PyroGenesis Inc T.PYR

You Can't Pay Your Bills with Accounts Receivable

[GrahamB]

Checking 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)
.
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

[Mostlyserious]

How do you get the $8 million quarterly cash burn rate?  Just curious and not saying that a lower one is not abchallenge.

[GrahamB]

Sorry about that, been looking at income statements, cash flow statements, but the number that I meant for cash burn is  $4,990, 706million which is from the cash flow statement, for this period which reflects all the adjustments to net loss, factoring in non-cash expenses and working capital changes. So, adding back depreciation and amortization, share base payments since

[Mostlyserious]

To me, the purpose of the cashflow statement is to translate all the non-cash accounting items into cash.  So, that statement will show how much cash was used in the quarter. For Q3 that amounted to $3.4 million.  But it includes items that may not be "regular" during the quarter like if they raised some money. That is on page 5 of their statements, although the heading on

[GrahamB]

Fair enough Mostlyserious-to me I want to look at the operations of the firm the actual buisness operations so I don't take the lower number which reflects financing(may not be available) or investing activities-just trying to understand how the business is working. What did you think of the profit margin ? Seperate post, but to your point of non cash items -seems like it's inflated by

[Mostlyserious]

Sure, if the balance sheet is clean, you have no debts and don't need to raise money, and you don't have to buy any equipment, the operating activities portion of the cashflow statement could represent the required cash burn which is about $5 million. i try to appease the pumpers by giving more benefit of the doubt, which usually still shows that a concern remains no matter how rosy of

[Melida]

Some consequential misunderstandings and mistakes here on your part.  Your best option would be to take advantage of the new investor relations platform that was announced during the conference call.  The CFO can set you straight.   The CFO can help you with your corrected burn rate and possibly provide more insight into Q4.  It would seem that if we use your numbers Pyro

[GrahamB]

Thanks for the advice, but I'll wait until I see the audited financials, and in the meantime, I think that it's pretty clear with the bottom line is. Whether we choose to focus on operating cash, or adjust for this, the business operations, or the poor efficiency is very very clear to me. By the way, did you want to comment on the profit margin, since it was your post where that was

[Melida]

If you dont want to take advantage of 3-2Speak and get clarification directly from the CFO you really aren't in it for the learning and entertainment as you state in every post. I'm not trying to attack your credibility here, I'm just trying to help you out. The CFO would be best. But you kinda throw the CFO under the bus by saying you'll wait for audited statements. Do you know

[GrahamB]

Melida, I don't know you and haven't had many interactions, but I sense an anger and condescending tone. You are making accusationshere that I haven't stated about trusting the company, and judgements that aren't appropriate. This is a discussion board , that's all. I like working through the financial statements as an exercise, to get insight into the business. Not to make

[Melida]

Well, it sure comes across as not trusting the CFO.  Why wait for audited statements when you can get the information now?  It's a very reasonable assumption that you are waiting for different numbers once audited.  That to me reasonably suggests you think something is wrong with the CFO's numbers.  Any fair person would take the opportunity to have the CFO advise as

[GrahamB]

  Melida, I appreciate your insights, and I  wouldn’t expect you to be very familiar with my process, and just because that doesn’t involve talking to management doesn’t mean that I don’t trust management.   One of the greatest investors in the world, Warren Buffett, wrote an article which was very impactful for me,  "The Superinvestors of Graham-and-Doddsville

[GrahamB]

Delisios article emphasized this point as made above.Its not about trust-it's a process. These types of insults that the pumpers make have a purpose to distract you and the reader from looking at the facts...to look away- 'Don't fall for it-look at the businesss at the numbers-that is what they don't want you to do. they want to distract you from seeing the truth "We agreed

[Mostlyserious]

You have to stop expressing the false view that signing of the contract means that PYR is in "good standing".  For this kind of an assessment, everyone asks for your financial statements and may want to look at only the audited ones.  There is no individual within Department of Defence that would present an opinion on these financial statements that they are in good standing. &

[Melida]

With all due respect you are wrong.  The process of tendering for government contracts is so much more detailed than you claim.  And how do you define working capital ?

[Melida]

 ...  as in working capital deficiency

[Mostlyserious]

Melida, I did not detail the DoD procurement process. I am not wrong that it includes submitting financial statements and if they have concerns about the future, it will likely include some pro-formas that may require providing some substantiating documentation for the forecasts.  Among many other things. And the terms of the contract are not as simple as described in the news release, if

[Melida]

You're wrong about the tendering process.  I've actually taught the process to supply chain managment students.  That doesn't make me an expert in any way, but I do know my way around the process.   Working capital deficiency?

[Mostlyserious]

Melisa, how can you say I am wrong about a process I did not even describe?  I feel sorry for your students. Working capital deficiency?  Google it.  In substance not much different than the definition from my inteoductory finance and accounting textbooks.  You know, once upon a time you use to get a list of books that you had to buy.  That was university.  In high

[Melida]

Now you're just pissed off.  How did you lose money in Pyro if you are so smart

[GrahamB]

Nope-never invested in this, only came here when it was promoted by a pumper Science First on another board. One of the cabal of promoters that lie, distract, and distort to avoid looking at the facts. All these posts, now clear;y are along these lines I can see now, even as I attempt to discuss rationally with you. A company that has never had a profitable year, declining revenues, 90

[Melida]

Please don't tell me what I can and cannot say.  I'm not taking one of your lectures How do you Pyro"s accounts payable administration?   What's the point of bringing up the CEO's payables ?  That's just so extreme

[Mostlyserious]

You can say whatever you want.  It is a figure of speech that provides for different scenarios.  You are starting to drown in this discussion and best to end it because you are going into scenarios that do not constitute the way "normal" businesses operate. Current assets and current liabilities have certain meanings.  Having a working capital deficiency means you do not

[Melida]

I see where you and Graham see yourselves as accounting people that know more than the rest of us here.  That's an incorrect assumption.  

[Melida]

Thank you.  So GAAP requires or results in a number for working capital deficiency but one must look beyond the number?  And do many successful businesses technically have working capital deficiencies that they are successful on an ongoing basis?  And does a company at the infancy of commercializing very expensive technology usually struggle with this area of accounting?   

[Mostlyserious]

Please provide me an example of a successful company that has ongoing working capital deficiencies.   No publicly traded company should struggle with "this area of accounting".  I think you meant to say that companies in its infancy may struggle with financial resources until they have a commercial product or service that reaches.a certain level of sales.  PYR had some

[GrahamB]

Mostly serious, I think she went a little off the rails and is defensive and angry about the data. That she thinks the solution is to speak to the CFO, to me is comical. It's like ending the engineer of the bridge that fell down to stand beside it and make me feel better ! Anyway enjoy your day all and rememberencevday. Will be back at some point when there is material data or a pumpers

[BIGMOE]

Graham B spednig lots of time to dish Pyro.  Just move on brother.  Why waist time if do not invest in Pyro. You are concern about accounting.  Just look at the backlog of $55 million.  Those signed contract and they are not concern about Pyro account.  Just move on brother. All the contract Pyro will sign going forward.