Although the bearish bashers on ihub may be annoyi

Although the bearish bashers on ihub may be annoying, aggravating, and sometimes personally offensive, there is little reason to think it actually hurts shareholder interest at this juncture and it might even help. By diminishing buying, it my have slowed conversions and bought time for the company to make the kind of progress that justifies restructuring the C share obligations. It seems naive to think C holders have any deep opposition to an R/S. If HIMR would have failed to secure a concession this year, shareholders would probably have endured an R/S and considerable dilution. I doubt C holders would have shed a tear. The burden to achieve a different fate was/is on management and it seems they have partially come through with this concession. Now, the issue seems to be whether they will deliver a complete resolution of the C conversion problem or will they try to saddle us with a partial resolution that still leaves much potential for dilution. Notice that in the PR which discusses the C share negotiations says Hayward has "agreed to either retire and/or restructure the conversion rate of the entire lot of Preferred C shares". So, they might retire them all, or they might retire some and adjust the conversion rate for the rest, or they might just adjust the conversion rate on them all. The current conversion rate is very, very, unfair to ordinary shareholders because it allows a $2 obligation to be converted into a million shares which as of today is worth $200. What will it be worth two months from now? Well...more. They can lower the conversion rate significantly and still have a very unfair conversion rate. Some of those bears might be hopelessly underwater shareholders - there is a long history of talk and dilution here. Compassion is sometimes warranted. In post 27418, the poster tells us he has endured two R/Ss with HIMR and now his investment is 2 shares worth .0004. That would have happened to a lot of people. I think it is perfectly fair to say management has an obligation to do what it can to end conversions and it seems quite clear they can.  I don't mean to suggest I condone the bears misinformation or disrespectful tone - I have pushed back against both, but the locus of risk right now is our own management, not the bashers.

None of the convertibles have provisions which allow the owner to force a R/S (this was true of convertibles earlier in HIMR's history), but it is unclear what is suppose to happen if a conversion is requested that would require a change in the A/S. I don't feel like looking them up at the moment, but I think the Watson Line of a credit was a bit worrisome because the terms of conversion were unclear and it didn't seem to have a cap. Kgem shared the rumor that HIMR sold shares to pay that one and we should hope that is true. I think the other near term convertible line had a cap on conversion of 4.9% of the A/S, so that wouldn't be very worrisome. With the C shares, management has the leverage to discourage conversions because it controls the conversion rate. And so, whether those are worrisome or not depends on your assessment of managements willingness to defend the interest of ordinary shareholders versus the C holders. If they use their standard conversion rate of .5, then it only takes 1,000 C shares to convert to a billion shares. The last disclosure of the number of C shareholders was in the 2012 annual report and it disclosed 18 C holders. Lonnie's professed desire to support HIMR's progress is less reassuring when you consider the damage other C holders can do if unchecked by our management.

And so, I will say it again. I hope shareholders will communicate to management that only a complete resolution of the C conversion problem is acceptable. The rationale isn't hard to see. HIMR has an obligation to C holders, but this obligation is for the redemption value at some point, which is far, far, below the conversions. The obligation to C holders doesn't occur in isolation, but occurs amidst other obligations and rights. Management has the right to adjust the conversion rate at its discretion - that is what the parties agreed to. With a concession secured, the unfairness to ordinary shareholders (who take a much greater risk) becomes so obscene that it is reasonable to say management incurs an obligation to exercise its agreed upon rights to defend shareholder interest and end conversions.

It is reasonable to respond to me by saying - Dan, they are going to do what they want, we don't control that at all. Well.....probably....in theory, technically, we kinda, sorta, own the company. It is our company too. It only takes a few minutes to try. It isn't painful, so why not try.