Helix Technologies Inc. (fka HLIX)

[NobleRoman]

Future Acquisition Pressures:

This is how KERN feels about future acquisitions, which is probably a pressure on HLIX and the reasons HLIX wants to make another acquisition:

From our perspective, there has never been a better time to be in our position, as many smaller players in the space are finding limited access to capital, driving opportunities for us to pick and choose complimentary assets at prices far below what it would take to build internally... ...And as a NASDAQ listed public company, we have unique access to capital and the opportunity to use our public currency in accretive acquisitions.

Source: https://seekingalpha.com/article/4347209-akerna-corp-kern-ceo-jessica-billingsley-on-q3-2020-results-earnings-call-transcript

She also talks about $3M in reduced costs for next year in the best case scenario from synergies. Roth Capital asks her to expand on that in the Q&A, but that still puts them far away from us as far as breakeven goes. But she makes a good point about having access to capital on better terms, which obviously we are not getting. So they are a threat and probably the heat on HLIX to want to stay relevant through the same aggressive means of strategic acquisitions. But for us, the dilution is much greater due to this low price. I still prefer to watch KERN crash and burn as I don't feel her best-case situations are going to materialize. There are a lot of best-case situations in her forecasts.

KERN also had guidance for about $27M in revenue for 2020 based on it acquisitions. That would be $7M more than what HLIX seems to be on trajectory for, but how much cash will they have at this time next year? They'll have to dilute too, but at a better price so less dilutive as I see it. I still think HLIX should form good partnerships and focus on what it has. Become very attractive themselves to be bought or let others crash and burn around them.

It's not an easy call. I just don't like our options for capital. And as KERN noted in their own conference call, the cannabis industry has been resilient in this Covid19 crisis, all things considered.