Apollo Healthcare Corp Warrants (03/01/2022) APHWF

Writing a Letter to Management

[cladium]

Have we thought about sending letters to management about wanting to put excess cash into a special dividend or increased buybacks? Perhaps at least guidance on capital allocation?

[Groddam]

Good idea- I'd like to see how they intend on spending the cash, right now, buybacks seems like the best idea. If I recall correctly, they have ample space to expand within their current building, so they likely don't need to invest much to increase capacity should that be necessary. They could put money into new products, like the CBD cream which I'd fully support provided some

[cladium]

I believe we can reach the CFO Paul Bozoki at [e-mail]. I intend to write an email asking for further guidance on capital allocation Seeing as how much gross margins expanded during the pandemic, they've certainly got the capacity. I wouldn't want to see a step-up in capex for PP&E. I'm interested in owning more of a solid business.  As for the CBD

[Groddam]

I'm right there with you on wanting to own a solid business and I'd obviously like capital to be spent to build the business, not super concerned with short term price appreciation, though I think the team can certainly do a better job keeping the price within a reasonable range. I'll send an email today. I think the cannabis industry is rapidly becoming accepted mainstream, though, I

[gary7789]

I did that a couple days ago re: special dividend, if there wasn't a better immediate use for the free cash they are generating. Wasn't my idea. Came from another post on this board but i thought it made a ton of sense. Paul wrote back saying he is taking the idea to the Board. So we will see if it has legs.

[Groddam]

I'd like management to prioritize investment in new products to offer to existing customers- once that's satisfied a form of dividend makes sense. 

[northcapital]

Actually they both can happen at the same time and can both make sense at the same time. Product research and innovation can be financed through cash flow. A special dividend would not impact this process at all. If it would make you feel better, they could put one brother in charge of looking at new products and one brother in charge of issuing a special dividend?

[Groddam]

I realize they can happen at the same time, but there's obviously a limit of cash available. If there's enough FCF for development of new products and more can't be used effectively for further development then the dividend makes sense. I don't see how that suggests their mutually exclusivity, again, I'm saying to prioritize development of new products vs. distributing cash

[northcapital]

I was not serious about dividing the work between the two brothers. The issuance of a special dividend to shareholders would not require any work.