Burn rate as expected. See Sedar- 2m Cash Jan15Our burn rate and cash position discussions have been very accurate.
They have 2+M cash as of today.
Their burn is projected 150k month for 2015.
This includes 1.1m salaries.
INCLUDES SALARIES @ 92000 month.
This does not include total cost of sales once TLC2000 approved... conversions once sales start would support additional cost of sales. Cost of sales offset by revenue of those sales, not to effect burn.
Theralase expects revenue from sales (net of the cost of sales and selling expenses) will decrease its projected cash burn rate in 2015
TLT can run for the next 13 months without additional funding.
However, research and development can be supported by additional funding, those costs are discretionary.
TLT r&D expenses increased last 9 months as we stated and expected to return to 100k after TLC2000 launch.
Theralase expects to devote the majority of its research and development expenses in 2015 to the PDT Division.
The actual amount of research and development expenses devoted to the PDT Division will be a function of the amount of cash available from sales or financings under this Prospectus or alternative sources.
Compare this with my last post about financing possibilities/scenarios and burn rates and it's pretty much right on.
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Cash Burn Analysis
Historical Cash Burn for the Nine Months ended September 30, 2014
For the nine months ended September 30, 2014, Theralase had a net loss of $1,737,761 comprised of operating expenses of $2,420,778 less gross margin on sales of $683,018. Operating expenses included research and development expenses of $1,021,717 (of which $323,353 was allocated to the TLT Division and $698,364 was allocated to the PDT Division) and selling expenses of $421,401. Including administrative expenses of $976,568 (or $108,528 per month), all other operating expenses (excluding research and development expenses and selling expenses) totaled $977,660 (or $108,629 per month).
The aggregate negative cash flow from operating activities for the period was $2,738,658 (or a cash burn of $304,295 per month). Such amount includes payments of $546,837 on account of prepaid expenses that relate to research and development to be undertaken after September 30, 2014 as well as $511,148 on account of payables, accruals and other provisions that relate to expenses incurred prior to January 1, 2014.
For additional information, please see the Interim Financial Statements.
Projected Cash Burn for Fiscal 2015
For fiscal 2015, based on and subject to the assumptions discussed below, Theralase’s projected cash burn rate is currently expected to be approximately $1.8 million (or approximately $150,000 per month). This amount consists of approximately $1.1 million (or approximately $92,000 per month) in administrative salaries, $0.35 million in general administrative expenses (or approximately $29,000 per month) and $0.35 million in overages and miscellaneous expenses (or approximately $29,000 per month).
Investors are cautioned that this projected cash burn rate only takes into account expenses that are necessary to maintain core operations throughout fiscal 2015 and does not account for expenses relating to costs of sales (and other selling expenses) or discretionary research and development activities. Costs of sales (and other selling expenses) are directly tied to product sales and, based on historical profit margins, are not anticipated to have a negative impact on the net cash burn rate if and when incurred. Theralase’s research and development expenses related to the TLT Division and the PDT Division are discretionary in nature and are expected to be undertaken only if appropriate funding is available, whether as a result of funds derived from net sale revenues or alternative sources of funding (including amounts raised through the issuance of Securities under this Prospectus). See also “Use of Proceeds - Cash Burn Analysis - Assumptions Relating to Projected Cash Burn for Fiscal 2015”.
Based on cash or cash equivalents of $2.035 million available as at the date of this Prospectus, Theralase expects to have sufficient funds available to fund its projected cash burn rate for approximately 13 months following the date of this Prospectus without requiring alternative sources of funding. Theralase is expected, however, to require additional funding (including through the issuance of Securities under this Prospectus) to fund its research and development efforts.
Assumptions Relating to Projected Cash Burn for 2015
Theralase’s projected cash burn rate for 2015 of approximately $1.8 million is derived from projected general and administrative expenses and assumes no positive cash flow resulting from revenue from sales and no negative cash flow resulting from expenses related to the cost of sales, selling expenses and research and development expenses.
Based on historical performance, Theralase expects revenue from sales (net of the cost of sales and selling expenses) will decrease its projected cash burn rate in 2015. For the nine months ended September 30, 2014, Theralase had sales of $994,473 and cost of sales of $311,455 (for a gross margin of $683,018). For the period, selling expenses were $421,401. While Theralase expects continued sales in 2015 and possible sales growth from the release of its patented TLC-2000 Theralase superpulsed laser, sales, cost of sales or selling expenses were not included in the calculation of Theralase’s projected 2015 cash burn rate for these purposes given their contingent nature.
Theralase expects research and development expenses will increase its projected cash burn rate in 2015. Historically, Theralase has incurred research and development expenses in relation to both the TLT Division and the PDT Division. For the nine months ended September 30, 2014, research and development expenses totaled $323,353 and $698,364 for the TLT Division and PDT Division respectively ($1,021,717 in aggregate). In 2015, research and development expenses related to the TLT Division (not including salary costs associated with the software development cycle expected to be ongoing throughout 2015) are expected to decrease to approximately $100,000 due to the anticipated completion and launch of the patented TLC-2000 Theralase superpulsed laser, expected in early 2015. Theralase expects to devote the majority of its research and development expenses in 2015 to the PDT Division. However, research and development expenses are discretionary in nature and will be undertaken only if appropriate funding is available. The actual amount of research and development expenses devoted to the PDT Division will be a function of the amount of cash available from sales or financings under this Prospectus or alternative sources.
The cash burn projection for 2015 and related discussion is included to comply with certain securities regulatory requirements, is determined on the basis of the assumptions discussed herein and should not be used for any other purposes. The inputs used to calculate the projected cash burn rate for fiscal 2015, as well as other inputs and factors that may affect Theralase’s actual cash burn rate for fiscal 2015 (including, without limitation, actual sales revenues, cost of sales (and other selling expenses), general and administrative expenses and research and development expenses) will be updated periodically with reference to actual results as reflected in Theralase’s financial statements, the related management’s discussion and analysis and other continuous disclosure documents that will be filed by Theralase with the applicable securities regulators. Investors should refer to such documents for updated information with respect to the actual cash burn rate