SEC Filings Reveal BioTrackTHC Acquisition Cost and Slowing Growth

SEC filings from Helix TCS (OTC: HLIX) revealed the historical financials for seed-to-sale software firm BioTrackTHC, which it announced it was acquiring in March in a deal with undisclosed terms at the time. The company closed the deal in early June, indicating that total 2017 sales for the combined company were $12 million.

Today’s amended 8-K filing indicated that the company, which is known legally as Bio-Tech Medical Software,  generated revenue of $7.79 million in 2017, with the combined firm generating total revenue of $11.8 million on a pro forma basis. BioTrackTHC sales, which consisted of $5.92 million in commercial revenue and $1.78 million in traceability revenue along with about $95K from vendor referral fees and Universal Contingency System sales in Washington, grew almost 48% over the prior year. The company reported an operating loss for the full year of $352K.

The filing also included financials for the first quarter of 2018 that revealed that growth slowed to just 7%, with sales increasing from $1.66 million to $1.77 million, which produced an operating loss of $40K:

Helix TCS is expected to file its 10-Q in the next few days, and investors will learn sales for the full quarter for Helix TCS but for just one month for the acquired business. Today’s filing revealed that Helix TCS issued 38.2 million shares and assumed 8.1 million options related to acquire the company, with a total acquisition price of $57.55 million, or 7.4X 2017 sales. The Helix TCS balance sheet will see goodwill increase by $39.1 million due to the acquisition.

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Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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