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KPM46 it proves Venegas lied.
His on the record excuse for not stopping his weekly 10k shares sale was because of 10b5 plan which allows him to sell independent of his insider information. He claimed stopping the 10b5 was disallowed because he could be stopping the 10b5 because of insider information. That was false and I posted that in this board.
So now the 10b5 stopped. Did he stop it because of insider info? If he was allowed to stop it the whole time, then he lied before.
According to May Venegas, October Venegas just committed insider trading.
According to October Venegas, May Venegas lied.
Either way, Venegas may be getting reported to the SEC.
Follow the white rabbit Neo.
Knock knock
I think you read that wrong Noble.
50% vest on grant date means 150,000 options are vested as of 2 days ago.
50% vest on first anniversary means 150,000 options will vest 10/14/21.
Exercise price is $0.1045 for all 300,000.
So Vengas has 150,000 options that he can exercise at $.1045 each right now. With the $75,000 cash bonus he paid to himself, he can buy all of it outright for $15,675 and still have almost $60,000. He probably already did so. If the stock gets to 21 cents, he'd double the value to $31,500.
He can buy another 150,000 shares a year from now at $.1045 each. So stock price to 15 cents hes still at 50% profit.
This is guy who until 3 weeks ago was still selling 10k shares every week at $.10 for a grand total of $1,000.
Noble I disagree that this is a good alignment of interests. If hes so short sighted and broke ass to sell shares in front of everyone to make an extra $1,000 per week then hell sell these shares at 12 or 13 or 14 cents.
Shame to hear about Prentice.
Based on our experience with Akerna MJ Freeway up here Billingsley's lying if her mouth is moving so Id believe Prentice's letter 100%. But it seems to be happening everywhere, the good guys sell their businesses to idiots who dont know what their doing. Curren built greenbits, Vo built biotrack, Prentice built ampleorganics, and they walk away because new leadership "is unlikely to make it a preeminent leader of anything," as Prentice writes.
In the words of Bobby Axlerod "Hutch I starts it, Hutch II grows it, Hutch III blows it, shirtsleeves to shirtsleeves in three generations."
Some balance please.
Man I turn everything off to focus on the store for a few weeks and this board turns upsidedown. Maybe NobleRoman and Whatsup are secret bffs and trolling the rest of us?
Jokes aside, I need group knowhow. I thought insiders must report new shares acquired or bought w/ a form 3 or form 4? Point is insiders cannot just issue themselves more shares w/o SEC filings right? They defenitely cant sell shares w/o disclosing. Im not letting company leadership off the hook for incompetence. But outstanding shares increase cannot be them. No new sec filings on more 3rd party sales or conversions since earnings call. Maybe June stock buyers or convertible notes got delayed processing and just not included in outstanding share count until now? We can assume new shares went to noninsiders right?
NobleRoman I got respect for u but u need to separate personal opinions from moderator responsibilities. The Buyer Beware underneath the investor deck shouldnt be there. Post all u want on your concerns but don't prioritize your unproven theories over others.
Part 2 Venegas vs His Peers
Contd from Part 1 on convertible notes.
Roughly $500,000 converted in Q1 and Q2 and the rest got maturity extensions to next year which is great.
Now if only Venegas was as competent as his peers he could raise real money and stop sh*ttin on the shareholders. He is ceo which means he is the employee of shareholders. If you own a single share he is your employee. He is my employee. The fundraising responsibility belongs to him alone and he seems to be the least effective out of all the other industry executives.
Two days ago Dutchie, cannabis e-commerce, raised $35m.
https://www.newcannabisventures.com/cannabis-e-commerce-enabler-dutchie-raises-35-million-to-fund-expansion/
One week ago Springbig, cannabis e-marketing, raised $11.5m while Fyllo, regulatory compliance, raised $10m.
https://mjbizdaily.com/marijuana-tech-firms-springbig-fyllo-raise-20-million-plus-in-venture-capital/
In June KERN, a direct competitor, raised $17m in debt.
https://finance.yahoo.com/news/akerna-closes-17-million-debt-191840747.html
In May Grow Flow, another direct competitor, raised $8.4m.
https://www.prnewswire.com/news-releases/cannabis-saas-company-growflow-raises-8-4m-growth-round-301057798.html
In April Green Bits, direct competitor, raised $23m.
https://www.prnewswire.com/news-releases/greenbits-raises-23-million-in-series-b-funding-led-by-tiger-global-and-casa-verde-301041650.html
Venegas on the record statements on Mondays earnings call that HLIX had "as everyone else, minimal access to capital markets." Facts speak for themselves. Capital markets are robust for cannabis plays. Or even if things are harder all the other executives can still execute, perform and deliver while hes making lil pussy excuses.
Convert Notes Part 1
@NobleRoman, here are the original maturity dates for the convertible notes. Theyre disclosed in Section 10 in both Q1 and Q2 filings.
Note 11. May 15
Note 12. June 16
Note 13. July 11
Note 14. Sept 26
Total of $1.4m of principal due not counting interest accumulated.
Roughly $500,000 converted in Q1 and Q2 and the rest got maturity extensions to next year which is great.
Part 2 coming up.
Cause and effects. If this then that.
1m+ shares sold before lunch.
10:02 95,000 shares sold
10:17 300,000 shares sold
10:23 123,000 shares sold
Many more 20,000 to 50,000 share trades made around that time too.
Whatsup I disagree that the S8 you ref is driving todays activity. The 10q show stock options issued to management have been mostly or all underwater at recent prices. Registering shares for options plan is not the same as executives exercising options. Executives are so hard up for money despite their bloated $200,000 salareis that theyre selling 10,000 shares every week to get an extra $1200 per week. Not a snowballs chance in hell theyre selling and using that money to exercise options to get more shares at current share price. Why sell shares at 12 cents to exercise options with a strike price of $.13 cents?
KMP46 I dont think insiders other than execs dumb enough to sell in such large quantities less than 72 hours after an earnings call that highlighted the company reached the op cf positive milestone. Non-insider employees might be more plausible as they wouldnt have S4 reporting requirements and this close to the 10q and earnings call means smallest risk of insider trading issues. Also any security and guarding employees may be trying to sell what they can before the sale of their division to a private entity is consummated. Id lean towards security and guarding. Software employees would risk management ire by selling. Security and guarding employees wouldnt care as theyve got new bosses anyways.
Everyone forgets that the 10qs spell out whats mostly going on. Half a million in convertible notes were converted thru Q1 and Q2. Thats in dollars. If they converted at 30% discount to stock price of 12 cents they convert at 8.5 cents. $500,000/.085 = is nearly 6 million shares at 8.5 cents each. Good news is if they were responsible for dropping share price in May from 34 cents down to 9 cents they might be almost out.
Good thing is that its temporary no matter what. Market will absorb shares and we can hopefully get back up to 30 cent range.
PR Q2 cash flows from ops is wrong, likely a typo.
@NobleRoman
cash flows from operations
Q1 ($362,296)
Q2 $83,653
The $445,949 is the Q1 to Q2 improvement. Its not the posted amount.
Predictions MET. NOT exceeded. A quick analysis
Calm down NobleRoman.
I expected "No meaningful revenue growth, which in the current economy is good vs steep losses. Q2 revenues will be roughly the same as Q1."
Q1 numbers are actually not provided. HLIX published Q2 2020 vs Q2 2019 and 6-months 2020 vs 6-months 2019. So I will provide them.
Q1 Revenues = $4.5m
Q2 Revenues = $4.7m
Prediction met.
I expected "Q2 EBITDA likely also the same as Q1, maybe a bit higher"
Security and guarding
Q1 EBITDA = -$726k
Q2 EBITDA = -$375k
Prediction exceeded.
Software
Q1 EBITDA = $780k
Q2 EBITDA = $799k
Prediction met.
I expected "the company should be in a better cash position."
Statements of cash flows show that the company brought in $1.3m from the common stock issuance in Q2 [$1.4m YTD minus $.1m already counted in Q1].
Q1 Cash balance = $617k
Q2 Cash balance = $2m
So they treaded water. Cash was unchanged other than the $1.3m from the stock sale. I wrote that level is good vs steep losses.
Thats it for my expectations. They were MET not exceeded which is still good. Solid ground. No need to skeet everywhere.
Statements of Cash Flows. Net cash used in operating activities is not the same as operating cash flow. If all operating assets and liabilities were constant I might agree with you. But they changed. Take Accts Payable. In Q1 Accts Payable was a minus 259k on cash. Meaning they spent 259k in cash beyond Q1 expenses to pay down Accts Payable. Accts Payable by end of Q2 is positive $122k. So they paid less in cash than they expensed. Ergo the company has additional cash because they did not pay some expenses and let current liabilities accumulate as Accts Payable. That does not mean the company is operationally better, it means they delayed paying vendors relative to Q1. The swing from -259k to +122k is a 381k difference to cash that has nothing to do with operations.
So youd have to do math to remove the effect of changes in operating assets and liabilities to determine if operating cash flow was truly positive. Im not saying they did or didnt make positive operating cash flow. Its just premature to declare that the company has positive operating cash flow with the numbers they give.
Q2 Thoughts & Expectations
Its that time of the year again. Earnings call. Thank god cannabis is an essential biz so between keeping the shop open and supplying medicine and support at CHAZ and Portland these 3 months zoomed by.
The noise of personal attacks and nonsensical chatter about Chinese women and c-sections on this board is repellant. I’ll endeavor to post something useful to the community to open source what to do about this company. Intelligent and respectful criticism, debate and discourse always welcome.
Q2 new revenues will be less than Q1. Pandemic meant state governments issued few/no new MJ licenses so only source for expanding user base was converting existing licenses using other systems. Pandemic also means businesses less likely to make invasive changes like switching software.
Q2 subscription revenues will be higher than Q1. Double edge sword of licenses not switching during pandemic also means less switched to competitors. If no one switched but backlogged licenses started operations, then subscriptions net up.
Government revenues will be unchanged b/c no new government contracts were won/loss. BUT, Venegas never answered my Q1 call question about losing the Maine contract and whether govt contracts will continue to be in the company’s future. WA has been in constant pain since Akerna got the contract in Washington and Oregon is no better off with metrc. Speaking of metrc some buddies of mine are launching in Missouri and metrc is blatantly defying a court ordre that should put the Missouri contract in HLIX’s hands https://mogreenway.com/2020/06/01/state-says-new-metrc-agreement-may-defy-a-court-order/. Will HLIX challenge? or are government contracts not important for the future of the company?
Revenues may or may not go up from recent software launches. Mgmt has not spoken about the progress of next-gen biotrack, americanex or analytics. No other big revenue movements. Cannabis being an essential business during pandemic and how much money licenses make has no impact on HLIX subscription fees.
Overall prediction? No meaningful revenue growth, which in the current economy is good vs steep losses. Q2 revenues will be roughly the same as Q1. Q2 EBITDA likely also the same as Q1, maybe a bit higher if revenues unchanged and they laid off anyone during the pandemic or saved on other costs from pandemic work-at-home. Pay attention to fact that the interest from the Q1 receivables factoring will not be within EBITDA calculation but really should be.
With the sale of shares for $1M in Q2, the company should be in a better cash position. Even better now after the sale of security but that won’t be in Q2 numbers.
Be honest be honest be honest. No one has ever really cared about the amount of the insider sales. 10,000 shares per week is not much. The issue is honesty. Venegas continues to dishonestly give excuse that 10b5 plan he and Ogur put in motion cannot be stopped, which is a flat out lie. Just call your broker and cancel it. If he wants to sell 10,000 shares per week because he needs to supplement is $200,000 salary, then fine, but then just say it. If he cant be honest for something so small how can we all trust his answer to bigger questions such as status of new product development? or things that can bring the SEC down on the company such as the reason why Vicente Fox is not on the board of directors? If Vicente Fox is actually on the board of directors, an SEC filing should have been made when he was formally put on. If Vicente Fox initially agreed on being on the board of directors but backed out or had to delay that should have been communicated to shareholders and SEC, which it wasnt. Announcing his intent to join the board and letting the price ride up to $3.00 without a follow-up of making it official or that things fell through puts the company in serious jeopardy.
Concern about fundamentals. Physical descriptions need not apply.
I don’t know nothing about Venegas (no one in pnw does tbh) other than his contempt for investors and what ex employees say about him on glassdoor (take with a spoon of salt but still interesting).
But this section of 10q scares me. 10. Convertible notes payable pg 23 – 25.
Note 11 part-converted to 1.1 million shares at 11 cents.
Note 11 $280k matured 5/15 (last week)
Note 12 $450k matures 6/16
Note 13 $450k matures 7/11
Note 14 $210k matures 9/26
That’s $1.2 million in principal due in less than 60 days and $1.4 million in 4 months. HLIX cash cannot pay back so all will convert at 30% discount to market. If HLIX price at conversion is 16 cents, these will convert at 11 cents.
That’s 12.5 million shares at 11 cents each about to flood the market w/o any care for if the price goes above 16 cents.
Counterpoint or show me something I missed b/c it looks like Michigan’s two dams broke and we’re all sitting in Midland?
If ppl keep asking the same question, it means your answer sucks. If you are given a second chance and you doubledown, it becomes clear that you're not dumb, you just think your shareholders are dumb and that's just insulting.
Asked about his personal stock sales, lied again and said that 10b5 can't be cancelled. Maybe 10k shares is not much comprared to total volume, but then why lie? Just say that your $200k salary isn't enough and you need the extra $1200 each week.
Asked about V. Fox, and he essentially says that V Fox doesn't provide value if Mexico industry is slow. I'd love to see a recording of the convo where Venegas tells V Fox to his face that his expertise and connections are not needed until Mexico picks up steam.
Looks like Venegas is more interested in his ego than in building a company shareholders can get behind.
Stock market in a dive does not explain HLIX poor performance @GloblDefensInitiativ.
Let's look at market's performance and see how much it should be affecting HLIX. Take the closing price on 2/18 (S&P500's all-time high), on 3/22 (S&P500's covid-19 low), and today.
S&P500
2/18 $3,393.52
3/22 $2,191.86
5/18 $2,953.91
KERN
2/18 $6.96
3/22 $4.07
5/18 $7.45
HLIX
2/18 $0.38
3/22 $0.12
5/18 $0.14
S&P lost 35% in value, then recovered 35%. Its now at 87% of it's 2/18 value.
KERN lost 42% in value, then recovered so much it's at 107% its 2/18 value.
HLIX lost 68% in value, then recovered so little that it's at 37% of its 2/18 value.
I posted earlier Venegas' words show he's blind or thinks investors are blind. Investors ain't blind. Take accountability for the company's performance or keep blaming others. Answer questions honestly or keep making stupid excuses everyone can see thru. Shareholders and the industry want the company to succeed but no one finds the stock attractive enough to buy even at these prices compared to what else is out there. Buck stops with him. Nuff said. Now get it done or find someone who can.
I submitted these questions. Let’s see what happens.
Convertible note 11, $120,000 of its principal balance was converted to common shares at a rate of 11 cents per share. The end result was nearly 1.1 million shares with a cost of 11 cents hitting the market.
The remainder of note 11 and all of notes 12 through 14 total $1.4 million in principal. Note 11 matured last Friday and the rest mature over the next 4 months. Assuming these notes are not repaid in cash and they convert at 11 cents each, that would be 12.6 million shares at 11 cents each flooding the market.
Does the company have a game plan to restructure its financing, or should the shareholders expect to continue to transfer wealth to the company’s debtholders for the foreseeable future?
In terms of liquidity, Q1 2019 we saw cash + receivables = $3.3 million while payables = $2.1 million. So cash and receivables could cover 150% of payables. Not only that, Cash was also at $2.1M and so could cover payables 100%.
This quarter, cash + receivables is $2.1M while payables and the note payable = $3.3 million. That means cash and receivables together are less than 66% of current liabilities. Worse yet, Cash is $600 thousand, and so is less than 19% of current liabilities as of 3/31.
Though EBITDA and operating cash flows have improved, they’re still negative for Q1, and it remains to be seen how covid-19 has impacted Q2 earnings and receivables collectability. Since delaying the payment of payables to vendors would harm operations, what steps is the company taking to improve the firm’s liquidity for the remainder of the year?
Since these questions were skipped in the March earnings call, I’m asking them again.
The Maine contract is the first government contract I know of that was cancelled before system launch. Does the company intend to continue pursuing government contracts? If so, can management provide color as to what happened in Maine and why shareholders can be assured that it won't happen again?
Seedtosale 2.0. What is the status of the development/launch of BioTrack's next gen product and how does management expect it to affect 2020 financial performance?
Can you provide any insight as to the revenues and expenses that the Americanex acquisition has added to the company's financial performance?
Since I don't believe in censorship............
Saw this post a few days ago. Someone at HLIX moved so fast they took it down in less than an hour. You guys need to spend more time company building less time silencing ppl with genuine concerns or frustrations. No better way to calm or silence objections than to deliver.
Pound-the-round
It would explain how a company with almost no cash bought the leading software company in the space. Hated the deal as a shareholder now stuck with this group. You hear things like "baby oil is not just for babies" in a corporate setting plus a fishy transaction you ask questions. Glad someone enjoyed the screwing as the value destruction since then is massive for shareholders.
Another earnings call tomorrow. Thoughts on last call and expectations for this call.
Post your questions on ihub so everyone can see what Venegas chooses to answer and dodge. Time to revisit this company and see if it’s worth upping my position at these prices or time to finally accept my losses.
My reaction from last call. V. Fox answer makes no sense. HLIX hasn't impaneled him b/c Mexico cannabis has slowed? The newsrelease was 2/25 in 2019 long before Mexico slowdown. Global name recognition and doors he can open still means something. If V. Fox was on the board or strategic advisor or even shareholder he'd draw attention and credibility to the company. V. Fox name drops Khiron regulalry but I can't find one instance of him mentioning Helix. Venegas must have gotten ahead of himself and made newsrelease and SEC filing w/o Fox having actually been closed. And yet the company never made a followup newsrelease or SEC filing to announce that Fox would NOT be joining the board. That has to be multiple SEC disclosure violations and would alone be basis for a shareholder class action.
V's reply to my valuation comparison to KERN was fine for first part but he ignored second part. If HLIX and KERN are comparable why the 5x delta in valuation? There are many reasons but I'll give one. Though Venegas' vocab sounds straight out of a b-school textbook, he lacks honesty. Like Trump he gives himself an A+ while ignoring questions about where things suck and why. How about "I fucked up. I announced the V. Fox thing before he signed and then he backed out"? Or "I relied too heavy on convertible debt in our early years and that's caused a flood of shares the market wasn't ready to absorb." If V showed that he made mistakes and learned from them, more ppl would likely be interested in the shares, but since its "we're awesome" all the time no one can get a real feel for company performance or its future so they just invest elsewhere. KERN's Billingsley is far better at showing she sees the issues and has a plan to fix them. By V ignoring the bad, investors can't tell if he's blind or if he thinks investors are blind.
That segues me to the 10b5/insidertrading crap. His answer is he's selling 5k shares every Tuesday and Wednesday b/c 10b5 is out of his control and he wants to not trip insidertrading. 10b5 can be canceled anytime w/o triggering insidertrading and everyone knows that. 5k shares per day isn't much, but then just answer question honestly. If you're hard up for cash even earning $200,000 per year b/c the girlfriend your wife doesn't know about has an expensive my first jack rabbit habit, just say “I’m selling because I need the money,” and we can all move on.
Venegas ignored all my other questions about loss of Maine contract and state of gov’t contracts in general, Seedtosale 2.0 status, and Americanex acqusition impact. Trying to decide if they’re worth asking again.
Venegas' and Siegel's orientation is no concern. However, if there is an inappropriate relationship there that is at the expense of shareholders then shareholders need to know.
My questions for today's earnings call.
As a former user of Biotrack's traceability system and commercial system in Washington I've followed Biotrack for years. My question got skipped on the last earnings call so I am posting all of my questions publicly so that it can be seen whether skipping me last time was intentional or an honest oversight. ir@helixtcs.com, if you are reading this, please at least acknowledge the existence of the questions even if you choose to not answer them.
My question was skipped on the Q3 earnings call and I resubmit it for today's earnings call.
You announced in February 2019 that Former President of Mexico Vicente Fox was to join Helix TCS's board of directors. I have not seen any updated filings regarding that announcement. My questions are: Is Mr. Fox a member of Helix's board of directors? If not, does he still intend on joining the company's board? When can shareholders expect an update one way or the other?
I also have the following questions.
You said on the last earnings call, "the market really hasn't caught up with the full value proposition in our view." In spite of the dive in the stock market, your direct competitor KERN is at a $64M market cap while HLIX is at a $12M market cap. Does company management believe that it is a peer of KERN and should be valued in the same range as KERN? If so, to what does company management attribute the fivefold difference in valuation between the two companies?
Many shareholders are concerned that in spite of assertions that the company is worth more than what the shareprice reflects, company management continues to sell shares at prices below 15 cents. Though it may be inappropriate for management to cancel specific sale orders out of concern for insider trading issues, it is NOT inappropriate to simply cancel a 10b5 plan in its entirety at any time. Even assuming management cannot technically undo a 10b5 plan already in motion, management could practically undo such sales by implementing a 10b5 plan that purchases company shares right back so that the net effect is zero. Why should those of us who own shares continue to hold on to them or acquire new shares when management is content with selling shares at current prices when the 10b5 can be cancelled entirely or counterbalanced with corresponding purchases?
Final question on share price. Rumors are flying around about shareholder Steven Siegel (aka ExpensiveGuy) selling shares and putting downward pressure on the shareprice. According to SEC filings Siegel owned in excess of 10% of the company's common shares as of the Q3 2019 10Q, which would require him to report all sales on a Form 4 until his holdings fall below the 10% threshold. Has company management been monitoring and enforcing SEC compliance with respect to executives, board of director members, and 10%+ shareholders to make sure company stakeholders are adhering to SEC regulations? If not, what exposure does the company have to the SEC if any of these actors have violated SEC reporting requirements? If yes, will the company fully cooperate with the SEC or other law enforcement agencies should anyone be found to have violated SEC reporting requirements?
The Maine contract was not worth a large amount of money and I would not expect its loss to significantly impact revenues. However, it is the first government contract I know of that was cancelled before system launch. Does the company intend to continue pursuing government contracts? If so, can management provide color as to what happened in Maine and why shareholders can be assured that it won't happen again?
Seedtosale 2.0. What is the status of the development/launch of BioTrack's next gen product and how does management expect it to affect 2020 financial performance?
Can you provide any insight as to the revenues and expenses that the Americanex acquisition has added to the company's financial performance for 2019? Do you have any guidance as to how Americanex will affect company financial performance in 2020?
Thank you
EBITDoobie clearly Venegas or employee posting w/ Venegas permission & watching. Welcome.
https://www.sec.gov/Archives/edgar/data/1611277/000121390020003946/f8k021020ex10-54_helixtcs.htm
Feb 14 8k shows HLIX sold $660k of biotrack's receivables for immediate $485k and founders personally guaranteed.
It's NOT $1M.
It's NOT even credit line.
They sold earned revenues at 73.5 cents on the dollar to bring in less than a half mil in cash.
HLIX is a public company so careful about lying Venegas. One screenshot to sec of you lying about black&white 8k would be drama drama drama.
Also big round of applause for founders to personal guarantee that company will successfully collect on its current receivables. *sarcasm* Doubt it keeps you up at night bc should be 0% risk there. If there is risk that the company cannot do even that, then founders shouldn't be leading.
If founders could *not* care less about 2 grand then why send signal to the market that $.11 is an acceptable valuation for only 2 grand? Isn't it worth foregoing 2 grand to instill confidence in market that $.11 so undervalues company that founders will not sell at that price under any circumstance?
4 months ago Zac said in the Q3 earnings call, "the market really hasn't caught up with the full value proposition in our view." (https://seekingalpha.com/article/4306858-helix-tcs-inc-hlix-ceo-zachary-venegas-on-q3-2019-earnings-call-transcript?page=3).
If that's true at $.55, that should def be true at $.20. He should be buying if he believed his own words. At worst he should be holding and not selling.
4 months ago Zac said in the Q3 earnings call, "the market really hasn't caught up with the full value proposition in our view." (https://seekingalpha.com/article/4306858-helix-tcs-inc-hlix-ceo-zachary-venegas-on-q3-2019-earnings-call-transcript?page=3).
If that's true at $.55, that should def be true at $.20. He should be buying if he believed his own words. At worst he should be holding and not selling.
Actually whatsup23 is totally right. I met Siegel/ExpensiveGuy years ago at an MJ conf in Washington. He definitely wears a perm wig, you can see the hair line! Also, that gold rolex he wears is clearly a knock-off.