RE:Stumble across thisWe addressed that in depth in Empower Army on Discord, that's one concise reply by Wolf of Oakville:
"Cash burn rate: Yes it was 1.4M in Q1, but we cannot simply extrapolate this to the remainder of the quarters as nearly half was used in professional fees for the 2 acquisitions. Was this pricey? Maybe somewhat, but the burn rate shouldn’t be anywhere near that in upcoming quarters
As I mentioned yesterday, the Quick Ratio on the Balance Sheet has vastly improved. .75 last year, which is not great to 1.52 currently which is quite good for a small cap. Good would be greater than 1.
He claimed $3.4M due within the next 90 days. This is one of his most disingenuous claims. 1/3 of the 3.4M is a Kai loan which expires in 2026, with a very good interest rate.
Has defaulted on leases: True, but again disingenuous. When they decided to get out of the CBD game which is one of their better decisions there were costs to get out of the lease. This was one of them and part of the clean up from former mgmt.
Material concern is a standard cut and paste you will find on any small cap company you own. I challenge you to look up another one of your holdings and NOT find this statement.
There are some PPP and CERB loans in here which could in fact be forgiven entirely.
Received $4M in cash from exercised warrants and options in the quarter. It may not continue at that pace, but there will be more and another inflow of cash.
Dilution: Small caps are always using shares as payment for services and I expect those will likely continue. This is always very minor in dilution.
Steve could pay off the entire 3.4M this assclown refers to. Here’s how that would look: 3.4M shares at today’s price of .60 would amount to about 5.5M shares. That entire amount which would clean up all of CBDT’s current liabilities would amount TO ABOUT A 2.5% DILUTION! That’s absolute peanuts and that’s an absolute never going to happen worst case scenario."
Hope that helps!
NuTrader17 wrote: Couple of points about Q1 2021
Stayed silent until now but here are a few thoughts after looking at these statements for 15 mins:
**Income Statement**
* Yes, revenues are up, but gross margin (efficiency of revenue less direct costs) is actually down compared to Q1 2020;
* Product revenues are also down - Kai tests aren't selling;
* Even ignoring non-cash items (depreciation, impairment (yikes), share based payments), the loss from operations is almost quadrupled;
* Professional fee spend is absurd for a company of this size;
* Note 15 is really telling - $270k (22% of opex) is other expense? What even is that. $540k in salaries and benefits in one quarter? How big is their staff? What is that per FTE? Note 18 has info on how much exec's are getting paid...
​
**Cash Flow & working cap**
* **$1.4M** cash burn in one quarter. $6.2M in cash at March 31. Do the math on the runway.
* $6.2M of cash and roughly the same amount of Trade AP and Debt. If they haven't burned through most of the cash already, I would their working cap ratio is well below 1.0
**General Notes**
* Note 2 corporate structure is an absolute mess;
* The company is way too complex for what it does, even throwing nearly $1M at professional advisors in a quarter can't make it clear;
* They are defaulting on all their leases (note 7; note 12) - how are they scaling up clinics?;
* Their acquisitions are not adding contribution margin or value
This Company is fast not a going concern (imminent bankruptcy) without further debt (already highly leveraged), or and equity raise.Do not let headlines of increase revenues in Q1 2021 to Q1 2020 fool you; this company has actually DECREASED in efficiency, with no clear indications that they can execute on the plans to sell Kai tests or scale the clinics.
\*\*EDIT - I'm getting a lot of DM's asking questions. I'm not sure why everyone is afraid to question management publicly in this sub.
\*\*EDIT 2.0 - Steve if you're reading this, definitely DM me.