve now surmised that) Mattersight will miss on its Hercules continued lending covenants.
All of this will, in turn, force another down round of equity — it will look pretty much like this: