Any reason they didn't release their 10-k along with their results?

Edward Woo, throwing a PDEX bone. Yeah they quintupled your estimate sir, may want to revise that price target. haha

This thread just lured me in for some reason. I know absolutely nothing about the stock market but I have high confidence in you guys haha. I'm throwing down my entire next check on PDEX in a few days and probably %10 of my checks after. If I'm making a mistake you got two days to warn me lol!

Well I guess this ended up not being such a crazy prediction after all. Although this story has been just once instance, I think how it played out highlights the inefficiencies/opportunities that exist investing in very small companies.

This article was written by a fellow PDEX shareholder where he highlights the historical out-performance of nanocaps that I thought was interesting.

https://microcapclub.com/2017/08/exc...ory-microcaps/

"microcaps are fine but nanocaps are the ticket to wealth; you just have to be poor enough to buy them."

BCI- When is there 10-k due out?

From PR:

"Although the Company has released its earnings prior to the filing of its annual Form 10-K with the Securities and Exchange Commission, we are able to do this because we are a smaller reporting company and we have more time to do so at fiscal year-end. During our quarterly reporting periods we anticipate that our earnings releases will continue to be released at the same time as our Form 10-Q’s are filed with the Securities and Exchange Commission. We anticipate filing our Form 10-K with the Securities and Exchange Commission on September 14, 2017."

Thanks, I wanted to add more after the earnings came out, but wanted to see their 10k first and historically PDEX has gone up and then given back some after earnings. This rise is semi sweet as a result, because it may go up too much so that I just keep my already large position.

I wouldn't count on PDEX giving any of its gain back after this latest earnings release. At some point, a multiple expansion is very likely to happen.

Right now, you have a company that did just did $5.1 million in net income and has $5 million in cash and investments on its balance sheet (with no debt) selling for $31 million. It's also growing revenue and seems to have very good management.

I don't see any reason why that couldn't get to about $45 million in short order (8x trailing P/E multiple ex cash) which would be over $11 a share. I think there's still a lot of upside from here.

I understand it's a great investment, but before I up it from super overweight in my portfolio to super duper overweight I want to see the 10-K.

I don't think sustainable net income is $5 million. They have little NOLS left so after tax profit based on last quarter is closer to $2.2 million. So probably cheapish if they can grow revenue. But not eye watering cheap (kind of annoyed I missed out on this one ).

Just FYI.

I dunno if this is serious or not but I do not recommend stuff like this, you shouldn't be blindly trusting people on the internet without doing some of your own work/diligence.

So far every stock I've ever wanted to buy that i felt like i missed out on I was able to find another time to buy at a great price even if that new price was 100% higher, the story just got that much better. PDEX was a good example here if you missed buying at $2.10 in 2015/early 2016, i thought buying at $4.25-$4.50 was just as strong of a buy this past April. Stay patient, don't give into FOMO.

So 10k is out, haven't read it all, but it turns out they have indeed started selling new stock to raise capital under the ATM agreement with ascendient. Says they intend to continue doing so whilst share price is rising. In 'subsequent events' £1.5m raised since July so doesn't show up in the end of June financial statements.

Can't see any indication of why they are doing this. Quoting from the section on the agreement it says:

"...provides an opportunity to raise additional capital for working capital requirements or to fund strategic opportunities that may present themselves from time to time."

They seem to have more than sufficient cash on the balance sheet for current operations, does this suggest a 'strategic opportunity'?

Also could this be a reason for the early release of results?

I sold 16.2k shares this afternoon, averaging $7.24, I have 1800 left. I'm either gonna look like a total chump or have made a good decision here. I'm not sure why they released the report mid-day like this? I was basically the only one selling it would seem.

227,000 shares sold ATM between July/Sept generating $1.5 million in revenue? I'm not sure I understand that, if Rick's stated intent is no M&A, focus on core business in immediate future, why are they so intent on raising additional capital when they have 4MM+ in reserves as is?

I guess I thought they would mention new contracts as well, I know they stated they have "no intention of losing the relationship with existing sales partners", but the orthopedic handpiece is a finite contract and would have liked to see this customer indicating an intention of renewing/replacing the contract with a like size order.

As always, i'm probably totally wrong in my hasty interpretation of the report, i'm very interesting in your analysis of the report BCI and anyone else who want's to chime in of course. Wasn't expecting the report til after market close, I wish i'd had more time to analyze. Either way, this has been a super fun ride over the past year, I've learned so much from when I started and this has been the most profitable investment (2nd to WSOP) I've ever made. Willing to jump back in if factors point toward mid-term share price accumulation again, but the quick glance risk seemed large for me mid day.

Releasing it mid day seems extremely strange, I'm going to look at it now. I just assumed they would release it after hours

I think you guys might be reading a little bit too much into that, although it is a little strange.

Interesting to note: In Fiscal 2017, they repurchased 63,496 shares at a cost of $312,000 (per the financing section of their Statement of Cashflows in their 10-K.) They subsequently issued 227,319 shares for ~$1.45 million, net of costs to Ascendiant Capital Markets.

So, in effect, they've issued 163,823 shares and raised ~$1,138,000, for an average share price $6.95 a share. My numbers might be slightly off since I think they had a small sale of like ~8k shares that they mentioned elsewhere in the report and I was only looking at the Subsequent Events, but that's not too bad.

Also, they haven't granted any stock options since July 1, 2015, which is a very good sign if you're worried about dilution. I think they're raising some money for R&D because there are probably some very large markets that they want to go after, which is one of the things Rick Van Kirk alluded to in this interview:

https://www.youtube.com/watch?v=7a_cz_k5y8k

So I'm not too concerned, but to each his own. I think when you have intelligent people making good decisions on your behalf, patience tends to be rewarded.

Incidentally, I'm planning on going to their annual meeting of shareholders this year, so if any of you guys are planning on going hopefully I'll see you there.

Lol, so smokey almost single handedly dropped the stock? There had to have been other big sales.
Issuing more shares doesn't make a ton of sense to me but I've been on since 2$ and don't see a reason to fire sale because they make one decision I don't understand.

Notes: Backlog went from 12.9 million a quarter ago to 8.7 million after completing an estimated 4.8 million of it last quarter (current year only increased 600k). Takes a little away from the security for next year's earnings, but could just be because the backlog was too large for them to accept new orders for a while.

They seem to be centralizing operations as the total number of full time employees remained unchanged, but increased from 60 to 70 at Irvine. Part time employees went from 28 to 6. Really seem to be focussing on medical device sales as the other smaller revenue streams declined (disbanded engineering services division)

Current lease expires in April 2018--> said facility is adequate for their expected needs

143 total shareholders---> how many are 2+2?

8276 shares sold during fiscal 2017 (Feb to June) generating 48k net of the 1.5k fees

Oh, and of course, having tons of cash on hand, having high cash flow from operations, selling stock, and getting approved for 500k of credit means something is up for sure.

I was over half of the daily volume, I just wondered the whole time if this was a huge mistake or not, but didn't see the catalyst for growth between now and next earnings. I don't think dilution is my worry, but I don't understand the need for additional capital, if you need it, why not explain the use in this report? The current cash reserves are not sufficient for R&D? It kind of makes sense now why they released earnings before the annual report, and why the price didn't increase drastically with such dramatic accumulation a couple weeks ago. If they've issued 227k shares in 60 days, man... there's nobody selling!

Long term, I think Nick/Ray/Rick clearly have shown their ability to generate value for the shareholder, and I anticipate hopefully resuming most of my position after discussion with Rick and potentially a consolidation in the price. And maybe I could have scaled out a little bit slower too honestly, but it is what it is.

Considering i'm the only one really selling today, I could be totally wrong and we're at $8 tomorrow. I guess I anticipated a different outcome and more guidance towards the future, something more concrete and specific. And was not expecting the share issuance when they were just repurchasing in the $5's.

One possibility for the capital raise is that it's related to the Monogram Investment. RVK mentioned on one of his interviews that that was going to require some capital. Long term, it sounds like it has the potential to be a grand slam for them since they sound very excited about the products and they have an exclusive 10 year (!) manufacturing agreement with Monogram once it comes to market, but it sounded like it might require some upfront investments from PDEX to help bring the products to market and might take a while for the investment to mature.

The only thing that would really concern me about a capital raise would be if it was somehow being used to finance excessive executive compensation. That's really not the case here - quite the opposite in fact, their compensation of executives is probably a little bit on the stingy side.

RVK and their CFO were paid $242k and $170k in total compensation for fiscal year ending 6/30/2016, which is very reasonable and if anything is probably under market for RVK. Moreover, RVK personally owns 70k shares.

Also, I believe that 3 of the Board Members are being paid $18k a piece, with the 4th being paid $25k because he's the Chair of the Audit Committee, which on a combined basis is less than the cost of one full time engineering employee.

Overall, I'd say that their incentives appear to be strongly aligned with ours. Spending money on discretionary share repurchases earlier in the year would tend to support that. So, bottom line for me is I'm inclined to believe that they probably have good reasons for doing what they're doing.

If this is the case and this Monogram investment is larger than we in this thread initially speculated it could be really good for the long term value of the company, but risk would be increased significantly as well. Also, the benefits of this arrangement might not be realized for a while either so company results may appear to stagnate over the next number of quarters causing the stock price to fall.
As a result I'm not comfortable adding to my super overweight position to make it a super duper overweight position, but I won't sell for a while either, only potentially adding more if the price does fall back somewhat. (My position isn't significant enough to affect the price more than a couple dimes probably)

Yeah that's speculation on my part, I have no particular insight into what they're doing but it seems logical that it would be for 1 of 3 things: M&A, internal R&D, or an external strategic investment.

Given that their CEO previously stated that they weren't really looking at M&A, I'm thinking it's probably for 2 or 3, but have no special insight here. Curious what BC thinks.

I wouldn't look too far into they releasing the 10-K during the day instead of after market close, they already released earnings so it matters less that they report after hours IMO.

Smokey the largest customer committed to $24m for calendar 2017 and 2018. $12m hit the backlog in the Nov earnings last year so i'm expecting the other $12m to hit the backlog in the earnings they report in Nov here.

I expected an update on one new product they were working on but that project has been delayed since earlier this year so probably just taking longer than expected. These projects are with massive companies and these companies move slow as molasses so i don't look too far into things taking a long time here.

Not gonna lie i'm somewhat surprised they are raising capital at current valuations, I thought they would wait until something closer to $10 but like Malachii pointed out these guys are well aligned with us so no need to worry there. I think its a pretty clear statement, they either have big plans in the works that they need the capital for and/or just see the current valuation as an attractive price to raise at. The combination of equity raise + new banking agreement would seem to imply they have something in the works but I guess only time will tell. The valuation of this company really comes down to that largest customer. The contract goes til at least 2022 I believe but the current order commitments visibility only goes through 2018 right now. Sounds like the company is also probably going to be a full tax paying entity now moving forward after using most of their NOLs so their cash generation going forward won't be as high as the past year even though EBITDA will be the same or higher.

They said they weren't focused on M&A but that was over a year ago, things can change/ new opportunities can present themselves.

I could definitely see them dramatically ramping up R&D given all of the growth stuff they had in that investor presentation. I don't think it would be for the Monogram investment, maybe, but I would love for them to find 10 more situations similar to the Monogram investment to invest in. I thought it was a very creative way to use their financial strength to try and grow their core medical device business.

I thought their R&D was just working with other companies on projects together? The time their engineers spend with the clients on the design process (unsure how the billing or agreements work, perhaps with smaller device manufacturers and not the bigger companies that contract them out?) and as a result retain some of the property rights?
Correct me if I'm wrong, but they can't just put $ into R & D, they need their current clients to come to them with work to do such a thing?