Inferences from Quarter Report
So, it's been too hectic to really look at the numbers closely until now. What I see is good cash management here and good margins.
I'm going to back out the "mark to market" writedown. In doing so, HLIX actually shrunk its losses while increasing its sales significantly. Working capital is still in good shape. There was a little dilution but nothing significant. There was no capital raised, yet they still managed to end up with a little cash. Or a lot of cash if you factor in accounts receivables (giving us a good safety margin in our working capital).
MARK TO MARKET: I would love for an accountant to step up and explain this entry. This wasn't even taught when I was in college to my memory. and I do have a business degree. But not in accounting or finance. I get the jist of it. It's a basically recording a hypothetical. Like when I had my stock at $10.00 per share, I hypoethically had those gains. But I actually made that hypothetical a reality. Had I not, I could have readjusted upwards with a "mark to market" entry for my non-existant shareholders. And thank God I don't have to answer to them. How irritating. It would slow me down. Sorry, Venegas, for having to put up with us. But I'm the low maintenance one!
Where I get lost is why this is a negative with HLIX in regard to convertibles. When the stock is up, everybody wins. Those who hold the notes get to convert for a lot more profit. In fact, if they are able to now, they should. And that helps HLIX, it reduces their debt, and it's a lot less dilution. So, I don't understand at all. What I do understand is that it is not relevant to our finances because it's a hypothetical entry if something were to be triggered now. Any conversion is just cash in HLIX's coffers too.
As far as valuation, the price is outpacing the sales. That just means sentiment is really positive for HLIX. The sales are great, and you do want to keep it controlled. Now, the fact that HLIX is hiring and their real losses shrunk means good margins to me is to be inferred here.
From my experiences, it's going to be a LOOONG wait for the next update. I imagine they will file 4th quarter wrapped up in their annual report. They have longer to file that, so I'm guessing mid April before the next briefing. But the good thing about that is the 2nd quarter will come quick on its heels. Till then, it will be a lot of progress updates in news, but no hard evidence.
Signs of a "green balloon emergence" is in the writing. Last quarter, payroll exceeded sales. This quarter, payroll went up but it is equal to sales. So sales are moving up faster, and that's a good thing.
There was a massive reduction in "other operating expenses," and everything else remained a relative constant.
That's all good to me. Coming in after all this, it gets a little more obfuscated so I don't expect anything linear in the above patterns to be inferred. We are too small to nail down any patterns as well. You will have a complicated purchase involving cash and stock (which I believe came from treasury), and you will have a capital raise. So profits are close yet not necessarily. Yet, assets will definitely climb and it could be -- and I'm betting on it with the quality of both Venegas and Biotrack -- an accretive deal. Very accretive! And that's all good because this is good cash management from my understanding. If we can get to $25 million sales with the "strategic chess" going on, and be the market leaders, that is the number one priority. Operating margins here are looking good.
Valuation is something each individual can determine for themselves. There are all sort of investor classes. My class is the superior class -- the contrarian class. But there are several others, such as the momentum class. There is the Brockstein class, the charts-tell-my-future fighter class, wallstreet-is-a-scam Trump class, and social issues investor, I-have-a-gut-feeling investor, high-volume investor, etc.
