Ann: Appendix 4D 31 December 2018, page-42

Since your post has received so much attention, I think I should bring up a few things.  I will try to keep it factual - I think all the numbers are correct but feel free to correct any errors.

Regarding the R&D payment, which was not received during the period, but why wasn't it accrued?  The note in the Director's Report says "refund is expected to be received in the 2nd half of this financial year."  I would have thought it was material enough to make sure it gets lodged and/or accrue it.  The auditors would have asked why it wasn't accrued also. Sounds strange to me.  Even if you add $800k into the cashflow for H1, it is still $475k from being cashflow positive.

"revenue total $1,147
cash received $641
that leaves $506k accrued for the next cashflow"
Clearly this is not correct as you are trying to compare cash and accrual accounting.  The revenue of $1,147 includes three basic accounting entries: (1) accrual reversals from last period, (2) actual revenue recognized during this period and (3) revenue accrued during this period.  You would need to go back to the prior periods to get the correct number for the amount to be included "next cashflow".  Even then, it really has no real use.  Mixing accrual accounting and cash accounting easily misleads and is at best useless and at worse misleading.

What about the Trade and Other Receivables of $729k?  You didn't mention that.  This is up from $254k at June 30.  So an increase of $475k in accruals. Those that don't understand accounting fully, if it is included in the Trade and Other Receivables, then it also appears in the Revenue figure in the financial statements.  A total of $729k accrued at the end of H1 doesn't really tell us what the detail is. Is this partly to do with the change in the terms with P&G where revenue is recognized differently? I would assume so. Either way, revenue has been recognized in the accounts of $729k and OBJ still hasn't received the cash.

Actual P&G revenue.
Last year in H1, revenue from P&G was $682k.  This year it was $1,047k.  That is an increase in revenue from P&G of $365k.  This is not much considering the change in P&G payment/invoice terms and all the "hype" from new markets, advertising, Instagram posts, etc that is routinely seen on HC.  Interestingly, for the FY18 full year, revenue from P&G was $1,072k for the full year, meaning that H2 revenue was just $389k.  Take from that whatever you like.

Changes in P&G terms.
In theory, the next 4C could be $729k, more than this, or less. Again, don't keep on mixing cash with accrual accounting. The next 4C really won't tell much of a story.  If the P&G terms have changed (I can't remember which announcement and the exact wording) where OBJ can recognize the revenue when the products are ordered, whereas previously it was not recognized until P&G had the product leave the warehouse and calculated the payment to OBJ. This is an important distinction as the 4C becomes a trailing indicator, not a leading indicator it once was.  The March 4C won't really tell anything.  The July 4C will be a mixed bag and won't help much as you won't know if there are late payments, early payments, etc.  The financial statements result will tell the real story.

From a pure accounting viewpoint, a H1 loss of -$788k in H1 and the Cashflow of -$1,275k is never good news.  OBJ MV still relies on speculation and forward-looking statements.  Whatever way you look at that, it is pretty much the same story as previous periods.  The questions that remain are: How much will the R&D rebate be? When will the company be cashflow positive and also make an accounting profit? How low will the bank account go before they do a capital raising? Only time will tell.