FormerXBC Inc XEBEQ

RE:Q. Bigger than XBC?

[GGreen]

Turns out my "Next step: wait to read the year end filing, listen to the call and watch 2021 for execution, execution, execution of the growth plans..." was wrong - it wasn't just for 2021 but also 2020 which was already behind us. I think the call next week will be one of their most important investor calls to-date if not THE most important call ever. Why? Big Qs on execution.... nevermind for new contracts but the existing contracts and impact of the fixed price contracts - I hope WE don't get the "it was due to COVID" like the Q3 call because if that was the case why did COO leave? How they address contract execution (not to mention the integration of numerous geographically dispersed acquisitions) AND the COO replacement for me will be key. But my guess is they will blame COVID, gloss over what they've disclosed and then turn the attention to "Isn't Hydrogen going to be great!".

Although my initial plan was to wait for the Q4/annual call before deciding on next steps, the surprise news release just put out all the bad news out there. Although the short fall in revenue was not a surprise (because their overeliance on revenue from acquisitions which happened later than expected which in turn reduced the revenue picked up from the closing dates were lower) the magnitude of the drop in the stock price was! Although it could fall further if emotions take over I think this will probably be a good point to build from (again) assuming no further surpises and the macro enviroment holds up.

2 Asides + 1 Q:
- Fixed price contracts (FPCs) - SNC which had tons of experience in large contracts and they also struggled with FPCs; just as they started to turn the corner on other governance issues the losses from FPCs just kept holding them back - so that could be a risk here also. Let's hope that's not the case.
- GRN puts out what I thought was good Q4 / annual #s (Rev, rev growth, GM% and even a +ve EBITDA in Q4, and also a view to breakeven in 2021) and the stock goes down! Then I saw a note I had made "Feb 22/21 - Healey (analyst at Haywood Securities) thinks Greenlane will generate full 2020 revenue and EBITDA of $27.3 million and $2.2 million, respectively..." Revenue was short by $5M and EBITDA for the year was +$1M loss. Although results were good they fell short of expectations! Given the have strong B/Sheet and fewer moving parts (lower execution risk) they could also be at a similar point to (re) build a position from IMO
- Q. If the COO was let go because the operating results for 2020 were going to be bad, why wasn't this disclosed when the Org. Changes (COO departure) was annonced Feb 12/21? I would have thought these MATERIAL changes should have been disclosed a month ago when they were know!