They are a cash incinerator. I feel for the people who just put another $2M into this.
They've invented a new excuse about cyclical effects, which is interesting, since their previous income history doesn't show any pattern of Q1 being worse than Q4 of the previous year, whether that's pre-COVID or post-COVID. Even the graph in the report shows Q1 being better than Q4 and Q2 (ominously) in net revenue and contribution profit in both 2022 and 2023.
Meanwhile management and board take big cash remuneration out of this company to once again handsomely reward themselves for losing a ton of money as per usual.
Their real burn was over $2M - leaving aside the games about hiding development expenditure as 'capitalized technology costs'. They're going to be out of cash again some point next year - very soon, if the contribution profit / revenue patterns for 2022/2023 are repeated in 2024, and they are racking up debt. They've raised a tiny amount of money and it's hard to see that subsequent raises will be on workable terms.
A quick acquisition is what they should be looking for. Sell to one of their big customers and call it a day.
JAY Price at posting:
6.4¢ Sentiment: Sell Disclosure: Not Held
