Management Discussion and Analysis – Outlook 2023
NEW YORK, May 31, 2023 (GLOBE NEWSWIRE) -- This management’s discussion and analysis (MD&A) includes information that will help you understand management’s perspective on the Outlook for 2023 for Balincan USA Inc (BCNN) and its subsidiary Tekumo LLC (the “Company”).
NEW YORK, May 31, 2023 (GLOBE NEWSWIRE) -- This management’s discussion and analysis (MD&A) includes information that will help you understand management’s perspective on the Outlook for 2023 for Balincan USA Inc (BCNN) and its subsidiary Tekumo LLC (the “Company”). We expect that the revenue generated over the next 12 months from our recent customer announcements will exceed more than $6 million.
As you review this MD&A, we encourage you to read our interim financial statements and notes for the quarter ended March 31, 2023, our consolidated financial statements and notes for the year ended December 31, 2022, and our Letter to Shareholders dated May 9, 2023 (all filed with OTC Markets).
Caution about forward-looking information
This MD&A includes statements and information about our expectations for the future. When we discuss our strategy, plans, future financial and operating performance, or other things that have not yet taken place, we are making statements considered to be forward-looking statements under United States (US) securities laws. Please see the disclosure relative to forward-looking statements at the base of this discussion.
CORPORATE OVERVIEW
The Company offers a service delivery platform that solves the "last-mile" of installing, monitoring, and maintaining technology systems and smart connected devices.
We play at the intersection of two major trends: the “Uber-ization” of product and service delivery, and the explosion of smart connected devices brought about by the “Internet of Things” (IoT). Our Service Delivery platform was designed to intelligently automate the installation and maintenance of products by offering On-Demand local technician resources, as well as providing a “smart interface” for the monitoring and management of connected devices.
This service platform caters for a broad range of technologies from POS systems, kiosks, digital menu boards, cameras, cabling, Wi-Fi and networking, to water and energy management, lighting and HVAC control, smart homes devices, wearable sensors, and access control.
Our platform results in “less people, less time and less cost” for our customers.
HISTORY & OUTLOOK
Tekumo started its journey as a small IT managed services company while we developed our Service Delivery Platform, recording service revenue of $2+ million in 2022 and 2021. We pivoted away from that managed service orientation to our real “soul” as a software-based solution at the end of 2022, having invested over $3 million in completing the Platform.
We have recently announced anchor customers in multiple industry segments. We expect that the revenue generated over the next 12 months from these announcements will exceed more than three times our previous annual revenue and will grow.
IT and Retail Services:
Most of our historical revenue has come from this segment. We have completed projects for such companies as Target, Home Depot, McDonalds, US Bank, 7Eleven, and AT&T. Our median work order is $250 for a 2.65-hour engagement.
- Our partnership with the largest third-party Managed Services provider to the Retail Industry offers the largest immediate revenue upside. They presently complete more than 2000 work orders per month ($5 million annually).
- We also added a partner in digital signage with OnPremise. They are part of a larger corporate group that has five divisions and earns more than $5 million in annualized revenue.
- Two prominent Quick Service Restaurant chains have ongoing projects across 700+ locations that have begun work with us through a prominent Japanese technology partner.
Smart Homes/Buildings:
The Smart Home Industry is already large and is expected to grow quickly. We have installed smart door locks, smart switches, access control, smart thermostats, and water leak sensors at an average per unit revenue of $200-250.
- Our partnership with the leading Smart Home Technology Company for the rental housing industry opens significant doors. One of our first projects is for 5000 units in the South and Southwest. This represents approximately $1.25 million in potential revenue and is only part of their tens of thousands in deployments.
- Water and energy conservation play a critically important role in managing operating budgets for facility managers. We have recently completed our first site surveys on properties in Miami, Detroit and New York. Our current pipeline of properties covers more than 100,000 units.
Hospitality:
Regulations to protect employees and guests in hotels are changing rapidly. We have been engaged to install panic buttons and other wireless technologies in a leading hotel group. These projects will be sold on a monthly recurring revenue basis
Financial Summary:
Our gross margin of 40% from 2022/21 is expected to continue in 2023. Operating Expenses ran $2.2 million in 2022, and there will be no major changes in fixed costs. An expected $6 million revenue rate would result in a near cash flow breakeven, with a continued investment in our technology and sales efforts fostering growth into 2024. We expect to see the effects of these recent partnerships from Q3 onwards.
SUMMARY OF OUTSTANDING SHARES
As of May 29, 2023 our common share structure is:
| BCNN SECURITY DETAILS (OTC) |
||
| Authorized Shares | 1,500,000,000 | 5/29/2023 |
| Outstanding Shares | 182,163,317 | 5/29/2023 |
| Restricted | 135,040,810 | 5/29/2023 |
| Unrestricted | 47,122,507 | 5/29/2023 |
| Held at DTC |
45,238,956 | 5/29/2023 |
| Float |
15,747,507 | 12/31/2022 |
During the first quarter, the Company only issued a total of 31,375,000 common shares pursuant to our Regulation 1-A offering filed with the Securities and Exchange commission as of September 23, 2022. Under such an offering, the Company may issue up to 100,000,000 shares.
Drawing down the balance of the Reg A offering will provide necessary working capital and will only result in outstanding shares of approximately 250 million.
COMPANY NAME AND TICKER CHANGE
On February 3, 2023 The Company announced that it had filed for a formal name and symbol change to Tekumo, Inc., TKMO, subject to the approval of FINRA. The Company has answered all questions as part of the preliminary review. However, there is a secondary review related to a filing that was not made back in 2010. This does not pertain to present management or operations, and we remain confident that we will announce a change in due course.
About Balincan USA, Inc.
Balincan USA, Inc (OTC: BCNN) is an alternative reporting publicly held company that wholly-owns Tekumo LLC.
Safe Harbor:
Forward-Looking Statements
Any statements made in this press release which are not historical facts contain certain forward-looking statements, as such term is defined in the Private Security Litigation Reform Act of 1995, concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. The actual results of the specific items described in this release, and the Company's operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the Company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the Company's dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. The Company disclaims any obligation to update the information contained in any forward-looking statement. This press release shall not be deemed a general solicitation.
Contact:
Colorado Springs
Phillip Dignan, President & CFO
719-419-6709
[email protected]
