Details in the Q4 4C statement saw Spacetalk burn a record $2.2m in cash, as compared to burning $3m for Q1, Q2 and Q3 combined.
Spacetalk started Q4 with $5.2m, burned $2.2m and had just $3m left at June 30th. Of course, with July now 5 weeks behind us, the cash balance will be lower today, likely to be $2 m.
Nett Full Year 2023 cash burn was a massive $7.36m of which $2.36m was raised from investors in a botched attempt to raise $4m in November which only resulted in a petty $1.3 m raised of which the 5 Directors tipped in a paltry $150k themselves.
Let’s also not forget Spacetalk’s $5m secured debt with Pure Asset Management, which means their net cash position at June 30 was -$3m and likely to be a shocking -$4m today.
Debt Covenants
Pure’s standard debt covenants normally include a minimum cash holding of $1.0m-$1.5m, which Spacetalk is on track to breach by October, or sooner. The Boards non-disclosure of debt covenants to investors is another issue.
The Board dressed up their recent 4C statement to spin they’ll be out of cash by December (rather than October). They did this by mischievously classifying $739,000 wage expenses for software developers as ‘intellectual property investments’, see below.
At a time when Spacetalk on the brink of going under, and shareholders about to loose all, we see the Spacetalk Board continue to deliberately and pathetically lie and mislead, treating investors like fools.
Within 45-60 days we’ll see the Directors coming back to us poor shareholders with their cap in hand begging for more money (unless the $5m Pure Asset Management lender doesn’t kick them all out first), like they truly deserve.
Watch out for the upcoming Spacetalk Share Purchase Plan(SPP) or other creative and manipulative capital raising attempt soon.
Get your cheque books out folks or watch Spacetalk go under.
Pure Asset Management’s removal of the Board and taking control is the best thing that can happen to the company to save what’s left.
(20min delay)