RE:RE:Downgraded from spec buy to hold by Cannacordcbcguy101 wrote: According to The Globe and Mail:
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-wednesdays-analyst-upgrades-and-downgrades-85/
Citing heightened risks following weaker-than-anticipated third-quarter financial results and “in light of current Canadian market conditions,” Canaccord Genuity analyst Kimberly Hedlin downgraded VIVO Cannabis Inc. (VIVO-X) to “hold” from “speculative buy.”
“While VIVO’s quarter had some noteworthy high points (including industry-leading pricing and expected EU-GMP certification in early 2020), a deeper dive into the company’s earnings has caused some concern surrounding the balance sheet,” said Ms. Hedlin. “While we don’t anticipate significant capital investments in 2020, we believe VIVO needs to outperform our revised estimates in order to repay $38-million in convertible debentures with cash on hand in 13-15 months. As the company ramps up sales of 2.0 products in Canada and medical products in Europe, we believe this could be a challenge over the next couple quarters.”
Pointing to sales thus far in the year, Ms. Hedlin lowered her Canadian revenue expectations for the Napanee, Ont.-based company to $24.5-million in 2019 and $51.5-million in 2020, which are reductions of 9 per cent and 13 per cent, respectively, and reflect market shares of 2.0 per cent and 2.2 per cent.
“We have increased our average COGS [cost of goods sold] assumptions given that, to date, the company’s adjusted production costs remain above our estimates,” she said. “Additionally, we expect incremental costs to persist through H1/20 as the company launches new products, optimizes new equipment and processes, and prepares to sell into Europe. Overall, relatively small reductions to our long-term gross margins (which declined into the 58-60-per-cent range) had the greatest impact on our SOTP [sum-of-the-parts] valuation.”
“Based on our updated estimates, we expect VIVO to start to generate positive operating cash flows in H2/20. However, even with a limited capital forecast of $3-4-million in 2020, we estimate that VIVO will end the year with a $6-7-million financing gap to repay $34.5-million in convertible debentures that mature February 28, 2021. While this is still quite manageable, we believe it increases the odds of a dilutive financing.”
With reductions to her revenue and earnings estimates, Ms. Hedlin lowered her target for VIVO shares to 30 cents, which is the current consensus, from 50 cents.
“While we believe the company could surprise to the upside with higher recreational volumes, gross margins and/or international sales, we are moving to the sidelines as we await execution on the company’s strategic priorities,” the analyst said.
What a total joke coming from the same people who did a bought deal for them at $3.50 a year and half ago...LOL Corruption at its finest !!!!..................................................................................................................................................... ABcann Global Completes $70 Million Bought Deal Financing and $4.8 Million Exercise of Underwriters Over-Allotment Option Email Print Friendly Share February 28, 2018 09:28 ET | Source: ABcann Global Corporation THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. NAPANEE, Ontario, Feb. 28, 2018 (GLOBE NEWSWIRE) -- ABcann Global Corporation (TSXV:ABCN) (ABcann or the Company) is pleased to announce that it has closed its bought deal financing, as previously announced on January 29, 2018, of: (i) 11,500,000 units (each, a Unit) of the Company at a price of $3.50 per Unit, for aggregate gross proceeds of $40,250,000 (the Unit Offering); and (ii) 30,000 6.0% unsecured convertible debentures (each, a Convertible Debenture) of the Company at a price of $1,000 per Convertible Debenture, for aggregate gross proceeds of $30,000,000 (the Debenture Offering and collectively with the Unit Offering, the Offering). The Offering was conducted by a syndicate of underwriters led by Canaccord Genuity Corp. and Eight Capital and including GMP Securities L.P. and PI Financial Corp. (collectively, the Underwriters). In addition, the Offering included 862,500 Warrants (defined below) and 4,500 Convertible Debentures sold pursuant to the exercise of the Underwriters over-allotment option, for additional aggregate gross proceeds of $4,793,250.