No idea @Hackofalltrades -- when I put that very question to Jason his opinion was that shares were under pressure because of the expectation they would be raising capital. But he was pretty emphatic in the interview that they would NOT be doing this. (See 19min 42 sec mark in the interview. And also see 57min 18sec mark at the end.)

So if they turned around in the next month or so and raised money it would seriously undermine my faith in management, from a trustworthiness perspective.

Frankly, I would love to see the executives and board members buying on market, and in reasonably volumes. Money talks and BS walks!

If I had a nickel every time a small or micro co denied raising capital only to go on and do that then I'd be able to retire young and live off TD interest.

Moral is back your own work on a company not needing to raise as no B&M would ever admit in advance they have to do as such.

Couldn't agree more !

I keep thinking of Jeremy Irons in Margin Call saying it’s not panic if you’re the first one out the door.

Can always buy back in later.

not sure why we even ask them if there will be a potential cap raise…..

They almost always lie.

Taking someone on face value regarding cr’s is incredibly hard….lol

I'd like to think there are honest management in small cap land where what they say is what they actually do. Outcomes are somewhat unpredictable and course adjustments will need to be made along the way. Is this naive thinking?

In terms of EVS I have recently found management overly promotional and excessively optimistic and sold out as a result.

Give it to me warts and all please!

I love that line from Margin Call @topowl

Re EVS potentially breaking their word. I agree they certainly wouldn't be the first (or last), but at least it'd be a potent signal for me if they did.

Fool me once shame on you. Fool me twice shame on me!

@topowl great movie, probably the most realistic depiction of investment bank boiler room, imo

I found it interesting that on their earnings call they said they expected R&D capex to be about where it was last year. That's ~$5.5m. With $8.3m in the bank and $5.2m in unearned revenue a part of that, it doesn't leave a lot of headroom for any WC investment or much of anything really. Looks like they are one or two delayed contracts away from needing to raise capital.

The problem with these promises is the market usually marks the SP down anyway so any advantage they might think they get by talking up the SP doesn't materialise and at the same time they damage their own credibility. I'm not saying that's the case here. I don't know. But it sure does look like a company that will need cash at some point.

What gives me some hope is that it wasn't a flat denial that added capital would be needed, especially as they look to bundle equipment into subscription charges, but that they would look to use debt as opposed to equity. In fact Jason said to expect an announcement over the next few months on that front.

A much better move, in my opinion, assuming financing terms aren't too onerous, and they do indeed transition to sustainable positive operating cash flow as they expect this year.

Perhaps worth also being careful not to equate "their word" with "Jason's word" in these musings i.e. Jason may well believe and publicly stated they won't raise capital, but that doesn't mean "they" (EVS the company + board) won't come to a different decision... would such a circumstance mean Jason is untrustworthy? No... Does it signal alignment issues between him and the board? Yes. Are both equally problematic/concerning? Not sure... maybe? But maybe not... at least doesn't seem quite so clear cut to me.

I wasn't even aware they did racetracks! But now you say it @Parko5 it does seem like an obvious fit.

That being said, their lack of focus previously has not served them well. In fact Jason basically said as much, without trying to throw the old CEO under the bus. Still, interesting potential.

Also, I think you're analogy is a good one @mikebrisy and agree that we need to see an uptick in ARR growth. Jason seemed pretty bullish on the prospects in aviation, which have been a deadweight through covid. But the proof will be in the pudding.

Also interesting to hear the level of inbound enquiries were growing. The improvement in "sales efficiency" (as he called it) really can be material to the pace of growth if that continues.

The last question I put to him, and his answer, was perhaps the most interesting overall for me -- he really seemed to be aware that it was the risk of a cap raise that was holding the market back, but he was also pretty adamant that they wouldn't need to do one (barring some kind of compelling investment opportunity). And I'm glad they're open to debt funding for any temporary funding requirements given the current share price.

I'm happy to hold for now, and will be looking for a clear bump in new ARR growth for Q1, plus a continued improvement in operating cash flows. I dare say we'll see a good re-rate should they deliver on that. (or a further slump if they don't!)

@Strawman @Parko5 I think the focus part is key here also. Jason's discussions around the loss of the defence contract were fascinating -- essentially that EVS don't want to focus on the noise side of things too much (loud jets/planes) -- instead they were more interested in focusing on commercial air due to it being scalable, repeatable and solving a real problem. So knowing what we know now about the loss of the defence contract, you wouldn't think focusing on racetracks -- big scary loud engines, not dissimilar to big scary loud military planes -- would be a sensible move based on Jason's comments. In fact one of the two racetracks doesn't even relate to noise if my memory serves me correct?