Out at $1.20, page-10

The conversation would have been between an investment bank and their corporate clients. The conversion might have been:

"RFG is a franchisor that focused its growth strategy on maximizing the quantity of franchisees rather the quality of franchisees. It is refocusing its business to focus on quality, and it will need to downsize its operations to shed unprofitable or inexperienced franchisees. At the stable business size in two years time the EBITDA is likely to be $80M to $100M per year. In the short term, they could see significant impairment of that EBITDA that reflects short-term costs to close stores and absorb related costs. At what price are you willing to invest in a $100M share offering? We need a buyer that can invest with a long-term horizon and see beyond the short-term losses."

Maybe the price that would have interested an investor was $1 not $1.80, and maybe the way they would have needed to dress that capital raising was as a convertible bond with a long maturity. That would have given a higher level of recovery than equity but would have let the issuer realize the upside as the business stabilizes. Conversion price might have needed to be $1.50 to $1.80.

Whatever the numbers were, I can't see those numbers improving as we move forward and EBITDA shrinks. Now they are in a very tricky place where the share price could significantly implode and any capital raise would be devastating to anyone left holding the shares.