Ann: China Revenue Update, page-85

Thank to those who sold today. For those interested, it will be worth your while to look at the 4Q14 and 1Q15 quarterlies. You might notice that although the company generated ~$1.6mn in revenues over those 2 quarters, they booked zero receipts from their customers... Ergo, one can infer that receipts lag revenue with a lag (as the announcement confirmed today) of ~2 quarters (give or take). For example, this quarter's receipts (2Q16) are 99% of the revenue generated 2 quarters ago (4Q15). Last quarter's (1Q16) receipts were 74% of the 2 quarters before that (3Q15). The quarter before that (4Q15), receipts were 107% of 2Q15's revenue....To make it simpler - the revenues generated over the 3 quarters mentioned was $3.275mn and receipts over the periods corresponding to 2 quarters past is $3.06mn...for a 93.5% conversion if you look at things in their proper context... That is, with a 2 quarter lag. Looking quarter to quarter, like sellers did today is, quite simply wrong, and unfortunately, has meant they have sold based on bad intel. The price will do whatever it will do and maybe selling today was right but it won't be right because of any issues over cash conversion.