Finally Had a Chance to Review Year End M D &A Seeding is finished and we had an quick half inch of rain tonight. So I have finally had a chance to review my voting package I received in the mail early last week.
Here are some points for review and discussion that I see (and welcome any ideas, thoughts or comments)
1) Page 3 - Intellectual Activities - A grant was received to work on a CMOS version that will cover between 40 & 60% of eleigible expenses (up to $250k)... Dr. Ghyslain Gagnon will start this in Q2 of 2021. Well , it is Q2 of 2021... so where are we at? Also... what is better, the CMOS application or the "portable USB type QNRG" they mention that may be a better option for commercialization? And.... portable USB QNRG? I think shareholders need details on that!
2) Page 4 - Patents. When is the expectation or timeline of examiner responses for countries we do not have patents in yet (I.e. Canada, Brazil, China et al)? Do we expect problems? (My interest here is China)
3) Page 6 - Cash position at December 31, 2020 was $20,090. Now everyone can see why the PP in early January 2021 was a necessity.
4) Page 6 - I understand that new management has been busy setting things in motion to roll out the new company strategy and vision, however, I see increases in consulting fees, share based payments, management fees and options. As shareholders we must keep management accountable in this area to ensure work and progress is compensated FAIRLY. So far, I have no concerns in this area. We do have to give these guys a fair chance as they have only been steering this ship for approx 5 months (see page 2 management changes)
5) Page 8 - Summary of Quarterly Results. As shareholders we have to watch this. Average company loss has been $800k per year with very little non cash expenses. So we have to watch for cash burn rates.... I am forecasting $700k per year for normal operating activities in my expense models. This will have to be adjusted accordingly with potential news and/or company updates pertaining to technological activities/breakthroughs. Note that the "Going Concern" notes say 12 months... I believe that with the $2m financing and the potential for additional cash from the execution of available warrants (possible $6m), the company should be good for longer than that.
6) Page 10 - Subsequent Events. I see there was 1.4m options exercised by "consultants" for $70k. I do not see that on SEDI so assume that these consultants are non management. And of course, the $2 million PP for 40m shares is listed here, but most know about that.
7) Page 11 - Transactions with Key Management. As you can see, fees here are actually lower year over year compared to 2019. But this does not match to overall yearly totals on the Income Statement. This means that there are paid consultants (not mangement) receiving remuneration. My guess is that this may be individuals such as Gagnon and Reulet... but this is something to ask at AGM. Also... see options in my point #6. Are these exercised options the same people? More questions.
8) Page 12 - Other. Shows outstanding shares on April 22 at 101,927,838. If you read any financials prior to the January PP, the outstanding shares always showed 60,527,838. So in addition to the 40m PP shares, the share count has increased an additional 1.4m which coincides with the exercising of options in the subsequent events section. Which also tells me that as of April 22, 2021 - there are no PP warrants exercised. But this may be something to ask at AGM as well.
Last but not least...
Personally, I have not submitted my Proxy Votes yet. I have reached out to management this evening to ask questions on the change of auditors from MNP LLP to KPMG LLP. MNP is heavily involved in SK Agriculture and I am quite familiar with how they approach agriculture with their metrics for profitability and sustainability. So I am curious as why they (Management & Directors) want to change. I am also wanting to get some insight on the proposed name change and why. Hopefully I hear back by the weekend.
I am trying my best to log in and attend the AGM, but I may be in the field. So I wanted to post this summary to get everyone thinking about things prior to May 27.
If anyone sees anything extra, please post. And we can all weigh in accordingly.
Good Luck to All. Have a Great week!
FI4