Hi all A few things to set straight as there are some...

Hi all

A few things to set straight as there are some mis-understandings floating around here:

1. $350k owing: the note in the 4C states " $352k still to be received from capital raising" - this relates to funds not received from the November capital raising, nothing to do with trade receivables from customers.

2.  $1.3m facility:
@asb83 "In other words, debt is going to keep racking up. They are essentially saying costs are going to go higher in order to increase revenue".
This is not how the facility works. It is a trade finance facility, when we invoice a customer, the trade finance company pays us x% upfront, takes a small % fee of the invoice value, and then remits to us the remaining balance (less the fee) when the customer pays the invoice. The "debt" that accumulates is the same amount that our customer would ordinarily owe us. So what it does is allow us to not wait to collect customer receipts, when we invoice we get the majority of the invoice value upfront. The facility will be able to expand to accommodate increasing revenue, so again, the % impact to our profit margin stays the same regardless of the size of the facility (in fact we would negotiate a lower fee as our revenue increases).

@djbowe86: "I'm sure I'm not alone here in wanting to know how much RBO are expected to pay back." As above, the facility is paid back by our customers paying their invoices when they fall due. At this stage, this type of facility is an efficient way for us to leverage our balance sheet and not tap equity markets for cash to fund as expanding working capital requirement.

3. Interest rate: currently this is commercially confidential by our partner however we are working with them to disclose this information. It is a % of invoice value, therefore we are not paying interest on the total facility as  mentioned above. We only pay the fee for each invoice that we factor. There is no benefit whatsoever for us to withhold this information.

4. Inventory value:
@sydneyguy: "The commentary says 350 to be received But Accounts indicate it should be 1.67 m!!!!!!
Why is that?"
Two completely different things. Per the 4C, $352k relates to funds not received from November capital raising, not accounts receivable. Per accounting standards, inventory on our balance sheet is calculated at lower of cost and NRV. Retail value of that inventory therefore needs to be grossed up. Our GP margins are in our reports, Dec-17 half year on a reported basis was 34%.

Hopefully that clears a few things up.  

I understand the frustration on here with how the reporting is delivered as the format of the 4C's does not provide a total picture of the financial position of the company.

Cheers
Ryan