A) you noticed I referred to penny stocks. Forward looking safe harbor is meaningful on actual companies and exchange traded stocks...on penny stocks a forward looking statement is the life blood of the penny CEO...everything is always going to be wonderful.....tomorrow, or next week ;-)
B) the 1.6 million was NOT net profit....LOL. It was net REVENUES. that is quite different. There is no profit guidance at all...other than we know the companies they bought were "barely keeping their head above water" according to the previous owner.
The only insight we get from that PR is that net revenues are running around a third of gross gaming.
After net revenues...all costs must be deducted. A net profit margin of 10% on net revenues would be reasonable and certainly much better than "just keeping their head above water".
So even if they did a gross gaming of $11 million...which is doubtful...and the business was even functioning at a 10% net margin on net revenues....you would be looking at a annual profit of $400,000.
So taking GNCP third Q numbers, that offsets the current annual loss run rate of about $10 million by $400,000.
That mean they will only lose $9.6 million instead of $10 million....and that is being charitable. Even if you DOUBLE the profit margin from my assumption that brings the company net LOSS down to $9.2 million.
And the overall cashflow of GNCP will still be VERY negative.
It helps to understand some basic level of accounting...lest the company mislead investors... ;-)
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