Take A Look At The 12b-25 Ext: What Does It Reveal?

why so desperate Brandon? Homer don't you think Mel will likely find a way to get JP Morgan to extend the May debt and problem solved? I think we'll be "ok" don't you Homer? Brandon is making everyone suicidal

Calm down everyone,it's all about making it look the worst for the star content that MEL is trying to renegotiate new terms.(MLB,HOWARD<OPRAH<MARTHA)also to appear reasonable in their avoiding having to go to the shareholders with Malone deal.Also it says if provision is waived(going concern)of which i;m sure Malone will do.Remember in ln last week's CC with Liberty Maffei said he likes sirius's bussiness model and wished Mel good luck in renegotiating terms of content,which is dragging expenses through the roof...Just my HO
Also i posted this concern on monday after i read the sec filings,it's all Gamesmanship here,with our money or as wall street says OFPM(other fing peoples money)
Long 400k at .26

I am beginning to see the same distress and despair as before the Malone deal announcement...I don't understand why but that is what I see.

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Originally Posted by Brandon Matthews

Revenue seems ok but they attribute it to the merger, probably best of subs.

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No, what they mean by that "that it doubled" -- is because prior to the merger it was Sirius alone -- then after the merger it was Sirius plus XM... thus their revenue will double.

I agree that the outlook is negative, but there is nothing contained in the lanugage that gives a hint that subscribership was negative during the quarter. I won't say it won't happnen, but I'm not convinced that it did happen.

As for impairment charges -- Sirius has already written off most of the cost of the XM Goodwill charges. And even if they are taken, they are typically understood by the market.


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Originally Posted by Hopeful

I agree that BK may be back on the table, however it only appears to be on XM's table? :confused:

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No. The default would be for the parent company with the recent refinancing.

Going Concern is a regularly applied concept to assessing a business' ability to do business in the future. It is regularly included language in loan / investment documents that shows that Malone is doing his DD in extending the loan and taking an equity position. KPMG's assessment along with Management, that Sirius Xm will not be able to maintain itself as a "Going Concern", in this case because of insurmountable May $250M debt, is the paragraph we are hoping to keep out of the 10K. This "Going Concern" clause is probably in other investment documents that Sirius and Xm have with other lenders. That is why this paragraph is so important to not have your Auditor put into any 10K, and why SXM says in the 12b-25, that without waivers from lendors that it could cause other defaults. This was always a contingency and why I felt a 10K extension was not good.:(:(:(

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Originally Posted by asm610

cos 1000,

Based on that definition, how is it that Liberty was allowed to put verbiage in the deal that stated a going concern kills the deal. Something smells rotten right now.....and they get a premuim for cancelling the deal as well......I'm really PISSED OFF right now!

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All I know is when you couple that with this from the 8k of Feb:


We paid Liberty Media Corporation a structuring fee of $30 million in connection with the Sirius Credit Agreement. In addition, we will pay a commitment fee of 2.0% per annum on the unused portion of the purchase money loan facility. If, prior to December 31, 2009, we elect to terminate the Investment Agreement (as defined below), the lenders under the Sirius Credit Agreement may require prompt repayment at 105% of face amount.

The loans under the Sirius Credit Agreement are guaranteed by Sirius Asset Management Company LLC and Satellite CD Radio, Inc., our wholly owned subsidiaries. The loans are secured by a lien on substantially all of our assets. The affirmative covenants, negative covenants and event of default provisions in the Sirius Credit Agreement are substantially similar to those in the Term Credit Agreement, dated as of June 20, 2007, among us, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent.

It really pisses me off! As I stated earlier..I will be standing in line with Relmor...if they pull this bullshit to go file a lawsuit! They had a clean way out forall of us and chose to go the riskier route!

LOL I just noticed that Sirius has twice as many common shares compared to Ford Motor Company.

May debt is not the problem right now,it is that with oem and car sales crashing,hence rev's are going down faster than forcasted,it is the expenses that must be cut GOING FORWARD,as that is the concern for staying in bussiness right now..The auditors can see that plain as day..

I will buy if the media puts a twist into this and uses it to squeeze more longs out sending the sp to sub .07 yo

Homer, I agree that any BK is for the whole not just XM... too intertwined, Sats, Subs, License, Shareholder Equity, etc... messy stuff...

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Originally Posted by homer985

No. The default would be for the parent company with the recent refinancing.

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My problem is as follows:

This is all about the year ending 2008. If they are doubting their ability to continue based on current economic conditions, bear in mind that January and February auto sales will play a major role in the decision to continue as is.

When the company speaks of doing an assessment, it must conclude that the economy will not turn around in time to make the business viable for any reasonable period of time.

Conclusion: BK prior to the 17th. You heard it here first.

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Originally Posted by cos1000

here is on explanation of "going concern" and it appears in this definition they can use all information available in making their assessment

International Accounting Standard 1 (revised 1997), "Presentation of Financial Statements" sets out management's responsibility for assessing going concern as follows:

"When preparing financial statements, management should make an assessment of an enterprise's ability to continue as a going concern. Financial statements should be prepared on a going concern basis unless management either intends to liquidate the enterprise or to cease trading, or has no realistic alternative but to do so. When management is aware … of material uncertainties … which may cast significant doubt upon the enterprise's ability to continue as a going concern, those uncertainties should be disclosed. When the financial statements are not prepared on a going concern basis, that fact should be disclosed, together with the basis on which the financial statements are prepared and the reason why the enterprise is not considered to be a going concern.

In assessing whether the going concern assumption is appropriate, management takes into account all available information for the foreseeable future, which should be at least, but is not limited to, twelve months from the balance sheet date.”

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That, is a big deal...

Could sirius xm decide at this point to use COH to pay off the remainder of the may debt? Seems like a good idea. This short delay could be giving them the time to gather the cash and make the deals.

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Originally Posted by FoolNHisMoney

It seems to me the Going Concern clause is a chicken and egg situation. The auditors are saying that they have to include the clause if the May debt is not extended, and the Liberty agreement to buy the May debt is contingent on the auditors not including the clause . . . which comes first? The answer has to be BOTH!

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This is exactly what I've been thinking -- which means there has to be a meeting/negotiation between the banks, Liberty and KPMG to work it out.

The fact is, if the KPMG going concern note is included and Sirius goes into default -- then Liberty gets barely anything. They have a small amount of Senior Notes and that's it. But if they work with Sirius to finish the second portion of the refinancing, then Liberty is much more control of the company to seize it in event of bankruptcy at that point.

I think that Liberty knows this. I see no reason for them to purposely allow them to default and get very little out of the deal. Even their CFO stated on their conference call last week that he was fairly confident that the second portion of the financing gets done.

While the wording in the extension concerns me -- I don't think anything is imminent.


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Originally Posted by Brandon Matthews

My problem is as follows:

This is all about the year ending 2008. If they are doubting their ability to continue based on current economic conditions, bear in mind that January and February auto sales will play a major role in the decision to continue as is.

When the company speaks of doing an assessment, it must conclude that the economy will not turn around in time to make the business viable for any reasonable period of time.

Conclusion: BK prior to the 17th. You heard it here first.

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No, BK anytime before the May debt is due. There's no need to rush things...

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Originally Posted by Shawn

Could XM goes bankrupt and Sirius prosper? Isn't XM a wholly owned subsidiary of Sirius? Couldn't they let XM go belly up? Wouldn't that be extraordinarily beneficial for Sirius? Or am I misreading this?

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Yes, but no. The Sirius XM financial statements are consolidated from XM and Satellite CD Radio... and a significant amount of the Sirius XM assets are made up of XM assets.

Bankruptcy of XM would be devestating for the Sirius XM common holders.



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Hi, The company has over 2 months of revenue before May debt. The going concern clause has to say they don't think their revenue intake can pay operating expense, debt due, from March 17 2009 through March 17 2010

I disagree, May $250M is the only problem IMHO.... They already made a deal with Malone / Liberty to take care of economic downturn to some recovery by end of 2009 and now debt due now in 2010. The only thing in the way is Moving out or Paying off the $250M. Malone agreed to pay the $100M and have Liberty take it on as part of phase II. So what does that leave????

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Originally Posted by JohnnyIrishXM

May debt is not the problem right now,it is that with oem and car sales crashing,hence rev's are going down faster than forcasted,it is the expenses that must be cut GOING FORWARD,as that is the concern for staying in bussiness right now..The auditors can see that plain as day..

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For future use. When looking at a stock to buy you want the company to have at least 2 years operating expense COH.

(edit saves us high school dropouts from looking like bad spellers)

In the end is all speculation, same as before... No need to kill yourselves over it. Y'all made the decision to be with SIRIUS until it dies right ? Cheers !