Dave, I think you are confused. It's not that they don't have to pay the interest on the convertables, but rather they are prevented from paying it. They still owe the interest. They still have the expense. It's just that they have to give all their cash to the bank. This of course puts them in default on the subordinated notes (probably makes them immediately due as well), and could make it difficult or impossible to pay bills or even payroll. They have no breathing room. They are out of time and choices. They must sell the company, and sell it soon.
I suggest that the buyout price will be about $8, taking into account the debt, the decline in business, and probably the total lack of morale. Perhaps AMAT will buy them at an exchange rate of 13 share of TRKN for 1 share of AMAT. I'd go for that. It could be lower than that, though. Heck at this point I'd take 15 to 1.
Barring a buyout, though, the end is near. Default on the bank note, and default on the subordinated notes could force a bankruptcy filing as the only other alternative. Remember that they have negative tangible net assets, and have had all year.
Carl
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