HRBR Update

I wanted to write an update on HRBR pro forma for the sale of substantially the entire business and assets to help anyone who might have a position and may trade the stock without knowing the current situation.

The company has announced the sale of substantially all its assets in a deal to sell the assets to two different entities for $113.9M in cash. This deal should hopefully close in late January. Once the deal is closed HRBR will be similar to SPAC but without any issues with regard to capital leaving any potential transaction. As far as I understand there are no NOLs here to monetize any longer.

Over the past year the company has likely made small sales of planes and engines that did not warrant 8-K filings. It has incurred a small cash burn post the May AA termination. Severance payments based on my research have not been substantial relative to its cash balance generating $5M a year in income and sales of assets. I believe there was little if any material reduction in its cash balance since we had the last 10-Q filing showing ~$100M in cash.

It follows the company will likely have a ~$210M cash balance once this deal closes. Pro forma for the pfd conversion and some small buybacks I believe the share count is ~58M. This equates to a minimum cash per share value IMO of ~$3.62. The question we have on our hands now is what will this cash be used. I believe we are completely aligned with the controlling shareholders who own more than 60% of the shares. Thankfully this deal closed and we didnt get a $1.25 tender over the summer. I am optimistic that going forward Resource Holding led by Mr Bartlett will create additional value through some sort of new investment. I am hoping they will get current by March of next year on its all filings now that we have a simple cash shell and they can turn their full attention to the accounting. Hopefully by then we also see some exciting news on how the cash will be used and/or distributed. I am happy to ride his coattails here…