Where to from here, page-87

More thoughts on this.

Cash balance at bank of $11m is comprised of non sponsored receipts plus 35% of sponsored receipts, minus the cost of running the business.

Given that the sponsorship facility is now nearly at capacity at $19.5m of $20m, the test is now on for BIG to demonstrate that it can facilitate operations without leaning on FC. It cannot overflow the facility of $20m, meaning that the non sponsored receipts going into BIGs working capital (35% of sale) will start to dry up.

If cash at bank starts to dwindle then they do not have sufficient working capital being generated from the non sponsored receipts to produce the videos for both non sponsored customers, and the sponsored customers on the books, values at a total of $48m in sales ($20m/41%).

This implies $16m has gone to BIG for working capital from sponsored payments ($48m*0.35). Current cash at bank is $11m. Therefore without the working capital from FC they are slightly cashflow negative overall (-$5m) since day dot ($16m - $11m). However, what it does demonstrate is they can almost (short of $5m) generate the working capital from non sponsored sales to run the entire business head to toe, to produce videos for all customers regardless of whether they are or arent sponsored. That's a good effort all things considered (being serious, not tongue in cheek).

The best way they can work their way out of this is to be true to their word and demonstrate that the bigger picture in the US is one where they will be self sufficient and not reliant on this form of financing facility.