Yeah I can only imagine the extension is a result of CR being under-subscribed. The company really should update the market with where the CR is at.
It's a shame that a company with potential seems likely to go to the wall when it doesn't have to.
I believe if they had of done a reverse stock split 2 - 3 months ago and let the market push the share price to its natural level, ie one where there are both buyers and sellers and then done a capital raising at that share price it would have been a much smoother process.
And I say that because I would have likely got involved myself.
Instead, like most of us on this forum, we are sitting on the sidelines waiting to see if management have a better plan for the business, its share liquidity and the capital raising.
Even at this point it would be nice to see them face up to the realities of the situation and stop wasting time and resources on plans that will not work and only distract from improving the company's operations.
Unfortunately at this point, existing shareholders have to accept that their shares are worth nothing - because that what the market is willing to pay for them - there are no bids even at $0.001 (and hasn't been for a LONG time) and ORH shares are so illiquid that not even 1% of company's shares have turned over in the last 6 months...
I'm not sure if ORH can be salvaged from here, but in my opinion the only way for ORH to succeed with a capital raising is to do what they should of done 3 months ago, do a reverse stock split to find out what the market is willing to pay ORH shares currently, (maybe it's 40% lower than the current price; maybe it's 80% lower; it doesn't matter at this point; the market needs a price).
Then they need to continue turning the screws on the business to squeeze out excess costs and ramp up revenues. I still think there is more fat to trim before tapping the market for more money.
Trimming the fat first, even from management's own salaries, show the market that you are willing to do what it takes to treat shareholders with respect. After that, they could try and raise a more modest $1.5M at a slight discount to whatever the fair market price for the stock was at that time.
The market will also want a viable business plan to becoming free cash flow positive again. No more raising capital, buying inventory and hoping customers find you. That model clearly doesn't work. The market wants a catalyst for change.
If management doesn't know what to do, they need to find someone who does and get them involved.
Though there are some obvious points the plan would benefit from - ie all staff (particularly the expensive upper management) moving to much lower base salaries, but higher commission rates (or stock options) for results that produce sustainable free cash flow for the company (ie everyone gets paid well once the company does well).
I think a new marketing plan would also be critical - probably something that is heavily focused on online marketing given that that is how people find businesses and products these days - and preferably headed up by someone who knows what they are doing in the online arena.
My sense is ORH don't have these skills in house at present and whilst I know hiring new people isn't exactly what ORH needs right now (its needs to cut costs as much as possible right now), I just don't think ORH can survive without investing in some new talent within the management team to drive the company's marketing and sales forward.
Maybe existing management, need to accept they need to take temporary pay cuts to be able to pay for that new person? Maybe they could find someone who is talented enough that they are willing to back themselves and accept a remuneration package that might only have a low base salary but a very generous stock options to incentivize them to produce tangible results as well as not be a burden on cashflow.
I know it might suck for existing shareholders to contemplate the company's market cap going from $1.3M down to a $200k - $500k, but I think that is far better than the alternative; pushing the company into administration and getting nothing (after debts are paid).
With a reserve stock split then successful capital raising at least existing shareholders get an opportunity to exit if they want or maybe with the new capital and some new marketing/sales talent the company might be able to turn around the business and take the share price to new highs.
I'm not sure if management have their own agenda and don't care about saving the company at this point, but this capital raising failing was fairly predictable (we wrote about it extensively in previous months) given that it didn't offer value to existing or new shareholders.
I hope ORH management read HotCopper posts and realise why the capital raising is failing and what they need to do to make it succeed.
@CheyneD - I know you've had a few chats with management, maybe you could pass on the link to this post.
And on the off chance ORH management are reading HC I recommend they go back and review a couple of the other posts that have been made over the last few months to get some insights into what shareholders are looking for:
