They released on Friday after all. There are some things good. I'm kinda disillusioned with the mgmt. But they put out these highlights:
Highlights of Q3 and YTD 2020 Include:
Grew YTD revenue to $8.8mm, up 13% from 2019*
Improved YTD gross margin to 68%, up from 53% in 2019*
Grew Q3 2020 Software revenue to $2.8mm, up 18% from 2019
Software revenue increased 6% QoQ, defying market headwinds
Generated Software Adjusted EBITDA1 of $1.0mm in Q3 2020, an 868% increase from 2019
Overall Adjusted EBITDA for Q3 was $95K, the third straight quarter of positive Adjusted EBITDA, despite one-time costs
Overall Software gross margin YTD was 74%, a 14% improvement over 2019
Completed the divestiture of the Security Guarding business, creating a streamlined, pure play technology value proposition
Continued to strengthen balance sheet with $1.7mm in cash and a $1mm decrease in liabilities QoQ
Launched the nation’s first all-electronic medical marijuana patient reciprocity program in New Mexico
Just skimming, what they left out is the $40M impairment charge. That shows how much they've been overpaying for things over the years. They left that Goodwill at $9M.
They don't break out the cash flows for the third quarter, which is annoying. But they still lose cash from operations. A lot better looking than KERN, to be fair. On all metrics from a glance. Even dilution.
And speaking of dilution, they really diluted their shareholders, making all the good null and void in my eyes. I'm kinda mad about all that toxic financing as I see it. So I don't trust them.
But, yes they strengthened the balance sheet. But failed to reach positive cash flows from operations. Even while increasing their margins, which is a dissappointment. So they need the $10M which they claim to be getting if the deal goes through. And from there, it gets very murky and a surrender of ownership.
So, I'd liek to be out myself at .35. But that's just me. I could be wrong. I want blue waters over there at IVFH. Just simple. And a lot more sales with a whole lost less shares, and without this RUDE diluion. Their adjusted EBITDA is where they choose to go for a measure of clash flows, which sidesteps the very real painful dilution. The statement of cash flows is a better plays to go for that. And that's not broken out for Q3, but it can't be positive as I see it for a net loss of $700K or thereabouts if memory serves correct for the last 9 months. Again, looks great to KERN in my opinion. But, it's not sustainable. So they still have to keep going to market for cash. Which means, more dilution, and I sure can't trust Scott Ogur in that dept. anymore for building shareholder value.
Pardon me if I'm a little angry with these guys. I expected more from Garis Toler. And that may be where Weiss Law is coming from and wanting an investigation. Because, yes, the waters are muddy. I don't feel like Zac is very forthcoming on our conference calls. I hope he changes his attitude in that area in the next one, assuming one may be coming on Monday.