Verus International Inc (VRUS)

[TyroneBiggumms]

Debo, one thing that sticks out to me that may be an explanation for at least part of yesterday's major sell off is that the 10Q shows an operating loss of 1.268 million dollars for the quarter compared to 112k operating loss from the Q3 2018.

The conference call offered a bit of insight on the increased legal fees (M/A paperwork and DD), and probably some of the general and administrative fees (BLF production startup). But this does appear to be a big negative from a financial investment perspective. We know that these expenses are part of expanding the business and increasing production for the BLF line, but until the revenue from BLF really starts to work its way into the financial statements this looks like a big negative.

Also see my previous post about earnings beat and cost of revenue. The company beat their guidance by only $50k. While any beat is good, it came with a major increase in cost of revenue. Also a negative from a financial standpoint. We know that the increase cost of revenue is being used to get things up and running.

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Q3 2019
Revenue $3,477,494
Cost of revenue $2,984,2401
Gross Profit $493,254

Operating Expenses:
Salaries and benefits $145,24855
Stock-based compensation $899,666
Selling and promotions expense $63,750
Legal and professional fees $266,59244
General and administrative $386,832
Total Operating Expenses $1,762,088
Operating loss $(1,268,834)


Operating loss same Q 2018: $(112,017)