written by reader BIONIK LABORATORIES, BNKL.

By lokahirr, September 5, 2017

aloha everyone,
i have owned shares if this groundbreaking company ( bionik laboritories. BNKL ) for a while now but am a little confused by recent events. the company is well managed, has a product line light years ahead of competitors, has opened markets in europe and asia. seem to be doing everything that they hoped to accomplish within the time frame they set for themselves.
so i guess that i must be missing something because there share price has been steadily declining despite the positive company direction. i am in for the long haul as i see great potential in bnkl. maybe someone out there can shed some insight about them. information from the company and from other investment outlets are few and far between.
i figure if anyone would know whats up it would be the gumshoe gang!

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Travis Johnson, Stock Gumshoe
September 5, 2017 9:41 am

That’s an absurdly tiny company — market cap only $8 million or so. Sometimes the “story” for these companies is compelling, but the financials are rarely attractive — they often have to issue tons of stock each year just to keep the lights on, and they often seem to exist solely to pad the wallet of the executives.

I have no idea what the company makes or does, but unless there’s something really compelling in the future the financials don’t make much sense — they had revenue of about half a million dollars, and cost of goods at about 70% of revenue, so gross profit is quite small at just over $100,000, and they have operating expenses of almost 9 million dollars over the past four quarters. They don’t have anywhere near enough cash to keep that going for more than a few weeks, so if those operating expenses stay anywhere near this level they’ll have to raise a huge amount of money — a company with an $8 million market cap that has to raise $8 million a year to fund their operations is not one that provides much equity to existing shareholders who will see their ownership halved.

Again, I don’t know this specific company or whether they have some product or business that will turn this financial picture around quickly, that would be the “story” that you’d have to believe to own the stock…. but the financials look like they’re in a downward spiral, and it’s hard to break out of that.

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