Hi there,
Loop has certainly been making several announcements lately. For those wondering, Loop essentially developed a platform that combines the power of IoT and AI to level connect physical and digital assets through contact tracing. It allows customers to make data-driven decisions based on real-time data. It certainly looks as though the company is gaining a ton of traction with its platform. The biggest news over the last little while is that Loop was accepted into Amazon Web Services Partner Network (APN). This opens up many doors and its received about 100 inquiries after partnering with AWS on a webinar to promote their technology.
As exciting as this is, we must point out that that most of the agreements it has announced are proof of concepts. This company has yet to release quarterly results in which it generated any revenue. The only agreement in which it announced actual $$ amounts was with CasaPerks which will lease Loop's technology for 250K and shares of CasaPerks. The other contract which should generate decent revenue is the rollout of of Loop technology to 550 CBD stores after a successful pilot.
From a financial perspective, since it hasn't generated any revenue, it is very difficult to evaluated this company. What I can say is that the debt load is reasonable (only 450K) but it is burning through considerable cash (negative FCF of $4M). To be expected from companies in proof of concept stages. To move forward however, it will need to start generating meaningful revenue to offset that cash burn, or it will need to go to market to fund expansion. It already has raised about 3.6M from offerings in 2020, and i'd expect another one to occur soon if this cash burn continues.
Time will tell if the company can generate meaningful revenue and to what degree it can scale its platform. Very early days for this company and as such, comes with considerable risk. This is a speculative investment and only appropriate for those with a higher risk tolerance.
Mat