RE:RE:RE:Vertical scope thoughtsHi Extreme,
In the most recent Torstar Quarterly filings – “Our investment in VerticalScope is classified as an associated business rather than a consolidated subsidiary or joint venture as a result of certain terms in the applicable shareholders’ agreement.” It is obvious when Torstar bought their 56.4% interest that this was a condition of the deal and was structured for tax planning or accounting purposes which shouldn't be a concern. I think it is a red herring to suggest it was done for nefarious reasons.
The Cayman Island commentary is not helpful. When the founding shareholders sold their shares to Torstar, they were well within their rights to transfer the proceeds to any jurisdictions. I don’t know where an owner decides to park their own money (even if they send it offshore) has anything to do with understanding the investment.
Finally, I am not sure what you are going to do with full disclosure on the debt. They are cash flow positive and I don’t believe they are paying racetrack interest rates. All I know is what I read which is “during the third quarter and first nine months of 2019, VerticalScope generated U.S. $5.4 million and U.S. $15.6 million in cash from operations. VerticalScope's debt, net of cash, decreased U.S. $10.7 million to U.S. $107.7 million at September 30, 2019 from U.S. $118.4 million at December 31, 2018.” Looks like they will generate free cash flow of U.S. $21 million in fiscal 2019 and that’s what matters.
MW