ShiftPixy, Inc. (NASDAQ:PIXY) Q3 2019 Earnings Conference Call - Final Transcript
Jul 22, 2019 • 08:30 am ET
Thank you, Patrice. So, we received a really interesting and diverse set of questions this quarter. But I want to start right in with a couple of questions on what many investors consider to be the heart of the matter. So for starters, many want to know about the 8-K filing that announced that conversion requests by the 2018 and 2019 convertible bondholders would no longer be honored, putting even to a voluntary default on these instruments. So, Scott, what is the thinking there?
Scott W. Absher
Sure, Vance. I appreciate the opportunity to explain why we decided it was best for ShiftPixy to force the notes into default. In simple terms, we believe our former bankers offered poor advice, leading us down a path that eventually harmed our share price and made additional capital raising and unattractive option given where our stock was trading. We've now taken two steps to rectify the situation. The first was ceasing to honor the convertible bond redemption requests, which we -- which were constantly punishing our stock price. And the second is the stock buyback program we just announced on Friday. It's our hope that these two actions will allow ShiftPixy shares to start to better reflect the steady progress we're making, executing our business plan.
Okay. Got it. And then one investor asked a follow up, which is how are the negotiations with the convert holders going and is negotiation still a fair way to describe it or is it kind of moved beyond that?
Scott W. Absher
We're talking to them and we hope to come to a mutually beneficial arrangement. In other words, we think there's a lot of future value in ShiftPixy stock and ideally that can be a benefit to all our stakeholders, including the converts.
Okay, understood. And what's really a closely related question, what are you doing to address the notification from Nasdaq that due to where shares were trading, you had six months to regain compliance with their listing requirements? Sounds like the steps you just described are also designed to address this issue as well?
Scott W. Absher
That's right, Vance, is our hope that ceasing the conversions, which were a primary reason for the pressure on the stock and by opportunistically buying back shares in the open market, we can help support our share price, hopefully move the stock above the $1 threshold for the Nasdaq listing and hopefully quite a bit higher than that.
All right. Fair enough. So then maybe a related question for Patrice. What are the mechanics around the buyback? Are there specific open windows in which you need to operate and any other limitations or thoughts you have around how you'll execute on the buyback?
Patrice H. Launay
Sure, Vance. As always, there are some timing and volume restriction for any share buyback program, but overall we tend to repurchase as market conditions warrant.
Okay. Makes sense. Maybe back to you, Scott, on this next one. This is a question we haven't received before, probably because ShiftPixy is still quite new.