That's my concern, Emerald. That's what I mean by toxic financing in my eyes, which doesn't clear up until next year.
IFFF they can consolidate all of that, it would be great. I mentioned in some posts back to look at NROM and the financing they got from Corbel Capital. Very simple. Simple financing, simple pizza.
This one, however, is very convuluted. And very toxic to my understanding, for precisely the reasons you note. In the conference call, they implied they have better prospects for better financing and hope to shed light on that in the next conference call. At least as I read between the lines here:
the market was even tighter than for capital than it is now. And we didn't want to make any substantial sales of equity at a very low or very tight price. And so, we did just the bare minimum to keep operations going, so we can continue to do the turnaround and produce the results that we just produced over the last two quarters. And we're already seeing substantially improved offerings of finance that we hope to report positively on in the Q2 call.
As I interpret that, it wasn't a lot of capital they got. But now at such a low stock price, the conversion is highly dilutive. That 30% discount is very toxic as I see it. And it remains so all through next year. That's what I've been saying! It's like a toxic death spiral financing. Basically, converts short the stock. By at 30% discount, sell at market, put downward pressure on the stock. They get 30% regardless, we get diluted. I call that TOXIC.
Now, IFFF they do get a 'substantially improved offering" I'm hoping somebody like a Corbel Capital (venture capital) will give them a few million, and they can consolidate all of those converts. Get one long term loan, improve working capital substantially, and take all the dilution off the table. And they are going to want to see numbers. And itis true our numbers are good. They don't have to go to market much if this trend continues as they are almost near cash neutrality. I'm not crazy about the idea of another acqusition, and that was intendted to be in my question(s) if I could have found my dang virtual number pad to dial #2, gosh darnit.
But IFFF such a thing happens, it would be very good I think. They do cherry pick, but they don't lie. And they do answer questions. I can't falsify their explanation of Vincente Fox. In the conference call, they did say they have plans still for that. And IFF it's announced he is on officially, that would slam our theories down. And there are competing theories here.
So, I'm liking this price. Even with all that dilution, I've rounded up to 100M OS for my market cap just to mamke things simple math. So thi is still a decent price for all that dilution which I definitely hope they can consolidate. And again, I'm not seeing the point of an acquision at this time, but that's just me. Unless they see a big capital raise on the horizon, but that wouldn't conform to the *price ceiling raise on the authorized shares. So, I kinda disregard that theory.
