April 19, 2013

$PVCT: Some Additional Analysis Regarding Today's 8K (Fund raising)

I went through the recent calendar year 2012-related 10-Q & 10-K, and produced the table below:

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The output (last line) is the company's cash monthly burn rate, per quarter, for 2012. Provectus issues stock and warrants for services rendered, and there also are additional non-cash items. I think I'm on the mark, but I am open to being corrected.

According to Peter, the raise announced in the 8-K filing today was related to ensuring BDO continues to provide the company with a going concern opinion, which is reviewed every quarter-end. For purposes of how BDO assesses Provectus' ongoing operations, the company requires ~$4 million at any given time of assessment.

Hence, prior to year-end, as you read the 2012 10-K, the company raised net proceeds of $2.28 million (not reflected on the 2012 year-end balance sheet in the K) to near this rough or soft $4 million threshold.

You can see this in the table below, under Q4-12: Cash and cash equivalents, at end of period.

Using recent historical quarterly cash burn amounts, I constructed the table below. This table assumes an approximate $930K burn per month.

Click on table to enlarge in separate window
And below. This table assumes a $750K burn per month:

Click on table to enlarge in separate window
The takeaway here is management probably won't fall sufficiently below the necessary threshold (again, I think it is a soft or rough one) through the end of Q2 (the end of June), assuming expenses don't shoot up for some expected or unreasonable reason, to endanger BDO's going concern opinion.

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