This is an extremely speculative buy. You should only invest what you can afford to lose.
In the 10-K itself the company stated, "You may lose your entire investment".
This company just received a qualified opinion on their year end financials. The auditors expressed reservation as to whether this company can continue to operate as a going concern.
Everyone who is thinking of buying shares should read the whole Risk section of the 10-K. I wish this was available as a reference prior to me buying shares (I would have had second thoughts and definitely would have tempered my expectations).
Some key points:
1. They owe more than they generate in annual revenues. $58M in debt compared to $43M in Revenue
2. Their Selling, General & Admin expenses are greater than revenues. This is not factoring in COGS & the Goodwill Impairment. This is a huge issue. Debt and Equity is what funds this company's operations.
3. As a result of 1. & 2. they NEED to obtain additional financing or they will not be able to continue to conduct their business operations.
4. As a result of 3. there will be further dilution, so that needs to be factored into the future (speculative) value you place in this company.
On the plus side, I still believe in this management team and the industry is growing at a massive rate. They are doing what they need to do to keep their heads above water, but nothing is certain right now. So many variables that this could pop or turn to dust.
I am a gambler by nature so okay to see how things play out...
AI
