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Fair commentary. I dont think cash receipts will point towards...

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06/03/19

17:50

Post #: 37675615
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Originally posted by BullBear45: ↑

It will come down to this quarter and next. I expect a material uplift in cash receipts, as well as a modest reduction in cash payments.

There are no buyers because the net cash outflows point to a run out of cash within a year. The market doesn't believe at all in current customer wins and the pipeline. The rights offer also sucked up all demand from existing holders looking to double down.

Gooroo is a great speculative pick at this price. It's an insanely cheap market cap that can easily multiply many times over, and there's a lot of revenue growth to come from customers already won. The floor in the price is not far from where it is now, if you attribute a typical value to a shell. There aren't many shares on the register.

I am hoping receipts this quarter reach $400k, and net burn <$500k. If the company reaches these numbers I think there will be visibility to potential break-even and lift the cap on the price. Especially if more pipeline is converted before the result.

My basis is:
Gooroo's biggest customers weren't signed until mid/late in the last quarter. They didn't contribute to revenue (let alone cash receipts) in that quarter and will most likely begin to add in this quarter and next.

Existing customers are also growing in value to Gooroo, so this will help with growing receipts this quarter. About three quarters of Gooroo's revenue is recurring so there's a higher base for the following quarters.

Last quarter's disappointing cash receipts figure suffered timing issues. A lot of receivables should've added to the cash balance but didn't settle until this current quarter.

Cash expenses are also expected to come down ~10% this quarter per their announcement.

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Fair commentary. I dont think cash receipts will point towards cash flow positive for some time. I think the market is valuing this at face value: $900k on hand -$800K Cash Burn+CN$550k+$200k Receipts - $720K burn= Not good news. IMO, the company need to pull their finger out and make some big sales, and even have some clients purchase licenses upfront to get positive cashflow whilst keeping some recurring. This will limit the need for more CR and dilution. Fundamentally the monetisation model is flawed.

GOO Price at posting: 3.5¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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