RE:RE:RE:RE:Will hit 50 cents within the next 30 days To address your last paragraph first:
1. Paying a fee for a covenant waiver is certainly common (banks make money on fees). I believe the other waivers were something like $25k. I'm not surprised by charging a fee, but rather the amount.
2. This is the first waiver that has been signed by Special Loans. The others were by their relationship people.
3. If BMO was concerned, they would have forced a paydown - to your point, they don't want the keys - it is an expensive and ugly process to wind up a construction company (ask Bondfield's surety). BMO did force 10 million to be paid off the operating line, but they did not reduce the availability. I do think they were trying to work things out. That said, they allowed for the promissory notes to be paid out from the proceeds of the equity raise - which if they knew that Spark was blowing covenants Dec 31st, they likely wouldnt have consented too. The notes ranked below them.
You are right about the working capital amount. I can't tell from their statements how much of AR is statutory 10% holdback (so not due until 60 days after substantial completion of the contract) - so the comment on AR may or may not be correct
My bigger concern is what they refer to as contract asset. This (i believe) is work completed which cannot be billed. This could be due to milestone billing (contract requires a milestone to bill, and have yet to completely hit it), or a lag in billing (just not being disciplined). But this can also be where the costs are accumulated for potential claims that cannot be billed. This is the most subjective item on the financials. When Spark took a writedown in Q3 and Q4, it was on this number. Now in Q1, it increased by $5 million.
I don't know what they need to do going forward. You mention SG&A. I do suspect there is some large rationalization that has to occur. They seemed to have done a number of acquisitions and have a ton of locations (and likely duplicative overhead).
BMO will do everything possible to keep the Company operational and realize on their loans - as long as Spark does not continue to burn cash (ie their collateral).
That said - current shareholders may see some value in the Company or may not. This is speculative. If there was the opportunity for someone to issue a bunch of equity, dilute shareholders, and pay the bank some cash - it would be done. The bank is in the drivers seat now. They are doing what they need to do to protect THEIR interest.