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Yea, that's the least of our worries at the moment. They've got 180 days to get into compliance. They also have 11M more shares adding to the market cap. The way I see it, if they don't have a $35M market cap within 6 months, we're probably screwed anyway (if not already).
But really, where is the "capital" they supposedly want to return to CR?
This has been one of the biggest mysteries since they released the Q2 Financials. They booked the C$19.3M loan from CR in Q2. They had $4.4M total cash remaining at the end of Q2. So where did the C$15M go that was ear-marked "only for dealerships". Here are the net changes in their other assets between Q1 and Q2 (excluding AR).
+ $1.5 Intangible assets
- $.05 Prop, Plant & Equip
+ $.27 Right of Use assets
+ $.24 Prepaid Exp
+ $.39 Current Portion of Prepaid Exp
Where's the $15M????
This PR had so much news, that it's almost an afterthought that they are issuing 10M more common shares to strategic investors in Saudi Arabia. Just a massive amount of dilution, but what other choice do they have? Which begs the question, why the Preferred shares then to settle the debentures? Couldn't they have just done it with common at 3x the share price five months ago?
Also, I didn't see any warrants mentioned with those 10M common shares, but I'll believe that when I see the F-1.
Exactly. I just can't believe that was ever the plan to begin with. That's why I asked the e-mail question during the last CC about taking on $250M in debt. Mcmeekin answered it as if they would be able to offload those assets easily to entities looking for the depreciation write-offs. Really? So you're getting into THAT business. You've gotta be kidding me with that strategy. How in the hell that ever got out of the board room is a joke.
Msg board posters have become the de facto BOD. LOL
Fair point. Perhaps it will be far fewer than I'm anticipating then.
It sounds like it. This seems like almost a complete restructuring of their business model. If migrating to Google Cloud is the right strategy, then why did they wait so long to do it? Is it strategic or desperate?
Yea, this is definitely the most confusing part for a whole bunch of reasons.
It doesn't seem like they've been able to actually reach an agreement with CR. So that is definitely not encouraging.
Most significantly, how can mCloud return the deployed capital? Where is it? Show me the assets on the 6/30 B/S? I can find the debt, that's for sure.
I mean, I hated the idea of taking on the debt all along. It sounded like an absolutely atrocious plan from the jump. If they are somehow able to restructure this in a way that they aren't the owners of the assets and just the AI provider it would be a much better proposition IMO, but somebody has to finance these implementations and hold the assets.
Yea, the asset count has proven worthless ever since we learned about "paused assets". This is what I meant by "another excuse" though. He doesn't have to face yet another atrociously missed asset target, because he essentially just blew up the whole metric. Here's the crazy part, you aren't going to believe how many assets we're talking here. I tried to estimate it once by using the Avg Rev per asset numbers vs what they currently charge. We're not talking just a couple thousand here. It's not tough to calculate.
LOL ... Whatta ya know, he found another excuse to miss all his targets.
There is A LOT to unpack in this PR.
https://investor.mcloudcorp.com/press-releases/press-releases-details/2022/mCloud-Integrates-with-Google-Cloud-to-Accelerate-Revenue-Growth-and-Maximize-Cost-Efficiency/default.aspx
There are no more excuses left for Mmeekin to hide behind ...
He told us he had the contracts to get close to 90K ... LAST YEAR
He told us all along it was the "pandemic restrictions" holding them up.
He told us the pandemic restrictions were lifted this past March ("in fact everywhere")
This is it. If he doesn't deliver in the 2nd half of this year, he is exposed as a fraud IMO.
Enough is Enough.
Contact mCloud and demand they update investors on what is going on with the financing. This is ridiculous.
russ.mcmeekin@mcloudcorp.com
chantal.schutz@mcloudcorp.com
wayne.andrews@mcloudcorp.com
There's no doubt. Once volume starts spiking the stock starts showing up on momentum screeners and the daytraders traders pile in. You can see it on social media. It's happened 3 times now in the past month or two. Nothing sustainable.
I think investors are sending a pretty clear message to Mcmeekin ...
We don't give a sh!t about your flashy partnership PR's, close your financing and show us the revenue. Until then, your stock is nothing but day trader fodder.
If nothing else, at least getting a close > $1 will stop the delisting notice countdown. One less thing to worry about.
Oldguy, Now we know what?
also, if it makes you feel any better, I need around $1.75 to get even as well, but that's BEFORE the reverse split ...
Google Partnership
The volume is incredible off this PR re the Google partnership. It's unclear to me though exactly how significant this is. The PR is trying to promote it as a "strategic partnership" between the two companies, but this Google Cloud Advantage program, at first glance, seems to be more of something that you just enroll in rather than Google actually choosing to partner with you. So I'm not sure what kind of role Google actually played in this, other than providing this service to companies that meet the enrollment requirements. Either way, I guess it's a positive to have access to their tech and marketing engine. Of course, I'm sure it comes at a healthy cost.
Been burned so many times by these flashy PR's that I refuse to get optimistic till I see the actual revenue and not a moment sooner.
Anyone have any insight into what exactly this partnership means?
I'm kind of amazed that $2M would even be enough to cover the Fiera Pymt by this point. What the heck is an "arms length strategic investor" anyway?
Do you think Mcmeekin and Schutz will thank us for out patience riding out this financing nightmare like they did back in May for waiting out their "pandemic restrictions" excuse for two years? Do you think maybe we'll get another "we're ready to move on and rock here" from Russ? That would make us all feel better right? I mean, who cares about destroying > 90% of shareholder value over the past two and a half years as long as they are appreciative of our patience and ready to rock! Right? What a joke.
We are now approaching FOUR months since their last PR re this financing (excluding the botched interest pymt notice). It's an embarrassment how badly this has been handled.
Is $15 million close to a Billion?
While he cut his price target by 40% ...
Nothing against Brian, but I give absolutely no weight to anything these analysts put out about mCloud. Zero. They have proven to either not be paying attn or too afraid to rock the boat because of banking relationships (see ATB and Maxim).
No, they're like a private debt fund or something. That would go nowhere for sure.
I've sent dozens of e-mails to Mcmeekin and Schutz. I've heard back from Mcmeekin twice, so I know he reads them (or at least used to), but nothing for several months. I think e-mail is a better option than Linkedin to try to get a response from Mgmt.
russ.mcmeekin@mcloudcorp.com
chantal.schutz@mcloudcorp.com
I obviously hope BK is not the end game here. I just don't know what CR was thinking here. They have a website up now, but it's very basic and only includes the BOD stuff. I even contacted their CFO to see if they had a publicly available investor presentation, but he replied they did not. I guess another angle here is Joulesmart. They are the implementation partner w/ the EV charging stuff. Will try to see if I can find anything there.
https://www.carbonroyalty.com/
Why would they have to "fight to get it into AssetCare" if they controlled the company?
I'm just trying to figure out how this deal with CR ever made any sense. I know what we've been told about the deal doesn't make sense, so there had to be some other arrangement made. Could that have been Mcmeekin convincing them that he would close the Preferred deal soon after Q2 end and replenish any of CR's funds he used to cover his operating expenses? Sure, if CR is incredibly stupid. But I don't think they are. So what else could they have been planning? I just think we have to leave open all possibilities here, including CR taking control of the company for $15M. How much was it going to cost CR to get publicly listed on the Naz? How much is mCloud's demand response tech and partnerships w/ the utility companies worth to them in their business of harvesting carbon credits?
One big bugaboo in that "plan" would be the debenture holders who'd get screwed over in a BK filing. A lot of them were Katusa subscribers. Would he really have embarked on a plan that would drive mCloud into BK and cost his own subscribers their investments? I'd like to think not. So then perhaps we need to consider the possibility of some type of merger rather than a BK? I've got no clue and am growing increasingly frustrated trying to figure out what is going on.
It's a valid point, but even if mCloud had bought zero EV equipment at the time of a BK filing, this subordination agreement still would give CR control of all "contracts and contract rights, including contracts with auto dealerships,"
There's no possible way insiders could legally buy/sell stock with all this going on right now. And we've already established how much their stake has already been diluted.
If one were to start hypothesizing about potential strategies that mCloud and Carbon could of had from the start of this seemingly nonviable arrangement, how do you think this particular Note (17b) from the Q1 Financials would fit in?
On May 5, 2022, the Company, Carbon and Fiera executed a Subordination and Postponement Agreement (the “Subordination Agreement”), whereby the parties agreed that the security previously held by Fiera would be subordinate
to the security to be granted to Carbon commencing on the date of the agreement. The security granted to Carbon means the EV Dealership Projects and to the extent related to the EV Dealership projects, all accounts, equipment and
machinery, contracts and contract rights, including contracts with auto dealerships, inventory, cash and proceeds, rent and profits for each of the preceding. Execution of the Subordination Agreement was required for the additional funding
under the Note to be released. A total of US$15,000,000 was funded subsequent to March 31, 2022 (Note 8(b)).
I just keep coming back to something with this whole mess that I can't get passed.
The fact that Carbon Royalty gave these guys $15M USD during Q2, and that Mcmeekin said that these funds were only to be used for the EV charging implementations. Think about that, it makes zero sense. mCloud had C$1.87M cash on the books at the end of Q1. They had burned an avg of $C7.75M in cash from ops over the prev two Qtrs. There was NO chance they were getting through Q2 w/o using that money to cover their operating expenses. Even if Mcmeekin convinced them that they would be able to close the preferred financing shortly after Qtr end, why would they take that gamble with their money knowing it would initially be sunk into mCloud's operating losses? It makes me wonder if there was something nefarious going on here from the start. mCloud borrowing $500K per dealership NEVER made any sense to me to begin with. I'll save my conspiracy theories for the time-being but you probably see where one could go with that.
I don't see any problem with that. I would imagine Aramco would pay them in USD. Plenty of American companies do business in S.A. Heck, the "am" in Aramco stands for "American". Why would you think it would be a problem?
URBSOFT is definitely their partner in SA. These are the recent public comments Mcmeekin has made re hiring in SA. and URBSOFT ...
4/4/2022 FY2021 Q4 CC
"Number two, the answer to your question around the Middle East, their intention is to go gangbusters. So the more capital we have to go gangbusters within the agreement we have with Aramco, the faster we can grow, and the more local people we can put in place. We already have a handful of technical experts in the Kingdom ready to hire. We want to hire more."
8/16/2022 FY2022 Q2 CC
"URBSOFT is very much involved in everything. You need a partner in Saudi Arabia. The professor who's the founder of URBSOFT is a very close friend. Also, we're working very closely together on the NEOM project."
They've told us that the S.A. connections would be done with people hired locally. They can't hire people locally w/o any money. Unless they are getting "pull-forward" revenue ... LOL.
You're probably correct that they grossly underestimated the time it would take because they had already been through the listing process last year, but they had to have been told something in June to put out that PR saying it would all be finalized around 7/14.
What makes this all even more devastating is that Q4 was supposed to be the Qtr where they ramped up in SA. If the lack of funding is now pushing back all those connections, then we may be screwed even if the F-1 eventually clears.
p.s. the original F-1 was filed on 5/11 so it's been over 5 months.
You're probably correct that they grossly underestimated the time it would take because they had already been through the listing process last year, but they had to have been told something in June to put out that PR saying it would all be finalized around 7/14.
What makes this all even more devastating is that Q4 was supposed to be the Qtr where they ramped up in SA. If the lack of funding is now pushing back all those connections, then we may be screwed even if the F-1 eventually clears.
p.s. the original F-1 was filed on 5/11 so it's been over 5 months.
So why not just put out a PR updating investors that they are still going through and responding to SEC comments and will provide more updates as information becomes available? At least put to rest the speculation that there is something else going on other than regulatory BS.
Filing Review Process
"The Division of Corporation Finance selectively reviews filings made under the Securities Act of 1933 and the Securities Exchange Act of 1934 to monitor and enhance compliance with the applicable disclosure and accounting requirements. In its filing reviews, the Division concentrates its resources on critical disclosures that appear to conflict with Commission rules or applicable accounting standards and on disclosure that appears to be materially deficient in explanation or clarity.
The Division does not evaluate the merits of any transaction or determine whether an investment is appropriate for any investor."
https://www.sec.gov/divisions/corpfin/cffilingreview
When you pair the above excerpt taken from the SEC website with the amendment to the annual report filed in August (Item 15), it may provide a clue as to what is going on here ...
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001756499/000119312522226599/d326190d20fa.htm
Katusa is the Chairman of Carbon Royalty and the guy who put up $5M to fund the debenture (and raised most of the rest with his subscriber base). I believe he is very much involved in whatever is going on here. He's also the reason I ever got involved in this sh!tshow in the first place. I read his research report on the co. and then watched an interview he did w/ Mcmeekin and was sold. I remember him in the interview praising Mcmeekin for being a straight-shooter who always made good on his promises or some utter horsesh!t like that. Said he had dealt with him in the past on prev deals. Almost comical in hindsight.
All that work to make inroads with Aramco, get set up on the cloud in S.A. with Virtual Vision and then actually begin connecting assets over there to then go into bankruptcy? Is that really what's going to happen here? I mean, I understand that BK doesn't mean the end of mCloud, just the end of our investments. And that Mcmeekin and the gang will probably make out just fine with consulting gigs with whoever takes them over (I'm assuming Katusa and his group). Is that really where we're headed? Did he really just rob investors for the past 2 years to hand this company over to Katusa and Carbon Royalty? Sickening if it happens.
Yep, and how can we expect the Prof & Consulting fees to go DOWN with all the BS around the financing going on. I'm expecting that Q3/Q4 will probably show a significant increase in those expenses.
It's not even possible to model this stuff anymore. I have a whole spreadsheet that I can punch in the est monthly asset numbers and get the revenue numbers, but that went out the window when we discovered that "paused" assets could generate zero revenue and then blew up again with the Agnity adj's. Add back in the Agnity adj's and the recurring revenue still is lower than it was last year despite more assets. My model is useless. I started laughing when McMeekin told the analyst last call "I don't know what's in your model" when trying to explain how to adjust for Agnity. Like it mattered what he had in his model before. Whatever he had is f*cking useless when you can randomly just stop recognizing revenue on assets.
Here's my best est of the cash situation since Q2 end ...
(all amounts in CAD)
4.4M (June 30)
+ 7.8M (Q3 Agnity $6M US)
- 8.0M (Q3 cash burn)
_____
4.2M
Pending ...
- 23M (debenture)
- 6.5M (Fiera loan)
- 8.0M (Q4 cash burn)
+40M (Preferred)
____
2.5M
So even if they close the Preferred, they might end the year with around $6.7M cash, but this includes the $15M from Carbon Royalty. Of course, if they could lower the burn rate by actually increasing their revenues it could go a long way to help matters, but how are they connecting assets right now w/o the financing?
Oh sorry, I read that as $2.5M/Qtr. My bad.
Yep, that's one of the main concerns. There's been so much dilution that Mcmeekin hardly owns any of the company anymore.