EVR’s plan is to make audio and visual recordings of concerts in high definition and then release them on its MelodyVR app. The company has already signed a framework agreement with major record labels Sony and Universal Music Group and is building up a catalogue of thousands of concerts, including from some hugely popular acts.

On the distribution and marketing side there will be assistance from a recently signed agreement with Microsoft that will see the Seattle tech giant invest cash and expertise into building the app while also marketing the MelodyVR name across its Windows devices.

Understandably, investors have become quite enamoured with the idea of getting in on EVH at the beginning. That’s why the company’s share price has risen over 120% in the past year alone.

However, there are a few issues that would-be investors should be aware of. For one, the company’s MelodyVR app isn’t even released to the public yet. The blame for this doesn’t lie with the company though as it’s waiting for the actual VR hardware to improve enough that it’s library of concerts will actually appear in high definition as they were recorded.

Of course, without an app that is selling access to these concert recordings, the company receives no revenue. And as it races to position itself as the market leader before competitors can take that crown, investments must be made. Indeed, in the half year to June operating, losses rose to £2.6m, the same amount lost in all of 2016. The company does have £6.5m cash on hand following a recent rights issue but investors shouldn’t be surprised if they’re tapped for funds again, especially if VR hardware improvement is slower than hoped.

EVH has a compelling investment case but for those investors like myself who think VR is simply the next 3D printing, a valuable technology but one with limited mass appeal, it may not prove the wisest investment.

Is profitable growth around the corner?

One high-flying small cap that’s actually producing sales already is Australian supercapacitor designer Cap-XX (LSE: CAPX). The company’s share price has risen over 180% over the past year as demand for its supercapacitors has increased across industries – as varied as cars and wearable devices.

In the year to June, revenue of A$4.1m was down on the A$5m posted in the year prior. Management blamed this on the timing of contract signings and said it still believes negotiations for several large deals will be completed successfully by the end of 2017.

Cap-XX is still loss-making with pre-tax losses rising to A$1.6m for the year. That said, management is doing well to trim operating costs by slashing administration expenses while maintaining a high R&D spend. Furthermore, increasing numbers of royalty licensing agreements should lead to rising profits in the coming quarters. Investing in loss-making small-caps isn’t my cup of tea but I’ll follow Cap-XX closely as it does appear to have solid growth prospects from targeting the fast-growing Internet of Things market.

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But the shares took a tumble today, dropping 18% by the time of writing, to 4.05p, caused by a 27% fall in revenue for the six months to December 2015. That was, we were told, due to the deferment of some orders combined with increasing project lead time. The deferments were known in October, so might the price fall be a bit of an over-reaction?

Well, there was an increased net loss, of A$1.3m, and the firm reported cash reserves of just A$0.9m — although a new patent licence agreed after the end of the period should bring CAP-XX an up-front payment of at least A$2.4m. There are no forecasts for profits yet — in fact, there are no forecasts at all —  so it’s hard to quantify. A big risk or a company with great potential? Possibly both.

Pretty skin

We also had interim results from Sinclair Pharma (LSE: SPH) today. They were greeted with a little more enthusiasm and the share price gained 3.4% to 34.6p as a result. Sinclair, which specialises in aesthetic dermatology (skin lifiting, collagen stimulation, and things like that), reported a loss of £14.1m for the period, up from £10.7m, with a 2.8p loss per share compared to 2.1p a year previously.

That came from an expected fall in sales to £7.7m, from £10.5m, attributed to “planned distributor de-stocking“. But the third quarter is expected to bring revenue in excess of £8m, and along with an amendment to the payment terms for Sinclair’s acquisition of AQTIS Medical BV, that pleased the markets. The disposal of Sinclair’s non-aesthetics brought in £132m, enabling it to clear all debt and leaving net cash of £75.4m at 31 December.

With losses expected to continue for at least the next two years, making any valuation of the company pretty difficult, it’s a big risk — but it could be one worth taking.

A great start

Since flotation in February 2014, shares in Manx Telecom (LSE: MANX) have put on 34% to reach 215p. And on top of that, the company paid out a 5.6% dividend for 2014, and has just announced a 5% rise in its 2015 dividend to 10.4p — yielding 4.8% on today’s elevated share price.

Revenues were pretty flat for the year, but underlying pre-tax profit gained 27.9% with underlying EPS up 19.4%, and the company recorded strong operational cash flow of £25.4m. How does it do so well? Having a monopoly on fixed-line communications in the Isle of Man certainly helps (and the firm has just renewed its government contract for another five years), and it also has about three quarters of the island’s mobile business.

With 4G rollouts continuing (after helping boost mobile revenues by 9.3% in 2015), forecasts suggest more of the same over the next couple of years, with the firm’s progressive dividend policy set to boost the annual cash handout by 5% per year.

The post Should You Buy Cap-XX Limited, Sinclair Pharma PLC And Manx Telecom PLC After Today’s Results? appeared first on The Motley Fool UK.