B-Scada, Inc.

What they do

B-Scada develops and sells software products for real-time data visualization, monitoring, and analytics, primarily under the 'Status' product line (Status Machine Edition and Status Enterprise). The company also sells wireless sensors through its Florida subsidiary, Monitor Sensing Technologies Inc., and offers consulting, graphic design, and contract development services. Revenue is generated from retail software sales, technology licensing, and sensor sales.

Revenue drivers

• HMI/SCADA Software Sales — Retail sales of Status software products, including machine-level HMI and enterprise-level SCADA, are a primary revenue source.
• Technology Licensing — Licensing portions of its technology to other software firms and Fortune 500 companies, a traditionally significant revenue stream.
• Wireless Sensors (MST) — Sales of low-cost sensors for residential and light commercial markets, managed through the IoT platform, through the subsidiary Monitor Sensing Technologies Inc.
• Consulting and Development Services — Income from consulting services, graphic design, and contract development provided alongside software solutions.

Recent performance

Annual revenue declined from $2.0 million in 2014 to $1.9 million in 2015, and the company reported a net loss of $398,221 in 2015 versus net income of $1.0 million in 2014. Quarterly revenue has been declining: $463,497 (Q3 2015), $471,777 (Q4 2015), $404,182 (Q1 2016), and $380,358 (Q2 2016). As of April 30, 2016, the company had $1.1 million in cash, total assets of $3.3 million, total liabilities of $384,894, and shareholder equity of $2.9 million.

Strategy

Management aims to become a leading supplier of data visualization and analytics by focusing on IoT and Smart City applications, rebranding Status Enterprise as an IoT platform ('VoT') since February 2015. They are targeting vertical markets including building automation, energy management, petro-chemical, mining, agriculture, transportation, and manufacturing. The company also seeks to grow through its Spain subsidiary (B-Scada Soluciones Industriales SL) for Europe, Latin America, the Middle East, and Africa, and through new sensor products from MST.

Risks

• Revenue decline and losses — Revenue fell in 2015 and continued to decline in the first half of 2016, with a net loss in 2015 and negative operating cash flow.
• Dependence on software and licensing — Revenue is heavily reliant on software sales and licensing, which may be subject to competitive pressures and technology changes.
• Key personnel and related-party transactions — The Spain office is subleased from an entity related to the two principal employees in Spain, creating potential conflicts of interest.
• Small reporting company risks — As a smaller reporting company, the company may face limited resources and market visibility, and its stock trades on the OTCBB which may have low liquidity.

Outlook

Management is positioning the company as an IoT platform provider, noting that IoT customers seek complete solutions including software, hardware, and consulting. They plan to continue expanding into new vertical markets and geographic regions. However, they also acknowledge forward-looking statements involve risks and uncertainties that could cause actual results to differ.