Quarterhill Inc T.QTRH

The Other Press Release Dated June 15, 2023

[AlwaysLong683]

Don't ignore other press release entitled "Quarterhill Announces Update to Credit Agreement".

Excerpt from PR:

"Quarterhill ITS Inc. was offside certain ratio covenants in the Credit Agreement. Under the terms agreed to in principle of the amended Credit Agreement, Quarterhill ITS Inc. will be granted a covenant relief period by the Syndicate through December 31, 2023."

The good news is creditors have enough faith in QRTH going forward that they were willing to cut them some slack in terms of covenant relief. If creditors refused to provide this relief, QRTH may have been forced to seek creditor protection under the Companies' Creditors Arrangement Act (CCAA),

Now the big issue is whether QRTH can deliver on the purchase order backlog on time and on budget. If there are delays in completting these projects on time or they experience cost overruns that are not passed on to clients, creditors may have second thoughts about the company should it violate debt convenants again, similar to what happened to Xebec Adsorption which also had a large backlog of projects but was forced into creditor protection anyway as creditors had enough.

[Homework]

Always long...........credit is a non issue with over 100 million+ in cash after the deal closes...... expenses going down by 10-12 million$$$. ...........They will use their solid balance sheet to leverage it against the bank for better terms or / and future consideration.......

[cabbieJBJ]

I agree with you Homework, provisionally.  The cash burn in Q2 and guidance/color on Q3 will be pivotal on this issue remaining a non-issue.

[cabbieJBJ]

BTW Homework, the deal has closed and I understand the money is in the bank.

[Socrates1]

Again here we are counting on miracles on Q2 results? Q2 could drag us closer to a sub-dollar sp price if things did not improve! We will NOT know it till results are released! Not sure investors or market can take another hit like that! I sure can't........ How long can the co. prop up underbid projects that seemed like winning the lottery when we bought ETC??? is the question???

[Socrates1]

LOOK AT THE VOLUME! Investors need good numbers soon not headlines and articles on the future of tolling, because patience is in short supply and if they drag their feet and mess this up its lights out ............................ yes reality sucks.....

[cabbieJBJ]

Socrates, I can't speak for the masses, but when the Q2 results are released in mid August I expect to see some early evidence that margins are improving.  If that is the case, then I also expect that management will be positioned to provide color on Q3 with some credibility.  Without any sign of Q2 margin improvement, slow realization of revenue and continuing high cash burn, your

[Socrates1]

Yes Cabbie, Lewis is hands on BUT he can not control the money required to COMPLETE the projects, if required. QTRH simply has to eat that to honor contracts......... Reality is q2 better be positive,  Wilan sale vs share price/volume tells you everything you need to know...... No commentary required!

[cabbieJBJ]

True, ETC has to honor the contracts.  Apparent underbidding or lack of understanding contract scope, in at least the two Colorado awards, appears to be the issue.  Lewis cannot change that, but these two contracts will be complete in the next 6 to 9 months.  ~$12M is annual cost savings have been identified so far; that will help with overall profitability until the ETC ship is

[mrmoribund]

Country club fashion? I'd find some other metaphor. That one implies that people there have been lazy, coasting along. My sense is that there's always a temptation in the tolling industry to bid very low because you might get lucky down the road with add-ons. And if the tailwinds are really as strong as JG insists they are then it might work out that way. But ETC did pay a very high

[snoopee]

What every happened to the 5-8x the contract value with side incomes/ add ones from these large contracts. Were these lies??? When would these monies roll in?  I recall some people posting that it was also in Quaterhill's presentations that additional income would be up to 8x ETC'S awarded contracts. So, what is the big problem with Colorado contracts if there is 5-8x awarded

[cabbieJBJ]

Snoopee, the multiplier effect happens throughout the term of the contact but doesn't happen to a great extent until after implementation as mrmoribund suggested in his post.

[Capharnaum]

Knowing the banking world, I don't think there was ever any risk related to the credit agreement. If there had been, the banks would have called the loan when the covenants were breached.