Line 1 scenario is likely to be where we are. However, it is too...

Line 1 scenario is likely to be where we are. However, it is too simplistic a description of p/l. What gives real insight is fixed cost vs variable cost. Companies go broke eventually if price is less than variable cost plus fixed cost (and if no shareholder funds come to save the day). Companies go broke immediately if price does not cover variable cost. My take is that at current volumes LiFX is unprofitable as the revenue likely covers variable cost but not the fixed cost. Typical in a start-up phase. And projected aggressive growth rates takes the company to a position where revenue covers both variable cost (as it always has) as well as fixed costs. Obviously efforts to lower costs (both variable and fixed) also help achieve profitability...just as long as it doesn't compromise the critically needed aggressive growth rates at this very early stage of the business.

Manufacturing costs are likely to be variable costs. As are sales costs. As are tariffs. And as are interest on working capital finance. However, things such as rents and corporate/admin staff costs and any interest on LT debt (if any) are likely to be fixed costs.

All IMO and GLTA.