RE:RE:RE:Long Term Perspective Yes, Stackem - It's fun to go through these as aan accountant. Here are some key points to mention for readers as I very quickly run through the financials:
- Revenue growth was exponential in Q4 which is a great sign. Given what we know about the acquisitions contributing strongly to revenues in the next quarters, I think it is fair to expect further growth here not to mention the various deals we know that were inked in months after the fiscal year end.
- Cost of services sold was $36,339. Which indicates an estimated profit margin of 77% on sales. This is very, very likely to change given the many lines of revenue and because we don't know the exact composition of revenues and their relation to cost of services sold, but it at least indicates margins are strong and sales prices are good. Bodes well for profitability down the line.
- Balance sheet is much healthier than 2020 - the company is cashed up significantly and can also expect cash inflows from GST receivable (as they collect little GST currently) and loans receivable from the former Passcreator owners, of which $288k is coming in in the next 12 months. Furthermore, we can expect cash inflows to be further supplemented by the revenue growth which is now evident.
- Debt was paid down significantly - a good sign. Went from $2.8M in current liabilities in 2020 to $680k in 2021 which is a significant pay down... $108k of which was deferred revenue which is only really a balance sheet liability. Real debt in 2021 was closer to $555k. Obviously they used their better cash position to pay their debts which is great.
- There is deferred revenue of $104,488 showing on the books. So we can expect this to be recognized on the income statement in revenue in the upcoming quarters and is of course further indicative of growing revenue lines.
- Marketing and R&D costs have increased which indicates further investment into improving the product and pushing for sales.
- Share based compensation is significant, but not a cash based expense, so do not read into it as such.
- Wages and benefits actually decreased which I found somewhat surprising given the executive management team that has been hired in the last year. of course this is because their compensation is very much related to the share based compensation we're seeing, and although causes dilution, it allows the company to retain its cashflows and remain financially healthy. It also indicates that executive management has an incentive to increase the share price as their compensation does depend on that.
Overall, the financial position is clearly steadily improving and it appears from a financial management perspective, they have done the right things to keep the operation healthy and growing. I would say that Rome was not built in a day, and this report was another big step for the company in the right direction. It's evident the next year Fobi will do even better as we head towards greater revenues and profitability on the back of the acquisitions and the many new deals on the books... and hopefully many more! Hope this helps.
GLTA