Pleo:
When there is new product rollout or new distribution channel implemented, the recognition of income can be a problem area. For instance, you have filling the channel (but not necessarily having the product used), channel stuffing, rights of return, contractual disputes, deadbeat customers, etc.
When the cost per antennae is given at $2,000, is that the cost to the patient, or the invoice amount of BSDM? Have all the antennae sold been used, or are they held in an inventory of a distributor?
Anyway, here I would suppose that the company will not recognize income until and until the hospital is reimbursed and then pays BSDM, which could be considerable time. It might be that BSDM gave liberal payment terms so as to induce more use of their products.
What you really need at BSDM is (1) demonstrated substantial growth rate in one or more products, and (2) ultimate positive cash flow. We shall see.
GTW |
