Quarterhill Inc T.QTRH

This deal…..

[xanada2]

Puts a cap on any possible apple settlement share price appreciation IMHO and ensures dilution as well at a stiff price.....

[prophetoffacts]

This post has been removed in accordance with Community Policy

[BearBullMarket]

Maybe you missed this pat of the announcement; We cannot simply buy back debt until after 3 years ! Except in certain circumstances involving a “Change of Control”, the Debentures will not be redeemable at the option of the Company before October 31, 2024.  So They have to pay interest for 3 years at 6% and for what ???  We need  the cash that bad that we are willing to pay

[Justhalffull]

Perhaps the weak link in the Quarterhill chain is John Rim.  I always wondered why someone with over $100 million in cash always failed to show any significant investment income.  Give me $100,000,000 in cash, and I'll easily give you $3,000,000 a year, and still keep a nice chunk for myself.  Incompetence persists.

[shareholders1]

"Give me $100,000,000 in cash, and I'll easily give you $3,000,000 a year, and still keep a nice chunk for myself.  Incompetence persists." - Anyone following money markets will know that since March 2020 short term rates, even for sums large sums have been under .005%. QTRH is not in the short term investment business and would only look at the safest places to park cash. 

[Capharnaum]

Which other two have issued convertibles today at those rates? The interest rate is just one part of the value of the convertible debentures. Market Cap also plays a large role.

[BearBullMarket]

Fortress Technologies (FORT) $20M CDN at 3.5% 36 months: today. the other was AG growth ( AFN) for $100M at 5% Agree on rate but I still think 6% for 3 years seems high, unless we really need cash ASAP, lets see. BBM

[shareholders1]

BBM - Thanks. Not surprized AFN commands a better rate. FORT more complex as they also issued warrants, so there is much more potential dilution involved for FORT, thus the lower rate.

[Capharnaum]

Fortress is at 3.5% because they are giving extra warrants with the convertible debentures and the conversion price is basically the market price (0.78 vs market of 0.75). AG Growth has $1B in sales and an EV of $1.7B. The size difference in terms of sales and EV likely explains the extra that Quarterhill has to pay. 

[shareholders1]

BBM - what is the net debt to ebitda ratio for those other companies, or can you mention their names? QTRH would have done some rate shopping and this had to be what the market demanded/ best they could do.

[v_guerriero]

Post tax this is a 4% lown rate.  Very attractive.   Shares cannot be converted until 2025.  No overhang on any settlement.   The one thing I don't admittedly understand is why this on its own deserved a halt.  They could have just announced this in the morning.   Or will there be a follow up announcement in the morning on something more substantial.  

[prophetoffacts]

This post has been removed in accordance with Community Policy

[Justhalffull]

Ridiculous.  Financial people would never gamble in this manner.  

[shareholders1]

"Ridiculous.  Financial people would never gamble in this manner."    -- It is called corporate finance and yes, that is what real financial people/ dynamic corporations do. They have also telegraphed using debt for some time now.

[cabbieJBJ]

v_g, wasn't it you who said halts get attention.

[ChiChi3]

I'd rather see a 'post-tax' rate of 2% V-G which is what they would have got in the floating rate market.  It's not so much that they will be flushing $9 million+ down the toilet, if they were to get some big cash settlements in the interim,  it's the junk-bond interest rate they are paying that indicates to me, and apparently the market, that they are quickly

[wilander]

For the love of god give us the Apple resolution soon, so a lot of us can move on. December seems too far away at this point.   lol

[cabbieJBJ]

Wilander, reputation 2,734. WOW! I always knew you weren't easy, you are just very popular. It must be excruciatingly painful for you to watch all that money going into ITS.

[wilander]

If I saw QRTH making a profit cabbie, I would not be complaining. Keep those ten year old pom poems waving.

[cabbieJBJ]

Will do Wilander. You're my inspiration. ;)

[wilander]

*pom poms

[wilander]

It's interesting how quickly you turn on long term holders cabbie who start to question and back up the rah rah boys. All I needed to know. I had alot of respect for you at one point.

[shareholders1]

Wilander - are you the guy that had mostly postive comments in Feb 2021, and then soon after announced "I am out" ?  Sort of like a pump and dump routine? 

[wilander]

nope. not me.  ive been holding this since first buying in 2012.  been on here since 2013 and virtually always supportive that we are undervalued and misunderstood. (though I have always had an issue with skippens reckless ego) Ive been very faithful, lost a bunch on paper for years, loaded up when we hovered at $1.30 and finally sold and made a healthy profit when we FINALLY reached $3

[cabbieJBJ]

This post deserves a thumbs up. Reputation 2,735. Well done Wilander. Now for a $200M USD Apple license. That WOULD be sweet.

[cabbieJBJ]

I didn't turn on you Wilander...just trying to have a little fun. Sorry You've known my stance on QTRH go forward for some time. ITS is what get me excited about QTRH. Wilan is a means to an end. I also know that your focus/obsession with an apple settlement drive your QTRH investment decision. Good luck to both of us. Realistically shake those pom-poms.

[astutein]

The do nothing or very little BOD with its 150 million cash and no returns on it finally gets aggressive creating new ITS INc and many board members are critical of the moves being made state their opposition to moves being made. You criticized for years lack of board initiative and rightfully so and when BOD under Paul  takes bold new steps, all the critics come out. I for one will not sell

[astutein]

V-G CABBIE ET AL All of comments relating to Bought financing IMO are meaningless as something bring is about to happen IMO with recent self financing and today signed bought deal. There are three analysts covering QTRH. One of the analysts Raymond James LTD had the highest estimateof Q3 36.7 million as quoted by V-G Oct19. The signed Bought today was led by syndcate RAYMOND JAMES LTD. 

[cabbieJBJ]

Astutein, the timing suggests urgency. I don't think it will be long before the next shoe drops.

[Capharnaum]

Which issue would have yielded a post-tax rate of 2% that counts as equity in most ratios (when you talk to banks)? 

[whaler83]

Seems to be in line with some other deals (re:6%). ECN capital is a $2.6B company in the financial sector. https://www.globenewswire.com/news-release/2021/10/19/2316577/0/en/ECN-Capital-Announces-75-million-Bought-Deal-Offering-of-6-00-Listed-Senior-Unsecured-Debentures.html

[shareholders1]

"HALT !!! "  - done because they happened to finalize the terms during market hours, thus had no choice.  Hard to time the completion of deals like this so that the are both finalized and announced while the market is closed.

[v_guerriero]

I think it is done for the marketing aspect.   And also they have one week to close the financing.   If there are material announcements before the close of the financing perhaps there is a something tomorrow morning.  Or during the week so that these new investors don't get the perception of the inside track.  it should be done tomorrow 

[Joske]

the 6% interest rate is due to the fact that the financing is unsecured & subordinated and is in fact similar to capital (one could even argue if this financing would increase the net debt position of QTRH). Thus I do not get why people are referring to 2% or 3% as a realistic rate for this type of financing, since this 3% is a rate for senior debt. I agree with V_G that you have to offset the