Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I'll say one thing
While I think they were awful in terms of IR prior to Alex's arrival, I do think they have a plan to get funding for individual drug development that minimizes dilution. No one can question that management's interests are aligned with investors.
Wait and see I suppose. Hopefully the shares sold ended up in good hands.
I do give Alex credit
He's really stepped up investor outreach. Why it took so long, I don't know, but he's at least trying. Hopefully we'll hear something about this soon:
"At the close of the interview, Jolly asked Wasyl what the vision is for the next 16-18 months of the Company. Wasyl replied, "We hope to be a leader in the cannabinoid pharmaceutical space. We are a true pharmaceutical company, not a cannabis company. We are publicly listed, and look forward to collaborating with other companies in this space." Wasyl also shared his excitement about upcoming research programs and partnerships that they are preparing to announce."
Don't entirely agree
I think investors are owed an update on financing plans since they've been in the works since February 2017. Moreover, it behooves a growth company to update shareholders to engender confidence and support a higher multiple. The fact that VRUS is trading at less than a $3mm cap with run-rate revenues of over $20mm (and obviously several multiples of that in terms of backlog) tells us that they aren't doing much right when it comes to investor relations.
My point was to ignore the persistent harping from the same set of posters clamoring for a PR. If they want more information, press Mark and let him communicate to management. Clogging up the board with useless pleas for PRs doesn't really help anyone. It's just self-serving to stir up anxiety.
Capital raise
I know Alex said they wouldn't raise money using the CSE, but that makes little sense to me. Alain stated that the point of the CSE listing was to access capital and have a more liquid trading market. The latter condition has been satisfied, to some extent, through PP shares hitting the market. That said, Canadian cannabis funds typically won't take positions in US OTC, so the CSE listing opens up the opportunity to sell shares to them.
Not sure why he'd restrict himself to PP and not take advantage of more liquid and better priced venues like CSE. The only explanation I can come up with is that they want shares locked up, but I think that's a bad reason.
By the way
Lots of M&A and financing deals get done in the next three weeks. Bankers love to get deals done before bonuses are decided. Moreover, Anshu will probably want to have his "dominoes" fall before filing the 10-K.
I'd also keep in mind that he announced the $78mm beef deal in December 2016...so he has a precedent for significant announcements in the last month of the year.
Simple solution
Ignore their posts. It's obvious which posters write those types of messages. Dont read them. They don't matter.
I disagree
I think they could have done a lot more to explain the strategy and business prospects. Alain barely communicated with the investors save for the letter in the Spring. There was no follow up letter after the 10-k was released. They could have done A LOT more to improve sentiment around the name, particularly knowing that PP holders were going to dump the stock mercilessly.
The company is also going to need to raise capital,so the stock price should be at the top of their mind. If they were cash flow positive and didn't need to raise external capital, then fine, ignore investors and just execute. They don't have that luxury.
Good points
Alex and the team can't draw salaries until they raise $5mm. Warrant exercises could get them part of the way there, but they really need to do an institutional offering. A $5mm raise at the current market cap is obviously not smart and they won't do it.
They need the market cap to be at least $50mm IMO to do a sufficient raise. Let's see what they have up their sleeves.
Feller, what are they going to do with the warrants now?
Extend and raise the strike AGAIN without a catalyst?
Next move?
Raise the strike price of the warrants AGAIN and hope that "refer to filings" is enough?
Puzzled and frustrated.
Hard to believe Alain was an investment banker
Has displayed no market savvy when it comes to this point. Mind boggling that the market cap is this low.
The update will be when it's approved
I doubt we hear anything until then because they probably don't know either.
All the more reason that the CSE listing is critical
We need institutional support to better absorb the PP holders selling. With the CSE listing, Canadian Cannabis funds can buy the stock.
They didn't say that at all
They aren't going to tell you when news is coming. No one does.
All they said was the 10-K, which is due by Jan 29th, should come early unlike the past couple of years. That is a GOOD thing, but it has nothing to do with news flow.
Well summarized
Only thing I'd add, which is not necessarily a contradiction to your message, is that the gross margin guidance is laughably conservative. They did slightly over 16% gross margins with revenues of ~$1mm. In FY 17, they had a quarter with gross margins of over 20% at a similar revenue level. With scale, there will be margin benefits.
In my view, this should easily be an 18-20% gross margin business given the mix of branded products. The company is run in a very lean fashion, excluding legal expenses that should decline markedly, so operating margins could easily be in the double digits.
When Anshu gives that type of guidance, which I hope isn't too far off, then the stock re-rates a lot higher.
With respect to the share count, I think an increase will be accompanied with a merger if it happens. If not, I think he'll try to convince some of the larger holders to swap into convertible preferred to free up some shares. That's just my view and one of a couple of options I've communicated to the company. I hope they follow through to address this issue soon so it can be put to rest.
Pending the resolution of certain developments
Perhaps you should contact Mark and ask him since you're not satisfied with reasonable deductions.
They never cancelled the conference call
Not sure what you are talking about, but reread the press releases and figure it out. They are in M&A and financing talks and don't want to have a call until those are completed.
End of story.
What is interesting is that...
Mark has started to talk about the underlying fundamentals and valuation. Ever since I've followed this stock, which has been since Anshu took over, he's never put forth a case to buy the stock based on valuation. It's mostly been him trying to calm investors and put out fires so to speak.
Perhaps the long-awaited catalysts are finally approaching as he's alluded to...
Never thought of Minnesota as a Red state
After all, you gave us Al Franken and Walter Mondale.
A little humor on a Friday morning. Hope NXEN can maintain the momemntum.
XactDose
He did speak about XactDose, albeit not to the same extent as the drug pipeline. I think he realizes the importance of signing a licensing deal for that product. It can bring in upfront cash and an ongoing royalty/revenue stream. That would be a huge catalyst for the stock. It could also be non-dilutive, and I'm sure he's cognizant of the desire to minimize dilution, particularly at the current paltry market cap.
I hope we'll see more outbound IR like this. Not sure why Alain couldn't have done a couple of interviews like that, but can't change the unfortunate past. It does indicate to me that the CRx guys will be more aggressive in marketing the story, which is a great thing.
Keep in mind
They actually guided to $20 million in revenue without a financing package. That assumes only $8mm gets recognized from the original backlog. So the target price, at just an average multiple, could be multiples of what you calculated.
You can sign up for free and listen
Available to anyone at no cost. Alex did a great job in that interview in my view. Very confident and great grasp of the business, despite his short tenure, and the opportunities.
Was that information from the interview?
At least Alex has seemingly stepped up the IR outreach efforts. Good to see. I hope they can find more broadly disseminated forums to share such information.
Exactly
Bad Hemper is interpreting everything negatively now.
What's amusing is that they extend the warrants
And increase the strike price without any information or IR outreach. They really have no clue how to market this story.
Make it happen Joe
Clear the ETRF barrier.
OTC is catalyst driven
It's not fundamentally driven given the lack of institutional ownership. Our time will come.
Anshu actually guided to $20mm in revenue
$12mm from the contract announced in August and $8mm from the "core" business, which implies roughly 60% growth on revenues derived from the backlog.
There's multiple reasons why Verus should trade at a much higher multiple than the group average:
1. Much faster growth for the foreseeable future.
2. Higher mix of first-party/branded product than the typical distributor.
3. Significantly higher operating margins than the typical distributor.
4. Attractive end market from a geographic perspective.
So he's obviously right that the current valuation is almost incomprehensibly cheap. What the market wants to see, IMO, is a viable path to recognizing more revenue from the backlog.
I would also suggest to them that they pre-announce revenues and operating income before releasing the 10-K. It shouldn't be that hard now that Nestbuilder isn't included in the financials. That said, what everyone wants to see is a financing package. Been waiting too long for that.
I obviously agree
A competent approach to IR would never have resulted in such a woeful market cap. It's frustrating.
Nothing wrong with the report
They are managing expenses tightly and legal will go down now that they have in-house counsel. I was fine with what I read.
Anyone selling here
Has to be doing it out of necessity, not by choice. JF seems like the most logical source of the selling pressure IMO.
Legal expenses will come down
Which is nice and the management isn't taking salaries until at least $5mm is raised, so they are incentivized to get the stock up.
Management
My criticism of their approach to IR isn't that they aren't updating when something material happens. Instead, I think that they could do a much better job of explaining the strategy. Alain put out a letter to shareholders in the Spring and after that, there were some material developments in the business. He could have put out a follow-up letter after the 10-K to discuss the key points regarding strategy and financing. Instead, they just expect investors to "refer to the filings". That's not a smart approach to IR.
In the absence of quarterly calls, which I doubt we'll get for some time, he could at least put out a quarterly letter highlighting accomplishments and future milestones. He could also discuss the vision for the company. This is particularly important now that they've acquired CRx.
I know Friedland was promotional, and it got him into trouble, but he was out doing interviews frequently. He actually would avoid speaking about Intiva, which was ultimately beneficial to the company as it avoided being embroiled in his legal troubles. I think Alex and Alain should try to do some interviews as well to explain the strategy and outlook. There's nothing wrong with doing some outbound PR, periodically, to explain the activities of the company. There's multiple avenues now to do that.
I hope the CSE listing jumpstarts their outreach efforts as they'll need to do more to court institutional investors.
That's a sensible explanation
He is likely price insensitive and just wants to raise cash.
That said, I think management could have managed this better. Setup block trades or done an offering rather than let sellers crush the stock. Reflects poorly on them too.
Alain and Richard can't sell that easily anyways
They're subjected to insider trading restrictions. They have limited windows to sell.
All evidence to the contrary so far
But the story has just begun...but they haven't displayed a mastery of the public markets in this case.
VRUS is like a difficult breakup for Bad Hemper
Girlfriend just won't let him go...keeps stalking him until he gives in.
Would be nice if the Intiva guys had our backs
I don't think they could have cared less about shareholders...hopefully CRx is different.
I'm going to wait for the CSE listing
I've given up on working through Mark. Seems like a nice guy, but I only get terse responses, with the typical gist being "refer to the filings". That obviously hasn't worked.
The CRx team seems more aggressive.
It's going to have to be the CRx guys
The Intiva guys haven't shown any understanding of how to educate investors despite Alain's banking background.