RE:Going back over $1?I was waiting for the waiver agreement to be posted on Sedar. They had promised this along with the press release. I don't know if it was posted until today.
I was surprised to see a waiver, but when I saw it, I wondered what conditions they would put on Spark. There are many.
1. Operating line needs to show $3 million of availability at any point in time. If they fail to maintain it, and cannot provide a valid explanation, it is an immediate event of default.
2. Any borrowings can only be used for items in the 13 week cash flow prepared for the bank.
3. No waivers on any covenants after March 31st.
4. Monthly cumulative EBITDA requirements for every month starting April. (So unlike normally, when they would be tested on covenants each quarter, they have to meet a covenant each month). If they miss one, that is an event of default.
5. Fee to BMO of $250,000, and interest rates +1%. Plus payments of bank's legal fees ($84k as of the date of the waiver).
6. Weekly 13 week cash flow reports, with bi-weekly cash flow variance reports.
In the second paragraph of the waiver, they state that Spark owes unpaid taxes for prior years, and throughout the document, they mention that these have not been disclosed (thus another event of default). Again, great to surprise to the bank.
At least they didn't pull the loan. That said, not a long leash.
Lorie Waisberg - appointed diector this week, resigned this week. Can't say this is a positive.
And Again - Richard Jackson President and CEO not being put on the Board - again VERY Unusual. Earlier disclosures did say he was to be elected at next AGM.
I would classify the press release as positive, but just barely.