Q2 FinancialsIt's going to be interesting to see the upcoming financials. It was almost 2 months ago now since the closing of the last financing and, with what I see as a high cash burn rate, I don't think I am going to be shocked to see what cash they carry on the balance sheet. It also will depend on receivables. What were they? how many sales were completed? how many cheques were actually cashed if any?
I also read in the last MD&A, that they were also responsible for some of the construction costs for the Wyoming Hydrogreen installation. I didn't know that before as I thought that the purchaser bought in to the company with $1.5MM USD at 1.29 (CAD) per share and I didn't realize capex was require for the project. I did read that the purchaser had the option to purchase the equipment at some point if they so choose. So the $1.5MM cash infusion was to be used for part of the installation? How much more has had to be spent since March 31, 2022 almost 4 months since then? I also do not see any announcements regarding completion of this installation so I have to assume it is still ongoing. Wayyy behind the schedule they were talking about in past interviews.
"Investing Activities
Cash used in investing activities changed from an inflow of $487,235 during the three months ended March 31, 2021, to an outflow of $1,554,277 during the three months ended March 31, 2022. The increase in cash outflow is primarily due to increased capital expenditures related to the Burnett project."
and this:
"General and administrative staffing expense and consulting fees for the three months ended March 31, 2022, was $2,982,289" this is one of the reasons alone that I say I think they have a high cash burn. Almost $3MM per 1/4 for staffing alone or almost $1MM per month. What about leases, power bills and inventory etc...? I think those consume cash as well. So that was as of March 31 when they had ~$12MM on the balance sheet and another 1/4 plus (4 months....another $4MM?) has gone by since then. The financing closed June 2, 2022 for $10.5MM gross. Almost 2 months ago.
It is almost hard to fathom, and I will need to see the upcoming financials, but I think they're going to need more cash. Let's see what happens but once again, as sad as I am to say it, I think the odds are high another financing of some type will occur and is probably not far off. Could be wrong, it wouldn't be the first time, but the numbers are just not adding up to me. I still say the marketcap is too high given these conditions. If it occurs, I can't imagine what the dilution might be and each financing is occurring at a lower share price. Not good especially in a rising interest rate environment.