How concerned should we be about the decline in the covenants over the next several months?
Overall I like the terms of the options for the next senior employees, however there are no incentive for them to buy stock now as the number of options they become entitled to is fixed and the required amount of shares for them to purchase is a fixed dollar amount not a specific number of shares. Ideally I would have liked them to have a little more incentive to put some money on the table now.
Hopefully the Company has enough time to allow new management to improve sales/operations while also waiting for the recovery in school spending.
It amazes me that the stock is down for last month and continues to decline despite a major refinancing that should take any near term liquidity risk off the table. The stock is a gift at these levels.
Again, it is not clear that they will have to issue a material amount or any equity at these levels. Should a new debt package be put toghether with no to minimal dilution, any price down here will prive to be a great buying opportunity.
I don't know if addtional debt at a reasonable level is possible at this point. I suspect (don't know) that equity will have to be added to make things work. - If that is the case then there will be dilution. - Probably significant dilution of existing shares.