Yes - good observation V but this will/should be more than...

Yes - good observation V but this will/should be more than offset through airtime earnings in the current period. Let me explain...

Creditors rose which is a function of BCC buying all the equipment upfront to satisfy the insatiable demand for Zoleo but the company has improved their net working capital position which is better. Essentially they’re using better terms of trade to grow quickly and that is being funded through Carl’s company instead of equity.

It’s too hard to work out on my phone but when you work out Net working capital / sales you will see a huge improvement. NWC is trade debtors + inventory - trade creditors. When you divide it by sales you can work out their working capital efficiency and working capital intensity. The lower the ratio the better.

Beam’s short term Achilles heal is the funding gap between extremely high demand for units which the company funds vs the lag of high margin airtime which drip feeds in monthly after around 6 months when a unit is invoiced.

This is a short term pain point because the company is small, not hugely capitalised and is growing extremely fast - when the company becomes a lot larger this risk will dissipate.

The equity risk is what is called ‘over trading’ which is when the company grows a lot faster than it collects money and leaves it prone to running out of cash.

In this instance, the company has stretched creditors in the short term but what you’re not seeing is the high margin airtime earnings that will come through sales that have already been made. That will more than offset the creditors balance over the next 6 months - not that creditors will go to zero but that’s what will drive (IMO) an improvement in cashflow over the next 6 months.

A bit of a technical response but hopefully it makes sense.