ChaseYourDream wrote: Xiawen, TY for asking.
I expect the Cash Flow in Q3 itself to be positive, that is more revenue in the quarter will be generated than total expenses for a net gain. It might be $1,000 or $100,000 or $1,000,000. Let's say it is $500,000. Now the loss from the previous two quarters is still part of FY2017, so $500,000 to the positive side in NET will not immediately make Convalo profitable for the entire year.
The net loss in Q!+Q2 is almost 8 million, against a $1.2 million net gain in the previous 15-month cycle on much smaller gross revenue. So with revenues inevitably growing much more, the crucial factor is,
will expenses consistently become less than the revenues? If I did not believe this is likely, I would never have bought a single share.
Once the company is consistently producing net gains (even as low as $500k a quarter), the deficit has only reached $11.1 million against probable revenues of
$8 million a quarter and growing. So the deficit could be wiped out entirely in 5.5 years and probably much sooner.
I do not know of any Venture company that has no deficit at all, but once revenues consistently surpass total expenses, but I expect that is because companies with such awesome financials do not remain on the Venture for much longer.
I have great respect for your perspective, so I thank you for the opportunity to clarify what I meant... and if I have misunderstood, I welcome someone else posting their understanding.
WHOA I have caught a misreading. They are refering specifically to OPERATING CASH FLOW, not total revenues. The 6-month CF OPS from Q1+Q2 was just under $6 million, so with OPCF posiitive by $500k to $1million every quarter, it could vanish inside 3 years.
One of my fav companies is HEO (Q1 FS tomorrow should wow the market). Their CF is usually positive by a narrow margin on significant revenues ($50m in 2016), with a deficit holding at $33 million, and a SP of $2.25 up!
In 1-2 more quarters Convalo should be approaching similar revenues on lower costs, producing a larger Net Gain, and a deficit around $10 million. BTW last quarter HEO had a market cap of $35 million and COH of $2.5 million, compared to Convalo last quarter at $32 million and over $12 million COH.
Again, better then one of the best.
So what should the SP be then?? .
Xiawen13 wrote: Hi Chase, you did express some reservation about that positive oprating cash flow thing last time I mentionned. Could you please explain me your understanding of that sentence from page 9 MD&A
"
The Company has sufficient cash on hand to continue to support its expansion plans and meet its contractual obligations, and expects to generate positive operating cash flow in the second half of fiscal 2017." All the important words are there: POSITIVE (which means cash in the bank increase) and OPERATING (which mean the money will come from operation not from a loan as in Q2) and FISCAL 2017 (which means now)
what is it you suspect is not said here??
ChaseYourDream wrote: Strong post. Appreciated.. but I do not interpret guidence to be cash-flow positive in Q3-Q4 2017 (now!) menas the net loss for the year will vanish, only that it will start beig reduced. Now I may be wrong about what was stated, and/or wrong about what happens, in either case I will be even more pleased.