@Ryes ... While the cash flow needs to be watched and they need to continue to sell product, I think the situation is more nuanced than just saying their go forward needs are just 4x last quarters cash flow.
So last quarter the cash draw was $6,046,000 ... however we need to make the following adjustments to get a better understanding of the "real" situation.
- $1.8m during the period on non-recurring capital items and product development, including costs relating to the FDA application for Xprecia Prime
- $1.2m on inventory relating to new products launched in markets around the world.
So those two items alone would reduce the cash used to @$3 million.
I would also speculate that our very good December sales will have been invoiced but no cash would have been received at year end and would not be due until the new year. So I reckon to reconcile that number we can assume that we have accounts receivable of at least $1.2 million that will be received in Q1.
So if that is the case that would take the reconciled operational cash burn down to @$1.8 million for the quarter.
Once you add back R&D tax refunds that gives @ 12 to 18 months of cash runway. If you assume we are able to increase overall revenue then that number drops again. Clearly this number is going to be lumpy from quarter to quarter for things like bonuses or additional inventory and they will need to manage these peaks and troughs which in the worst case might require a few million of equity or debt. However, that said on a "clean" blended basis the cashflow number is significantly better than the headline in the 4C would signify.
