Hi Guys,
Let's all just take a deep breath here. NGW is a start up company. And sure we would have all wished that they finished construction 3 months earlier. Things would be a lot different in their business model.
But the reality is that they just started to produce product very late in the current reporting quarter ending September 2019.
And yes NGW had to issue more shares and do a current financial deal to give them the current cash flow that they need to continue to run their growing operation.
But they are now in full production cycle. And the next quarterly report will include a full 3 months of production and product available for sale. It should show some considerable sales growth.
What is very important to me after reading the financial current SEC filing is a major piece of information.
How much cash did NGW use in the last quarter to run their operations????
If you look at the Consolidated Condensed Statement of Cash flow we see the detail, for the last 3 months.
It shows that they used $4,862,484 dollars.
Ok, $ 5 millions dollar to run their operation for 3 months.
Big question can we generate enough production to make available to sale $ 5 million dollars so that we can break even next quarter.
One weed plant produces approximately one pound of weed. NGW grows 240 plants per planting. Selling price per high quality indoor grown weed is approximately $2500 per pound.
So 240 plants x 1 pound of weed per plant x 2 harvest per month x $2000 per pound of weed= 240 x 1 x 2 x $2500 = $ 1,200,000.00 per month.
Three months sales of just weed should bring close to $3,600,000.
Hopefully they expand their sales with clone plants and CBD oils to get near break even.
This is the reason for the current financing at a costly and share count dilution basis. But NGW needed this cushion so that they can continue operation as the increase their sales and production. This give NGW some more time to expand their sales and start up of other revenue production besides just weed alone.
Yes, we are down but not out in my opinion.
GLTA
