You Can't Pay Your Bills with Accounts ReceivableChecking in, and seeing lots of discussion on the liquidity concerns, and how contracts are being announced, and all will be well.
Maybe-but lets look at verifiable data from Q3 from the company (unaudited)
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The current cash balance of $38,716 and a quarterly burn rate of approximately $8,134,330, the indicates an urgent liquidity issue, as the available cash is far below the amount needed to cover operating expenses even for a week.
Yet the company continues….
Since the ownership clearly wants this to continue-we know there are regular cash infusions/debentures etc that are happening.
To me the point isn’t that-it is the issue of the poor efficiency of the business, and the risks of this strategy even if they can keep pulling a rabbit from the hat.
For example, the accounts receivable are a source of cash that should be available now-yet look at the financials.
Now I read a poster crow about a 20 million contract-but remember you don’t get paid with the contract upfront unless you are Amazon-everyone else needs to do the work, maybe get some milestone payments, BUT there can be holdbacks as well with milestones
-SEE below….
Aging of Receivables:
Current: $1,174,793 – Hopefully to be collected soon.
1–30 Days: $20,041 – Also fairly recent and typically collectible.
31–60 Days: $280,617 – Moderate age, but still within a reasonable collection timeframe.
61–90 Days: $295,626 – Starting to age; may need follow-up for timely collection.
Greater than 90 Days: $12,158,646 –what ! Come on - This is a significant amount that is overdue, indicating potential collection difficulties or delays.
One thing to note is the aging of the receivable- its not aging gracefully like saying someone doesn’t look their age-they look way older.
At least 80% + is over 3 months old!
Wish I could push off my bills like that. Usually I get a text saying they will repossess my house (actually that was a scam call from my admirers from another continent, and to tell me I was left 10 million, if only I would give them my account numbers and the OTP on my phone).
The other question is how do you fulfill a new contract (let alone pay the massive bills on the accounts payable) if you don’t have cash-well 38k, but that puppys been spent by Oct 2nd based on the burn rate.
Well go to the bank? and I showed the growing debt already and interest payments, issue stock-to who? , debentures to insiders...etc.
Basically, its running on fumes IMO.
Not saying they wont get some much needed cash, but I am saying the numbers-which are only 40 days ago-look scary
But, hey for interest only-don’t invest on what I say-talk to a professional, don’t trust what you read here(goes both ways there-don’t trust a pumper IMO who calls out blue skies) This is for education, entertainment-not to invest with-at least not for me no thanks