RE: RE: Looks like I'm the only one left 4 employees (key employee retention program, the court document says) $22,625/month. This doesn't include David Campbell's salary. Still a huge difference over the approx $1.5 million payroll which was common.
Was all that inhouse expertise necessary to be a resller or were they hesitant to get rid of long time empolyees and hope things would work themselve sout. Well they didn't work out as expected.
The next issue is the debt. It would be great if could both reduce debt and interest expense. Maybe Aeroplan will buy the tax losses, but to get the best value, creditors will probably have to accept AIMIA (Aeroplan parent) shares as payment.
Here too. A large reduction in expenses is possible and also clean up the balance sheet. I don't expect Futura to rely on debt as much as in the past. equity financing will be the way to go. Need to get rid of the debt as much as possible to attract new money.
Depending on what is received for their tax losses, let's assume they will save $800,000 in interest expense and general/admin expenses saved will be about a $ 1 million. Total$1.8 million saved.
Even with all of these, there's still a $400,000 loss. They could wipe out the debt entirely, but still have $200,000 loss. However, some debt could be converted to shares. But for that to happen. Management needs to provide a solid business plan to be accepted by the creditors.
It won't be easy, but compared to a $2.2 million loss, it;'s a big improvement.
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How would the business be restructured? Is US expansion the way to go with independent commissioned salespeople? Additional costs involved include training of new territory sales reps, marketing material, etc.
In Canada, will Aeroplan renegotiate the contract with Futura? Another issue is, how confident is management that operation can be financed with equity. (A clean balance sheet will help). The fate of Futura Rewards.
No wonder there' was no news release last week. To bring all of the above issues into one workable solution is time consuming. Also assumes that there are serious buyers for the tax losses and not only tire kickers.
Probably will take to Jan 18th to get any news. The other alternative is to go into a different line of business. That can be both encouraging for shareholders, but also risky.