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Is $15 million close to a Billion?
I don't understand why he lowered the price target. I though Russ had a billion dollar business here...
TB - You and DVP have good questions. It's too bad they have to be filled with so much conjecture when one or two PR's would answer most of our questions.
A "quiet period" doesn't stop these types of PR's. Only incompetence. All IMO. Prime
Right on the money with these analysts, DVP.
Less than a year ago Maxim's raise was at $4.50, now the stock is at $0.90. They got paid their 8% and have been bellying up to the bar again with old Russ on this raise. Hopefully these bottom feeders can get it done. All IMO. Prime
TB. Too bad I cannot start over at these prices since it is a buy. ;) Prime
While he cut his price target by 40% ...
Nothing against Brian, but I give absolutely no weight to anything these analysts put out about mCloud. Zero. They have proven to either not be paying attn or too afraid to rock the boat because of banking relationships (see ATB and Maxim).
Brian Kinstlinger Still says it’s a buy. Wonder if he spoke to Russ. Not that you would hear anything but empty promises.
Alliance Global Adjusts Price Target on mCloud Technologies to $2.50 From $4, Reiterates Buy Rating
No, they're like a private debt fund or something. That would go nowhere for sure.
I've sent dozens of e-mails to Mcmeekin and Schutz. I've heard back from Mcmeekin twice, so I know he reads them (or at least used to), but nothing for several months. I think e-mail is a better option than Linkedin to try to get a response from Mgmt.
russ.mcmeekin@mcloudcorp.com
chantal.schutz@mcloudcorp.com
I've been trying to contract a lot of people, but don't get replies from analysts. But I have a back track record of people getting back to me in general... I haven't really bothered contacting people from inside the company... I guess I could message everyone that works there on linkedin, but I don't want to be that guy...
have you tried contacting fiera?
I obviously hope BK is not the end game here. I just don't know what CR was thinking here. They have a website up now, but it's very basic and only includes the BOD stuff. I even contacted their CFO to see if they had a publicly available investor presentation, but he replied they did not. I guess another angle here is Joulesmart. They are the implementation partner w/ the EV charging stuff. Will try to see if I can find anything there.
https://www.carbonroyalty.com/
So there is an order debts obviously in bankruptcies. I'm no lawyer, but my understanding is that secured debt is treated differently than non-secured debt. They placed CR 1st, secured against the EV dealerships. So I don't know, but if that asset goes to 0, I'm not actually sure you have a right to part of the company, proportional to the debt. At the very least you wouldn't get full control. Especially if all the rest of the debt was called, which they all could because we are way beyond the covanents.
I think generally secured debt is like a mortage, that is only secured against a particular asset. Like you can call the debt on the asset and take control of the asset, not the company... but you would have to read the details of the deals...
But here is the likely Scenario:
Carbon gets full control, then fiera becomes #1 debt holder... calls their debt from CR... and so on. So what ends up happening is a restructuring of all the debt... it becomes a mess. There are people who invest in Bankruptcies and buy undervalued rights, but it is a very specialized art. Howard Marks does this stuff. So if all the debt is called, then it would be sorted out in court. But in the mean time, the company would lose all its staff, because the ops isn't cash flow positive. It would really screw the bond holders too.
Plus a lot of bond funds don't actually want or have the mandate to hold common rights, so they would just sell the entire company. I believe the fiera debt is in a bond fund (fiera private debt fund VI). So you would have to read their mandates...
Why would they have to "fight to get it into AssetCare" if they controlled the company?
I'm just trying to figure out how this deal with CR ever made any sense. I know what we've been told about the deal doesn't make sense, so there had to be some other arrangement made. Could that have been Mcmeekin convincing them that he would close the Preferred deal soon after Q2 end and replenish any of CR's funds he used to cover his operating expenses? Sure, if CR is incredibly stupid. But I don't think they are. So what else could they have been planning? I just think we have to leave open all possibilities here, including CR taking control of the company for $15M. How much was it going to cost CR to get publicly listed on the Naz? How much is mCloud's demand response tech and partnerships w/ the utility companies worth to them in their business of harvesting carbon credits?
One big bugaboo in that "plan" would be the debenture holders who'd get screwed over in a BK filing. A lot of them were Katusa subscribers. Would he really have embarked on a plan that would drive mCloud into BK and cost his own subscribers their investments? I'd like to think not. So then perhaps we need to consider the possibility of some type of merger rather than a BK? I've got no clue and am growing increasingly frustrated trying to figure out what is going on.
Yes, but if you don't have equipment the dealerships won't be paying a $7000/month fee. So carbon would have to pony up the money all over again and fight to tie it into Asset Care. Like im sure there are legal details in the Bond, written by smarter people than me, but... what a mess if that happened...
It's a valid point, but even if mCloud had bought zero EV equipment at the time of a BK filing, this subordination agreement still would give CR control of all "contracts and contract rights, including contracts with auto dealerships,"
Like there are so many things they can do before actually going BR. They could sell the company, raise higher yield debt, etc.... I think selling the company is the biggest risk where they do some back door deal to give the insiders more and the rest of us get screwed...
If your securitization right is limited to the EV equipment, if there is no equipment to secure against, what is the point of securitization? Wouldn't you just become another unsecured bond holder? Maybe you have first rights of recoupment otherwise...
There's no possible way insiders could legally buy/sell stock with all this going on right now. And we've already established how much their stake has already been diluted.
If one were to start hypothesizing about potential strategies that mCloud and Carbon could of had from the start of this seemingly nonviable arrangement, how do you think this particular Note (17b) from the Q1 Financials would fit in?
On May 5, 2022, the Company, Carbon and Fiera executed a Subordination and Postponement Agreement (the “Subordination Agreement”), whereby the parties agreed that the security previously held by Fiera would be subordinate
to the security to be granted to Carbon commencing on the date of the agreement. The security granted to Carbon means the EV Dealership Projects and to the extent related to the EV Dealership projects, all accounts, equipment and
machinery, contracts and contract rights, including contracts with auto dealerships, inventory, cash and proceeds, rent and profits for each of the preceding. Execution of the Subordination Agreement was required for the additional funding
under the Note to be released. A total of US$15,000,000 was funded subsequent to March 31, 2022 (Note 8(b)).
And I haven't seen insiders dump their shares yet....
The only thing we have going for us is that if the bond honders call the debts, they get a cash flow negative company, mind you with no debt, but then they have to raise more debt anyway.
Like let's be honest, they are in deep cash trouble. If they got assets connected 6 months ago, maybe they wouldn't be in this mess. But 100% they had to use that cash.
However, we did have some permitting problems in the state of New York. I think
this is part of getting a new segment started with the utilities and with the municipal governments in the state of New York. So we expect all those kinks to be worked out by September. We have a dedicated, very smart team on that, and we expect those kinks to be worked out by September.
So you can't start the work until you get a permit. So I don't even know how they would have spent money on anything for the dealerships without permits....
Ya and considering where it came from....
I just keep coming back to something with this whole mess that I can't get passed.
The fact that Carbon Royalty gave these guys $15M USD during Q2, and that Mcmeekin said that these funds were only to be used for the EV charging implementations. Think about that, it makes zero sense. mCloud had C$1.87M cash on the books at the end of Q1. They had burned an avg of $C7.75M in cash from ops over the prev two Qtrs. There was NO chance they were getting through Q2 w/o using that money to cover their operating expenses. Even if Mcmeekin convinced them that they would be able to close the preferred financing shortly after Qtr end, why would they take that gamble with their money knowing it would initially be sunk into mCloud's operating losses? It makes me wonder if there was something nefarious going on here from the start. mCloud borrowing $500K per dealership NEVER made any sense to me to begin with. I'll save my conspiracy theories for the time-being but you probably see where one could go with that.
You’re probably right. I just know there are some countries where this is an issue. ie China. But SA is more western friendly trade.
I don't see any problem with that. I would imagine Aramco would pay them in USD. Plenty of American companies do business in S.A. Heck, the "am" in Aramco stands for "American". Why would you think it would be a problem?
I wonder, even if they make money in SA, how easy is it to take it out to pay your bills in the USA
URBSOFT is definitely their partner in SA. These are the recent public comments Mcmeekin has made re hiring in SA. and URBSOFT ...
4/4/2022 FY2021 Q4 CC
"Number two, the answer to your question around the Middle East, their intention is to go gangbusters. So the more capital we have to go gangbusters within the agreement we have with Aramco, the faster we can grow, and the more local people we can put in place. We already have a handful of technical experts in the Kingdom ready to hire. We want to hire more."
8/16/2022 FY2022 Q2 CC
"URBSOFT is very much involved in everything. You need a partner in Saudi Arabia. The professor who's the founder of URBSOFT is a very close friend. Also, we're working very closely together on the NEOM project."
I believe they hired urbsoft etc to do the work as a partner. I suspect that urbsoft will get a cut of the SAAS revenue? That was my understanding? But who knows.
They've told us that the S.A. connections would be done with people hired locally. They can't hire people locally w/o any money. Unless they are getting "pull-forward" revenue ... LOL.
I don't think that most connections require any capital. The dealerships do, but we are mostly talking about travel costs to do the digital twins, in some cases I don't think they even need to travel and the customer can hook up assets that are already digitized. The mobile worker its the cost of the head sets though...
You're probably correct that they grossly underestimated the time it would take because they had already been through the listing process last year, but they had to have been told something in June to put out that PR saying it would all be finalized around 7/14.
What makes this all even more devastating is that Q4 was supposed to be the Qtr where they ramped up in SA. If the lack of funding is now pushing back all those connections, then we may be screwed even if the F-1 eventually clears.
p.s. the original F-1 was filed on 5/11 so it's been over 5 months.
You're probably correct that they grossly underestimated the time it would take because they had already been through the listing process last year, but they had to have been told something in June to put out that PR saying it would all be finalized around 7/14.
What makes this all even more devastating is that Q4 was supposed to be the Qtr where they ramped up in SA. If the lack of funding is now pushing back all those connections, then we may be screwed even if the F-1 eventually clears.
p.s. the original F-1 was filed on 5/11 so it's been over 5 months.
That would be crazy if gets tied to these prices. Thank you though for the clarification.
Because those elements of the deal are tied to the market stock price. It would be crazy to tie it to this price because it would dilute the deal like crazy. And the reason the price is down is because the deal isn't through. But I've ate my words before...
Good thoughts guys! Still why cost per share decreased and amount of warrants increased the last 4 months. The latest price action and volume are brutal...
Ya I think that's what they should do, if there is nothing else. I mean at this point, Occam's razor. What's the simplest explanation that fits the data. A ton of F1/A's with F20's with nit picky things. The 9% rate hasn't changed. The offering has increased. Other sites say it takes 30 days to even get comments on IPOs back plus 30-120 days for review, totalling 6-9 months with other BS. So we are at what month 4 from the initial filing in June right? So I don't think we can argue with the fact it takes time. I think what probably happened is they underestimated it because they thought it was easier to do a Pref from the initial common since they already had an approved annual report structure and policy. But you get a new guy who crosses the t's and dots the i's and you're in hell. So it was always oh it will be done next week... next week... and then a couple months have gone by and you realize crap. But who knows...
That doesn't take anything away from us being in this position about to run out of Cash though...
So why not just put out a PR updating investors that they are still going through and responding to SEC comments and will provide more updates as information becomes available? At least put to rest the speculation that there is something else going on other than regulatory BS.
So basically, what I see is they were missing some information about reporting timelines etc in their annual report/MD&A etc. Which is whatever... we are talking about including those procedures within the annual filings.
So what we are seeing is mCloud responding to some of the issues that were in the comment letters from the SEC. But we can only see that against the updated annual filings which is the 20F/a. We know they were done for the F-1/A, but obviously they are updating more because there are new F-1/As without updated Annuals every time.
For example, back in June you can see in an updated annual F20, they did it because they forgot some attachments:
EXPLANATORY NOTE This Amendment No. 1 (this “Amendment No. 1”) to the Annual Report on Form 20-F for the fiscal year ended December 31, 2021, initially filed on May 2, 2022 (the “Original Filing”) is being filed solely to include (i) Exhibits 12.1 and 12.2, and (ii) Exhibits 13.1 and 13.2, which were omitted in the Original Filing due to a clerical error. Other than as expressly set forth above, this Amendment No. 1 does not, and does not purport to, amend, update or restate any other items or disclosures contained in the Original Filing and does not reflect events occurring after the date of the Original Filing. This Amendment No. 1 consists solely of the cover page, this explanatory note, the exhibit index and the exhibits filed herewith.
So I totally understand why this takes 6 months playing telephone, dealing with SEC accountants. If you want to pull your hair out, try dealing with regulatory engineers...
Not that I am saying there is a huge part of the story missing here... But it is what it is
It looks to me like the SEC audited the annual report’s compliance to the filing rules and mcloud changed a bunch of things to comply. Which would make sense why this is taking so f’ing long. I work in a similar industry that is regulated and it’s the same line by line audit of processes and controls. I’ll go through this in more detail.
Filing Review Process
"The Division of Corporation Finance selectively reviews filings made under the Securities Act of 1933 and the Securities Exchange Act of 1934 to monitor and enhance compliance with the applicable disclosure and accounting requirements. In its filing reviews, the Division concentrates its resources on critical disclosures that appear to conflict with Commission rules or applicable accounting standards and on disclosure that appears to be materially deficient in explanation or clarity.
The Division does not evaluate the merits of any transaction or determine whether an investment is appropriate for any investor."
https://www.sec.gov/divisions/corpfin/cffilingreview
When you pair the above excerpt taken from the SEC website with the amendment to the annual report filed in August (Item 15), it may provide a clue as to what is going on here ...
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001756499/000119312522226599/d326190d20fa.htm
Oh Martin katusa. He owns the convert debentures or at least half prob….
https://www.macrovoices.com/podcast-transcripts/609-marin-katusa-everyone-s-focused-on-gold-but-the-real-buy-is-in-oil
Oh Martin katusa. He owns the convert debentures or at least half prob….
https://www.macrovoices.com/podcast-transcripts/609-marin-katusa-everyone-s-focused-on-gold-but-the-real-buy-is-in-oil
Katusa is the Chairman of Carbon Royalty and the guy who put up $5M to fund the debenture (and raised most of the rest with his subscriber base). I believe he is very much involved in whatever is going on here. He's also the reason I ever got involved in this sh!tshow in the first place. I read his research report on the co. and then watched an interview he did w/ Mcmeekin and was sold. I remember him in the interview praising Mcmeekin for being a straight-shooter who always made good on his promises or some utter horsesh!t like that. Said he had dealt with him in the past on prev deals. Almost comical in hindsight.
All that work to make inroads with Aramco, get set up on the cloud in S.A. with Virtual Vision and then actually begin connecting assets over there to then go into bankruptcy? Is that really what's going to happen here? I mean, I understand that BK doesn't mean the end of mCloud, just the end of our investments. And that Mcmeekin and the gang will probably make out just fine with consulting gigs with whoever takes them over (I'm assuming Katusa and his group). Is that really where we're headed? Did he really just rob investors for the past 2 years to hand this company over to Katusa and Carbon Royalty? Sickening if it happens.
Yep, and how can we expect the Prof & Consulting fees to go DOWN with all the BS around the financing going on. I'm expecting that Q3/Q4 will probably show a significant increase in those expenses.
It's not even possible to model this stuff anymore. I have a whole spreadsheet that I can punch in the est monthly asset numbers and get the revenue numbers, but that went out the window when we discovered that "paused" assets could generate zero revenue and then blew up again with the Agnity adj's. Add back in the Agnity adj's and the recurring revenue still is lower than it was last year despite more assets. My model is useless. I started laughing when McMeekin told the analyst last call "I don't know what's in your model" when trying to explain how to adjust for Agnity. Like it mattered what he had in his model before. Whatever he had is f*cking useless when you can randomly just stop recognizing revenue on assets.
Maybe they cut the cash burn too... almost half of the burn is professional fees. like 6.7M!
Ya so if they don't get the 90k assets they are toast... Like let's assume they are actually getting money from connected assets. So they connected what 2700 in Q2 that are generating what $150 CAD per asset. I think someone on the last call did the math at over $200, but let's say $150. At a 50% gross, that's 1.2M for the second half. If we assume they connect another 1500/month for second half:
July 31: 1500 * 150 * 50% = 112500
Sept: 3000 = 225000
Oct: 4500 = 337500
Nov: 6000 = 450000
Dec: 7500 = 562500
1,687,500 +1,200,000 = 2.8M gross
Here's my best est of the cash situation since Q2 end ...
(all amounts in CAD)
4.4M (June 30)
+ 7.8M (Q3 Agnity $6M US)
- 8.0M (Q3 cash burn)
_____
4.2M
Pending ...
- 23M (debenture)
- 6.5M (Fiera loan)
- 8.0M (Q4 cash burn)
+40M (Preferred)
____
2.5M
So even if they close the Preferred, they might end the year with around $6.7M cash, but this includes the $15M from Carbon Royalty. Of course, if they could lower the burn rate by actually increasing their revenues it could go a long way to help matters, but how are they connecting assets right now w/o the financing?
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