Yes, you are right to say GSS is burning through its cash.Over...

Yes, you are right to say GSS is burning through its cash.

Over the latest 6 month period, its cash balance has declined by more than $10 million. It is at least 6 months late in its application to the FDA and is arguably closer to nine months late. Consequently, its cash balance is at a minimum $10 million less than it should be at the point at which it makes its FDA application; that is, if it eventually makes its application by the end of April 2023.

The situation is worse than this because GSS points out that its successful FDA application can lead to strong revenues. So, in addition to the material weakening of its balance sheet due to its rapidly depleting cash balance (as reported in this and prior quarterly report), there is a further and perhaps greater opportunity cost of foregone revenues.

GSS never did succeed in obtaining FDA approval of its Covid testing kits. Instead, it sold its kits in the US under a special exemption. Now, it is at risk of squandering its most important growth opportunity by its failure to properly implement its application to the FDA in a timely fashion. This is wholly under the control of GSS and it has failed in it implementation. The CEO, Chairman and Board of Directors of GSS are responsible for this. Their silence on this matter is deafening. This also brings into question their competence in securing FDA approval in other indications.

GSS quite simply sees fit not to explain the causes of its repeated delays in making its FDA application.

Christoper Abbott of Maple, Brown Abbott is a material investor in GSS, as are Fidelity. They should insist better from this management, as indeed should all shareholders.

I have retained a buy recommendation on GSS. Should there be a further delay in its application to the FDA I will downgrade my recommendation.