RE:RE:FinancialsAntonChigurh wrote: The market didn't like them? Huge sell-off...
This is a very complicated set of financials due to all the work done to spin out the Power division, and Incorporate Prairie Plant Systems into cannimed. PPS also was a receipient of funds from the Province of Sask Through the labor sponsored funds program... hence the $5.50 warrants issued in return. In the end, they had lots going on! 55 pages of details mean company was busy!
Here is the highlights I take from this, and everyone can share their opinions as well in case I missed something.
First off, I think the decision to re-org the company and take it to market was no coincidence. The balance sheet kinda sucked and the company needed cash. The $69 million was desperately needed in lieu of the news from the task force report and impending legislation to take company to the next level. I have not read up on what the new Power Division side is all about... that will be for another day. What has me excited is Cannimed itself. So here it goes..
$9.8 Million in sales on the backs of increased patients
$3.6 Million in operational expenses
$3.3 Million in General & Admin expenses
$1.4 Million in Research & Development expenses
So approx $8.3 Million in total expenses related to just basic operations... I realize there were other expenses putting this company into negative earnings due to re-org of company, but to me, this is exciting because it means CMED has ability to become profitable. For the basis of my calculations, I am going to use a potential profit of the year (operational standpoint only), of $1.5 Million. This works out to an EPS of somewhere around 6 to 7 cents... So what multiple do we use to come up with a decent valuation???
Aphria is sitting at 150 P/E Ratio... So does that put a fair shareprice somewhere between $9 and $10.50? Let's debate here on this...
Now to Note 26 Subsequent Events in the Audited Financials...
The biggest thing to take out of that is the company has $69 million in new money and has 22,500,000 shares outstanding...
The positives...
The added $69 million should get expansions going and should be able to fund the company to next phase of their plans (I believe a description of how they want to allocate these funds is written in the Final Prospectus released Dec 21 on Sedar... but I won't get into that in this post). These monies should strengthen the balance sheet and get company on the right track
And recent news releases with MS study at U of M, Epilepsy trials in Ontario and the potential for dissolving tabs is excellent.
The company also has certain patents and with their strict Quality control processes combined with 14 years experience in this game... What is that worth?
The upcoming financials will tell a huge tale on what should transpire going forward. These financials should not have all the "clutter" of all the Pre-IPO work that was done. One will have sift through what the TSX listing in the end of December will have on the companies bottom line though.
So I hope that this is a good start to open up debate. I am long this company but don't have a large position yet. I am looking forward to everyone's opinions
Good Luck,
FI4