It will come as no surprise that the balance sheet of Ackroo is extremely week. The company needs a cash infusion to get capitalized so that it can scale its business. I am confident the capitalization will happen as it is almost near impossible, in my opinion, to not see the upside potential in Ackroo. However, until such capitalization occurs the market will not care about the continued, exceptional progress that Steve Levely, the CEO of Ackroo, continues to make with the company.
My quick take on Ackroo's Q1 earnings are below, with the understanding that until the company gets capitalized the progress won't mean that much to the market.
- 42% Revenue growth from same period in 2015 with continued significant reduction in expenses/operating costs.
- Subscription growth (i.e. the recurring revenue base) increased over 140% since same period in 2015.
- The operating loss from operations for the three months ended March 31, 2016 was $88,122 ($62,442 + $25,680 for non-recurring/non-operating investment services).
To show just how close I think the company is to profitability and positive cash flow, if you back out the following three things the company reaches both of these milestones.
- $25k for 3 months worth of Investor Relations activities (Ackroo did not renew the contract).
- $24k/month ($72k/quarter) in DRC licensing fees.
- Transaction, year-end legal fees, and acquisition-related fees.
Regarding the DRC licensing fee, it doesn't technically "go away" until all the DRC customers migrate over to Ackroo's platform, but the company can overcome this cost with some more organic growth so that once the DRC fee is gone it won't "get them to profitability" but rather it would "add to profitability".
It is quite remarkable what Steve has been able to accomplish with very little cash. Believers in Ackroo, like myself, get extremely excited when considering where the company will be, and where it will go, once it gets capitalized. One thing is for sure, profitability and positive cash flow would be almost immediate.