1) NUH over the last two quarters have had a fairly flat level of receipt intake circa $850k
2) NUH outflows over the last two quarters have been between $3m to $3.3m and that does not include extra costs (cash flows from investing activities table 2 4C) which appear to be around $600 to $800k per quarter
3) Smoothing all that out and proposing the next quarter will be in line with that amount a total $3.85m outflow is quite reasonably expected for March. Stating that though - the Dec 4C did note expected outflows for the next Q would be in the vicinity of $4.5m.
4) NUH cash in bank as of the Dec Q was $5.6m
5)Here comes the tricky part - if receipts fall flat again and they sit within the $800k - $850k area and if NUH has outflows of $4.5m (as projected) they could have about $1.9m left. If, NUH come under their projected outflows and lets say it is only $3.85m and receipts are still flat at $850k then they may have up to $2.5m in the bank
6) If NUH receipts are higher and depending on their outflows the preceding numbers will change again.
7) As NUH are ramping up new products I don't believe they will pull off a low outflow quarter - it does take money to make money and some of their new profits from new products may not come through for a while yet.
8) Despite this, I am more inclined to believe NUH receipts will fall flat circa $850k and their outflows will be in line with their projected outflows circa $4.5m. That would leave NUH with approximately $1.9m in the bank give or take.
9) I'm not going to argue over $100k here or there - because at the end of the day it becomes irrelevant. Whether you have $1.9m or $2.5m in the bank with the high costs of production ramp up and associated costs you start to find yourself in cap raise territory again.
10) The preceding reasons is why I believe NUH are a short in addition to the fact that it is going to be quite a few quarters until NUH can build receipt numbers (if they do at all). If it takes another 5 quarters to ramp up NUH could chew through another $13m plus in capital. Even with 40% Q on Q growth NUH will take 4-5 quarters to hit cash flow positive and then beyond that it has to actually consider making profit. When you see receipts going sideways and then consider NUH has to start doing 40% Q on Q for 5 straight quarters to stop cash burn it starts to bring up some questions regarding achieve-ability.
NUH Price at posting:
9.1¢ Sentiment: Sell Disclosure: Not Held
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