RE:RE:Hidden GemPokerchamp wrote:
What you say is all true. The trouble for now is that results and positive earnings are a year away. Till then more losses and likely some dilution. They need revenues of $25 million for break even.
At $25 million at 60% margins they generate $15 million free cash which just about covers their expenses. This does not include the $275,000 or so that needs to be repaid quarterly on the last funding. And $25 millin in annual revenues is more than $6 million a quarter. S7 is still some ways from that. I'd be happy to see $4 million in Q1. We already know that Q4 was around $2.5 mill.
I don't have time right now to go back and read the prospectus but from memory they stated that they had enough money with existing revenue stream which was somewhere around 8.5 to 9 million per year and the proceeds of the financing and the overhead cut-backs they proposed. they had enough money including paying back the defered loan payments to get into the beginning of the fourth quarter.
So I don't disagree with your estimates but I don't believe they begin until the 4th quarter of this year
unless you have some other information I am not aware of.