Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-4

Additional analyze from DeepSeek

**Financial Auditor and Stock Expert Opinion on Range International Limited’s Q1 2025 Report**

### **Key Positives**

1. **Revenue Growth**:

- Q1 2025 revenue rose 51% YoY (vs. Q1 2024) and 7% above the 2024 quarterly average, indicating sustained demand despite macroeconomic headwinds.

- Gross margin held steady at 32%, and EBITDA margin improved to 6% (from 2% in Q4 2024), reflecting better cost control and operational efficiency.

2. **Strategic Initiatives**:

- Expansion into **pallet rentals** (Indonesia/Philippines) and **local production in the Philippines** aligns with market opportunities. Higher pallet prices in the Philippines (due to timber scarcity) and supportive legislation could boost margins.

- Existing Indonesian production capacity is underutilized (3x 2024 sales), providing scalability.

3. **Governance**:

- Minimal related-party payments ($1k) and directors waiving fees demonstrate prudent cash management.

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### **Key Risks and Concerns**

1. **Cash Position and Burn Rate**:

- **Critical liquidity issue**: Cash reserves fell to **$76k** (from $336k in Q4 2024), with a quarterly burn of **$246k**. Total available funding ($438k) covers only **1.8 quarters**, necessitating immediate action (e.g., capital raising or accelerated cash flow improvements).

- High inventory and receivables contributed to the burn; tighter working capital management is essential.

2. **Operational Risks**:

- **Feedstock disruptions** (polyal supplier failures) reduced Q1 revenue by **$250k**. While resolved in Q2, reliance on two suppliers remains a vulnerability.

- **Indonesian tax disputes** (VAT and withholding tax) could result in material liabilities if rulings are unfavorable.

3. **Expansion Challenges**:

- Philippines expansion requires upfront capex and working capital. Freight savings and higher margins are compelling, but execution risks (e.g., setup delays, quality control) could strain resources.

4. **Market Risks**:

- Economic uncertainty and customer budget constraints (noted in the report) may delay order conversions.

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### **Recommendations**

1. **Immediate Funding**: Prioritize capital raising (equity/debt) to extend the runway beyond 1.8 quarters.

2. **Diversify Feedstock Suppliers**: Mitigate supply chain risks by onboarding additional polyal suppliers.

3. **Working Capital Optimization**: Reduce inventory/receivables days and negotiate extended payables terms.

4. **Monitor Tax Litigation**: Set aside provisions for potential liabilities and engage proactively with Indonesian authorities.

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### **Stock Perspective**

- **Bull Case**: Successful expansion into rentals and Philippines production could drive revenue growth (20%+ CAGR) and margin expansion (30%+ gross margin).

- **Bear Case**: Liquidity crunch, unresolved tax disputes, or further feedstock disruptions could lead to equity dilution or insolvency.

**Verdict**: High-risk, high-reward play. Investors should monitor Q2 2025 cash flows, tax case developments, and progress on growth initiatives. A capital raise is likely imminent.