3 facts and 1 opinion 1) "Campaign infrastructure costs were $3,558,647 during the first quarter of fiscal 2015 compared to $33,234 incurred during the first quarter of fiscal 2014.
These costs are associated with maintaining the Company’s short code for mobile messaging services, cellular network usage and third party campaign components required to support client services. The increases in these costs were due to increased communication costs and increased campaign costs required to support the increased sales revenue. "
2) net income would have been a loss of $1.233M were it not for the options/warrants derivatives valuation liability that was decreased by $1.419M from the 12/31/14 to 03/31/15 period (per note 8 in financials). i will admit that the wording on the press release could have been more transparent.
"The derivative liability is a NON-CASH liability that is not associated with any form of debt or convertible instrument. The derivative liability represents the Black-Scholes valuation of the Company’s Financing warrants that are subject to currency fluctuation as the exercise price of the Company’s Financing warrants is fixed in Canadian dollars and the functional currency of the Company is the U.S. dollar. This results in the warrants being considered a derivative as a variable amount of cash in the Company’s functional currency will be received on exercise. The fair value of this derivative liability fluctuates from period to period based on fluctuations in the share price, changing Black-Scholes inputs and changes in foreign exchange rates. These fair value changes are recognized through profit and loss."
3) the 22,322,727 PP shares priced at 55 cents: the deal closed feb 5, 2015 so SHOULD be free trading june 5, 2015. potential is there for these folks, or someone, to short this thing this week and cover with PP shares...
4) 3.7m in Q1 revs, with swiss post only around since feb 5. organic revs the rest of the year could be 5.0, 7.0, 9.0... so let's estimate total = 24.7m... hip digital could be another 8.5, after that the incentives kick in for hip execs. so let's use that... so total 33.2m. whats a decent valuation for that revenue stream? 6x sales? 8x sales? some of these unicorns out in the valle are 20x trailing 12 months, but let's use 7... 7 x 33.2 = 231 million. they'll issue another 13 million shares to the hip folks, so lets use 113m for share count...works out to $2.04 per share canadian... this includes no more acquisitions and a very conservative (5/7/9) revenue estimate for rest of 2015... could easily exceed 50 million on a steeper organic ramp and more acquisitions... and what if we use 10 times sales???