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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (42397)	3/20/2002 6:54:47 PM
From: Pierre	Read Replies (1) \| Respond to of 99280

Zeev - re: OAKT I may have exited prematurely as it seems to be holding up well here. Do you see a retrenchment? It's looks to me to be ready to make a strong upside move from here. TIA. Pierre

To: Zeev Hed who wrote (42397)	3/20/2002 7:32:10 PM
From: Jim Cash	Read Replies (1) \| Respond to of 99280

I found the following from the quarterly somewhat troubling. They had to give a warrant to their lender for 750,000 shares of the company at 12 for failing to get junior capital. This junior capital was a requirement when they violated loan covenants several times last year. They also had to pay penalities for this several times last year. As late as Sept of last year they were battling with their auditors vis a vis a "going concern" label. They are covered by NO major firm and the only firm that covers them so happens to be their "financial advisor" who was scheduled to provide junior financing but Immucor balked at the 11th hour (Was it a toxic ?). Sidoti started coverage in March 2000 with a buy and 3 weeks later Immucor announces they will miss the quarter by a HUGE amount.. Their quarter ends in Feb . It doesn't make sense that a company like Sidoti (who dropped coverage about a month later) would miss so badly especially after the quarter has closed. Another take on the warrants is the lender gets a free Short on the stock at any point it is over 12. Meaning they can short here and if it runs to 20 they can cover at 12, if it goes to 12 they can cover without using the warrant. Once the warrant gets executed there is a dilution issue. Any individual item can be forgiven but all in all it don't add up and I don't want to wake up to a disaster in spite of the good looking chart. There are many fish in the see and I've learned when I get paranoid about a stock that its best I listen to the inner voice. From the Q === On September 11, 2001 the Company successfully completed negotiations with its primary lender to issue a waiver of covenant defaults and to reset the loan covenants for the next four quarters in the Loan Agreement dated February 23, 2001. The Company will pay a waiver fee of $750,000 in twelve equal monthly payments beginning September 30, 2001, except that the unpaid balance of this fee must be paid upon the Company's receipt of the junior capital investment, discussed in the following paragraph. The interest rate on the revolving lines of credit and Term Loan A were reset to prime rate plus 0.50% and the interest rate on Term Loan B were reset to the prime rate plus 2.00%. The Company is required to meet quarterly and cumulative EBITDA covenants in addition to quarterly funded debt to EBITDA ratios. Once the Company's trailing twelve-month funded debt to EBITDA reaches 2.50 to 1 or less the interest rates on these loans will revert back to the more favorable pricing provided in the Loan Agreement dated February 23, 2001. An additional requirement of the waiver is that the Company obtain a minimum of $5.0 million in junior capital, in the form of either equity or subordinated debt. Since the Company did not receive the investment by December 31, 2001, the Company must pay the lender an additional fee of $450,000 payable in twelve equal monthly installments beginning January 31, 2002. The Company will also issue the lender a warrant to purchase 750,000 shares of Immucor, Inc. stock at the market price of the stock on December 31, 2001. If the Company meets all of its quarterly EBITDA covenants and no other events of default are then occurring, the number of shares the lender may purchase under the warrant will be reduced based on when the Company raises the junior capital. Specifically, the lender's warrant would be reduced by 562,500 shares if the $5.0 million of junior capital is raised by January 31, 2002; the lender's warrant would be reduced by 375,000 shares if the $5.0 million of junior capital is raised by February 28, 2002; and the lender's warrant would be reduced by 187,500 shares if the $5.0 million of junior capital is raised by March 31, 2002. Additionally, since the junior capital investment was not received by December 31, 2001, the revolving lines of credit and Term Note A were re-priced at prime plus 2.0% and Term Note B was re-priced at prime plus 4.0% until the junior capital is received. If the junior capital is not received by April 30, 2002, all existing credit facilities will be reset to mature on February 28, 2003.