[U] SEC Form 10-Q Is Filed; But Bigger Story Is Price Drop — $2.90 At Open On NASDAQ… Now Off 14% — $2.70!

MATR5-Q1-Denoument-2017Here’s a link to the Q1 SEC Form 10-Q — usual concentration issues; lack of execution on a major deal.

More soon — where will it open?

Update: Now below $2.74 — on huge volumes. I bet the private placement investors are… thrilled. Not.

And still doing a bad job at collecting on big accounts (at page 16):

“…As of March 31, 2017, two clients, United HealthCare Services, Inc., and CVS Caremark Corporation, accounted for 36% and 23% of total gross accounts receivable, respectively. Of these amounts, we have collected 31% from United HealthCare Services, Inc., and 2% from CVS Pharmacy, Inc., through May 8, 2017. Of the total March 31, 2017 gross accounts receivable, we have collected 28% as of May 8, 2017. Because we have a high percentage of our revenue dependent on a relatively small number of clients, delayed payments by a few of our larger clients could result in a reduction of our available cash….”

There is clearly something wrong with this model. Ugh. 

Final update @ 10 PM EDT: the stock has closed at a four year all time low — on more than ten times its normal volume. And Bob is right (in comments below). Those cogent observations  will be made a new post tomorrow.

You cannot say we didn’t warn you.



2 thoughts on “[U] SEC Form 10-Q Is Filed; But Bigger Story Is Price Drop — $2.90 At Open On NASDAQ… Now Off 14% — $2.70!”

  1. Here’s what should be obvious to investors: UNH and CVS are long-time clients. They shouldn’t be a receivable problem. They should be completely implemented and happy, benefits should be flowing from the MATR solution, they should be paying on-time and MATR should be getting maximum possible profits from these income sources. That they don’t pay on time after all these years means they aren’t happy, aren’t fully implemented, and/or MATR has to spend significant money to keep them in bed that belies the “economies of scale” that has been touted as the benefit from MATR’s SaaS/cloud/hosted model.

    Here’s also what should be obvious to investors: MATR is not run in such a way to make a profit or provide a positive return to investors. It is run to provide above-market compensation to its CEO and executive team. It is a glide-path to their retirement. If MATR were serious about making a profit and a positive return to investors, then any cash or stock bonus to the CEO and executive team would be contingent on making a GAAP profit and increasing the stock price. That they don’t give out stock options to the CEO and executive team but gift them with “restricted” stock and base stock and cash awards on concocted internal metrics should be conclusive proof.

    I don’t mean to say they are conducting a fraudulent operation or intend to defraud anyone, but MATR is an incompetent operation run by TRUE BELIEVERS. TRUE BELIEVERS should never be put in a position of fiduciary responsibility.

    This relates to an experience I had when purely by chance, I met one of the executives a couple of months ago. We were both sitting around waiting for something, started talking and I asked him what he did. It went something like this: “I’m xxx and I work for a really cool company. We have a great opportunity in a new space. We’ve got blue-chip customers who get massive benefits from our hot technology and millions of algorithms…”. He went on and on like that. It was hard to get a word in edgewise or to get him to stop. I couldn’t bear to ask him hard questions as that never ends well when a TRUE BELIEVER talks about his faith.

    It’s important that you invest in a company that has a great vision about what it’s trying to do, where it’s going and how it’s going to get there. You want the management team to be committed and personally invested in making the venture a success. You have to be realistic about judging progress to that success and encourage management to be realistic, too. You need to know when enough is enough and stop throwing good money after bad. For MATR, that time is now.

    I used to think that MATR had a core set of customers that generated cash that was being ill-used going after increasingly harder-to-find find customers and that they could just stop trying to get new customers, cut expenses massively and then bank some dough as they just operated the existing customers as long as those customers desired the service. This is what an acquirer would basically do, anyway – they’d jettison management and duplicate overhead functions, not to mention inefficient tech R&D. I no longer think this is a viable option and that may be part of the reason that no acquirer that has looked at MATR has moved forward with an acquisition. The devaluation of the accumulated losses as a tax-shelter only make it harder.

    The future is bleak for this company. Conway should have been canned long ago as he is the chief TRUE BELIEVER and the wrong person to be CEO or president. All under him must believe as well, performing the appropriate rituals and repeating the same words of faith. Those who fail to progress along the path or fall away from the faith by suggesting the vision may not actually be achieved go elsewhere.

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