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Gold/Mining/Energy : Nuvo Research Inc
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To: john.d who wrote (8571)2/3/2002 4:36:24 PM
From: Montana Wildhack  Read Replies (1) of 14101
 
Hi guys,

We appear to be gaining on the cash position.

Using 1 million as the current draw net proceeds to DMX,
this would bring the cash infusion to 7.5 million for Q3.

Their average net burn rate has been 2.9 million a quarter
in 2002. This includes material offset swings in expense
categories in R&D and Selling/Marketing.

In the quarterly expenses has been a tripling of prepaids
away from a yearend, and an additional 708,000 YTD to OXO I
presume, reflected in Notes Receivable.

I also notice the long term debt reflects the 2.5 million
owed to the LOC offset by the additional 2 million in
Capital Assets related to improvements in the plant.

I was looking for a jump in selling expense and we'll need
a few more quarters to draw rough conclusions about the
impact of a Cdn sales force. The R&D moves around and I
believe this quarter was simply a low number.

Using 3.2 million as an anticipated burn rate, there may
be something close to 5.3 million in available cash for
Q3 February. These estimates are of course affected by
all activities including the higher AR this quarter; but,
I consider it essential to try to follow the cash.

I'll be watching for another jump in Notes Receivable which
should be converted into stock directly on any closure of
the OXO acquisition as part of the use of these funds and
I suspect some further increase in Capital Assets both
cash funded.

It appears to me that REK may have insisted on a solid floor
on this placement or that Acqua declined going out of range.
The more logical assumption I believe is that it was REK.
Given the previous draw movements it appears clear Acqua was
not opposed at those times in moving down with the price.

With the 3.5 million of LOC open and moving somewhat in
front of immediate cash needs, I think she may be getting
a bit more selective at this time. At current average
usage DMX is covered to Nov 30. I don't expect that will
be the case since many new situations should be coming
into play this year.

I notice Streetsmart on SH is suggesting a move up from
here is quite possible. We could now also receive the
FDA report at any time (per REK). And lastely watching
the tone of the OXO comments, I'm conjecturing that OXO
has been asked to report in detail on the state of the
phase III. I suspect there is concern about exposure there
which could have an effect on the agreement. I have few
concerns about the product itself; but, believe scientists
do not make good business managers in general.

Bring it on.

Wolf
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