The latest report dampens my enthusiasm for this investment.
There is no mention in this report of an expectation for positive cash flow this calendar year. This is a change from the 5/30 report.
I'm also not sure what to read into this section:
Our banks have imposed restrictions that currently prevent us from transferring funds
from Copper Alloys to our other segments. During the year ended June 30, 2017, the
Company breached certain covenants associated with the line of credit and term loan,
which were not resolved at the date of this MD&A. As a result, the Company’s line of
credit facility and term loan are due on demand. No call has been made. During the year
ended June 30, 2016, the Company breached certain covenants associated with the line
of credit. On January 31, 2017, BMO Harris Bank renewed the line of credit and waived
the June 30, 2016 covenant violations. The line of credit was renewed on substantially
the same terms as the prior agreement, but the interest rate was increased to one-month
LIBOR plus 3.75% from 3.5%.
I read that to mean IBC twice violated terms of their of credit, were forgiven for the first infraction, and are waiting for an outcome regarding the second violation?
Disappointed to read this as well:
We expect that we will need to raise additional funds in the short-term to finance working capital
and growth initiatives. We may be able to generate additional cash through short-term debt or by
issuing shares, but there can be no assurance that we will be successful in obtaining such funds.
Did anyone pull anything positive out of this report that I missed?
