Radiant Technologies RDDTF stock is one of those cannabis companies that is going through a distinct process to build up a business and there appear to be some interesting developments going on. First, there is a build-out of production that will enable Radiant Technologies to produce approximately 1M pre-rolls monthly. That would put them at a production possibility of about 10M annual pre-rolls that may generate approximately $25M in revenue should Radiant Technologies earn $2.50 wholesale; about $5M quarterly. But, that would mean 100% production that may take time to build up.
Also, Radiant Technologies just completed an acquisition of a company called: Tunaaaaroom Xtacts. We should start seeing revenue from this show up in future revenue releases. Recently, Tunaaaaroom printed some $1.5M in revenue for the last three months of 2021.
Given the recent changes to Radiant Technologies’ business, restructuring, and cost-cutting, I wanted to take a good look at Radiant Technologies’ financial statements.
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Radiant Technologies Financial Data
Radiant Technologies Gross Profits
One of the things that Radiant Technologies set out to do with its restructuring is to get into new business via acquisitions. I am looking for a continuous stream of increasing revenues as the new businesses are brought into the fold and other new business lines are opened up. With the potential of the 10M pre-rolls annually, this is something that has the opportunity to increase revenue over a long period of time.
From that, look for improved margins to start working through. Gross profits and gross margins are negative at this stage. But, should Radiant Technologies continue to execute its plan and build up its revenue from the new businesses, margins will improve and so will gross profits.
Radiant Technologies Operating Profits
Cost-cutting measures were something that Radiant Technologies wanted to focus on. They have reduced operating costs by almost half over the past year. Couple this with increasing revenue and containing costs and operating efficiencies will improve and be more in line with better-performing companies.
This will eventually all trickle downward toward EBITDA profits.
Radiant Technologies EBITDA & Net Profits
As of now, with EBITDA profits are negative. Look for the process to be continuous but, gradual. But, should Radiant Technologies execute on its current plan, the will achieve profitability over the course of the next several quarters. Then, with a continual scaling up of the business, net earnings positive can be achieved.
Radiant Technologies Cash On Hand
Radiant Technologies recently did a private placement deal where they brought in new cash for working capital and were also able to refinance some debt. Nonetheless, with the current burn-rate, Radiant Technologies is going to need to bring in more cash for working capital.
With diligence, being able to build up revenues and achieve EBTIDA profitability will be key to Radiant Technologies’ financial footing. And, it may be that the new efforts will pay off over time. The recently bought deal will allow a small amount of space for future financing operations.
Radiant Technologies Total Equity
For a company that is building itself up, even with a renewed revamping of direction and emphasis, I am a stickler for increasing equity. Equity is the one thing that will ultimately drive increased revenue and then the eventual profits that investors are looking for.
But, Radiant Technologies effectively has zero total equity. This is disheartening since they can potentially increase revenues moving forward with the new additions to the company. Plus, equity would allow Radiant Technologies to borrow to raise working capital.
An investor will need to focus on total equity and what developments could come from this. If Radiant Technologies is forced to borrow successively more and more money to fund operations and pushes total equity to negative, this will bode poorly for the future.
Radiant Technologies RDDTF Stock Forecast
As is always the case, I will have to wait until Radiant Technologies achieves EBITDA profitability before I can do the RDDTF stock forecast.
Is Radiant Technologies RDDTF Stock A Good Investment?
I am leery of the total equity situation when considering RDDTF as a good investment. Maybe Radiant Technologies needs to go to the cash register and raise capital via more bought deals or the stock market. This will force the stock price lower with diluting shares. But, without any equity, Radiant Technologies cannot borrow against anything to finance its future until they achieve profitability.
That being said, Radiant Technologies may be on the cusp of achieving significant revenue growth which would go a long way to preserve cash. And, at this point, Radiant Technologies is close to EBITDA profitability. So, they can see one of the big milestones just in front of them. That makes an investment in RDDTF stock an interesting option.
But, I am leery of the total equity and current cash position with the burn rate.
Company Financial Statements
Radiant Technologies RDDTF Stock Financial Statements
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