Capital Raising ?, page-25

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Beale

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15/06/16

16:07

Post #: 18038797
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Originally posted by Doole ↑

I agree.

Careful when reading only the bottom line Beale. The co DIDNT make a profit last quarter, what put them in the black was a tax break (discussed on here at the time and disclosed to ASX in annual). But Westcoast DID reduce it's losses to 'nearly not' losing money (about -300k? was it?). Note that this reduction appears to have been made through staff cuts etc at Westcoast (also in announcements and discussed here). Aggressive cost cutting in a company does have the potential to affect performance negatively (gratuitous fact). But hey the government do it all the time and the schools and hospitals somehow stay open. The next ann report will tell whether it has affected Westcoast's performance.

Looking at their annuals the last 3-years, each one has well over 1M just in general expenses (unexplained, how do you put 30% of your gross as an unexplained/coded expense?), plus there is in those reports between 400k and 1.3M in legals every year. I assume this will rise significantly now with HCBP claim.

The annuals also appear to say that Suda appear to rely on Westcoast financially, but Westcoast has it's own legal war going on (discussed on here which no-one seems to know anything about? and the co haven't disclosed?) Westcoast's gross I think was over 4M last year? but no profit and this as a distributor of product (no patents, development costs, etc), they definitely seem to have their own issues/cash drain to resolve.

Factoring all that in and knowing the obligations to be an ASX listed co, whatever cashburn you can guess at, I have to agree with Choc that Sud does seem to be in a very fragile financial position right now. NW and SC saying they aren't "planning" a CR doesn't mean it won't happen. Imho the statement can be countered by delivering a line like "there have been unforeseen events in the last quarter that have required us to re-evaluate our CR position/plan" etc. No doubt the co hopes the implied costs of defending against the HCBP claim will move Sud execs out of the firing line just prior to/when announcing a CR that (imo) had to come soon anyway. But who knows for sure, there are other ways to run numbers, always. But I believed then and still believe the wording they chose around the CR question asked of them was chosen 'very carefully'. And why not, who would knowingly paint themselves into a corner?

My guess (fwiw) is sh won't see anything till August/September. Sud have definitely moved the posts out past eofy using the smell of an oily rag - whose got the match?

Expand

Doole

A "$500k positive cash position outcome" doesn't suggest anything towards a profitable outcome for the quarter (but it does put to rest another of Dougs outlandish unsubstantiated guestimates about real time supposed numbers ).

Regarding a CR your revisiting the HC hot topic from back in March / April that didn't eventuate.

Unless you know otherwise the cash position should be around the $3 MIL mark which gives them another 4-6 months to burn down towards the $1.5 MIL cash floor to trigger a raising. Here's hoping a nice upfront deal can land prior.

Happy for you to put some numbers together to substantiate otherwise but have some calcs to back your argument.

SUD Price at posting: 2.3¢ Sentiment: Buy Disclosure: Held
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