Dilution
I just read the complete report and I have mixed feelings about all the stock that was issued to pay down debt. On one hand, I am glad the debt has been taken off the balance sheet, this saves in interest expense. It also appears to have allowed DKAM to secure $10M in credit at slightly above prime. Good news for working capital. Also good news is $10M+ in cash now on hand from the issuance of stock.
However, the shares outstanding has climbed significantly, about 15%, from 64M to 79M. This of course makes my shares less valuable.
This also explains part of price drop in that fair value for PPS, with 79M shares and at 10Xsales valuation means fair value for PPS is 1.50
Of course, PPS is based on future earnings, and revenues will be ramping up sharply. But no guidance today or outlook.
I hope mgmt breaks their habit of being free and easy with stock and warrant payments and gifts to suppliers, board members, private investors and friends.
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