<<Also, In the recent quarter Race had cash outlay expenses of approx. $1850. (The financial
statements include approx $650K of NON cash expense.) At that rate even with NO revenue they
have enough cash for in excess of 6 months. Additionally the shipments to Sabretek began to
happen in quantity in the existing qtr. (1999), add in Moody's, the pharmaceutical firm, global
financial services firm, etc..and there should be significantly more revenue in this quarter, and in
subsequent quarters. Plus add in new customers, and sales or licensing agreements on some of the
new products, etc.. CAsh is NOT an issue. NTA is NOT an issue.>>
Using your numbers (finally), and assuming Drakes is correct that we are half way through Feb with no material changes to this quarter they will end up the quarter with $2M or so in cash (enough, as you say, for the "fourth" /final? quarter). Current Operating margins though suspect to use due to operating inefficiencies are at 30%, even assuming they rise to 50% soon, RACE would need roughly $4M in revenues simply to stop the cash drain of SG&A and their rather pathetic marketing budget of $500K. Assuming, as you suggest, the fourth quarter shows some improvement to cash burn (say $2M in Revs...burning only $1M instead of 1.8)..this implies RACe begins their "new' fiscal year with approximately $1M in cash (read less than 1 qtr of life) and would need to achieve said breakeven level of sales in order to survive without further dilution. Is it then, your position that from here on out RACE's revenues will increase sequentially from current $1m/qtr III to $2M/qtr IV to $4M in FY'00 QTR I? Or do you disagree with my assumptions?
Interested to hear you opinion?
edge
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