ICQ (ASX) Its taken so long

Originally posted by goldbear77: ↑

the company is spending $6.6m Dec qtr and earning about $3m currently - net cash burn will likely be negative $3-3.5m.

the spend in dec qtr is up on sept qtr - sept qtr being seasonally a strong time for revenues- which is why youd expect the net cash decrease more in Dec than the -$2.8m they burnt in Sept qtr

the company has $12m cash on hand as at end of sept - so in 6 months you are looking at ~$6m cash in bank - or less than 1 qtrs outgoings before income

any director will require a raising before that point - most boards require a minimum of 2 qtrs cash on hand with assumption of 0 income as a safety measure against any risk of trading insolvency

there is a $10m debt facility undrawn + 20c strike options that if exercised would bring in additional funds

the options at this point would seem unlikely to be exercised - unless ICQ can show it turns a corner and moves very close to or actually goes cashflow positive

The $10m debt facility will have a high rate of interest attached - thats the nature of commercial lending - so you really dont want to use that unless in extremis. taking on debt while non positive cashflow has been the death of many companies

I would expect a raise by early 2nd qtr next year on all the above - unless something suddenly improves in net cash earnings

you can of course gamble on the earnings J curving before then - but the history hasnt shown fast natural growth rate in adoption as yet - instead its been a solid slog with the rise in company spending linked to driving rising company revenue

theyve been gradually lifting spending to try to speed up growth and traction - only natural - but its not yet ignited

$6.6m is a massive qtrly spend for such a small tech company

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Are you saying they are capitalizing marketing expenses . As in this marketing figure is not included in their talk of two countries going into cash flow positive,

If not they must be getting close to cash flow positive overall as that would only leave Indonesia. Which they could merge with others if cash was a problem.

Are you saying they are capitalizing marketing expenses . As in...