At the current burn rate (if maintained), they have ~2.5 quarters of cash left.
The big question is how much more expenditure is required in the area of network rollout costs (~$14.3m spent during the last quarter).
Of slightly greater concern is the operational profile: Q1 receipts = $1.164m Q1 gross margin (in this instance, receipts - cost of sales of $1.082m) = $82,000.
Q1 OPEX (netted out, following interest income of $661K) = $5.427m.
Sales have started, but the pick-up appears either slower than originally anticipated, or the pricing profile is not quite right (ie: eating into margin).
Keep in mind that PEO is a re-seller /bundler of the services. Therefore, the flow through effect here is likely to be quite interesting (ie: what was PEO really expecting out of this; margin mix; etc).
Its early days yet, but the window of opportunity is not that great. Effectively, they have to March to secure critical mass (ie: otherwide the dilutionary cash effect of their current rollout could require a further financial attention).
UNW Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
