RE:Never ending drip Late Friday unfavourable news releass always signals that management is trying to sneak one past investors. All it ever ends up doing is shake investor confidence so yes I'm happy that they announced mid-week, though I didn't see an official press release in my inbox this morning.
I was quite certain that they needed to draw the entire $5M they prenegotiated with Beedie after a weak Q3 and what they signalled as only a partial recovery in Q4. In total now THNK is paying just under $6M in interest and while some of that is PIK rather than cash payments its still a lot for a company that is just turning EBITDA positive. Assuming that they need to fund about $3 million in capex/intangibles plus $1.7M in upcoming short term obligations (not incl. Scotia debt) and you have a company that will only breakeven cash flow wise if they hit close to $11 million in Adj. EBITDA (Analysts are forecasting $6.7 million in Adj. EBITDA for 2024 and $10 million in 2025). With all the Beedie line draws cash on hand should be around $8 million at present. So for 2025 they have a cash shortfall of about $5M and the following year closer to break even. The wild card here is THNK landing a big deal (or deals) in their self proclaimed "mature pipeline" but news on that front has been very lite which is inconsistent with managements rhetoric during conference calls.
So where do we go from here? I'f I'm Beedie and also Scotia I'm looking for a private equity sponsor or large strategic buyer to aquire the company. For Beedie a price of $0.50 to $0.60 would do it so that they can realize a good return on their convertibles which would auto convert on a takeover. A takeover would allow Scotia to exit its debt position.