MPX Bioceutical Corp (OTCMKTS:MPXEF) Is A Small Cap Worth Watching Closely

MPX Bioceutical Corp (OTCMKTS:MPXEF) has proven to the market that it is a company worth its salt. With a very high jump in the last year’s revenue and the announcement of its new acquisition, the firm is giving every indication that it is on the way up.In this piece, we give the details of the company and its latest acquisition deal. Take a look at the stock’s price movement below: MPXEF Daily ChartCompany ProfileMPX Bioceutical Corp. was founded on April 2, 1974, and is headquartered in Toronto, Canada. The company delivers financial, procurement, advisory, logistics, staffing, administrative, management and real estate rental services. It also provides financial and business support to developing organizations, which comprises medical, biotechnology and pharmaceutical sectors.Through its fully-owned subsidiaries in the United States, MPX delivers numerous services to three medicinal cannabis firms in Arizona functioning under the Health for Life dispensaries and the well-respected Melting Point Extracts brands. The effective Health for Life brand works in the swiftly growing Phoenix Metropolitan Statistical Area. Through the acquisition of the Holistic Center, MPX added a new operating medical cannabis institution to its business within Arizona.Recent DevelopmentsThe company recently announced that it had signed a letter of intent for the total acquisition of Canveda Inc.’s issued and outstanding shares. Canveda Inc. is a private company which operates in Peterborough, Ontario from within a fully built-out facility which is set to begin its first manufacturing run and is able to produce between 1,000-1,200 kilograms of good quality cannabis flower in a year.President and CEO of MPX explained that its leadership has always considered the expansion of its Canadian business presence to be a critical aspect of its business strategy. He added that although there have been no plans to build-out the massive cultivation facilities being developed by some other Licensed Canadian producers, the firm will focus its efforts on utilizing the advanced extraction and distillation processes created by its U.S. operations in order to produce and market the MPX-branded, highly regarded concentrates within Canada, starting with high-level cannabis oils, and then a much wider range of MPX products as they become authorized in line with the ACMPR. Another exciting area of promise is the vast array of import and export opportunities available to Canadian LP’s.It is anticipated that the acquisition will speed up the company’s ability to obtain a license for production within Owen Sound and will be accelerating its development plans. The current plan is to replicate within Peterborough and Owen Sounds well as any other areas where permitted by Canadian laws, its business model of vertical integration in the United States which includes manufacturing, production and later retail sale of its product to the Canadian consumer market.MPXEF is presently exploring partnerships with possible operators of dispensaries in West Canada which would deliver a further distribution channel for MPX products.The success of the transaction is highly dependent on certain customary conditions which including the completion of satisfactory due diligence, the signing of definitive documents, and other required regulatory approvals including CSE if required.There is already an agreement for MPX to pay a finder’s fee amounting to 1% of the acquisition price in MPX Shares at the estimated price of $0.70 per MPX Share to Stoic Advisory Inc., an independent Toronto-based corporate finance consulting organization which is working with firms across the global cannabis sector, in MPX.Financial PerformanceAt the end of 2017, the firm recorded revenues of $3.99 million, a massive jump from the revenues of the last year. Noticeably, this figure is by a distance highest revenue recorded in the last few years, the next figures being $5,635 recorded in 2015, and reversing a decrease in revenues for the company. However, it is anticipated that the market demand for MPX Bioceutical’s products will continue to increase and boost sales revenues in the coming years.However, the firm only recorded cost of sales of $3.2 million, a major increase from the previous year, and consisting of a sizeable portion of its revenue. A pointer that the firm may have lost some of its production efficiency in its sales operations over the years.In line with the cost of sales, sales, general and administrative expenses jumped by 236%, while the firm incurred other expenses of $0.25 million during the year. With no major additional income, while there were increases in sales and administrative costs and other costs, operating loss for the year was recorded at $3.5 million, a jump from the previous year’s loss of $1.2 million. Net loss for the year was $3.9million.The statement of financial position reveals that the firm is not too highly geared. On its books, its total debt is worth an estimated $22.8 million, leading to stable debt to equity ratio of 0.71. It also has a liquidity ratio of 11.5, which can be considered acceptable for its industry.ConclusionMPXEF has the potential to keep growing for years and this seems to be just the start.Disclosure: We have no position in MPXEF and have not been compensated for this article.