BEACN Wizardry and Magic Inc. (BEACN.V) is a Canadian company focused on supplying tech peripherals for Gamers, YouTubers, Podcasters, and content creators on the internet. The company, based out of BC, began trading on the TSX Venture Exchange in November 2021.
It shouldn’t have.
BEACN came to market too early, before it had real sales traction, and by going out on the Venture instead of the much more flexible and microcap-suitable CSE, it spent a lot more money getting and staying on the public markets than it should have.
But hey, we don’t deal in time machines here.
This is what it does.
BEACN just put out its latest financials and, today, the company is showing a stronger beating heart and great sales movement, if a dwindling cash position.
Net Loss: BEACN incurred a significant net loss of $1,708,863 for the nine months ending September 30, 2023, which isn’t great until you look into the details.
“.. revenue for the three months ended Sept. 30, 2023, increased to $886,786, an increase of 22 per cent compared with $727,088 for the same period in 2022 and a 79-per-cent increase of the prior three-month period ended June 30, 2023.“
Yo, I’m someone who doesn’t really care much about comparisons to the same quarter a year back, or even nine-month numbers. I want to know what’s happening NOW, and a 79% sales jump in three months is significant, especially when some B2B deals they’ve been making haven’t really kicked in yet and the hardware they sell hasn’t yet been released in Mac versions (but will this quarter).
Sales in the quarter included “the first orders from new B2B retail partners including London Drugs and two United States-based custom-build PC companies,” but the Mac releases should kick in a whole new sales vertical, and new accessories that went out to sale after the financials cut-off (but were paid for prior) will also have a positive effect.
If the company can keep sales lifting by the percentage they managed in the last quarter (and with Christmas coming, there’s no reason why not), that would see them bring in just over $1.3 million and most likely bring them close to breakeven, which is what the market has been waiting for since its initial listing.
Let’s be clear: Hitting profitability this month would CHANGE EVERYTHING for Beacn and, with its illiquid stock chart right now sitting at $0.10, and insider ownership fairly high, the chance of significant movement in price is apparent.
BEACN reported an operating loss of $616,592 for the quarter, so the challenge now, with around $430k in cash left, will be to continue to streamline and sell hard so those two numbers end up in the positive.
That said, going that close to the bone might bring a cash crunch for the company down the road, which wouldn’t be helpful, so one hopes management is either raising again (not optimal, since the stock is so cheap) or finding lines of credit, to fluff the mattress a little. Shifting from the Venture to the CSE might be a move worth making while they’re at it.
It’s clear the company is not marketing itself to investors as the stock trades by appointment and there’s no volume, but that’s to be expected as they’re clearly trying to keep costs to an absolute low while they charge toward breakeven.
For mine, this hasn’t been a company I’d have wanted to be in – to this point. But if they can keep the numbers going where they’re going, and avoid short term cash issues, this could be the turning point for Beacn, kids.
Watch this stock. I’ll watch the money.
And let’s have some support for the first Canadian electronics story I can think of since Blackberry.
— Lucy
FULL DISCLOSURE: Equity.Guru owns stock in BEACN and has for some time. It is not a client company but has been in the past.
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