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Thanks for the detailed reply. Much appreciated.

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19/07/19

03:28

Post #: 39591604
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Originally posted by djwally: ↑

perhaps I see your confusion. without a doubt EN1 will be 'profitable' later this year. I'm just not hanging on 'cash flow positive 4C's'.

the point I made in my earlier post is that they need to turn over about $4.8M in revenue to be 'profitable' in an accrual sense I.e in a P&L statement. I see very little chance they won't turn over in excess if $4.8M revenue in Q3. so they will be a profitable company at least on Q3 run rate. but I hope they reinvest this profit into future growth by buying more inventory which will show up as COGS for the next quarter. because of the lag in payment terms this means receipts (cash) is always lagging slightly.

so IMO there is nothing wrong with using debt financing to grow your revenue so long as your profit margin easily exceeds the financing costs. which it clearly does.

hope this makes more sense.

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Thanks for the detailed reply. Much appreciated.

EN1 Price at posting: 3.9¢ Sentiment: None Disclosure: Held
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