Redknee Solutions (
TSX: RKN,
Stock Forum) continues to hold on to its market and as it moves toward what investors hope is a cash-positive December, the company continues to sign contracts.
Since August the company has signed on ~$54 million in orders from various Tier 1 operators of mobile and communications services. The company provides B2B back-end real-time monetization and subscriber management software and currently supports over 200 communications service providers and Tier 1 operators the world over.
The
financial picture this year hasn’t necessarily been rosy with the company filing a nine-month net comprehensive income loss of $5.2 million compared to a profit of net comprehensive income of $706,217 for the same 2013 period, leading me, as well as some investors, to wondered aloud if the CFO was capable of leading this company to profitability.
Sure,
revenues were way up in the nine-month results, but the cost of revenue had skyrocketed during that same period nullifying any progress to a profitable bottom line. One can only hope that these are one-time growth related expenditures, and the order backlog and new contracts rounding out the rest of the year bring the company into the black at least for the fourth quarter.
If the company can keep these costs under control and maintain their marketing push, 2015 could see SP bump significantly.
I wrote about
Sphere 3D (
TSX: V.ANY,
Stock Forum) recently and its push to establish itself as a major desktop virtualization provider for the small/mid-size business demographic. Their
Glassware 2.0 and Desktop Orchestrator was touted to provide a plug and play solution for businesses unable to support the army of technicians required to install and maintain current virtualization platforms marketed by sector giants such as Citrix.
They made moves to vertically integrate their offering with the acquisition Overland Storage, which some analysts and investors found confusing as Overland, a 34-year veteran of tape storage, had reached an impasse with competing storage technologies and was unprofitable for at least the last five years. Steadfast in their belief that they could turn this around,
Overland, went into a complete restructuring to optimize operations and focus on the marketing of 3D’s products as companions to their data storage solutions. It seems that Overland has completed its conversion and cost-cutting measures as well as dealing with its litigation woes and is
finally poised for profitability – hopefully.
This all sounds wonderful and the company is replete with case studies showing the potential of profits for their shareholders,
but the problem is, they aren’t first movers in the sector. Citrix and VMWare, with Microsoft and Amazon in the wings, have already divvied up the large-scale enterprise market and will undoubtedly work their way down the chain, while
Sphere 3D has managed to get its feet wet, it has yet to make any major inroads into their preferred demographic. It has a window of nine to fourteen months to perform, or it faces a more than uphill battle to stay afloat.
Spectra7 Microsystems (
TSX: V.SEV,
Stock Forum) is like the little engine that could. While many industry analysts passed over the company (you know who you are), I saw its
potential to become an integral supplier to the burgeoning VR marketplace and, yes, the soon to arrive augmented reality sector, which I think will be far larger than VR. Anyway, Spectra7 had developed the VR7100 ultra-miniature digital video link processer chip that would provide one of the industry’s thinner and higher performance interconnect systems for OEMs, such as Oculus Rift, to plant into their VR head-mounted displays.
Shortly after I wrote my article outlining the
production milestones Spectra7 had hit this year with the commencement of
commercial production of the VR7100 announced in May and the
launch of CouchConnect™ targeted at providing Gamers with a low-latency, ultra-light active HDMI gaming interconnect, investors took note of the company. Whether it was based on my writing or not,
SP skyrocketed ~50% by the end of that week, hitting a level commensurate with the company’s achievements.
There was another production announcement made almost a week ago when
the company presented the industry’s first VR chip, VR7050, for gesture recognition and motion sensing backhaul – perfect for gaming implantation, bringing VR to a whole new interactive level in a unified, ultra-light, ultra-thin wearable interconnect with incredibly low latency.
Production aside,
the company needed to market its offerings to truly realize its potential and give investors something concrete to hang their shareholding hopes on. It began following through on that requirement today when it announced that it had received
an order from an industry-leading consumer original equipment manufacturer (“OEM”) for delivery of over 500,000 devices which included the recently developed VR7050.
This is a relatively small, but significant step to creating a solid and long-lasting presence in the emerging VR sector and one of many sales transactions necessary to create a vastly more important profitable bottom line.
The extent of the hill Spectra7 will have to climb will be revealed when the company releases its Q3 2014 results. I still see a bright future for this company, but it needs to aggressively and successfully market its products during the next 6-months in order to capitalize on market potential and maintain a decent SP for its investors in the coming fiscal year.
Here is a summary of tech on the TSX: