Ann: Quarterly Activities Report and Appendix 4C, page-8

We probably aren't that far off as you mentioned. Especially given markets are forward looking.

The cost of manufacturing is a forward indicator (you have to manufacture first, then sell in upcoming quarters) - and right now, the manufacturing costs are below current receipts already. The current receipts of around $2.2m are actually based on a cost base of around $1.5m (~ average of previous 2 quarters' manufacturing cashflows) resulting in around a 35% gross margin, which matches accrual numbers from annual report.

Using similar growth rate assumptions, the next two quarters combined should bring around $6m of receipts, with the cost of goods sold for these receipts of $4m. This leaves around $2m left to pay for corporate overheads etc which takes the company to about neutral.

The only thing left is to deal with a particularly strong growth in sales, which means cost of manufacturing will spike, before the sales are realised. This will in short term require capital - but at this stage of the business, they could probably choose to use trade factoring and other forms of financing and advance financing from H&H at a discounted cost plus.

I hope management isn't particularly lazy in thinking about this issue and stay on the front foot to deal with inventory drag, and not just press the equity raise button for convenience.