So, the long awaited Q. I was also disappointed the first time I read it like many on here. We knew Q1 would not have covid sales but were hoping for blockbuster subsequent events. Well, we also knew that the stock would not rocket in a matter of weeks, but in a matter of couple of quarters. The situation just affirms this. It will take a while. The business is building. Will the stock go down Monday? Almost certainly given the high hopes for this 10-Q. But the business is building. None of the things we knew about the company changed. I would rather hold my stock than dump in a fire sale. There will certainly be better opportunities to realize profits. Pandemic isn't going anywhere, antibody testing need isn't going anywhere, the fundamentals are there, and the company needs to execute with the supplier.
Now the company is pink current. What use would a PR be when many respectable brokers didn't allow new buyers to come because of the STOP sign? Once it's current, and the company has worked the supply issues, and therefore confident about the cash flow, I would expect PR. The slightest hint of a PR will take the stock to multiple dollars. The company insiders have more stock than us so they will be targeting the right moment for a PR. If I sell now, and in a few days PR drops, I would feel bad.
So, The second time I read the whole thing, I see many positives in it:
As of the date of this report, we have shipped $1,126,000 in products to customers and there are additional orders pending from customers.
They say in another place in the report that until end of May, "specific regulatory problems prevented shipping of the product from manufacturer in China" and "they did not record any sales". This means sales from end of May to end of July -2 month period- are 1.26M, and "with pending orders from customers." --> They are not able to ship every order, which points to a supply chain issue. Hopefully we can see this addressed in the coming weeks/months.
While we do expect the marketing of the Covid-19 test to further positively impact our revenues in the year ending December 31, 2020, we do not yet know the full extent of the impact of COVID-19 test sales on our business, our financial condition and/or results of operations. The extent to which sales of the COVID-19 test may impact our business, operating results, financial condition, or liquidity in the future will depend on future developments which are evolving and uncertain including the duration of the outbreak and the need for antibody testing in the future.
Here they are just stating the obvious. No one knows how long the pandemic will last. Demand for tests depends on this, which is highly uncertain. They don't want to give guidance on this kind of unprecedented uncertainty. This is how an accountant/CFO mind works. These people are not penny stock pumpers, they are running a legitimate business. Furthermore, they acknowledge the risks that demand for tests, their margins, pricing, costs from manufacturer, competing new products with EUA, all have the potential to affect cash flows. Given the conservative nature of the company, this defensive stance is to be expected. We are all betting that the pandemic will be with us for a long time. Even after a vaccine is widely adopted, which will take years, antibody tests may be needed/required to verify immunity or no exposure.
In late March 2020, we also started selling a Covid-19 rapid antibody test from Healgen Scientific, LLC via a distribution relationship. As of result of this new product offering, we do expect sales commission rates to increase as sales are achieved. We may also increase the size of our sales team depending on the level of sales achieved. We will continue to take all steps necessary to ensure selling and marketing expenditures are in line with sales.
these are mainly positives
10-K last sentence: Opportunity to impact 2020 financial results significantly.