As a layman, I had these round numbers in mind...
My simplistic prediction for Q2 revenue, made in an earlier post, is $6,537,758.
On distribution, we predict about the same. For administration, I see CrossConsense raising this expense much more than just 7.09% - especially in the beginning, and until legal costs subside and efficiencies can be introduced. For R&D, I see money being spent on ironing out of the Edge product offering and advancing its certification, and I see costs for whatever full product Flyht produces and certifies with MBS (for wireless data offloading). A 3.35% increase doesn't seem large enough. This expense category is never going away.
Overall, I don't begrudge management spending what's necessary to move the company forward. There may be additional expenditures for things we aren't aware of as yet that may appear this quarter, so I feel even my estimate may be well low of actual, once reported.
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Comments re the logic here are welcomed...
One thing I think will be true is that Flyht is going to need to average about $7M in revenue per quarter going forward to make a profit.
In looking at Q1, if the big three expenses are left as-is, one can calculate how much more in revenue Flyht would have needed to break even - that is to say, if the gross profit was to be increased by $1.285M.
Of course, one can’t simply add the equivalent of the loss to the revenue – there is a cost of sales to reckon with. But for that, I could factor in the gross profit margin.
For example, a loss of $1,284,347 was reported in Q1 2022. To make up for this, I would need to calculate how much additional revenue at a gross profit of 54.69% would have been required to break even.
If Flyht had made another $2,348,530 in revenue at 54.69% gross profit, this loss would have been neutralized.
As a formula...
The loss to compensate for ($1,284,347) = 54.69% of additional revenue
$1,284,347 = additional revenue
54.69%
$2,348,412 = additional revenue
Flyht would have needed $2,348,412 in additional revenue to overcome the reported loss of $1,284,347 and break even - at a gross profit margin of 54.69%.
Again, this is simplistic and doesn't account for the big three expense categories having larger values if Flyht had, in fact, produced and sold more goods. Still, it does speak to $7M in revenue per quarter as a target, to break even.
$5.03M (actual) + $2.35M (additional) = $7.38M (required for break even, if margin is 54.69%).
If the gross profit were to be higher, less revenue would be needed. The remaining quarters in 2022 should all have higher gross profit margins due to revenue from licensing sales. This could have brought the revenue requirement in this example closer to $7M. (KRC does predict a margin of 66.68% in Q2 2022.)
If 66.68% was used in the calculation above, the additional revenue required would only be $1,926,135.
$5.03M (actual) + $1.93M (additional) = $6.96M (required to break even, if margin is 66.68%).
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It is unlikely Flyht can reduce its expenditures in any significant way, so how will Flyht make up the shortfall in revenue and achieve profitability?
CrossConsense will help by contributing about $1.2M in revenue starting in Q2, with a profit of some kind.
The high margin revenue from anticipated AFIRS license sales this next Q will help a great deal.
There is a significant backlog - hopefully airlines will be taking delivery post-COVID by now.
Weather date revenue - resumption post-COVID, depends on AirAsia continuing its recovery primarily.
New product sales, the WVSS-II sensor -- meteorological offices are interested and acting.
New product sales, the Edge+ and Edge -- once certification is complete (by Q3).
New product sales, secure wireless data loader -- TBA, work in progress with MBS.
Comac OEM installs - out there, but not imminent.
Will any of these factors come into play in Q2? Some will.
What don't we know about? A lot, I'd bet.