October 30, 2026Key date down the road. Maturity of the 6% convertible debentures.
When CM talks about the future balance sheet he likely has one eye on the eventual fate of those debentures.
I think the conversion price is $3.85. Best would be if the common share price can get above that level by 2026 which would then lead to the debentures being converted and $60 million in debt disappears. If the share price doesn't get above $3.85 then you have to refinance--a headache, possibly rather painful depending on where interest rates are at that time.
If they are ultimately converted that will vindicate the decision to issue convertibles in the first place (as opposed to just selling common shares).
I'm sure many small companies end up regretting the decision to sell convertible debentures. Seduced by their puffed-up belief in their eventual success--and probably also egged on by the brokers looking at those fat convertible debenture fees--they ultimately end up with an expensive headache and a wish that they had just sold common shares in the first place.
Just look at Baylin and their convertible issue (currently at 67 cents on the dollar).