I'm not sure where the expectation of CFP by June came from. As best I can tell the goal of CFP first appeared in the TMT Analytica Research Report in March 2107. No time frame mentioned.
TMT Research March 2017
3DP’s cash position per the end of 2Q17 (December quarter) amounted to A$ 3.7M. Given the company’s current low cash burn (A$ 177k in Q1 and A$ 371k in Q2) and limited projected growth of staff numbers and other costs in the next few quarters, we believe 3DP is sufficiently funded to reach cash break even in the current business plan.
I presume the current business plan means from IPO to CFP. I'm sure I read, or heard, Ian say somewhere that funds raised in the IPO were expected to be sufficient to reach CFP, but now can't find the reference, or remember if he put a timeframe on it.
In the Oct 2017 Quarterly there was no mention of CFP.
However.....
Significantly, Pointerra has also identified the global power transmission and distribution utility sector as highly prospective for its enterprise DaaS solution. The Company expects to convert existing paid trial and evaluation trial customers in this segment to full enterprise licenses in coming quarters.
The addition of regional/global AEC (Architecture-Engineering-Construction) companies as full licence, paid trial and evaluation trial licence customers during the quarter has added additional materially prospective DaaS deals to the overall end-user sales pipeline.
Existing relationships with WorleyParsons/Advisian, Esri, Blue Marble Geographics, NGIS and CR Kennedy continue to be developed and supported as they provide important leveraged access to globally distributed revenue generating opportunities.
So the language in October changed to the upside. This suggests that the various initiatives outlined in the OctQ are sufficiently well-advanced to have confidence that in coming quarters the company is moving towards CFP.
CFP is not mentioned again until the JanQ, then again in the Half Yearly:
Jan Quarterly:
Cash Flow Cash receipts from customers grew from $20K in Q1 FY18 to $46K in Q2 however sales invoices raised and revenue generated (as both earned and unearned under accrual accounting) during the quarter were higher again,
with cash receipts from customers expected to grow strongly in the next quarter and beyond as the Company moves towards a cash flow positive operating position.
Half Yearly Report:
Importantly, the profile of the sales pipeline continues to mature, meaning that individual deals are moving through the various stages of the sales process, with the combined value of the most prospective of these (evaluation trial, paid trial and under-proposal) customers sufficient to move Pointerra into a cashflow positive position following their successful conversion into full DaaS licenses.
Cash receipts from customers grew to $66K in the half-year however sales invoices raised and revenue generated (as both earned and unearned under accrual accounting) during the quarter were higher again, with cash receipts from customers expected to grow in the next quarter and beyond as the Company moves towards a cash flow positive operating position.
To me, this suggests some time after MarchQ, though not necessarily by JuneQ
However....
Moving forward, Pointerra intends to report aggregate ACV (annual contract value) as soon as it is practical. ACV is generally accepted as one of the better measures of sales performance for a SaaS business and will allow the Company to report on growth in customer sales in addition to cash generated through operations.
This tells us they are anticipating contracts of sufficient scale to report them as growth in actual sales via Annual Contract Value, not just quarterly cash receipts. These contracts are not yet in place, but they will be.
It isn't a stretch to suggest that WorleyParsons/Advisian, Esri, Blue Marble Geographics, NGIS, CR Kennedy, TES, and others - especially the multi-year fixed price contracts for various utilities they have been asked to quote on in the US - will be part of reaching CFP, and an ACV reporting structure. Interestingly, in the recent Inside Market interview Ian talks in some detail about the shortcomings of the 4c reporting mechanism.
In this respect, it is a positive that Ian is an accountant by training, including stints at EY and global funds in London and NY. He runs a very tight fiscal ship, understands how things like work and is surrounded by an excellent team. For the most part, good accountants are traditionally conservative and not given to making outlandish forecasts. That Ian raised sufficient IPO funds to reach CFP, and is still on track to achieve that is encouraging.
So, while there is clearly a lot happening and much news to come, until advised otherwise, am just trying to keep expectations realistic vis-à-vis reaching a CFP position sooner rather than later. Especially in the current environment where the ASX is querying in forensic detail every forward-looking " revenue forecast" early stage companies like 3DP put out. Within reason, it doesn't matter when CFP happens, just that it does without recourse to an additional CR, unless that comes in the form of a strategic placement to a cornerstone investor.
Of course, if anyone can find a quoted timeframe for CFP by June, then the clock really is ticking. Either they have a lot more happening than they are letting on, or........time will tell.
