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Here's Our Take On The MyDx Inc (OTCMKTS:MYDX) Numbers

Here's Our Take On The MyDx Inc (OTCMKTS:MYDX) Numbers
Written by
Chris Sandburg
Published on
April 18, 2017
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MyDx Inc (OTCMKTS:MYDX) just put out its latest earnings, and it looks as though the company is going to run throughout the session on Tuesday on the back of the release. There's a conference call scheduled for Thursday, on which management will no doubt serve up some added clarity into the fundamentals behind the numbers, as well as where things are headed, but ahead of the call, here's our take on the release and what we see it as meaning for the near to medium term future of MyDx and its shareholders.So, here goes.Before we get started, MyDx is a young cannabis play (sort of) that's trying to take, and seemingly succeeding in taking, advantage of the wave of legalization that's spreading across the US in the recreational (and to some extent, medical) side of the space right now.We say sort of because its lead asset is a type of testing technology, designed to provide users with a contaminant analysis of a sample, in the instance of its lead product the CannaDX, cannabis. However, it can also be used to test and verify the quality of pretty much anything organic, and MyDx has applied this concept to water quality, food, other plants (outside of cannabis) and more.That said, cannabis is where the money is right now, and that's where we're looking as the growth segment for MyDx near term.So what did the company just put out?The numbers just released detail earnings for full year 2016. The release is not only important because of the numbers, but also because MyDx filed an inability to report back at the end of March, and yesterday was the day slated as the threshold for rectifying this inability. So, before any numbers are mentioned, that the company has managed to meet this target (well, for all intents and purposes) is a good sign in our eyes.That aside, and looking at the figures, the report detailed product revenues for the year of $808,000 – up 110% year over year, and driven primarily by sales of the above mentioned CannaDX. This is likely a direct attribution to the increased activity in the cannabis space, and suggests that there exists a correlation between growth in the sector and awareness (and sales) of MyDx's products. This may seem obvious, but there are a lot of companies that picked up strength on the back of cannabis sector buzz, but for which this strength (market capitalization strength, that is) has failed to filter through to any top line improvement. This top line increase is validation that MyDx is positioning itself to expand as the sector grows, with top line growth confirming this positioning. Gross profit expanded 131%, which is nice, but not overly important at this stage as far as factoring into long term value is concerned. Improved margins are great, and better than worsening margins, of course, but we can't read too much into it.Looking at balance sheet, over $1.5 million on debt (convertible) was satisfied during the year, and at today's date, outstanding convertible debt stands at just $35,000. That's a huge balance sheet shift, and one that strengthens MyDx appeal as a potential cannabis play this year.We also learnt that the app (which links up to the CannaDX device) has more than 50,000 downloads, and that it reached the #1 Ranking in the medical category in the iOS app store, #1 for the keyword Cannabis, and is consistently in the Top 100 of FREE Apps.Finally, we got confirmation on a number we touched on in our previous coverage – a number that relates to the data base that we see as being a strong growth driver (perhaps even the primary growth driver) for MyDx long term. Specifically, the company announced that its database is at more than 40,000 consumer-generated data points growing at over 100% year over year. To catch up on this data side of the company's operations, we recommend checking out our previous coverage, in which we go into detail as to how this part of MyDx could fuel growth going forward.We will be updating our subscribers as soon as we know more. For the latest updates on MYDX, sign up below!Disclosure: We have no position in MYDX and have not been compensated for this article.

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