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Sunday, October 25, 2020

Signal Bay Inc (OTCMKTS:SGBY) Puts Up the Numbers

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Signal Bay Inc (OTCMKTS:SGBY) is a company that has been one of the most direct beneficiaries of recent voting to increase the legality of pot in California and Oregon. The stock has performed extremely well, and now hopes to benefit from its recent announcement that the company achieved record sales growth in October.

CEO William Waldrop stated, “Operating within the new Oregon regulatory environment which commenced October 1, 2016, EVIO Labs has seen a tremendous increase in the number of accounts and variety of tests being processed across the board at all four of our Oregon cannabis testing laboratories.  The growth has been incredible and I personally could not be more proud of our team for the way they’ve stepped up to meet demand.  For the month of October, the company generated over $198,000 in revenue.”

Signal Bay Inc (OTCMKTS:SGBY) bills itself as a company that provides advisory, management, and analytical testing services to the legalized cannabis industry in the United States.

The company offers industry research; business and market intelligence; and advisory and consulting services, including license application support, regulatory compliance, market forecasts, and operational insights.

It also publishes industry information through online media, research reports, and publications; and operates CANNAiQ.com, a business to business information portal, as well as MarijuanaMath.com, a general interest informational Website.

In addition, the company provides Cannabis Consultant Marketplace, an outsourcing freelancing matching platform to enable cannabis companies to post projects and hire consultants.

Further, it provides operating services; and operates CR Labs, Inc., which offers analytical testing services, such as residual solvent analysis, pesticide screening, microbiological screening, terpene analysis, and cannabinoid potency profiling of cannabis and cannabis-infused products to growers, processors, and dispensaries.

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According to company materials, “Signal Bay, Inc. is an Oregon-based Life Sciences company. Through its three subsidiaries: Signal Bay Research, Signal Bay Services and EVIO Labs; the Company provides research, consulting services, and analytical testing services to the legal cannabis industry. The Company’s EVIO Labs division operates state-of-the-art testing facilities and offers accredited testing methodologies performed by a qualified team of scientists to ensure the safety and quality of the nation’s cannabis supply.”

As noted above, October was apparently a record month. Signal Bay Inc has been investing in expansion, and so we would expect, as new legal boundaries go into an applied status, the company may see increasing growth. Management is confident.

In the company’s mid-November press release, Mr. Waldrop added, “We are confident that the revenue results for November will be much higher as more edible and extract processors are entering the market.  The forward-looking number based on October results is a very conservative number as it includes only 11 days of operations for our Portland location and our first California EVIO Labs facility did not begin registering sales as part of Signal Bay until November.”

Mr. Waldrop concluded, “The election results in California were a huge positive for our industry and we feel strongly that our continued expansion into this state will be favorable as a result.  We are now up to 31 total team members working to build our business and our EVIO Labs brand and I’d like to thank them once again for their amazing efforts to date.  We are fast approaching a cash-flow positive status and it is due entirely to the team’s hard work and dedication to clean cannabis products.”

Earning a current market cap value of $21.1M, Signal Bay Inc has an extremely small store of cash on the books, with total assets just under $2.2M, which stands against an appreciable load ($1.50M) of total accumulated debt. The balance sheet is troubling, but sales growth may hold the key.

Note that SGBY is making real money, with trailing revs already coming in at $500.37k. In addition, the company is starting to see major topline growth, with quarterly y/y revs increasing at 1723%. It would appear that October growth reinforced that trend. We will be interested in seeing how the story plays out from here. For continuing coverage on shares of $SGBY stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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