Ann: Corporate Update and Quarterly Reporting, page-86

Some of the commentary on here is quite simply frightening.


Fitza, I dont know what announcement(s) you looked at for NOR, BRN, ZIP etc - but the numbers you are posting don't match what I see. Neither have posted cash receipts of $500k for the quarter.

Here is what I see for ZIP:

• $215k receipts for the quarter, $531k year to date (last 6 months)
• $1.7 million on marketing to acquire around 5 million users (34c / user) in 6 months
• Cash outlflows from operations $2.1 million ($3.7 last 6 months)
• Cash left $2.7 million

For NOR

• $215k receipts for the quarter, $216k year to date (last 6 months)
• $2.4 million marketing to acquire around 2.7 million users so far ( 88c / user) in 6 months
• Cash outflows from operations $3.3 million ($4.7 million last 6 months)
• Cash left $6.5 million

Now I am not saying ZIP is an example of what an ideal company cash flows would be, personally I think both are looking pretty dire.

Yes, NOR have more cash left, just enough for another couple of quarters. Zip probably only enough for one. Basically though they are very similar so far, spending money much much much faster than its coming in. This will have to change or a CR is inevitable.


A few other points;

• To those who say its unreasonable to extrapolate the cash burn. Tell that to management who extrapolated the revenue run rate in the first place.
  
  
• Revenue /= profit. Fixed costs aside, there is a cost to provide the service - specifically line rental, call termination, payment process, support etc.
• If the magical $2 million revenue is achieved, I would expect they would see less than 30% as actual profit (going by the COGS figures thus far)

• Hope is not a strategy

CORONA might pop out of the blue one day and bring in some cash. The longer it lingers, the more uncertainty there will be. The market hates uncertainty.

In the long run, Norwood might be a great success, whether its because of WorldPhone, CORONA or their next pivot - who tips in more money along the way and ends up being shareholders will be the question. Probably not answerable for another few quarters at the very, very least.