Z, I was under the impression that the new forecast for Affinity's sales is only $25 MM (rather than the prior expected $30 MM when the $4 MM pretax profits were forecasted), in any event, you are right in taking only $4.8 MM in burn rate as a "first cut", if you assume no more financing (and associated costs).
However, on a "second look at these numbers, you find that TSIG's operating expenses for the month of September 2000 only, is cited by this document, at $464,000, which by itself comes to $5.570 on an anualized basis. If you subtract these $464,000 from th last quarter's expenses and multiply by four the resulting $900,000 or so, you end up with an additional $3.6 MM on an annualized basis for GSCI (could be $500,000 less if no "consulting fees are paid to outsiders), or a total yearly burn rate of $9.174 MM, which is even worse than my own conservative assumption.
Even if Affinity does bring down to the bottom line $4 MM (and it should be doubtfull the number will be that large in iew of the recent downsizing of sales expectations to only $25 MM), you still have close to $5 MM in cash drain that will have to be financed.
Have a happy holidays season.
Zeev |
