RE:RE:Wowkmottbank wrote: Nope!! Chip supply chain is the achilles heel to Spectra7. We could have rounded the corner and be looking great for 2022-2023 if this did not exist. Also, Raouf spoke too soon regarding profitability without truly understanding the supply chain issue. Also, the war in Ukraine has just intensified the chip supply issue. Neon gas required for chips, 50% comes from Ukraine plants which are now shut down. We are screwed for now. Plus Spectra7 will dilute to raise money soon to pay salaries. JMHO.
note: I want to correct my previous message. It wasn't $16 million raised. It was $14.8 million.
I completely agree! The supply chain issue could have been solved by now. They raised the $14.8 million in October, 2021, already with a backlog of $7.2 million (Q3 financial report). If that was a revenue number that they gave for the backlog, then they could have used $3.5 million to clear the backlog in one single order (calculated at 50% gross profit per chip). If they anticipated another $7 million in backlog for the quarter, they could have used half of the raise to supply themselves with chips. Now the backlog is at $9 million and the chip shortage could get worse. Even if you take into account that they need to wait in line to produce the chips, they likely didn't need to wait 4 months to get a slot. If they did, the manufacturer would give them a timeline. That timeline could be shared with shareholders.
As I mentioned before, the main cost and time for a wafer manufacturer is setting up the system. Once running, additional chips can be made relatively quickly in comparison. For example, it might take 4 hours to produce 3 million chips, but only 6 hours to produce 10 million.
I believe the market is reacting as it should. They have given no plan or timeline on when they will solve the backlog issue, and yet have relied on that to keep kicking the can down the road. They have had 4 months since the fundraising, plenty of time to have placed an order to clear the backlog or have a plan in place, with a clear timeline and reassure shareholders that they did so. Now they will use the war as the excuse for not knowing anything.
I also believe that this recent drop in share price is setting it up for another round of financing. The pattern is the same as it has been for the last 5 years.
-Chucklehead