Helix Technologies Inc. (fka HLIX)

[EmeraldSEA]

Q2 Thoughts & Expectations

Its that time of the year again. Earnings call. Thank god cannabis is an essential biz so between keeping the shop open and supplying medicine and support at CHAZ and Portland these 3 months zoomed by.

The noise of personal attacks and nonsensical chatter about Chinese women and c-sections on this board is repellant. I’ll endeavor to post something useful to the community to open source what to do about this company. Intelligent and respectful criticism, debate and discourse always welcome.

Q2 new revenues will be less than Q1. Pandemic meant state governments issued few/no new MJ licenses so only source for expanding user base was converting existing licenses using other systems. Pandemic also means businesses less likely to make invasive changes like switching software.

Q2 subscription revenues will be higher than Q1. Double edge sword of licenses not switching during pandemic also means less switched to competitors. If no one switched but backlogged licenses started operations, then subscriptions net up.

Government revenues will be unchanged b/c no new government contracts were won/loss. BUT, Venegas never answered my Q1 call question about losing the Maine contract and whether govt contracts will continue to be in the company’s future. WA has been in constant pain since Akerna got the contract in Washington and Oregon is no better off with metrc. Speaking of metrc some buddies of mine are launching in Missouri and metrc is blatantly defying a court ordre that should put the Missouri contract in HLIX’s hands https://mogreenway.com/2020/06/01/state-says-new-metrc-agreement-may-defy-a-court-order/. Will HLIX challenge? or are government contracts not important for the future of the company?

Revenues may or may not go up from recent software launches. Mgmt has not spoken about the progress of next-gen biotrack, americanex or analytics. No other big revenue movements. Cannabis being an essential business during pandemic and how much money licenses make has no impact on HLIX subscription fees.

Overall prediction? No meaningful revenue growth, which in the current economy is good vs steep losses. Q2 revenues will be roughly the same as Q1. Q2 EBITDA likely also the same as Q1, maybe a bit higher if revenues unchanged and they laid off anyone during the pandemic or saved on other costs from pandemic work-at-home. Pay attention to fact that the interest from the Q1 receivables factoring will not be within EBITDA calculation but really should be.

With the sale of shares for $1M in Q2, the company should be in a better cash position. Even better now after the sale of security but that won’t be in Q2 numbers.

Be honest be honest be honest. No one has ever really cared about the amount of the insider sales. 10,000 shares per week is not much. The issue is honesty. Venegas continues to dishonestly give excuse that 10b5 plan he and Ogur put in motion cannot be stopped, which is a flat out lie. Just call your broker and cancel it. If he wants to sell 10,000 shares per week because he needs to supplement is $200,000 salary, then fine, but then just say it. If he cant be honest for something so small how can we all trust his answer to bigger questions such as status of new product development? or things that can bring the SEC down on the company such as the reason why Vicente Fox is not on the board of directors? If Vicente Fox is actually on the board of directors, an SEC filing should have been made when he was formally put on. If Vicente Fox initially agreed on being on the board of directors but backed out or had to delay that should have been communicated to shareholders and SEC, which it wasnt. Announcing his intent to join the board and letting the price ride up to $3.00 without a follow-up of making it official or that things fell through puts the company in serious jeopardy.