HLIX Reports!
That's not so bad. This still feels better than KERN to me. I don't have visibility on Amercanex or what exactly they conribute. But apparently:
" Amercanex is a business to business wholesale marketplace that leverages blockchain technology and is capable of facilitating wholesale cannabis and hemp transactions between licensed businesses on a global scale. The Company has integrated Amercanex’s technology with BioTrackTHC’s software platforms
I'll take their word for it though. It's all enterprise is complicated and I can't navigate their websites.
Interesting, KERN reported today too and it's interesting to compare the two. Looking at both side by side, I see KERN burning it's cash and HLIX moving to positive cash flow. I say don't acquire anybody and let KERN crash and burn. More partnerships.
We have $600,000 in cash, and KERN has $14M. Down from $29M last year. So KERN still has good working capital of $13M. For now, that is. We have negative working capital of almost a $3M deficit. That probably hurts our share price, but I think KERN is going to blow through its cash. If we could get to the point of funding all our needs through OCF alone, and we are getting close, that would be great because this company finds capital and can extend those short term obligations. They seem to like to live life on the edge.
HLIX is on sale for $11M Market cap (assuming no future dilution the company wants to do) and KERN is on sale for $91M today. I still think HLIX is a better deal for reasons below:
Our quarterly revenue is at $4.5M. KERN's is at $3M. We have them beat by a full 1.5M. And if you back our our security business of $1.7M, we still have them beat on a software to software comparison. We have Biotrack's $2.8M compared to their $2.3M. Which is MJ Freeway and whatever other non-organic growth they got from burning cash.
HLIX has a gross margin 51% of whereas KERN has a slightly insignificantly higher gross profit margin of 53%. Yet, HLIX is the one with the lower-margin security business.
HLIX grew its revenue significantly across all sectors for a net $1.2 million increase. KERN had a net increase of $700,000, but from software alone it was only a $200,000 increase whereas Biotrack (HLIX) had a $700,000 increase. Most of KERN's increase comes from consulting services, which doesn't seem like much of a moat that HLIX couldn't cross into if it so desired. To my understanding...
And then my BEST PARTS:
KERN widens its net loss from to $5.4M from $2.4M last year. HLIX, on the other hand, narrows its net loss to $3M from $10M. However, more importantly, the cash flows from operatons below:
The cash flow from operations is the most important number here in my opinion (OCF). We only lost $362,000 in cash, down from $1.1M last year. That's getting close to cash neutrality from operations alone. And I don't want to purchase anything else! But that's just me and it's not a bad cash burn here for the direction we are moving in. If we can sustain it.
And then KERN over there burned through $11.6M in cash. I mean, God #$@!! And they burned $6M the year prior. They are increasing their cash burn. I know they are flush with cash now, and maybe they acquired a lot of cash positive deals, but that remains to be seen. They received over $4M in cash from the exercise of warrants. Which, we have those too. And if we get a strong stock price someday, we too could have cash from the exercise of our warrants, which are all above our heads and that's a good thing.
I'm just skimming, but I don't see those words of "doubtful" of retaitaining positive cash flow you see in the mandatory statements of a lot of our penny stock friends out there. And this one, btw, is in penny stock "exempt" status because it is a real micro cap company. Instead, we have this language: "The Company plans to generate positive cash flow from its Colorado and California security operations and BioTrackTHC to address some of the liquidity concerns..."
So, I know there were some lawsuits from memory and I haven't read that far yet. But on a surface reading, I still like HLIX better. The debt, however, a convuluted mess and kinda toxic to my understanding for another year still. But a lot better value than KERN I think if you disregard their strong cash position which I'm not so sure will be there next year at this time. We'll see...
They are priced to what would be if we were a dollar.
I really look forward to the conference call on Monday!! And I hope we get a transcript unlike NROM. They had a great conference call 2 days ago on an 80's party line type situation. Adn I got disconnected but got most of it while multi-tasking. And I was hoping to read what I half-way heard. And I'm hoping there is a transcriptionist out there still working on it, trying to turn it in...
And then you have PHUN over there, unrelated indusry, going backwards. They reported today too! And they lost 50% of their sales. I think I know who's smoking the cannabis, and it's not HLIX.
