Invesque Ord Shs T.IVQ

Easy 20%+ yearly return on the debentures

[Capharnaum]

With the MOU taking place and the announced transactions that will raise cash by $15M (with potentially more coming), the probability that the debentures will be paid in cash at the end of January is close to 100%.

At the current ask price of $88.50, there is $15 to be earned ($11.50 in capital gain and $3.50 in interests). $15 on $88.50 investment is a return of 17%, and considering that return will be raked in over 270 days, it makes for a yearly return rate of 24%. Yearly return stays over 20% for all purchases below $90.50 (as of today).

That being said, it's possible that the return on common shares exceed that (would need a stock price over $4.05 as of the end of Jan 2022). However, the nearly guaranteed nature of the return on the debentures still make it a compelling buy over the common shares, imo.

[2young2invest]

Nice obesrvation! I'm holding debentures with the average price around $60 and think to buy more. My biggest problem is low volume though.

[Capharnaum]

Around $90-91 for debentures, still 20% return (yearly basis) to hold 6 months. Pretty safe return, imo.

[scarface9]

Where do you think they'll get the $45 million? Will they raise the money with an equity offering or some combo of asset sale along with shares issued via PP? I'm looking at another debenture that just came out paying 8%. Of course, 20% returns sounds better, just trying to figure out the risks. What scenario could take place if they don't have funds to pay in January?

[Capharnaum]

They already had $36M at the end of Q1. They also should be able to generate, outside of changes in working capital, around $3-5M from operations each quarter (around $10M for Q2 through Q4). The completion of the new framework with Symphony also netted in total $16M of cash that wasn't there at the end of Q1. If they don't want to use the cash on hand, they have several different options

[scarface9]

I should have read the MDA first. I didn't know their cash on hand was that high. That does sound more likely they pay out. But wouldn't the real return be around 12%? $9 capital gains plus $1.75 interest=$10.75/91=11.81% It's a quick 12%, I'm not sure I understand why you used an annualized 20%.

[Capharnaum]

At $91, it would be $9 + as of Monday (+ 2 days to settle) and additional $2.35 in interests (annual rate is 5% off every $100 in face value). Real return would indeed be around 12.5%. However, when comparing investment opportunities, I usually try to see the return on a yearly basis, as that's the usual benchmark. In that sense, if you could invest in something that returns 18% in a year or

[scarface9]

Thanks for clarifying. I've never bought debentures before. There's a start up company that issued 8% debentures paid quarterly. The main reason I was considering buying was because management and the BOD holds around 50% ownership so I figure they should be motivated to make it a success. I keep debating with myself whether to buy or not.‍

[Capharnaum]

The financial report just came out for Q2 and supports that the jan 2022 debentures are safe: The Company expects to be able to meet all of its obligations as they become due utilizing some or all of the following sources of liquidity: (i) cash on hand of $29,176, (ii) cash flow generated from operations, (iii) credit facilities, under which $23,311 was available as at June 30, 2021, (iv