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Re: Scott12 post# 6449

Sunday, 11/26/2017 8:30:07 AM

Sunday, November 26, 2017 8:30:07 AM

Post# of 7213
Scott, I agree that the stock is not acting like they are going to announce an uplisting very soon. But it looks like the company doesn't leak news given that they put out a blockbuster quarterly earnings release and the stock didn't run up very much in the days leading to that release.

Some companies use their SEC filings as vehicles to promote the stock and I believe this company may have in the past but in recent quarters they have not, merely providing the bare minimum disclosures without any embellishment. The company mentioned the uplisting in the last bullet of their PR: "Advanced uplist strategy with recent reverse stock split".

If I take their adjusted EBITDA of $11,604K that they reported last quarter and dock that for the $2,033K change in warrant liability (which I believe is appropriate), this says, in my way of thinking, they had adjusted EBITDA of $9,571K last quarter or about $38M annualized. This says they are trading at an EV/EBITDA ratio of just 3.3, an absurdly low ratio for a company that is growing so much.

Their interest coverage ratio (i.e. adjusted EBITDA / Interest exp.) was 5 X for the quarter, which is approaching investment grade. They should be getting a lot closer to being at a point where they can refinance their senior debt and get a lot better terms than what they are having to give on the present loan. The only question I have on that is, would the new lender insist on waiting until they get their 2017 audit completed before issuing their new loan. If so that would push out the closing of the refinancing to March/April.

They have $15M of debt due by 9/30/18, which sounds like a big number but repayment should be doable given that they are now generating nearly $8M of discretionary cash flow (i.e. adjusted EBITDA less interest expense) per quarter.

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