This post appeared first on SecretCaps, the MicroCap destination
Empty trading books in most stocks seem to indicate that the buyers are on a holiday. Smart micro-cap investors can profit with low (stinker) bids before the buyers return!
Specific Portfolio Updates:
Memex:
Memex had a very solid quarter. The continued uptake in the industry (Kuss etc) and the on-boarding of Sun (phase 1 of a major rollout) demonstrates the viability of MERLIN. With revenue up 42% Y/Y and enough cash to fund operations ($2.2M plus ITM warrants) Memex is a long term conviction play for SecretCaps.
Q2 earnings of Memex:
Financial Highlights for the Second Quarter Ended March 31, 2016:
Memex generated quarterly revenue of $571 thousand, 42% or $169 thousand, higher than the same period in the prior year, and 7% lower than Q1-2016.
Memex 53.4% gross margin for the quarter ($305 thousand in gross profit), was down 3.3% from the same quarter a year ago and 7.7% from Q1-2016. A higher hardware to software sales mix in the current quarter accounts for the decline.
Unearned revenue of $536 thousand closed the quarter up $54 thousand from December 31, 2016's close and was $46 thousand off its highest level of $582 thousand at September 30, 2015.
Bookings1 for the quarter were $833 thousand, down 5% from the prior quarter, but up 50% or $276 thousand from Q4-2015.
The Company showed a $991 thousand net and comprehensive loss for the quarter equating to a $0.01 loss per share. This compares with a $512 thousand net and comprehensive loss in the same quarter last year, and a $0.007 loss per share.
At the end of the Q2 the Company had more than $3.0 million in current assets including more than $2.2 million in cash and $2.1 million in working capital.
Q2 Fiscal 2016 and Subsequent Operational Highlights:
In February, Memex received a substantial follow-on order from Kuss Filtration Inc. for 43 MERLIN licences as part of a multi-plant roll-out in the US, China, and Brazil. Memex also generated 5 new customer orders, and more than ten follow on orders from existing customers in the quarter.
Memex's CEO and CTO were recognized by Smart Manufacturing Magazine as two of the top 30 advanced manufacturing visionaries.
In April, Memex launched MERLIN OPTime, a free downloadable real-time dashboard for manufacturing analytics.In April, Sun Hydraulics Corp. placed an 89 machine follow-on order for MERLIN MES Enterprise Edition Software, after an 11 machine initial phase.
Management Commentary:
Memex's President & CEO David McPhail said, "We continue to see strong interest in MERLIN with both follow-on orders from existing customers and new customers buying our solutions. Our investment into sales and marketing is paying off with substantial revenue gains over prior periods, and no reason not to expect the trend to continue."
See Our Original Research Report On Memex
SilverSun:
SSNT reported impressive Q1 FY16′ results. When we think of SilverSun, we think of the buy and forget MicroCap, since its undiscovered and the growth story is so simply (acquisition strategy of buying other Sage Resellers) and it has been proven since the company has been doing it cheaply for years.
- Revenues increased to $7,784,301, rising 20.1% from $6,483,114.
- Software sales decreased 37.8% to $860,442 from $1,382,472.
- Services revenues totaled $6,923,859, increasing 35.8% from $5,100,372.
- Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $315,265, decreasing 53% from $669,923.
- Net income was $74,277, or $0.02 earnings per basic and diluted share, compared to net income of $521,167, or 0.13 earnings per basic and diluted share.
As of March 31, 2016, the Company had $673,536 in cash; $2,576,863 in accounts receivable; $1,230,622 in long term debt; and total stockholders' equity of $1,377,851.
Urbanimmersive:
Urbanimmersive hired an IR firm to help spread the word. The company topped our recently up around 500%+ from our original buy in.
"With recent business achievements, we believe it is time to increase awareness of the Company within the financial community. Contact Financial has demonstrated a great knowledge of our industry and their capacity to reach a broader audience within the financial community" said Ghislain Lemire, CEO of Urbanimmersive.
Also, the company announced the signing of a Memorandum of Understanding for the establishment of an integration agreement between Urbanimmersive's Content Marketplace solution with RESAAS Global Platform for real estate professionals.
As part of the memorandum of understanding, both UI and RESAAS intend to focus on integration areas required to make it easy for users of one service to access the other without additional login information and to make it possible to push real estate content created for an agent in UI's solution to their corresponding RESAAS profile page.
"We're happy to start working with the RESAAS integration team. We've built our real estate content marketplace to allow third party integration with well-establish industry providers and this memorandum of understanding with RESAAS shows us we are on the right track." said Ghislain Lemire, Urbanimmersive CEO.
Radcom:
Radcom prices 1.8 million shares at $11, raising $20 million in the process:
The discount is a tad disappointing, we expected pricing to be at $12 to be honest. Granted, the offering means 20% dilution, which is quite hefty. Also, no new warrants will be issued, which is a good thing. And, it's not an easy environment out there to raise capital for speculative micro-caps.
Why the raise in the first place? Radcom doesn't need money now. But potential Tier-1 customers are selective, they are only looking at companies that can boast the moat needed to deploy their latest telecom solutions. Radcom reported a $25 million cash hoard at the end of late March. This is not enough. By raising an extra $20 million now, Radcom can now say being fully cashed up. This is a loud signal of strength to the market they are addressing. I (Sujan) plan to add more shares.
Its worth noting that RADCOM'S largest shareholder, Zohar Zisapel, has agreed to purchase up to $5.6 million of the ordinary shares, a major green flag for the company.
BVX Medical:
BVX shares continue to be weak. We are pondering on selling BVX to enlarge our position in Radcom. We'll keep you updated.
BeWhere Holdings:
Tom tripled his stake in BeWhere Holdings, and I (Sujan) plan to do the same! Shares are under pressure recently on light volume, so like we said, put in low bids and you're bound to get filled.
Ivrnet:
Ivrnet is an exception with many shares having exchanged hands this week, we are not sure why (no news). I (Sujan) added at C$0.045. Do note that a lot of Venture stocks are under pressure lately, buyers seem to be on holiday or something so small blocks of shares hitting the market can have a big impact in empty trading books. Put in low bids, and you'll get filled sooner than later.
Research Solutions:
Research Solutions is scouring for acquisition targets. This is pro-growth in our opinion as the company's SaaS Article Galaxy solution (access to science, technical and medical information) is growing on its own. We're interested to see if the company locates any synergistic, or new business acquisitions.
Network-1:
Ran by the most impressive IP CEO in the industry in my opinion (Tom) NTIP continues to monetize their patent portfolios effectively. A tad dated, but our original report on NTIP.
Network-1 had revenue of $5,190,000 for the three months ended March 31, 2016 as compared to revenue of $5,627,000 for the three months ended March 31, 2015. The decrease of $437,000 in revenue for the three months ended March 31, 2016 was due primarily to a fully paid license entered into in connection with a litigation settlement of $440,000 in the three months ended March 31, 2015.
Network-1 reported net income of $3,820,000 or $0.16 per share (basic and diluted) for the three months ended March 31, 2016 compared with net income of $1,530,000 or $0.06 per share (basic and diluted) for the three months ended March 31, 2015.
Lime:
Lime reported results this week, with revenue increasing, although a bottom line number that increased above expectations.
- Consolidated revenue from continuing operations increased $4.8 million, or 26.5%, to $23.1.
- Net loss was $7.3 million, compared to net loss of $2.1 million for the first quarter of 2015.
Looking ahead, the company is executing:
Business Highlights
- During the first quarter of 2016 we were awarded the small business energy efficiency program with Oncor in Texas, a new utility client.
- We were awarded the small business energy efficiency program with AEP Kentucky, a new utility territory for an existing client (we have been serving AEP Ohio since 2013).
- We were awarded the LADWP Commercial Direct Install Program under a re-compete, with expanded measures and customer eligibility.
- We deployed a new technology platform to manage the small business energy efficiency programs of NYSEG and RG&E in New York, which we were awarded late in 2015 under a re-compete.
- We expanded our team in Massachusetts to serve the Eversource small business energy efficiency program where we were awarded new territories for 2016.
- During the hold period prior to starting the new contract with LADWP, we utilized our LADWP team to serve the community in various volunteer initiatives. These included community gardens and clean-ups as well as working with at-risk youth in mentoring programs.
Canada:
As we have focused heavily on Canada for reasons outlined in our original article, we have since revisited the focus and penned the report below.
I just wanted to update on one item I left out. A key concern was that if oil recovered, the Canadian exchanges would recover, and thus hurt the advantageous FX rate we enjoy (more buying power when we move money there, and Canadian companies doing business in the U.S. benefit when they bring the money home).
Although, a natural hedge here is that if oil recovers, the exchange recovers and lifts the companies within the exchange. The exchanges getting crushed is what created so many opportunities for us, materials and energy companies got killed and brought down viable tech names by association. If the opposite occurs, our FX advantage would get affected, but the exchange would lift the PPS.
Its a simple, natural hedge, that we forgot to mention. It is the complete opposite of what created the opportunity for us in the first place, and is an excellent natural hedge on the way back.
We've found over 10 MicroCap Gems in Canada so far, with many providing solid returns. Such as our last research report on Memex and posts on BeWhere, AtmanCo, Ivrnet, UrbanImmersive, Telesta, and more.
Our Follow Up Post On Canada Can Be Viewed Here:
Our Latest Reports: (Released First To Pro Members)
Check out our latest articles:
- Reliq Health Technologies: New Leadership Driving a Recent Acquisition Offers a Potential InflectionPoint
- BeWhereHoldings: A Pulsing, Immutable NanoCap Growth Story
- AtmanCo: Past Personality Is An Indicator Of Future Results
Watchlist:
Spindle issued a letter to shareholders. Its been a rough few years for this company, although we are reviewing their progress.
Reach An Audience:
Want to share your hard work and get exposure for yourself and your content? Watch this video now! See the exposure you can achieve!
Education:
View all of our educational content in one easy place , all of which is posted publicly on a delayed basis
Latest Premium Content: Long and Short Term Plays:
View all of our latest plays in one easy place!
Broader Micro-Cap Market:
The IWC continued to sell-off. It's a weak market out there, especially biotechs are fealing the heat again.
Lesson Of The Week:
Headlines can be so misleading! Tonix Pharmaceuticals, a small biotech, press released this week that one of their studies generated positive results. Stock spiked pre-market. However, diving deeper into the study report revealed that the results were actually a mixed bag, causing shares to crater intra-day, eventually closing even 15% lower. Ouch. Lesson: never buy just on a flimsy promotional headline.
Holdings Not Listed In Our Portfolio:
Memex (OEE.V), UrbanImmersive (UI.V), AcuityAds (AT.V), Spectra Inc (SSA.V), Ivrnet (IVI.V), RSI International Systems (RSY.V), AtmanCo (ATW.V), BeWhere Holdings (BEW.V or BEWT)
Submit A MicroCap Blog Post
Take full advantage of SecretCaps and submit a blog post on a company you are invested in. It will go on the homepage, help you build a track record and a following and get exposure for your idea!
You don't have to be a PRO, submit a post today and we will work with you to make it work for our homepage!
Videos:
Following our successful MicroCap screening video , we are interested in doing another video lesson and are trying to pinpoint a topic. Have any ideas? share them below!
Disclosure: This content is strictly informational and educational. Do not invest or trade based upon this content. Always contact a financial professional before executing any trades or investment