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[dr_airtime]

COV.V Q2 similar to Q1

Fiscal Q2 (March 31) C$ 6M in sales (C$ 5.8M in Q1) with 78% Gross Margins. About C$ 0.5M in Net Income due to high marketing costs as company is looking to expand on Saudi Arabia success.

Pretty much at a run rate of $C 24M in annualized revenue vs. a $C 42M basic market cap so >2X P/Sales with 70-80% Gross Margins, 250% YoY revenue growth, and no debt.

Only another 2M options/warrants oustanding on basic common shares of 19.3M so fully diluted market cap will not blow-out.

Direction appears up but there is huge single-customer risk here. Per the FS Notes for Q2 C$ 5.3M of C$ 6.0M in revenue came from 'international customers' and I believe this is the Saudi Arabian health ministry. This is what is holding Covalon down of course.

Conference call tomorrow I may dial into and ask to confirm this.

If they can show growth later this year to non-Saudi customers direction here is up.

http://ir.covalon.com/phoenix.zhtml?c=183092&p=irol-newsArticle&ID=2277023

I did some looking and Covalon guided for C$ 11M MINIMUM in sales from Saudi Arabia in F2017 so new C$ 24M revenue run-rate either means Saudi sales are overdelivering year-to-date or they have new non-Saudi customers which would pull the share price upwards IMO.

http://ir.covalon.com/phoenix.zhtml?c=183092&p=irol-newsArticle&ID=2233328

The fiscal 2016 (before Saudi sales started) segmented disclosure note states that they did C$ 4M in sales internationally for the 12 months ended September 30, 2016.