This a short term play for a company known for disliking. So them taking advantage and raising money while they are on a short term venture was needed. They probably said they needed the money to pay upfront to buy all the tests. Well after they make their markup on most tests they will be stuck with supply left on hand after the FDA pulls their EUA and then they will record zero profit. So why does this deserve to be trading 5 times their value prior? I think this will slowly bleed till the end with a couple spikes on the way down.
Read their last filed SEC 10-Q: They are now CASH LOADED with at least 2 years, yes TWO YEARS of cash "on the books" w/ $62 MILLION approx.
Moreover the following has occurred:
1) They completed an acquisition which GREATLY increases their product line and already existing sales - which will now be potentially as high as $30 million annual by the next SEC 10-Q. AND their margins are off the charts- nearly 90% or more margin on existing sales. Meaning, they keep nearly all of what they sell- their cost of sales is LOW !
2) They have good, tight cost controls- their SG&A/expense line and cash use max is approx $20 million annually. NOW, they have over $60 MILLION in cash booked on the balance sheet AND they generate revenues, lots of revenues, as in likely $50 MILLION in revenues per annual minimum now- heading towards $75 million or more rapidly. This is a RAPID GROWTH, CASH RICH company now.
3) They just got their name AYTU HEARD ROUND THE NATION and are selling COVID-19 test kits into the HIGHEST PROFILE MEDICAL SUPPLY CHANNELS on the planet- EVERY key hospital, EVERY govt agency and the MILITARY NEXT. Their name and sales of their other products lines will be leveraged huge from this reality- it was played PERFECT by Sr MGt. PERFECT.
CASH ON HAND to last at least TWO PLUS YEARS and/or MAKE ANOTHER ACQUISITION AND GROW RAPIDLY - w/ existing fast growing sales and already FDA approved products in their inventory and now CONTACTS/SALES TO EVERY KEY "MEDICAL SUPPLY CHAIN" in the nation and ALL OF N. America via their brilliant licensing move of thee COVID-19 test kit which will become the single most HIGH DEMAND KIT ON THE MARKET.
PERFECT STORM HERE - this is going much, much higher- they're a growth story now and Wall Street will "pick it up" real soon, real fast here now.
PR's will be hitting in rapid succession on the next 500,000 kits, the MILITARY and IF, IF Pence or the POTUS says "AYTU" by name, just once- just strap in, as we'll be gone in a vertical 6G pull straight up - my favorite kind :)
$AYTU: Like this - this is how it's done LOL !
LCDR Olson Solo #6 driving the Hornet - 6g's to the vertical aka vape n wake over water :)
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