All,In the lead-up to the Q2 Quarterly, I thought it was worth...

All,

In the lead-up to the Q2 Quarterly, I thought it was worth taking stock of where we are at, and also get views on what people are expecting to be released in the Quarterly. Please add thoughts, concerns or other comments as you wish.

T-Mall Stores

1. Nuria (US) - Apr20 - LAUNCHED - Contract Revenue: 1.3m, 2 years > nuria.tmall.hk
2. Colab (UK) - May20 - LAUNCHED - Contract Revenue: 2.5m, 3 years > colab.tmall.hk
3. Kiwi Health (NZ) - Jul20 - LAUNCHED - Contract Revenue: 2.2m, 3 years > kiwihealthbjp.tmall.hk
4. BLIS Probiotics (NZ) - Aug20 - LAUNCHED - Contract Revenue: 2.7m, 3 years > BLIS.tmall.hk
5. Inika Organics (AU) - Sep20 - NOT LAUNCHED - Contract Revenue: 2.5m, 3 years > inikaorganic.tmall.hk
6. Kadalys (FR) - Nov20 - NOT LAUNCHED - Contract Revenue: 1.1m, 2 years > <??>
7. Murray River Organics (AU) - Jan21 - NOT LAUNCHED - Contract Revenue 10m, 3 years > <??>

Other Stores

1. Reid Fruits (AU) - WeChat Mini-App - Contract Unclear (announced as immaterial)
2. FRUTEEC (South America) - Platform to be utilized similar to Reid - Amounts unclear (1 year contract, expected revenue Q2/Q3 FY21

Statutory Revenue

In the 21 Dec announcement, it was mentioned "RooLife expects Half Year Revenue to December 2020 to be up 40% from December 2019 Half Year ($1.56m). This signals revenue of approx. $2.2 million. Given revenue for the September quarter was $940,000, the revenue for December quarter is expected to be $1.26m (a quarter-on-quarter increase of 34%), which is strong.

Cash Flow

Based on last quarterly, customer receipts were $600,000. With the acquisition of new customers, I would expect this to increase, unclear to what level, but in the Reid Fruit Announcement (17/11), it mentioned the expectation of 20% revenue growth over the last quarter (Q1). Whilst the two things are not the same, if we had a 20% increase in cashflows, then best estimate of receipts would be $720,000 for the quarter.

On the outflows side, the Q1 operating outflows were just over $1,500,000. Given the working environment in Q2 still doesn't allow for travel, I don't expect this to increase too much, especially considering the majority of headcount growth is likely on the China side (which would be cheaper). We hired Vincent Lo late in the quarter, so even he is not likely to have much of an impact here. I'm expecting around the same $1,500,000.

Therefore, overall cash burn would be around $780,000.

Cash

Cash at the end of last quarter was $1,390,000.

Capital raise funds add to this ($5,492,521), and if we deduct the cash burn, then I'm anticipating final cash to be around $6.1m.

Other things

When I was re-reading the announcement for Murray River Organics, I realized that the $10m / 3 years arrangement is quite different to the other stores. Typically, we set-up a store and earn management fees and commissions for sales on the store. For Murray River, we are also taking care of their general trade sales in China - i.e. the bricks and mortar BEYOND our sales channels. This sounds like we are an extended marketing arm of Murray River and will be working with CostCo, Ole and Hema to grow other sales channels. I'm not sure how big this is as an ongoing opportunity with other customers, but what a win if we can make this work!

Good luck all. Very happy to hear responses and additional analysis. Let me know if I've missed anything, or if you think my assumptions are rubbish. Have tried to base them off company announcements rather than my own view (which is extremely bullish).