running on fumes
With the results for the first quarter coming out soon, I thought I would put forward a few guesses and predictions; 1- The loss for this quarter will exceed 7 million dollars. Eight million might be the over under line. 2- Sales of Sunniva products will show a substantial loss before G&A. I think the 30- 35% gross profit on sales, will not even cover the costs of labour, marketing, delivery , promotion, packaging and California taxes. If so, then the more they sell, the more they lose in cash. My guess is that on say 1 million in sales the costs, prior to G&A, will well exceed 1 million dollars.. At some point early this summer, they will not be able to afford to continue sales as they simply wont have the cash to fund the direct losses that result from every sale. 3 My guess is, to survive June, they may have factored all their receivables to get more cash. It's just a guess, as with no PP in the last week or so, without extra cash, they would be on fumes today. With cash going out the window at a rate of say 2.5 million a month, plus another 10 million required for equipment for the glass house per the MD&A, they will need at least 33 million in additional cash to last to the end of the year. Where is all this cash going to come from? 4 With the temperatures in the glass house now well over 100 degrees and as I understand it from a Discord tour, no power inside the building , will they not have the same experience as last year, and have to shut down all work inside the building until its cool enough to work safely? Won't this further delay construction of the eight bays inside? 5 Exactly what proceeds are expected from the sale of Canada assets. The land might be worth 3.5 million after the notes are paid off, but, NHS has lost millions, and will needed to be fed cash, by anyone who is crazy enough to purchase the company. Further, who would ever buy a company with a lawsuit hanging over their head the outcome of which is in doubt. I don't think NHS can be sold until the lawsuit is settled, regardless whether some people think it has no merit at all.. I would expect a settlement or dismissal in 2020 at the earliest. After that, perhaps Sunniva might find someone will to pay a nominal amount to end up with losses every month, but I doubt it. 6 When you see the CEO of NHS, California , and now the head guy, resign, all within the last five months, something is not right in the State of Denmark . These 6 observations and questions, are simply guesses on my part. I could easily be wrong and have been wrong in the past. They are not facts. Facts are included in the quarter results and MD&A, and I urge you to read them. . Another guess, is 99% of people who buy this stock, have never even read the financials or MD&A. You should.