Hi All,Apart from receipts, the 4C didnt hold any real...

Hi All,

Apart from receipts, the 4C didnt hold any real surprises; the cash at end of quarter was pretty close to what I had anticipated 2 months ago on this forum. I also identified/speculated the desperate need for 3DP to raise capital or disclose some visible pathway to survival...before the quarterly...which hasnt happened. So FWIW, here are some re-set observations:

Receipts/receivables: At the half yearly, 3DP had only $0.6m of receivables which is about as low as one could expect to have...so there was little extra left to pull into the Mar Q. IO knew this Q would be very CF tough and called in the $1m placement to keep the boat afloat. That he didnt raise additional in the last 2 months strongly implies he and creditors were very confident of a minimum getting paid ($1.0m in April and $0.4m in early May). IO would have have sat on these clients to cough up in time; he was very good at this earlier in 3DP's life but now realises he has to play a different game when dealing with US mega-coys.

I believe IO knew what was coming: He started reducing head count in late Sept Q...so he knew a CF squeeze was coming...at least 2-3 months before the cuts started happening. Bevan must have got a better 'sense' of the slow down in corporate momentum and acted early.

The Biz: At the Sept peak, I estimate there were approx 45 FTE's at 3DP. The March Q figures suggest about 30 FTE's. This clearly states the coy quickly dialled down from the 'growth' mode in early Sept to 'survive/steady' mode over a 4-6 month period. No business can 'grow' with such a material head count cut: so it is very disappointing that IO continued to promote shorter term growth expectations.

However, I feel that we may have now passed the 'survive' mode and are now in the 'steady the ship and re-set' mode. Perhaps the payable/receivable profile is now better understood and the business/Cflow model now (hopefully) has a less volatile and more visible pathway to assist IO to re-set the coys growth objectives.

To be fair, a lot coys new to the US get this wrong initially....expand too fast into early stage contracts from 1 or 2 mega coys. Their BS and CF become very susceptible to the vagaries and high reliance upon entities who have much higher order and differing priorities/objectives. It is now fairly clear that IO had some naive expectations and reliance on these 'uber' clients and has now had to re-set the ship for 'US growth 2.0'.

IO learnings: I have not spoken to IO but I suspect he has learnt a bit. My first clue is that he (thankfully) did not preface this 4C his usual 'false flag of hope'. I also noted the reduction in 'pump' lines in the quarterly. Hopefully he's ditched and flipped the 'over-promise, under-deliver' method of market management which the market NEVER tolerates twice (let alone the 3-4 times tried on us shareholders). So I'm expecting fewer announcements going forward except those relating xero/low risk outcomes...ie more factual Vs wishful.

It'll take time: The re-set is likely to take 2-4 qtrs and I suspect the market and institutions will now require 2-3 really solid and truly valid business-supporting announcements before acknowledging that IO has sufficiently re-set the corporate growth pathway. It'll now take consistant quality before we can expect any return to the valuation premiums enjoyed briefly in early 2021.

Wouldn't it be 'band-aid rippingly' good if IO could confirm or refute the above? (LOL)

But for now, I'm thinking we'll just have to bide (and survive) our time in the valuation sin bin to hopefully yet slowly re-climb the valuation and credibility ladder with each single and bankable announcement.

Cheers