mCloud Technologies Corp V.MCLD.WT.H

New to Board - Need Advice

[LowtoHigh]

Hi All!

I've been tracking Mcloud for the past few days but did not want to enter because it was on a quite good run. Do any of the longs here have confidence trend will continue? Is there a bright future here or is entry point too high for a new entry like myself.

[lscfa]

I'm not selling. Co is at 60,000 connected assets. It says it needs 70,000 to be cash flow positive. Move to Alberta will do that. CEO says there are 20,000,000 assets that can take adavantge of co's tech.

[LowtoHigh]

Thank you! Looks like profitability is right around th corner.

[GreenBull]

My advice, sell MCLD and buy KNR. The energy management side is expanding and our new and only one in the world "Covid Detector" will make an easy 10 bagger from here. Look into it, MCLD has gone nowhere over the years.

[LowtoHigh]

COVID stocks are a flash in the pan and I would not chase. Look at DM (detametrics) for best example of people chasing a flash in the pan.

[lscfa]

After reviewing the annual report I believe the CEO is exaggerating things. He says cash flow positive at 70,000 connections but that appears to be based on operations and excludes corporate costs. The annual report shows an adjusted ebitda calc that excludes $ 8 million of salaries that are not directly associated with operations. i.e corporate overhead. So it will take more than 70,000

[Dunworkin2]

In the SNN video, their goal is 500,000 connected assets in 5 years. Achievable or a pipe dream? 

[lscfa]

Market size is 20,000,000 so 2.5% seems reasonable.  

[TickBomb]

So the math is a bit tricky since they add assets and expenses throughout the year and the older contracts have lower MRR.  It was lower to get those initial customers on board.  Their long term view is a $70 average MRR between $50/building and $150-$250 for things like wind and Oil & gas.  Their current MRR average is ~$31/asset, which is rapidly rising with new contracts

[lscfa]

Co says at $14.5 million revenue/qtr it is breakeven. Gross margin of 55% = $8 million offsets the $8 million in quarterly opex which it claims is recurring. Assuming no onboarding rev or engineering rev the $14.5 million has to come all from recurring SAAS revenue.  $14,500,000 / $100/qtr/asset = 145,000 assets  

[TickBomb]

MRR is per month not per Quarter.  

[lscfa]

I know.....33/mo = 100/qtr....

[TickBomb]

So during Q4 they had an average of 57000 connected assets at $31. 31 x 57,000 x 3 months = $5.3M They are adding new asset at $50-250. So connect another 13,000 @ $100/asset MRR 100 x 13,000 x 3 = $3.9M/Quarter New connect fees say $3M/Quarter Eng Services @ 2M/Quarter Total is $14.2M/quarter So it depends on your assumptions.  Which is why I say that they have a much better idea of the

[lscfa]

onboarding revs and eng revs are non-recurring. Also, I bet the margins on these activities are low (e.g. at cost) as they are really offered to generate new customers. So the $14.5 million revenue /qtr must come from SAAS fees to stay breakeven over long term.   if MRR is $30 then need 161,111 assets to be breakeven. if MRR is $40 => 120,833 assets if MRR is $50 => 96,667 assets

[TickBomb]

The $14.5M includes costs associated with new connections and engineering servies.  You seriously need to go into the MD&A and look at Q4 costs and where they come from: Cost of sales $ 3.579 Salaries, wages and benefits $ 4.486  Sales and marketing 0.304 Research and development 0.323  General and administration 1.924 Total Ops expenses 7.037 Ignore the non-recurring

[TickBomb]

Sorry I meant 70,000 x 40 x 3 = 8.4M 70,000 x 50 x 3 = 10.5M