HHI 0.00% 0.5¢ health house international limited

DSG if the company needs to raise more cash for working capital...

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  1. 8,720 Posts.
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    DSG if the company needs to raise more cash for working capital until it becomes cashflow positive, they basically have 3 options:

    1. Sell assets - I don't believe VPC is in a position to do that
    2. Debt funding
    3. Equity funding

    From my observations, 9 out of 10 small or micro caps raise funds for working capital when they need it by issuing more equity - its very rare for them to be able to raise debt funding, especially if they don't have assets (like a producing oil lease), or an offtake agreement to provide security to lenders - VPC is not in a position to do either imo.

    I'm not in any way saying it will happen, but until cashflow positive there is always the risk. The best thing the company can do to avoid it is to sign new clients and increase revenue to generate free cashflow.

    I'd definitely like to buy some more because I like what the company is doing, but I'll wait until either its around 3c if no positive news in the short term or up to 5c if there is.

    Cheers, Sharks.
 
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