Q: Can it survive? If so, are its prospects viable within 5 years?
5i Research Answer:
The problem with tiny companies is that public listing costs are a big drag on potential recovery. Just listing can cost $300,000 annually with accounting and regulatory fees. With a market cap of less than $3M, this is like an MER of 10% on a fund. But there are other flags. A director has resigned. It needs money. It recently signed a loan for 15% interest that could rise to 25% interest under certain conditions. The stock is down 91% in the past year. Default risk is huge here. With $5.6M debt and negative cash flow, we think its time is running out.