Yes. The share price ‘targets’ are fanciful IMO and the revenue forecasts are more like “This is what the revenue could be if the satellites were commissioned to management’s timelines and assuming customers were lining up and will buy as soon as the satellites are delivering data.”
However, despite this, I still find the financial projections useful to look at how the accounts would scale under even wildly optimistic scenarios.
Unfortunately, the cashflow forecast does not look at all good, even under a wildly optimistic scenario where the satellites are finally commissioned as per management’s latest timelines. In my opinion.
This projections assumes they raise 11m Euro this year, and then 7.5m Euro each year after that. 11 million Euro is approximately $18m AUD and getting close to the market cap of the company.
Worryingly, using their projections, they would still end the year with only 1 million Euro cash in hand, even if they raised this $18mAUD. That’s less than their loan covenant, and doesn’t leave much headroom for anything to go wrong.
The business needs lots of cash to come in for a long time, even under an optimistic revenue scenario. This makes sense, because Spire are still making losses and they have grown to $100mUSD ARR revenue.
Is it realistic to access this amount of cash in current market conditions and where they have had so many disappointments with the satellites? Where is the shareholder meeting that was supposedly urgently needed by the end of March/early April to approve the next capital raise in time?
KSS Price at posting:
12.0¢ Sentiment: None Disclosure: Not Held
