Is this a corporate raid?, page-5

Regarding the $250MM note, I think you may be confusing this financing with convertible notes or bonds where buyers often do short stock against their positions. The 2016 note is not convertible, nor was it adding $250MM to the balance sheet of the company. Instead, the financing was done to Refinance existing debt, the majority of which was borrowed at a much higher rate (11%), with the investors receiving warrants, increasing the real cost to the company. The company's ability to come to market and refinance that original $150MM deal was a positive, similar to someone refinancing their mortgage.

One of the things that bothered me about the report was the way the author listed all of the debt deals and then aggregated them as if they were all still on the balance sheet of the company. That was one of the worse mischaracterizations in the report, but certainly not the only one. Anyone presenting the debt of a company would make sure to net out the various deals and show the current picture of the company. Instead, the short sellers provided a list of every deal, labeling the company as a serial capital raiser, whatever that means. They should have noted the benefits of refinancing, not pointing it out as a fault. Plenty of other problems with the report, but too little space to go through line by line. I hope the company would do that, and if they need help, I would be happy to oblige.