Sunniva Inc SNNVF

RE:Out of money experience

[Benedictus]

thetis88, not everyone disagreed with you that a pp was needed. It was very clear a pp would be needed in Q1 and that the 500k monthly burn rate stated on the conf call was absolute BS. The source that the uber-bulls have often quoted w.r.t. no need for a pp in either Q1 or Q2 clearly turned out to lack all credibility. However, the fact that mgt participated in this one I view as a very solid underpinning of confidence and I was pleased to see that.

Sales are materializing and so I do believe a good portion of the 10M raise is legitimately needed for biomass feed to generate the ramping extraction revs, which have very good margins but I do agree that this raise was also needed due to high cash burn for all the Cali pieces to come together.

I wouldn't say spinco is dead bu I'd certainly say the jury is still out. NHS sequentially declining revs will need to turnaround over the next 2 quarters and the plans for the modular grow will need to be coming in on time and on budget, which has not been the case with most of snn's plans thus far. But if that transpires, i can imagine spinco coming together albeit with perhaps a modest market cap initially until revs and the potentially very fat margins are realized. 

While the debt burden of snn is onerous, the leaseholder has a vested interest in not making it punitive (i.e. pushing out the overhead costs until snn can capitalize on revs from the grow), so I  simply cannot forsee the company collapsing by May of this year as you suggest. Q4 revs will probably be fairly flat but Q1 revs should be well more than double Q4 with much better margins (but by no means in the black).

Having said that, we are still way too early in this story to assume sales run rates as some of the uber-bulls are wont to do. And in my mind, that remains the billion  dollar question: how successful and consistently repeatable will the company grow and realize sales from both the white label and house of brands products? As a start, I would like to see some multi-year contracts announced. That would signal to the market that they have not taken this company very seriously and would re-rate the stock immediately. All imho