Traderking60 and Biloseby.
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FICTION: The stock buyback projections INTK made during its March 24, 2022 webinar
SUPPORTING INFORMATION: During the 3/24/2022 webinar the company indicated its goal is to buy back as much stock as possible, with a target of 1 billion shares during the next 12 months, and 2 billion shares overall.
RATIONALE: During the same call, the company projected revenue for 2022 as follows:
Q1: $3 million
Q2: $6 million
Q3: $12 million
Q4: $24 million
2022 Total Revenue: $45 million
Revenue for 2023 was projected at between $96 million - $125 million for the year.
The company used the 2 billion share buyback as a means of justifying a future stock price of $0.50 per share (more on that below).
The company projects total revenue of $141 million to $166 million over the course of the next two years. This would leave the company with, at best, roughly $60 million to $70 million in cash. It would be irresponsible of the company to use more than 30% of its cash to buyback shares, so let’s say $18 million to $21 million is available for the stock buyback program. If the company were to buyback 2 billion shares today it would cost between $40 million and $50 million. If the company can meet its revenue projections the stock price is going to increase as shareholders, and future shareholders, become more confident in the company and are willing to pay more for the shares. As the share price goes up so does the cost to buy back shares. I estimate $18 – 21 million will allow the company to purchase between 300 and 600 million shares, not 1 to 2 billion.
FICTION: The share price projections INTK made during its March 24, 2022 webinar
SUPPORTING INFORMATION: During the 3/24/2022 webinar the company presented a slide with the following share price targets:
2022 Q2: $0.10
2022 Q3: $0.20
2022 Q4: $0.30
2023 Q1: $0.40
2023 Q2: $0.50
RATIONALE: To justify these targets the company used an outstanding share count of 1.7 billion, which would require 2 billion shares be bought back. As noted above, that isn’t going to happen. I firmly believe the company breaks through $0.10 per share in 2023, but with the current revenue projections, and several billion shares outstanding, I don’t see a path to $0.50 per share by the end of 2023.
CONCLUSION: INTK is an extremely small company that has had the stars align and hit the proverbial revenue lottery, with revenue projections that rival some mid to large cap companies. As the company adjusts to the substantial increase in sales by hiring additional staff, opening additional offices, flying all over the world to meet with new clients, etc. it is going to encounter some bumps a long the way. There are clearly significant opportunities for the company to deliver huge returns to shareholders, but the company also needs to navigate operational and logistical challenges that come along with the increasing demand for its products. I appreciate the efforts the company is making to communicate with shareholders; hosting semi-regular webinars, answering shareholder questions, etc., however the CEO’s excitement over the future of the company, which I find to be genuine, is also leading to the company making overly optimistic statements, which, when unfulfilled, are negatively impacting the share price. My hope is the company will make two changes in the near future; 1) Hire a Public Relation’s Director, or appoint an existing employee to serve in this role, and transition shareholder communications responsibilities over to this employee. The CEO, unfortunately, tends to do more harm than good when leading the communication strategy. While he should have a role in these efforts, it should be minimal, and the bulk of communications should be left to those who have the expertise to deliver articulate, coherent, and well thought out messages to shareholders and future shareholders. 2) Make it a priority to uplist to the OTCQX. If INTK truly wants to unlock the full potential of the company, it needs to gain exposure to a much broader pool of investors. Uplisting to OTCQX would give instant credibility to INTK since the criteria to be listed are more stringent; OTCQX weeds out companies associated with stock promoters, the company must meet higher financial standards, be current in its disclosures, have a sponsorship from a third party advisor, and would be regulated by the SEC or FDIC.
