Amfil Technologies Inc (FUNN)

[User-65225]

It’s not unhealthy for a company at this stage to have some debt. I expect them to. Its a normal thing for a business with massive expansion potential... With this popular/hot concept, I hope they take on much more debt in the future and expand at a faster pace, just like every other chain did on their way to a multi billion valuation

Whats more important is the type of debt they have. FUNN has credit lines with the largest banks in Canada and no doubt they did their research, right? Banks don’t give out money to businesses that they don’t think will be able to pay it back.

FUNN has also signed private placements, at a fixed price, which is the cleanest/safest type of equity financing you will find. It also happened to be at the price the stock was trading at the time, which is pretty much unheard of for a small cap

... and this company has never signed a floorless (toxic) convertible debt deal, which is extremely important in pennyland. This is the type of debt that desperate companies agree to, which is why FUNN has never signed any...

This type of debt is also the reason why so many companies fail at an accelerated speed. One large floorless convertible debt deal puts a company on a timer. If they don’t become something by the time that debt is due, the stock will be wiped out as the funders push it lower and lower and convert into larger and larger amounts.

PS: the one wildcard is the publishing division. It could bring in so much free cash, so fast, they could add a location(s) per month without taking on any debt... This is a very good situation for a small cap