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Of course, as soon as I post that there's been no PR's, we get one today from RCA. Mostly a rehash of prev released information. This was the one thing I was focused on ...
"mCloud and Aramco co-developed LDAR AssetCare, proprietary AI that continuously detects gas leaks at the sub-asset level and maps the leak data to a location within 4mm precision using its proprietary 3-D digital twin technology. Aramco is the first adopter of mCloud’s solution, eliminating the need for regularly occurring costly engineering surveys by providing continuous and auditable results."
... "Aramco has over 39 million LDAR connection points associated with its refineries and natural gas, petrochemical, and power plants."
So, is mCloud actually recognizing any revenue from this LDAR collaboration w/ Aramco? Or is this a proof of concept type arrangement? I think we can probably guess the answer to that.
Crickets on the boards and no info from the co. in about a month. About as quiet as I can remember. Not sure if that's good or bad, it's not like the corp PR's have ever got the stock moving anyway. A little action in the stock on Friday. My guess is it was related to the pump it got from some outlet called "Market Wire News", whatever the heck that is (link below).
https://marketwirenews.com/news-releases/5-tech-stocks-under-5-wall-street-believes-are-set-t-8529275805879454.html?t=382966
The 22M shares is the fully diluted count, which would include > 6M warrants. Also the split adj price would be about C$.156 not a nickle.
I also remember McMeekin's claim of a $1B mrkt cap back in '19. I also remember his projection of $70-72M in Rev in 2020. Zero Accountabilty.
It's always something ...
Seemed like we were building a little momentum here with the partnerships with Mercedes and Aramco and then they deliver a nice swift kick to the mid-section with the news of the COO's departure at the end of the PR. The guy had only been there about 8-9 months. Would be lying if I said that didn't concern me quite a bit.
https://investor.mcloudcorp.com/press-releases/press-releases-details/2021/mCloud-Appoints-Arnel-Santos-EVP-and-Chief-Operating-Officer/default.aspx
MOU with Aramco
Any thoughts on the news today? My first take is that this is yet another partnership with no commitments for actual connected assets. However, it is Aramco, and this collaboration certainly will help mCloud get to the table with companies up and down their supply chain.
Show me the revenue.
https://investor.mcloudcorp.com/press-releases/press-releases-details/2022/mCloud-Signs-MOU-with-Aramco-to-Explore-Co-Development-of-ESG-and-Digitalization-Hub-in-the-Kingdom-of-Saudi-Arabia/default.aspx
I think being able to associate themselves with a massive global brand like Mercedes is a great thing, even if it means giving away free services. Now let's get the mCloud logo on the side of that car ... haha.
https://www.mercedes-benz.com/en/eq-formulae/we-race-the-city/team/team-news/mcloud-technologies-joins-as-official-partner/
Not much to take away from the ATB conf. Was more of a staged interview than an actual presentation. Mcmeekin did say he was headed back to S.A. next week. Let's hope it's for more than another ribbon cutting ceremony. He also mentioned that there was a lot of "planning" that occurred over the holiday season for beginning work in the springtime at some European wind farms. I'll believe it when I see the revenue.
ATB Institutional Investor Conf
McMeekin is presenting on Jan 11th at 9am et. In the past, he hasn't revealed much new info during these investor presentations and has pretty much just re-hashed the latest online Investor Presentation. But who knows, maybe we get an update on any S.A. progress now that they are supposedly up and running on the Cloud there.
ATB recently initiated coverage of MCLD with a $13 PT, so perhaps there's some motivation there for a little promotion.
Here's the link to ATB's coverage initiation blurb in the Globe and Mail from last month ...
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-mondays-analyst-upgrades-and-downgrades-171/
Yea, but when you provide virtual access to investors the year before and then don't even update the meeting on your event calendar or issue a PR the following year, it certainly doesn't give the impression of transparency. We need a forum to ask this CEO some direct questions. We've listened to the same story for far too long.
I don't know what to make of the fact that the co. has provided no information for attending today's shareholder meeting virtually. There has been no PR, no update to the online corp. event calendar, and no link provided in the AGR circular on the website. It's almost as if they don't want us to participate .. lol. Are they concerned that someone might actually ask a question this year? What kind of message does this send?
Maybe it was the $13 PT that ATB Capital put out recently when they initiated coverage. Considering they're the ones who are allegedly going to refinance the debentures coming due in May, it's nice to know they are at least on board the promotion train.
... more likely a Festivus miracle though.
Pretty good trading volume on the Naz today, up 4.2% on over 150K shares traded. Encouraging given the recent Covid news and the rough overall market today. Greenshoots? Let's hope.
Annual Shareholder Meeting
Hotel Valley Ho, Scottsdale, AZ, 12/30/21 12:00pm PST
"We strongly encourage shareholders not to attend the meeting in person and instead to vote their common shares (the "Common Shares") by proxy."
Received the notice from my broker today, but have not seen a PR from the company. Scanned the voting items, at least there's not another RS on the docket. Also of note, I did not realize our CEO received a bonus last year equal to about 120% of his salary for missing his revenue guidance by about 60%. How much would he have gotten had he hit his target? LOL.
I was disappointed last year that there wasn't ample time allotted for Q&A (online) and got shut out. Mcmeekin's closing remarks were pre-recorded and then the meeting adjourned immediately afterward.
https://investor.mcloudcorp.com/financials/proxy-statements/default.aspx
Who knows what goes on. Someone bought 3 shares AH last night and moved the stock up 25% on the Naz ... LOL. Was it just a fat finger or a novice placing an AH market order? Or was it someone trying to spoof a higher open in anticipation of the PR?
There's probably a chance we get another of these pops when they announce these MSA's with the three "mega-companies". Is one of them Aramco? I think that would prob get a good reaction, regardless of whether or not there was an actual financial commitment.
Given this price action, it looks like this may have just been an opportunity for the subscribers of the recent secondary to dump their shares and pocket the warrants.
I think it was the cloud PR from today, because the RCA PR came out yesterday and there wasn't much action, although volume did pick up a little late in the day.
Today's cloud PR wasn't really anything new either, like you said, but most people don't listen to the CC's anyway so it was new to them. The volume is def significant though. 400K sh would be the equiv of 1.2M pre-RS which is pretty crazy.
Could there be something "new" in the passage below though? As far as I know they hadn't told us that they had actually made any real progress outside of the Ckick n' Dip. But this implies there has been progress in some other areas potentially in O&G. Of course "customer adoption" is a bit nebulous.
"In collaboration with local partners such as V2, mCloud has brought the full suite of AssetCare solutions to Saudi Arabia, including ESG tracking and reporting capabilities via AssetCare Enterprise, HVAC and indoor air quality solutions via Connected Buildings, connected worker solutions through AssetCare Mobile, and the Company's 3D Digital Twin offering, all of which are seeing customer adoption in support of the ESG objectives of Saudi Vision 2030."
RCA put out a PR this morning. Mostly just a summary of mCloud's services. Didn't see much in terms of new info ...
https://newsletters.rcafinancialpartners.com/t/t-2E5A32B70C6F9B4A2540EF23F30FEDED
Yea, you're right. They just tweeted the link out yesterday from their corp account so I assumed it was new. My bad ... should never assume anything w/ these guys.
New video from mCloud on AssetCare for wind turbines ...
https://www.mcloudcorp.com/blog/connected-wind/digital-transformation-wind-energy
"... similarly on the wind turbine side, I think we're about to really ramp up there in the late second quarter early third. There's quite a number of deals in the wind area coming our way that are quite exciting ..."
-McMeekin (5/26/21 Conf Call)
After almost 6 mos, would love to hear about the progress on all those exciting wind deals.
“We’ve gone from nascent to prevalent in 18 months,” McMeekin said.
Thank goodness, I'd hate to see where us investors would be if we were still "nascent" ... LOL.
https://financialpost.com/commodities/energy/meet-the-calgary-startup-tapping-the-booming-market-of-esg-reporting
Well, it's better than nothing. Maybe more to come ... hopefully.
https://www.canadianinsider.com/node/7?menu_tickersearch=MCLD+%7C+mCloud+Technologies
I think it's more complicated than that. There are definitely Salary expenses and Prof & Consult fees being included in the COS. Here's the note from the Q3 10Q that explains the adj made to the H1 results ...
"The Company has reclassified certain expenses during the nine months ended September 30, 2021 in the condensed consolidated interim statement of loss and comprehensive loss. These adjustments, captured in the nine months ended September 30, 2021, impacted previously reported amounts for the six months ended June 30, 2021 by decreasing cost of sales by $539,776, increasing sales, wages and benefits by $749,688 and decreasing professional and consulting fees by $209,912 ..."
So they basically backed out some Salaries from the COS and added back some Prof & Consult fees.
Not sure about that. The Initializations recognize a chunk of TCV as rev, like you said, but that's also where the bulk of the cost is incurred. Maybe it's something in the amortization of those costs? If you listen to the CFO on the CC, she credits the higher y/y GM in the 1st 9 mos of 2021 to the higher % of "over-time" revs. So if it positively impacted the 1st 6 mos, why not Q3? Doesn't make sense to me.
I think the $10M should last about 5-6 mos given prev cash burn rates, but that could change. And, Yes, I've noticed the lack of insider buying for 15+ straight mos now.
We'll be glad they are on the Naz if they ever get this thing turned around and institutional investors get interested, but as of right now, you're correct, it doesn't matter (except for the Millions in Prof & Consulting fees it cost us).
McMeekin claims to have close to 90K total assets under contract. My math has that generating in excess of $50M in recurring rev per year. Do we believe him? Did you notice how he skirted the analyst's question re how much of the backlog/pipeline was actual contracts? He loves being "on track" and having "targets" because they don't mean squadoosh.
Q3 Financials ...
I'm really perplexed by what I'm seeing with the Q3 margins. Anyone else noticing the problem?
Q3 gross margins were 61% (down from 63% in Q3 2020). How can this be when over 90% of Q3 revenues were recurring vs only 58% in the same pd last year? Not to mention that the 1st 9 mos of 2021 gross margin was reported as 64%, which implies a 65.9% GM for the 1st 6 mos (re-stated from the original 62% reported in Aug).
Shouldn't the GM be much higher if 90% of revs are recurring?
I believe it would be at least 35 assets, but maybe even 70 because there is both IAQ and Energy Eff monitoring happening across 35 zones. I remember McMeekin discussing how that works at some point. Will post if I come across it.
Speaking of Aramco, I was surprised to hear Mcmeekin refer to them as a "customer". I mean, he didn't call them out by name, but there's only one O&G co. "bigger than Exxon and Shell combined". They've never announced any actual deals with them, right? So not sure what that was about ... maybe he meant "prospective" customer? But you're right, there's always the chance that some momentum gets behind this stock. It could take just one high profile deal to get it going.
Tick, I forgot to ask what you thought of McMeekin's response to Brian's questions regarding the restrictions in Alberta. Did you find him convincing at all?
to clarify something ... the 90K asset number in contract backlog I mentioned is not an incremental number, it represents the TOTAL asset count after the backlog is added in.
(didn't want to mislead anyone who didn't listen)
OK thanks, that's a good explanation. Will be interesting to hear who these "mega-companies" are. I guess on the downside these deals will be kind of "fluffy" if there are no actual asset commitments. I can see the headlines now ... "mCloud announces Master Service contract with {insert major co name}" and then we read the details and realize there are zero commitments for any assets. Basically a partnership agreement.
Yes, I thought he did a pretty good job pressing on the restrictions question. First time that I've heard the "30% of fire code capacity" restriction detail for Alberta. He also got an actual asset number out of him that was in contract backlog (not pipeline), which Mcmeekin answered as close to 90k. I thought that was prob the most significant bit of info in the call. But I have to ask this, if they are building the backlog/pipeline as they have suggested many times, then why are they still reporting the same $178M in total backlog/pipeline that they were reporting on the March '21 call?
A few other items I took note of:
They are moving to an Aramco owned Cloud platform in SA to be announced soon.
They are now signing "Large Master Service agreements" which include 3 "mega-companies". (I'm not sure I really understand the diff between these contracts and prev other than duration)
"Very large deals" combining HVAC/IAQ coming in NA (I'll believe it when I see it)
Alberta connections still close to zero in Oct/Nov (oh my) ... but Mckmeekin indicate that will be picking up in Dec (last Qtr it was going to pickup in Sep ... it's always a month or so out it seems)
One of their customers in S.A. is "larger than Exxon/Shell combined" (OK, what service are you providing to them if they are a "customer")
Also of note, there was zero mention of the following: Arkansas govt buildings, fugitive gas installations, pull-forward revs, Utility partnerships.
No doubt this intro music will be the best part of the call.
Another $2.4M in Prof & Consulting fees in Q3 ... IT NEVER ENDS.
Good idea. I just sent an e-mail as well.
btw, I tried to get myself approved for participating in the Q&A. Prob best for all of us that I was unsuccessful.
Yep, as investors we have to start demanding some actual answers here. Nobody is holding these guys accountable. Six straight Qtrs of essentially the same excuses. They connected 6K assets in Q2/Q3 last year and did 2K this year over the same period. Why are things so much worse NOW than last year. What are the SPECIFIC restrictions they are facing that they weren't last year. And then they have the audacity to try to frame this as "growth". Do they think we're idiots? Yes, they must.
I want to see some proof that this backlog actually exists.
Or Georgia (the state) ... they've got 430!
$$$$$$$$$$$$$$$$$$$$$$$
I think it's possible, but I'm fearing another Qtr of about 1K assets in Q3. We know that as of 8/16 there was very little progress and the Covid situation in Alberta only got worse by the end of the Qtr. I'd be very happy w/ 2500 in Q3, but am not optimistic they'll hit that. So if they do only 1000, they'd need 6.5K in Q4 to hit the 70K number. With no restrictions, we know they can do that, but who knows.
Yea, I think that's a rational way to view it. I'm just concerned by the notion that they wouldn't just expand the credit facility w/o some kind of sweetener. After all, isn't ATB the bank that that is supposedly being counted on to refinance the $23M debenture? What are they going to require to close that?
Tick, curious to hear your thoughts on the co. having to offer $1M in warrants in order to receive an additional $5M expansion in their ATB credit facility. How alarming is this?
First rule of mCloud Club ...
There's always warrants. If you don't see them initially just keep reading.
LOL
https://investor.mcloudcorp.com/press-releases/press-releases-details/2021/mCloud-Amends-Existing-Credit-Facility-with-Addition-of-C5-Million-Accordion/default.aspx