CeCors Inc (OTCMKTS: CEOS) Opportunity Mushrooms with Disabled Veterans

CeCors Inc (OTCMKTS: CEOS) is at heart a mushroom company with products on the shelf that is transforming into a disabled veteran benefits company.  Many have heard of magic mushrooms, psychedelic mushrooms, and psilocybin and their medicinal benefits. One of the biggest consumers of these products is disabled veterans. The core company is PsyKey which is a vertically integrated mushroom company developing medicinal products for healthcare professionals and consumers.  The products come primarily from functional mushrooms that have specific purposes.  Their mushrooms are cleverly mixed with coffee pods as a delivery system that allows people to start their day off right.      

While the company does have modest revenues from the sales of their core products, the sizzle is in the acquisition of VetComm Corp. announced in mid December. The reality was that this binding letter of intent was not taken seriously by market participants until they were beaten over the head with a video with the charismatic CEO of VetComm, Kate Monroe.    

This video outlined her goal of onboarding 1.0 million veterans of the 14 million veterans eligible for disability to get their rating.  If she accomplishes this goal she claims 

“This would put $30 billion per month into the US economy”

The huge problem they are trying to solve is the simplification of the governmental claims process.  These 14 million veterans eligible for benefits simply don’t have the energy to cut through the red tape and get a successful disability rating with the government.  VetCOMM has a seasoned team that essentially handles the rating process for the vets.  All the vets have to do is pay the monthly fee and answer the questions from VetComm.  

1.0 Million Veteran Challenge

Anyone thinking that 1.0 million isn’t attainable is underestimating both the CEO Kate Monroe, a veteran herself from the Marine Corps, and the networking power of veterans. Veterans are a tight knit community.  Think about it some of these vets were sitting in a foxhole and their life depended on their buddy doing his job.  So when these vets sign up for VetComm and get a positive result and then call their buddy up and say trust me you need to do this, there is no waffling around. Vets will listen to other vets.  This video from Randy Couture just shows you a hint of the star power they have behind this company. 

The government set aside tens of billions of dollars for disabled veterans but navigating the rating process with the government paper pushers is worse than combat for some of these vets.  They get discouraged and give up, that is where the tenacity of the VetComm team comes into play and knows how to successfully navigate the bureaucratic maze and get results for these veterans. VetComm just takes a flat fee for their service ($247 or $997) and the vets could receive thousands of dollars monthly depending on their level of injury.  There is no reason not to try, and the company has a money back guarantee.  Even more exciting is the back pay some of these vets could receive.  Wait until some of the testimonials go viral.  The website currently has real testimonials from veterans sharing their story of how easy it was to get rated.  The message from VetComm is that there is nothing to lose and almost everyone walks away with something.  

The CEO is a networking guru and has pictures with top politicians and generals all supporting her efforts.  These are top politicians like Senator Ted Cruz, Roger Marshall, Earnest Grassley, John Cornyn, and Deb Fischer. Then there are the celebrity endorsements from Randy Couture, Ken Shamrock, Donald Trump, Jr., Sarah Palin, Matt Thomas of Parmalee, Carl Higbee, and Gretchen Carlson. 

Revenue Estimates

The revenue off of her 1.0 million veteran goal could be $500 million considering that the average fee is about $500 dollars assuming the majority will opt for the do it yourself rating instead of the “Done-For-You” service.  The company has no formal projections but if they do release something it could be a big catalyst. The costs of goods sold on this are marketing and the customer support line.  VetComm is essentially getting a small sliver of the $30 billion monthly pot of money the government has agreed to pay out but hasn’t had to because the veterans haven’t filled out their paperwork.  Kate Monroe is creating a social movement in the veteran community to take what they are owed and not let politicians repurpose those funds for other special interests     

Acquisition Synergy         

There is a sense of community that VetComm is trying to establish.  Many of the vets that suffer from PTSD would be helped by the functional mushroom products.  There is also a planned expansion of the product line that the company alluded to last year.  A natural expansion of the line could mean that other products like gummy bears, capsules, or other delivery systems are introduced.       

Financial Analysis

The company has 332 million shares in the O/S and has 148 million in the float.  The current market cap is sitting at close to $10 million. Since they are an operational company with revenues they had their Shell Status designation removed from OTC Markets.  The company has also openly stated that they are not going to reverse split the stock or take on additional dilution.  This might be interpreted to mean that they won’t exceed the authorized limit of 500 million shares.    

This means the VetComm acquisition is likely to be paid with treasury stock.  In early 2022 87.75 million shares were brought back into treasury and could easily be reissued for the purchase.  This is complete speculation because the details of the acquisition have yet to be released but the bread crumbs lead to a very shareholder friendly transaction.  

Risks

There is a definitive deal to acquire VetComm, but investors are not privy to the terms of the deal. Therein lies the major risk. Investors have no idea how much dilution is possible in the acquisition nor do they know how strong the underlying business is. Dilution would have to be less than the authorized max.  It’s impossible to tell if it’s a good deal or a bad deal, although their comments on social media demonstrate it’s going to be very positive.  Leadership is a question too because there is no CEO at the helm.  The filings show Amar Bhatal is the president and the CEO spot is vacant. While it’s reasonable to speculate that Kate Monroe would be the ideal candidate for CEO, she has no public market experience. If the VetComm acquisition were to fall apart many investors could be holding the bag because the underlying mushroom business has not generated sufficient earnings to support the public listing short term.       

Investor Summary

The volume is just starting to ramp off of what looks like a long term bottom so there doesn’t appear to be much downside at the current stock price and plenty of upside to $.12. The mushroom industry is massive, but a unique opportunity exists in servicing veterans.  VetComm is led by a charismatic CEO who might very well take over CEOS.  Her social media standing suggests that she is going to use digital marketing and the power of veteran networking and endorsements to mobilize the veterans.  This deal can almost be considered a Software as a Service (SaaS) deal as it contains those components.  The goal of attaining 1.0 million veterans by year end could translate into massive revenues in the tens of millions or hundreds of millions with little to no customer acquisition acquisition costs (CAC).  It’s too early to tell, but CEOS is one of those long term fundamental plays that should be held in a speculative portfolio. Should they complete the acquisition and give revenue estimates investors could see long term 12 – 18 month upside up to $1.00 assuming a fully diluted 500 million O/S and $500 million in revenues trading at a multiple of 1X sales. The downside risk is nominal given their rapidly expanding mushroom line that could be cash flow positive on its own this year.  

Disclosure: MicroCapDaily has not been compensated for this article. This post was written by a guest contributor and posted on our website for free. The owners of MicroCapDaily have no position in any of the securities mentioned.

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