Sanity Check
New to this board. Looking at price performance and market cap and shaking my head, $600million market cap on maybe $5million in revenues? Why is this stock worth $4.00/share???
Last few years the company is muddling along - as of End 2018 (last audited financials) it has an accumulated equity deficit of $50million.
Fast forward to early 2020
- CEO loans company a million in the midst of Covid at 12% with a 28c conversion price. Private transaction, not offered to shareholders....Converts and gets 3million shares (now worth 12million - nice trade)
-March 24 material news on an order - stock starts rallying
-March 31, extends maturity of other debenture ....stock continues to rally
And then in July 2020 from the companies MD&A/Financials:
The Company has incurred, in the last several years, operating losses and negative cash flows from operations, resulting in an accumulated deficit of $61,994,683 and a negative working capital of $11,157,110as at Q1 2020, (December 31, 2019 -$60,237,656 and $10,492,102 respectively). Furthermore, as at Q1 2020, the Company’s current liabilities and expected level of expenses for the next twelve months exceed cash on hand of $1,139,416 (December 31, 2019 -$34,431).
Really breathtaking to see the stock rally 10x while losing money, admitting they are running out of cash and that their expenses are likely exceeding their cash. And they bought HPQ in a private placement ! How How?
Appreciate any insights/comments. Forgive my naive comments if they are totally off the mark or I have missed material info
RC