Q: What are your recent thoughts on Flow? They seem to have good distribution through Starbucks and often seem to be on stage with any speaker at any given conference. Which looks impressive but is there too much debt and no profit?
5i Research Answer:
With a market cap of only $12M, even with a 32% gain this year, FLOW is simply too small to get much investor attention. Debt is very high for the size of the company. Revenue growth potential is high, especially with recent partnerships, but we note it lost $11.5M in the recent quarter. Operating cash flow was a huge negative $23.8M. It is going to need more capital, and with a 25c stock price this means lots of equity dilution. We think risk is extreme here, and one to watch only at this time.