The reason I am not concerned with cash is that:
- They have $2.77m left in the bank
- Costs are forecast at $2.1m next quarter
- If we assume another 23% revenue growth next quarter, as indicated in the commentary, revenue will be at ~1.45m for Q1 (there is a good chance it will be even higher)
- Thus, cashburn next quarter will be ~0.6m
- Thus, the cash balance will be at ~ 2.1m at the end of next quarter
- Following that quarter, I'm expecting cashburn to continue to reduce
- If revenue continues to climb at 20-25% per quarter and costs remain ~2.1m we will be at breakeven in Q3-FY19
- Consequently, the cash balance should be sufficient to take us to breakeven
Even if it was not the case, the #1 shareholder is no doubt willing to provide debt based financing solutions at will on very favourable terms as he has done in the past.
Ann: Quarterly & Full Year Update, page-40
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