Wow, this business is wound-up like a spring.
The increase in high quality staff is a required calculated risk on the expectation of future business.
It must be incredibly frustrating for management awaiting contract signatures.
We will sit in this holding pattern until contracts are signed and the market has confirmation of Wrkr's future.
4C Observations- This quarter's cash flow optics are flattered by the inclusion of the $328K R&D payment.
- Yet, the late payment of $531k (a milestone payment) would have made this quarter's results quite impressive, but alias, we will have to await next quarter's 4c to confirm that milestone payment from an accounting perspective.
- My guess, the milestone payment is in relation to Hong Kong project delivery, which I expect is now up and running.
- Cash at bank of $6.72M is adequate to complete expected super fund onboarding but I bet management are now thankful for upsizing the oversubscribed SPP, considering the unexpected time delay of moving from industry super fund trial phase into production phase.
- The lengthy delay of super fund and payroll providers leaves me with no other conclusion that Wrkr will require to onboard multiple customers simultaneously. Once again, I see an all hands on deck Christmas coming for Wrkr staff. That's three years in a row. My early thanks to management and staff, but it did not need to be this way if clients had moved earlier in their decision making.
- I note that API development increased markedly over the past 6 months with what I think will be a big payoff re onboarding payroll providers and small business clients with the subsequent closure of the SBSCH.
- Costs control remains impressive for a microcap (thanks Karen).
It is worth noting again that future revenue will be impacted by these contract delays. It may get a bit messy, onboarding multiple clients simultaneously will require cash to be spent, with expected (but not malicious) delays of invoice payments from MUFG for meeting production/onboarding milestones and longtail recurring income streams that take a full 12 months to truly have an affect on the bottom line.
Cash InflowsQtr 1 $2.302M
Qtr 2 $1.897M
Qtr 3 $2.644M
Total $6.843M
Staff CostsQtr 1 $1.368M
Qtr 2 $1.636M
Qtr 3 $1.673M (Expect a jump in staff costs next qtr)
Total $4.677M
InvestmentQtr 1 $531k
Qtr 2 $622k
Qtr 3 $959k
Total $2.112M (this is a serious amount of investment for a microcap without reciprocal contracts to match)
Cash at BankQtr 1 $8.599M
Qtr 2 $7.218M
Qtr 3 $6.720M
Spent $1.879M
Its frustrating that we go another quarter without having contract announcements. I can't wait to be vindicated about this company.
Ian
