mCloud Technologies Corp (MCLD)

[DVP25]

mCloud updated the Investor Presentation on their website for the first time since July. They usually send out an e-mail notice when it's updated but I don't think they did this time (or I missed it).

Haven't had a chance to really comb through the details yet, but there were a lot of changes made, including incorporating the Google Cloud stuff. It kind of looks like maybe it's not finished, but they needed to get something out there to replace what was now obsolete.

https://s21.q4cdn.com/959970859/files/doc_presentation/2022/10/mCloud-Investor-Deck-October-2022.pdf

[DVP25]

His presentation was at 8:50 ct this morning according to the agenda. I would guess it was probably more of an oversight given everything going on there right now than it was anything intentional. But who knows.

[Prime39]

DVP: Wow, released after his presentation. What a bunch of chicken $hit$. I would have attended, I'm on the east side of Houston. All IMO Prime

[Tickbomb]

That’s why we need a board shake up. Someone who represents the smaller investors. The largest shareholders are going to be the saudis through this new offering and the prefs

[Prime39]

The Board of Directors is MIA. No one to hold old Russ accountable.
Michael Allman - Chairman and Independent Director. I've tried reaching out to the board, but with no luck. They hide better than Russ. All IMO. Prime

[DVP25]

Yea, they released the PR after his scheduled presentation was completed .. haha. I would very much like to see it as Higgins has taken on an important role with the co. A lot of speakers from major players at that conf and one of the keynotes was from mCloud. Not sure how they got that slot, but it would be nice to be able to see a replay and see what this guy has to offer.

[Prime39]

I just saw this with Higgins as a speaker but to late to get in.
https://www.oilandgasiq.com/events-opexinoilandgas/speakers
Prime

[Butte Bill]

In my email to mCloud yesterday I “declined” to reference scene from The Godfather.
Silly me, I meant Goodfellas:

We are all good fellows here. Sometimes I imagine the mCloud board dealing with the Sicilian side of my family. Ciao.

[Tickbomb]

I sent you a DM on Twitter. If you want to make a difference, from my experience we need to be more organized.

[DVP25]

Exactly, that is my point. They are not providing us metrics with the intention of giving us a barometer to track the performance of the company. They are giving us metrics as a way of distracting us. I could give other examples of this.

They did the same thing when they first reported their TCV metric back in Nov '20. Did they then update that for us ea subsequent Qtr? No, they morphed it into a nebulous TCV + Pipeline Number which rendered the comparison (and the metric itself) useless. Eight months after they first provided us that $178M TCV + Pipeline number they DID actually provide an update to it, if you can believe that. You know what it was? ... $178M LOL.

[Tickbomb]

Ya but i'm talking about having consistent metrics. they just dissapeared, but were important to see inside to a certain extent. The SAAS metrics help show lost assets or customers through the net retention etc. They can have different metrics, but they need to be consistent. they just dissapeared.

[DVP25]

IMO, the SAAS metrics they gave before, like just about every other new piece of info they've given during CC's (pull-forward revenue anyone?) is more about providing a shiny new object to distract us from their dismal performance than it is anything else.

This is what they do and I'm afraid now that this latest Google news will be their latest shiny new object to distract from:

Missing their 90K target
Missing their 45 dealership target
Not coming close to positive EBITDA at 70K assets
Massive dilution
Still haven't closed the Preferred

and on and on and on ...

[DVP25]

That language was already "smoothed". You should see what I really want to send them. That's about as nice as I can be to people who have disrespected ME so much by bullsh!tting me for two years.

[Tickbomb]

Yes but maybe we can smooth the language out lol. I want to ask about the:

SAAS metrics they used before, but stopped. We need clear consistent growth targets that tie into the SAAS metrics:
-New connections vs connection targets (20k by year end)
-New connection MRR vs old
-Free Cash Flow targets. I mean real free cash flow, not BS cashflow. Including normalizing expenses like "professional fees". Reduction in professional fees. We spend 1.7M in 2021 on auditing, which is fine, but we are spending 3M a quarter on professional fees now. You can reduce all the headcount you want. But we spend the same on professional fees.

I want Russ to explain what value has the board brought in the last 2-3 years. I want a board shakeup with skin in the game. I have more shares than a couple of these board members.

[DVP25]

Maybe it's a good idea to start posting the e-mails we send to the co. publicly on this board and elsewhere. They don't seem to respond to anyone, so perhaps this would help in that regard. Probably not, but I don't give a sh!t anymore. Here's my latest ...

____________________________________

Why issue 11M shares to raise $35-$50M in March-Jun, when you can do it in November and raise $12.5M, right? From an outside perspective, it honestly appears that you do whatever you can to minimize shareholder value. You obviously knew that the Preferred would not be sufficient to cover your debts and provide the necessary growth capital needed, but you somehow decided to wait until your stock got obliterated to almost zero and THEN issue more common. Why do you always wait to act until you are in a dire financial situation? It's truly unbelievable.

A couple other quick questions ...

Now that you're exiting the Project Services business after telling us it would be back to generating 2.5-3M a Qtr by the end of 2021, what will become of the TCV backlog that was never implemented, even after pandemic restrictions lifted. By my calculation, there should be at least $10M in contract backlog even if you didn't generate a dime of new business since 2020.

You said that you're working on an arrangement to return the capital to Carbon Royalty. I think that's great. Taking on $500K in debt per dealership was always a preposterous plan for a co. constantly teetering on the edge of insolvency. But my question is, where is the capital? It wasn't on the B/S as of 6/30. Is it in someone's garage or something?

I'll have plenty more questions for the CC.

[DVP25]

Yea, that's the least of our worries at the moment. They've got 180 days to get into compliance. They also have 11M more shares adding to the market cap. The way I see it, if they don't have a $35M market cap within 6 months, we're probably screwed anyway (if not already).

[westcoastinvestorj]

mCloud Technologies (NASDAQ:MCLD) received a notice from Nasdaq for not being in compliance with the minimum Market Value of Listed Securities for continued listing on the exchange.

https://finance.yahoo.com/news/mcloud-receives-nasdaq-notification-regarding-230000290.html

[Tickbomb]

we obviously all should ask that next Q. I’m going to send in a bunch of questions.

[DVP25]

But really, where is the "capital" they supposedly want to return to CR?

This has been one of the biggest mysteries since they released the Q2 Financials. They booked the C$19.3M loan from CR in Q2. They had $4.4M total cash remaining at the end of Q2. So where did the C$15M go that was ear-marked "only for dealerships". Here are the net changes in their other assets between Q1 and Q2 (excluding AR).

+ $1.5 Intangible assets
- $.05 Prop, Plant & Equip
+ $.27 Right of Use assets
+ $.24 Prepaid Exp
+ $.39 Current Portion of Prepaid Exp

Where's the $15M????

[Tickbomb]

I was thinking that before. I know that most investors want protection and upside, so converts is the way to go to get a coupon while you wait. But this should have always been funded with common. But it was just painful because they didn't grow the business....

I feel like google cloud is just another promise of growth... Like they need to get to the 90k target. We are about to see another adjusted revenue deck next presentation.

It's like they keep getting more debt and less revenue!

[Tickbomb]

I am expecting another large "one time cost" severance of laying off 25% of the staff... That's 50 people in an organization with 200. I don't expect they only gave them 2 weeks pay in severance.... the legal standard is around a month per year... so i expect 2-3M in lay off costs.

They also need to "lay off" the "non-recurring" costs like professional services....

[DVP25]

This PR had so much news, that it's almost an afterthought that they are issuing 10M more common shares to strategic investors in Saudi Arabia. Just a massive amount of dilution, but what other choice do they have? Which begs the question, why the Preferred shares then to settle the debentures? Couldn't they have just done it with common at 3x the share price five months ago?

Also, I didn't see any warrants mentioned with those 10M common shares, but I'll believe that when I see the F-1.

[DVP25]

Exactly. I just can't believe that was ever the plan to begin with. That's why I asked the e-mail question during the last CC about taking on $250M in debt. Mcmeekin answered it as if they would be able to offload those assets easily to entities looking for the depreciation write-offs. Really? So you're getting into THAT business. You've gotta be kidding me with that strategy. How in the hell that ever got out of the board room is a joke.

Msg board posters have become the de facto BOD. LOL

[DVP25]

Fair point. Perhaps it will be far fewer than I'm anticipating then.

[DVP25]

It sounds like it. This seems like almost a complete restructuring of their business model. If migrating to Google Cloud is the right strategy, then why did they wait so long to do it? Is it strategic or desperate?

[Tickbomb]

It would have been fine if mCloud was a cash flow positive business. Then I'll take debt on for a 4-5 year pay back. But they can't find a way to be cash flow positive... screw all this strategy. Just connect assets and charge the $150/month guys...

[DVP25]

Yea, this is definitely the most confusing part for a whole bunch of reasons.

It doesn't seem like they've been able to actually reach an agreement with CR. So that is definitely not encouraging.

Most significantly, how can mCloud return the deployed capital? Where is it? Show me the assets on the 6/30 B/S? I can find the debt, that's for sure.

I mean, I hated the idea of taking on the debt all along. It sounded like an absolutely atrocious plan from the jump. If they are somehow able to restructure this in a way that they aren't the owners of the assets and just the AI provider it would be a much better proposition IMO, but somebody has to finance these implementations and hold the assets.

[Tickbomb]

Im not saying that it could be a lot of assets, but I think they are only disconnecting the "disparate small-box retail facilities". I had to look up the word disparate because I'm a dumb person. It means unique. So I don't think they are disconnecting all the legacy. Probably just the small accounts because it's inefficient to manage. Easier to manage Bank of America with 2000 assets etc... But usually I am wrong.

[DVP25]

Yea, the asset count has proven worthless ever since we learned about "paused assets". This is what I meant by "another excuse" though. He doesn't have to face yet another atrociously missed asset target, because he essentially just blew up the whole metric. Here's the crazy part, you aren't going to believe how many assets we're talking here. I tried to estimate it once by using the Avg Rev per asset numbers vs what they currently charge. We're not talking just a couple thousand here. It's not tough to calculate.

[Tickbomb]

So people will essentially buy assetcare through Google now, not directly through mCloud...

"The nature of our strategic partnership and integration with Google Cloud includes mechanisms for contracting via Google Cloud as the contracting entity to end customers. As a result, the details of customer contracts must remain confidential in accordance with Google Cloud policies. As announced earlier this week, we are moving very quickly to join forces with Google Cloud in co-selling AssetCare worldwide to drive ARR growth. mCloud and Google Cloud together is truly a sum greater than its parts."

[Tickbomb]

I don't understand the carbon royalty thing:

"mCloud and Carbon Royalty Corp are working toward a mutually beneficial arrangement where mCloud returns the deployed capital used in customer deployment, permitting, and solution development, evolving the relationship to one focused around leveraging Carbon Royalty Corp's expertise to manage and develop carbon credits and carbon offsets across all joint mCloud and Google Cloud activities, tracked through AssetCare for a fixed royalty rate."

Royalty for who? Is this so we don't have the debt on our balance sheet and we charge a royalty fee?

[Tickbomb]

Professional services gone. Big surprise there. Some dude on the yahoo board already said that was happening...

[Tickbomb]

So they are ditching early assets. So the 90k target is gone. I don't really care about asset numbers, but we need to get this thing cash flow positive. We're digging a hole here.

[DVP25]

LOL ... Whatta ya know, he found another excuse to miss all his targets.

There is A LOT to unpack in this PR.

https://investor.mcloudcorp.com/press-releases/press-releases-details/2022/mCloud-Integrates-with-Google-Cloud-to-Accelerate-Revenue-Growth-and-Maximize-Cost-Efficiency/default.aspx

[DVP25]

There are no more excuses left for Mmeekin to hide behind ...

He told us he had the contracts to get close to 90K ... LAST YEAR

He told us all along it was the "pandemic restrictions" holding them up.

He told us the pandemic restrictions were lifted this past March ("in fact everywhere")


This is it. If he doesn't deliver in the 2nd half of this year, he is exposed as a fraud IMO.

[Butte Bill]

I have sent email to mCloud people: It is truly frustrating when I can get more information from a bulletin board than from the company. A new press release on regulatory approval/disapproval of your f-1 is in order. I will refrain from making any references to The Godfather movie scenes.

[DVP25]

Enough is Enough.

Contact mCloud and demand they update investors on what is going on with the financing. This is ridiculous.

[e-mail]
[e-mail]
[e-mail]

[DVP25]

There's no doubt. Once volume starts spiking the stock starts showing up on momentum screeners and the daytraders traders pile in. You can see it on social media. It's happened 3 times now in the past month or two. Nothing sustainable.

[Tickbomb]

I think a lot of volume and any movement is day trading and pump/dump by people who don't know the company.

[DVP25]

I think investors are sending a pretty clear message to Mcmeekin ...

We don't give a sh!t about your flashy partnership PR's, close your financing and show us the revenue. Until then, your stock is nothing but day trader fodder.

[DVP25]

If nothing else, at least getting a close > $1 will stop the delisting notice countdown. One less thing to worry about.

[Tickbomb]

Ya I'm more confused than before....

[Tickbomb]

But DVP, it's strategic! I sick of strategy and want more implementation... Implementation pays the bills. How much are we making from the cyber deal?

[DVP25]

Oldguy, Now we know what?

also, if it makes you feel any better, I need around $1.75 to get even as well, but that's BEFORE the reverse split ...

[DVP25]

Google Partnership

The volume is incredible off this PR re the Google partnership. It's unclear to me though exactly how significant this is. The PR is trying to promote it as a "strategic partnership" between the two companies, but this Google Cloud Advantage program, at first glance, seems to be more of something that you just enroll in rather than Google actually choosing to partner with you. So I'm not sure what kind of role Google actually played in this, other than providing this service to companies that meet the enrollment requirements. Either way, I guess it's a positive to have access to their tech and marketing engine. Of course, I'm sure it comes at a healthy cost.

Been burned so many times by these flashy PR's that I refuse to get optimistic till I see the actual revenue and not a moment sooner.

Anyone have any insight into what exactly this partnership means?

[oldguy]

So, now we know. But even with averaging down, I need 1.75 to get back to even.

[Tickbomb]

Hopefully this means they are getting the prefs done. But next month I wouldn’t be surprised for another loan and more confusion. I don’t expect them to provide any other info until the Q3. Wouldn’t be surprised if Q3 is delayed.

[DVP25]

I'm kind of amazed that $2M would even be enough to cover the Fiera Pymt by this point. What the heck is an "arms length strategic investor" anyway?

[Tickbomb]

russ funding another month of burn

[DVP25]

Do you think Mcmeekin and Schutz will thank us for out patience riding out this financing nightmare like they did back in May for waiting out their "pandemic restrictions" excuse for two years? Do you think maybe we'll get another "we're ready to move on and rock here" from Russ? That would make us all feel better right? I mean, who cares about destroying > 90% of shareholder value over the past two and a half years as long as they are appreciative of our patience and ready to rock! Right? What a joke.

We are now approaching FOUR months since their last PR re this financing (excluding the botched interest pymt notice). It's an embarrassment how badly this has been handled.