Looks like a bargain, at least on the surface. Questions:
Sales seem to be shrinking. See any turnaround catalysts?
From 10-K Note 2: At December 31, 2023 and 2022, three customers accounted for 74% and two customers accounted for 31% of accounts receivable, respectively. Two customers accounted for 34% of revenues for the year ended December 31, 2023 and one customer accounted for 32% of revenues, for the year ended December 31, 2022.
They had a 1-8 reverse split last year. Prior to that (9/30/23) there were 8,591,374 shares. Now there are
1,986,540. They issued some stock in the 4th quarter (from the cash flow 10-K vs 3rd quarter), but the numbers don't add up.
Seems easier to liquidate or find a buyer that can use the NOL tax assets (I don't know all the ins and outs of whether a new owner can use them), but they seem substantial. 10-K Note 5.
Edit:
An interesting exchange from the latest conference call:
Joshua Horowitz
Good morning. I'd like to know who is advising the company that it's a proper and efficient use of the company's capital strategy to clandestinely sell stock every quarter under the ATM as opposed to doing a legitimate stock offering with institutional investors?
Shai Gozani
Yes. I'll -- I wouldn't describe it as clandestine, but I'll let Tom address that question.
Thomas Higgins
Sure. That's an interesting choice of words that you use since whenever we do use the ATM, that's reported every quarter. So perhaps you want to reconsider some of the
Joshua Horowitz
Well I'm not going to reconsider.
Thomas Higgins
But let me answer.
Joshua Horowitz
We don't find out about that you guys publish, right? So it's sort of clandestine. I'm out there in the market interested in the company buying stock. You guys are sitting there pressing a button and selling it. It's a pretty ridiculous structure, and it sort of makes the company uninvestable. Don't you agree?
Thomas Higgins
No, I think you've absolutely got it wrong. If you look at our company, we are a consumer of cash. We're also a company that's looking to grow. And so we do have two choices here. We can either do as you recommend, which is to try to put together an offering to the market. But you may -- since you're in this business, you may be aware that the market hasn't been very receptive to pipe deals, particularly for micro-cap companies over the last couple of years.
And so we think that it makes a little bit more sense to sell shares directly to people that are interested in buying on a small basis when the opportunity presents itself. And so if you're asking who gives us this advice, while it comes from investment bankers that we speak with and it's discussed internally.
Joshua Horowitz
There were $10 b [?] illion of issuances last year. So I don't know what you're talking about, but I would recommend that you've canceled the pipe to a legitimate offering, bringing long-term value-oriented institutional investors that will support the company. Maybe that comes along with some governance changes. And absent that, you should just literally close down, melt the whole thing down and return the cash to the stockholders, because the current setup is just a recipe for disaster. You can't point to one legitimate company that's used in ATM.
Thomas Higgins
Well, thank you very much for your input. |
