CloudMD....my point of viewI compare DOC`s situation to a wedding shower. At a shower you gets lots of stuff. Some you want to keep, some you dont want and other stuff you already have similar. And there is always something you wanted but did not get. When Karen Adams took over the role as CEO she inhereted a lot of stuff. She knew that the markets had changed over the last year and investors wanted profit not revenue. Im sure that the board and her took a long look at all the assets in the company and are now making some important decisions. She has already stated that they will be selling some of the pharmacies and clinics. They are low margin and not the direction that DOC wants to go to in the future. Over the next few months most will probably be sold and more cash will be added to the balance sheet. VisionPros was aquired just as Karen was joining DOC. The contact and glasses business had some revenue. The eye exam business had none. The eye exam business had lots of potential but it would take many more millions invested and many years before it ever made any money. When VisionPros became a problem Karen was the CEO. This could of turned into a long and ugly situation. When the news came out about the VisionPros problem DOC`s share price went from the mid 80`s to 70 cents in a few days. On Friday DOC settled with the sellers. The terms are well documented. So what happened. DOC has given back the online eye exam business but they keep the rest. DOC gets cash, also 6 million shares will come off the total count, and $800,000 in payables will come of the books. DOC will have less debt and no further earn out payments. In total the reduction totaled 14.6 million. Some might think that is not enough. But remember that the puchase was done with DOC the shares were above $2 and a financing at $2.70 was done. So why keep the contact and eyewear business. Well, she has already said that it will become part of Kii and they will be able to cross sell to existing clients. Kii is becoming the total package for enterprise. She turned a bad situation into a good one for DOC.
Now the scarry stuff.
Everyone saw that DOC will take up to a $28 million goodwill hit from this. Most think this is a surprise. Its not. During the last conference call they mentioned that there will be a ONE TIME hit from the acquasitions (Mindbeacon etc.) and it will come in the 2nd quarter results at the end of August. So DOC will report a HUGE loss in August but this is already built into the stock price. They will still have lots of cash and lots of revenue and they wont have these losses on the books next quarter. My husband and his Bay Street buddies are buying large amount of stock on a weekly basis. He tells me that if it goes down after the financials they will buy it all up. But he doesnt think that will happen since the stock is so oversold already. Thats why they are buying now. So when the financials come out in a month focus on the cash and revenue not the one time loss. Look forward not behind to make money in the markets.
What will Karen and the board do with all that cash they are building up.....STAY TUNED.