EarthLabs Inc V.SPOT

Excellent Analysis from Sustainabledude on Yahoo Finance

[kentucky77]

Sustainabledude57 minutes ago

Alright. What I'm destilling from the earnings report is that the Goldspot workforce has partially transitioned to focus on further development of the SaaS side. Consultancy revenues are considerably lower than the last two quarters, that while they're on a hiring spree since May. They're currently hiring a front-end developer for the finishing touches on Litholens which will be integrated in the Geotic platform, and set to release in the coming months. Key thing to take away here is that the consultancy side almost covers all business expenses, meaning that SaaS revenue gross margin will directly flow into the bottom line. Ridgeline is at a revenue run-rate of roughly $1.2M a year now, but my expectations are they can ramp that up significantly with the new M-PASS system, of which we have seen quite a few contracts signed already.

I think it is a shock for a lot of shareholders to see consultancy revenue at the $2M level while many have guided above $3M I think. I agree it doesn't look pretty but remember that most of us (at least I am not) are not here specifically for the consultancy revenue but more for the promising SaaS opportunity and the investment AI leverage.

Regarding the investment portfolio that has me not concerned at all. The volatility is expected with many juniors still waiting for assays and spot prices being highly volatile you can't win every quarter. If the AI gives a statistic advantage in comparison with the gdjx, that can only be judged upon longer term, so patience is key. Last thing, we can also expect an IPO of Golden Planet Mining in H1 2022 so that would add significantly to the book value.

Lately we have seen some solid validation of the tech. With Pretium announcing a bonzana grade discovery targeted by Spot, QPM finding new gold vains in greenfield territory and Critical Elements discovering new Lithium veins through Spot. Not to forget the infamous NFG. Their tech has proven to give an edge in exploration and shortage of clients is not a problem per the ceo in his last interview. They're workforce constrained at the moment and that is, among other reasons, why the transition to SaaS is so strategic. I bet the clients will be gobbling up our SaaS tools once they are released market wide.

My plan is as follows. I decided to hold my 200k core position and will add in any sharp dips. For the rest I'll remain passive this quarter and I'm looking forward to Q4 numbers. Remember we only need a few million of free cash flow a year for this valuation to make sense. Something which may look distant to some but is something which can happen quickly. Don't underestimate SaaS. Cheers.