OUT OF MONEYI have been saying for a long time that Sunniva will run out of money in the first quarter of 2019.
I was not going to post for a while, but the post by GotMoney just has to be replied to.
Some facts;
You are correct, that the September 30 cash position is 3.4 million, and they subsequently raised 24 million. However, you forgot to add that there were accounts payables at September 30, 2018, amounting to 10,782,000 dollars.!!!!!!!!!! Yes, Sunniva owed over ten million dollars in payables. After paying off these, that new 24 million of cash in October, had turned into just 11.2 million on November 28,2019.
The 11.2 million cash position was disclosed in the MD&A dated Nov 29 2018.
Cash outflows in 2018.
I am aware that management has said their burn rate is about .5 million a month. Looking at the big picture, Sunniva started the year with 11.2 million in cash, raised 27.8 million in a PP , raised 5 million through exercise of warrants, and raised recently, another 23.0 million for a total cash coming into the company of 67.0 million dollars.
That means the outflow of cash for 11 months to November 2019 was 55 million dollars in total , leaving 11.2 cash at Nov 30 . A cash outflow of FIVE million a month!!!!!!!!!!!, not .5 million a month, a vast difference.
Looking forward to March 31 2019. How long will it take the 11.2 million ( about 8 million US )
at Nov 30 to go to zero???
They are spending about 2 million a month on G&A, NHS is making almost nothing after some G&A, spending another 1.5 million on modules in Canada , bought a new warehouse in Long beach, and have substantial start up costs next quarter in 2019. Some talk of huge sales in California in the first quarter, but show me the money. How do you know these first sales will be profitable and will they collect the receivables from these sales prior to March 31?
Also,
The recent prospectus of Sunniva states on page 17.... approximately 7,000,000 dollars will be used to fund leasehold improvements and the purchase of equipment for the Sunniva California Campus.... Is this true? Where the hell is this 7 million coming from in next few months if it is true.
Is it coming out of the 11 million left in cash, that leaves only 3 million after amounts spent on the Campus to fund all of above???? I have seen nothing from Sunniva to correct their prospectus so far???It clearly states the 7 million is not being funded by the buildings owners.
I think the only issue is when they will run out of money. If they are able to do another PP . my view is they will need to announce it in February ,and that will buy them another three months. If no PP then I think its over.
Last,
My view of the spin off happening, is near zero. . . How can the Canadian assets have any value. You have a loser in NHS, which could easily be required under GAAP to write off all its intangible assets at Dec 31,2019. I Have no idea if this will be done, but it is a possibility. And, a large property ,on which Sunniva owes 3.5 million .
Given that there will be excess supply of Pot, by the end of 2019, its hard to assign any value to this land other than cost. Where by the way, is the strategic review of the Canadian operations?????
How could you do a new listing with no cash, and no assets????
Of course these are my opinions only. I ask that investors look at the financials ,rather than pictures of equipment you don't own. The proof will be the stock price. If it drops below 2 bucks by the end of January, then something is wrong. Unfortunately, we wont know if they have run out of cash until the first quarter of 2019 statements are released on May 30 2019. Or, you may see a press release with yet another PP in the first quarter of 2019.
So thats it for posting for a long while. I see too many dreamers on this forum, and very few if any read the MD&A or financials and make decisions based on numbers in those documents rater than pictures.
I am sure I will get roundly criticized by those who have married the stock and cant see anything wrong ,except the share price keeps falling.