Input Capital (TSXV: INP) â Initiating Coverage - First ... - Baystreet.ca

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Page 18 Source: Input Capital Filing Statement (July 5, 2013) The following lists the terms of the outstanding options: • 2,864,601 options to management of the company with an exercise price of $1.00; expires on November 30, 2017. • 265,001 options to employees and consultants. The exercise price is $1.00; expires on November 30, 2017. • 78,125 options to WB II with an exercise price of $1.60 and expires April 24, 2022. • 15,625 options to agents of WB II with an exercise price of 1.60 and expiry date of April 24, 2022. • 350,000 options are expected to be issued to the board of directors and a consultant at a price of $1.28 per share and an 8 year expiry. All the options are currently “in the money”. Management and insiders control 29.87% of the outstanding shares and 34.46%, on a fully diluted basis. The shares held by management are subject to the following trading restrictions. • 10% available for immediate trading. • The next 20% of shares are available for trading in 6 months. • The next 30% shares are available for trading in 12 months. • The next 40% shares are available for trading in 18 months. Management compensation Mr. Emsley, Mr. Farquhar and Mr. Nystuen will receive an annual base salary of $100,000 each. Financials Input Capital had no revenues for the year ended March 31, 2013. Although they raised capital in November 2012, and started deploying capital in January 2013, revenues are not received until late August - September. We feel to accurately review Input’s financial performance, investors should review annual performance, and not quarterly reports due to the seasonality of canola. For FY2012, Input had no revenues, and incurred a loss of $0.37 million (EPS: -$0.03). Our revenue forecasts for FY2013, and FY2014, are $6.58 million, and $8.53 million, respectively. The assumptions made for our estimates are discussed in the valuation section below. Our net income forecasts are $1.56 million (EPS: 0.04) in FY2013, and $2.25 © 2013 Fundamental Research Corp. “10 Years of Bringing Undiscovered Investment Opportunities to the Forefront “ www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 19 million (EPS: 0.06) in FY2014. Income Statement 2012 2013E 2014E Capital Deployed $ 6,000,000 $ 19,500,000 $ 25,282,288 Base Tonnage Received N/A 14,625 18,962 Avg Contract Price $ per tonne N/A $ 50 $ 50 Avg Canola Price $ per tonne N/A $ 500 $ 500 Sales $ - $ 6,581,250 $ 8,532,772 COGS $ - $ - $ - Gross Profit $ - $ 6,581,250 $ 8,532,772 G&A Expenses $ (364,969) $ (1,200,000) $ (1,236,000) EBITDA $ (364,969) $ 5,381,250 $ 7,296,772 Amortization $ (100) $ (3,250,000) $ (4,213,715) EBIT $ (365,069) $ 2,131,250 $ 3,083,058 Non-recurring income (expenses) $ (121,105) Income before income tax (loss) $ (486,174) $ 2,131,250 $ 3,083,058 Income tax (recovery) expense $ (116,568) $ 575,438 $ 832,425.55 Net income (loss) $ (369,606) $ 1,555,813 $ 2,250,632 Weighted average number of common shares $ 11,415,448 $ 35,577,273 $ 35,577,273 Earnings per share (loss) $ (0.03) $ 0.04 $ 0.06 Operating margins Our estimates of operating margins are shown below. When comparing margins with metal streamers, Input has lower EBIT margins due to the shorter contract length. This causes amortization of initial capital to be higher for Input. Margins 2012 2013E 2014E EBITDA N/A 82% 86% EBIT N/A 32% 36% Net N/A 24% 26% Cash Flow Our estimate of free cash flow (“FCF”) for FY2013 is $0.23 million. We anticipate that free cash flow in subsequent years will be reinvested into new streaming contracts. Cash Flows 2012 2013E 2014E Cash from Operating $ 955,369 $ 5,782,288 $ 6,529,954 Cash from Investing $ (18,827,586) $ (3,833,349) $ (5,782,288) Cash from Financing $ 19,382,687 $ - $ - Net increase (decrease ) in cash $ 1,510,470 $ 1,948,939 $ 747,665 Free Cash Flows to Firm $ (5,302,326) $ 227,447 $ 747,665 Balance Sheet Key balance sheet ratios are shown below. The trailing ROE of comparable mining streamers is 11.7%. © 2013 Fundamental Research Corp. “10 Years of Bringing Undiscovered Investment Opportunities to the Forefront “ www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 1 and 2: Siddharth Rajeev, B.Tech, MBA, CFA
Page 3 and 4: Page 3 • Public company status gi
Page 5 and 6: Page 5 Gord Nystuen - Vice-Presiden
Page 7 and 8: Page 7 Source: Barchart Inflation:
Page 9 and 10: Page 9 Source: Ontario Ministry of
Page 11 and 12: Page 11 below shows the seasonality
Page 13 and 14: Page 13 will cause rent/mortgages t
Page 15 and 16: Page 15 Canola cash receipts (in $1
Page 17: Page 17 Source:Barcharts We believe
Page 21 and 22: Page 21 Input Comparable Input's FV
Page 23 and 24: Page 23 Cash Flow Statement 2012 20
Page 25: Page 25 Fundamental Research Corp.

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