Well the last raise was pretty clearly to pay back the convertible note and a small amount of working capital as they were running negative cash.
Without balance sheet flexibility they are capital constrained and will find it hard to progress and grow. i see the next cap raise as necessary as getting the company to a position where it can grow from a decent base.
It is still early days of integrating their products into a couple of platforms so unsure how much progress they have had this quarter, sales pipelines and distribution dont just switch on.
A bounce-back in IDTF sales and a small increase in product sales or ongoing revenues ($500k) would move them close to break even on a quarterly operating basis, thats not that bad for a company at this stage. My concerns are there haven't been any discernible increase in revenue over the last 12months, but the regulatory approvals have opened up that possibility.
Whilst a raise at this level in shares would be hard to swallow, they dont really have much choice if we want to see some significant progress in sales. They need to hire in the US to boost sales and potentially acquire further revenues, IDTFs will be a good distribution platform for the PATCH primarily, but possibly the PRIZMA as well. They are in the aged care sector for PRIZMA which is a good start, but again need to expand sales and distribution in this area.
Personally i doubt their is a large purchase order on the cards for the moment as they "arent' in the business of selling boxes" they are in the business of "trying" to generate recurring revenue which the market values much higher than one off sales.
I see progress, but the dilution, lack of communication and ongoing management questions are the primary concerns here alongside the lack of revenue growth.
Im sticking with it, have voted no against performance shares given current situation and lack of any foreseeable progress out side of regulatory approvals. Startups are tough (from experience) as are medical device companies....i would also say the equity performance stock is common place in startups that cant pay salaries, more commonly known as sweat equity
Without great risk, there is no great reward
GMV Price at posting:
5.2¢ Sentiment: Buy Disclosure: Held
