Nutsy started a great thread (
http://hotcopper.com.au/threads/avoiding-the-dreaded-cr.2448687/#post-14672210) after this latest App 4C announcement - questioning whether or not a capital raising was on the horizon.
Very good question.
My suspicion is yes a CR will be required this year, in fact it will be required by mid year.
Of course all the usual caveats need to be put in play which would negate the need for the company to do a CR. The trade sale of artimist for $200MM; signing a stiffy mist deal with Pfizer with a few million in up-fronts, winning the lottery, spinning off of west coast asset are some of the usual suspects.
It's required because the quarterly burn rate (I use net operating and financial cash flow from the 4C) over the past 12 months or so has ranged from
losses of $460K to $1.9MM.
There is $3MM in the bank - this company (despite all of the great work done by West Coast and Billingham's crew) has at best 3 quarters worth of funds before they make like Greece or Venezuela and are unable to pay their debts. In fact it's 2 quarters because hopefully our recently awarded performance shares CFO should be giving the board the head's up before time so they can run out and tap the market again.
So Carter's comments about 12 months of funding left are misguided at best or FoS at worst.
Kipp's comment on Nutsy's thread about oppies is also true but an additional million bucks at best gives SUD another 3 months to play with.
The only redeeming quality from management recently has been their decision not to table at the last AGM a resolution to further dilute my shareholding by 25%. The apathy expressed by many SUD shareholders/voters (outside of Suda Shareholders Association who were active when it counted) would almost certainly have approved this resolution as well. As it is they can only dilute by 15% (which will entail another 150 MM shares on issue).
Here's the updated graph.
