I understand your concern over the financials, but in a company of this size and in this stage of development it is critical to look far deeper into the reasons behind the data in the balance sheet.
First, it is critical to remember that the founders of the company spent $15 million of their own money over 4 years on research and development BEFORE going public which is extremely rare.
Furthermore, they have assembled an incredible acquisition record in an extremely short time after going public. While it takes most companies years after going public to be in the financial position to undertake acquisitions, NHMCF made its first acquisition only 5 months after going public. The acquisition of the liquid division of Arjo alone will produce an additional $5 million in revenue this year. Yet the real benefit of these acquisitions is expanding marketing channels for its entire product line. Normally I am very wary of frequent acquisitions, but I am very comfortable with those of NHMCF not only due to the quality of its management but also because of the fact that I feel they can devote additional efforts to expanding marketing channels when their research and development and manufacturing components are in such outstanding shape.
Also, few investing in the stock seem to realize that they have already had a private placement for $10.5 million (Cdn) approved on November 25th. This is an excellent move for the company and shows how tight the demand currently is for their shares.
Finally, it is important to remember that, with costs up to 85% below that of its competitors using manual labor, the company feels confident about spending cash for acquisitions. Each of their machines alone is capable of producing $80 million of revenue and can be operated by only 5 workers. |
