Ann: Clean Seas FY18 Results Investor Presentation, page-10

The company just doesnt have the free cash flow to support its growth plans Redant. The headline sales numbers are great but they dont translate to cash. By no means does this mean that they will go broke but the SP will struggle as the cash has to come from somewhere. The trade finance facilities + cash in bank will only last a few quarters. Also trade finance is expensive in terms of funding sources. The interest expense will eat into profits and net free cash. The company cant source cheaper funding as they dont have the earnings quality. I.e not cash flow positive. If they use those finance facilities it will delay/degrade CF/profit figures. Its a trade off.

Take a look at last Q4 report. Expected cash outflows over $10M. There is no way they can cover that whilst maintaining growth plans i.e marketing spend, new leases, new equipment (pens etc) to expand biomass. This is exactly why they've detailed a 'possible' cash profit (positive operating cash flow) in FY21. The issue facing CSS is revenues. They need to reach 'x' revenues so as to become cash flow positive. They are not there yet clearly. However to reach that inflection pt requires capex and or marketing dollars.

Profits are looking great but below my original forecasts. But that means nothing if youre CF negative. At the end of the day they'll need to do another CR which I expect in june CY19 after full yr profit forecasts are reported thus supporting SP in prep for another CR. But in the interim it wont move much. Even without conducting full fundamental analysis on fin. accts the tech charts are showing that the SP is really struggling. The mkt knows a CR will be required.