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SaberX

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11/11/21

21:00

Post #: 57509648
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Originally posted by npa869: ↑

Actually - last quarter's cash burn from operating was 3.4M (10x what you said).

We have had a few quarters of "cash flow positive", but this doesn't mean the same thing as "we have cash that is growing". The last strategic investor was required because I think reading between the lines, we were almost out.

Put it this way.... we started last quarter with Cash of 3.8M, and had a negative operating cashflow of 3.4M last quarter (that doesn't leave a lot at all). We raised 1.7M from a capital raise, and we start this quarter with only 2.2M - again, doesn't leave a lot of room to manoeuvre.

So - yeh, okay, we all hate capital raises, and dilution is a thing. However, with companies of this size, it's always going to be lumpy and seasonal, so this is par for the course. When we have 5x Revenue, and are continuously profitable, then let's complain about capital raises

If we need cash, and we can get it from a strategic investor (as opposed to paying a firm to raise funds), then this is ideal. Even if it costs us a bit of dilution, it's a far cheaper source of funds. If we went to the market for this, it's starting at a 20%+ discount, with a 7-10% cost of funds. Better to be getting something out of it rather than just bending over.

Let's see what we have, then we can work out if it's great, good or lame.

Bring on Monday!

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The problem is if every 2 quarters a 'strategic investor' placement is required then this will go nowhere for holders.

At some point with the exponential revenue they tout if the net cash isn't coming in the door then clearly bells will start ringing.... the strategic side and 'more to offer' is a positive but i'd imagine most of this is going to be to the benefit of said investor.... hopefully something in it for retail holders.

RLG Price at posting: 2.2¢ Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

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