October 31, 2024 Cash Position - 2 How to deploy the $2.5 million October 31, 2024 cash balance
While investing in another GIC is easily done, and if directed into a cashable product retains the cash as readily accessed if and when a better use is determined, the fall in interest rates has reduced the interest that could potentially be earned - we will not see a 4.75% rate as being earned on the current 1 year GIC purchased in April 2024.
A better interest rate yied is available on the current Long Term Debt which has a floating rate of Bank Prime + .75%. Paying down any portion of this debt (if there is the option to do so without penalty) immediately earns us the equivalent of this rate - currently 6.7%. The term loan with BMO is a non-revolving facility, which means that if we do pay down part of the current balance, we are not able to draw it back in the future.
Given the current quarterly losses in all but the legacy APL business, my recommendation for the excess cash would be further NCIB share purchase and retirement (or holding in Treasury in order to cover any shares purchased under the existing stok options granted to insiders) or investments to improve productivity and efficiency in the lagacy APL manufacturing operations.
I would be Interested to hear what other shareholders have in mind for this $2.5 million sitting in the bank. Anyone else care to jump into the hot tub?