EVIO Inc (EVIO)

[fiveteenthirty]

$EVIO Q1 REVENUE FORECAST - Breakdown

Lets start with the quarter - Its 12 weeks long so, 65 business days. Remove the 2 holidays xmas and tgiving and another day for the lazy time between xmas and call it 62 business days of cash flow to calculate.

Last year $EVIO reported $568,000 in testing revenues (this breakdown will focus only on testing rev forecast because the consulting revenue, as anyone who has followed this deal seen in past Q's knows that consulting revs could be anywhere from $25,000 to $250,000 - Q1 2017 was $100,000- as far as im concerned $EVIO -for the moment- is a testing play and the consulting revenue is just free gravy) Back to it...

So: $568,000 testing revenue Q1 2017 - 4 Labs - 62 Days cashflow = $9161.29/day in $EVIO analytical testing cash flow.

But hold on.... We know -board regulars & $EVIO longs- that Oregons rollout launch of legal cannabis and especially testing was a bottleneck of clustercuss the first week of October 2016 so lets knock it down to... 59 days of cashflow. That kicks our daily number up to $9627/day cashflow

But wait. There's more: $EVIO Portland acquisition wasn't closed until Oct 22 - So lets call $EVIO #PDX cash flowing 52 days.

So: $EVIO Bend Eugene & Medford were cashflowing 59/62 potential days. Portland cash flowed only 52/62 days

Math part... if we use 62 as the potential days to cash flow in the Q and multiply that by 4 $EVIO Labs... that = 248 potential days. If everyone is comfortable with the PDX Lab 52/62 and the other 3 at 59.... We come up with a number of 229 days of cash flow that $EVIO was actually operating out of the 248 days they could have potentially cash flowed. make sense?

Take the 229 days and divide by 4 Labs (to all the math pros and stats peeps...i know this is very rough and not likely the best way to get at this - but im trying to get a number within like $1-200,000+- not 1 or 2 dollars)

When we divide the number of actual days that each lab was actually cash flow Q1 2017 by the number of labs operating for these days...we get 229/4= 57.25 - lets call it 57 for ease of math - which we could argue, for this very back of napkin formula - means that $EVIO Labs $586,000 Q1 2017 testing revenue $586,000/57= $10,280/day cash flow (on average) per lab per open business day.

So: if everything was in stasis and there was no growth or operational efficiency improvements etc that Q1 2018 $EVIO is 62 days open x $10,280 = $637,000 in Q1 testing cash flow.

$637,000 would be a huge disappointment, right? No worries though. We can definitely anticipate that everything is smooth flow form and most all the growing pains associated with the legalization launch in Oregon, staffing, maintenance, device calibration, deliveries, pickups, turnaround times are behind them.

There is also edibles testing to consider. Last year saw an explosion in companies providing cannabis edibles in almost every possible concoction that your imagination could ever dream of.

This is important to know because the testing of edibles is a HUGE challenge due to the HUGE variety of substrates that companies use. Gummies, gum, candy, drinks crackers, licorice - all of the cane sugars, raw sugar, stevia, fructose, corn syrup, chocolate etc etc never mind additives, fillers, binders raise HOLY HELL with the scientists ingenuity, creativity and scientific ingenuity and sensitive equipment used in these labs- another doozy is that that a processor wont be fully transparent with the labs about the ingredients for the sake of IP protection. Only for the reason that hardly anybody, anywhere is doing these tests this way in the food, agricultural pharma sectors.

Typically an analytical testing lab testing beef or apples or cannabis flower is testing those items. For example - Beef is tested before it is sold to a restaurant but nobody is testing it after it is cooked and covered in juice and sauce and mushrooms. OR Apples might be tested from the orchard as a batch. But nobody is requiring that a candied apple on a stick needs to be analytically tested. Cannabis flower is easy enough. Blender, alcohol, draw a sample.
-off on a tangent - back to the Forecast

Point being - $EVIO Labs Portland is (reportedly) the ONLY analytical testing lab in the Portland area that will even PERFORM edibles testing.

So all that being said - growing pains, operational improvements, marketing, edibles - I am going to slap a 40% revenue increase for these points - old number was $637,000 x 1.4 = $891,000 - still not impressed - neither am i...

Lets drill down - Nov 22 2017 saw EVIO PR the approval of their pesticide testing license - until that point the company had to outsource ALL of their required pesticide testing. We are going to use a number of 35% increase to the revenues by keeping that inhouse.

So: if we go with the $891,000 base of lab testing revs divided by - 62 days of cash flow - $14,383/day - We know the PR was issued on Nov 22 - Thansgiving/Xmas included lest call it 24 cash flow days in the Q -

Take $14,383 x 1.35 = $19,418 cash flow per business day from Nov 22 - Jan 31

Now we have:
38 days x $14,383 = $546,554
24 days x $19,418 = $466,032
Total: $1,012,586 - Oregon Testing revenue

$EVIO Eastern Oregon/ California/ Colorado- Licensee/ Mass- Licensee /Florida- Licensee

Lets call that $200,000

Throw in $75,000 for consulting

Forecast Q1 2017 $EVIO Total revs - $1,287,000

imho - 10% higher than that - $1.388m would pretty exciting and anything over $1,450,000 should see the market respond strongly.

Which brings me all the way around back to an $EVIO PR from Oct 18, 2017 where the company said:

EVIO Labs division has already exceeded last October's Testing Revenues through the first half of October 2017 with sales surpassing $250,000

October had 22 business days in 2017 - Starting on Mon Oct 2 - if we were to extrapolate that (surpassing) $250,000 and call half the month 11 days as per $EVIO PR - $250,000/11 = $22,727/day cashflow!

$22,727 is SIGNIFICANTLY higher than the $14,383 that i had guestimated up a paragraph or two ago, right?

We take the same calculation as used above from MY forecast and insert $EVIO PR numbers, it gets crazy...

38 days x $22,727 = $863,636 - outsource pesticide testing
24 days x $30,681 = $736,344 - in-house pesticide testing

= $1,599,707 Projected Q1 2017 $EVIO Testing Revs

For arguments sake lets assume $EVIO Oct 2018 PR included California/ assorted licensees in the mix - and add $75,000 in consulting revenue.

Thats $1,674,000 in Forecast Q1 2017 $EVIO revs - using $EVIO PR #'s - 243% YOY INCREASE

and $1,262,000 using my napkin method. 185% YOY increase

What do you guys think? of the forecast? of market reaction to either of these numbers?

thanks for reading if you made it this far...

lawyer lawyers lawyers... dont listen to me im just an idiot on the internet. do your research and DD and draw your own conclusions.