This is one of the easiest decisions I have had to make. The KitD deal is the most poorly structured deal I have come across. It is grossly incorrect to say that Hyro is selling its businesses for $17.2m. It is selling them for $8.5m with almost insurmountable strings attached.
Net to Hyro (the company) is around $8.5m. Then as shareholders you need to adjust for payment back to PFG (~$2.7m), running costs of the Hyro shell for another 12 months (~$1.3m), potential tax issues (could be anything). So net to the Hyro shareholder is $4.5m, or around $0.15 per share.
Sure, there is this supposed floor of $0.35, but has anyone seen how this is structured or what other strings are attached to this? THEN you also have to assume that KitD is a going concern in 12 months time!?!?
I have only met Gary Cohen once and don't know him at all well BUT his CV in "IT" is strong and in my view, anyone who is prepared to stump up $1.6m at $0.40 a share should be taken very seriously. He has a plan to turn this company around. I am excited about the prospects of Hyro under the Cohen direction and leadership. In fact, given the opportunity (and assuming Cohen takes the reins) I am prepared to invest along side the Cohen team.
I am a large shareholder and have already voted against the KitD deal.
Good luck to all Hyro holders. Let's hope sanity prevails and the Cohen Train gets the opportunity to pull Hyro out of its slow and painful death spiral
HYO Price at posting:
34.0¢ Sentiment: None Disclosure: Held
