Short Convertible Debentures AnalysisDon't have the time to do a full-out analysis; therefore, just some quick informal opinions about the latest news from OG.
$3M Convertible Debentures deal eh? Didn't really expect this one--guess it makes sense though considering the tough spot OG was in and no private financial instution wanting to touch the company.
IMO this changes nothing. Over $2.5M is being used to pay off the original BDC loan in full so the company still has relatively low cash assets and while 9.5% interest is better than 14%, it's still on the higher spectrum and will exhaust their working capital quickly.
Also noticed that the company released a company update report acknowledging their plans to stop their growth plan and open up the store in central Toronto. Although they were forced into this decision by not having the capital to grow; it's still the smartest decision I've seen from the company in the last 2 years.
OG still remains in really bad shape and I revert back to my original opinion: Liquidation and insolvency sometime mid-late next year.