GREY:LFDEF - Post by User
Post by
BlueHorseshoe13on Mar 30, 2016 6:30pm
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Post# 24713110
It was good
It was goodI was impressed with today’s presentation. Results were expected, but there was a renewed honesty about their business that I appreciated. Some thoughts:
1) $15M of their $21M loss was attributable to R&D, or otherwise discretionary (non-core to earned revenues). Means they grew from ~100 to ~250 employees while not increasing core operating loss, which by any standard is impressive.
2) Cash took a hit, but the general guidance that no subsequent raises will be needed was reiterated, which is good, and entirely consistent with the $6M EBITDA guidance.
3) I figure worst case scenario is that at the end of 2016 they burn through the $6M in EBITDA guidance and another $20M in cash and then can the OPTI SAR program. I don’t give this more than a 10% probability, but it’s the new downside mark. End of 2016 cash is ~$20M and forward 2017 guidance is probably $80-$100M at 40-50% EBITDA margin. So that’s fine and would be worth $3-$5/s based on forward guidance easy. So even if they cack up the OptiSar program, which I don’t think they are going to, the share price is *significantly* de-risked at this point.
4) Upside if they start building the OPTI Sar/UrDaily program. Now I’m going to keep my powder dry on this one as I have a number of thangs to say, but… this is an impressive system.
5) Will there be some selling associated with the Q1 guidance? Maybe.
6) agree with about two thirds retail ownership.
7) Converting MOUs to funded agreements. I was a little concerned about this, and judging by reactions, so were mgmt.
a. But I think UR has a fall back plan in that Canada has a cave full of pension fund giants that have a recent history of PAYING for infrastructure assets and a growing appetite for technology. It would be a tough but not impossible pitch to have one of these fund part of the constellation by underwriting the deal. Canada also has EDC which specifically underwrites international receivables, which is what they need. Hopefully either through the capital markets or by government support UR can put this deal together. And whoever does this deal should get a tombstone made from kryptonite three feet high.