Team - thanks for your reactions. Mostly I appreciate the civility and thoughtful comments for and against. If nothing else, I love the diversity of thought on this MB. We all bring something of value to this board and our discussion. I will always respects you even if I disagree with your assessment.
Again, I am a supporter of Innovus or I would not have invested so heavily. I shared with you all yesterday that the market will not be impressed with the revenues or the guidance and the SP will take a hit today. This morning I am a little concerned (as I went through the financials last night) about our accumulated deficit of $39 million since inception; I am a bit concerned that we started Q2 with $5 million in cash-on-hand and now as of 8/10, we are down to $1.9 million cash-on-hand; I worry that they may have to sell debt securities or sell equity in the next few months to raise fast cash to run the business etc. I also think that the CEO should reduce his salary compensation for another 12-months because his salary, vacation, bonus and benefits are all part of the long-term liability and negatively impact the income statement. I appreciate the fact that he is actually deferring his hefty $1.4 million annual salary but it is still being accrued and hits the P&L as an expense. I am not the CEO of Innovus so it is not my place (as a shareholder) to dictate what he does but many CEO's sacrifice in the infancy stage of the company only to reap heavily in the long-run. Q2 also shows $225,000 in stock option grants which again show-up as a liability and hurts the EPS line item.
This company is in a growth mode as they have gone from 6 employees in 2017 to 19 employees in 2018. This is a fairly large expansion. Their sales expenses are growing commensurately and that is explainable. What worries me perhaps more than anything is dilution. This is a real probability for Innovus in the next 6-12 months as it burns through cash to support the operation. While we are retiring many notes (a big part of their income statement expenses for Q2), my concern is that they will sell more debt instruments and that will simply replace the old debt and further delay their quest for profitability.
Lastly, if I could give Dr. Damaj a bit of advice, it would be to stop taunting the market-makers and just focus on your business and your own flight plan. Stay in your swim lane and don't get emotionally tangled. Let your stock performance take care of them down the road.
Sorry for the lengthy post; this is it. I will see you all in a few months. Ciao from SYD Y.B.
