I'm actually fine with the burn rate
Hi que,
I feel that the company has done really well in reducing the burn rate down to about 500K per month. I also welcomed how the company got rid of the legacy business by the Maxim deal. It was a good decision and it was also executed quite well afterwards.
So honestly I think the only nagging question remaining is the revenue issue. Whatever the strategy was or is in the future they must convert it into sales finally. You can't make a living by simply being lean. The cash flow situation must change soon by money flowing into the company.
They have good products now, huge markets and they are getting more and more market clearances. Distributors are also in place. So there is only one final piece missing: Sales
They can't have a zero burn rate. There are only 18 (right?) people left, the CEO is paid only by shares which is a fine agreement for Calypte and a fair committment by Roger Gale at this stage. This is really lean. Other companies might spend half of Calypte's monthly burn rate alone for a CEO's salary.
They must spend at least some resources to execute the commercalization effort. The good thing about this low burn rate is that the company can cross the profitability line rather quickly on relatively moderate revenues. One typical contract of about a few million $ shows up quickly on the balance sheet. This is especially true for the BED sales. Let's hope that the 10K indeed shows us soon some growing sales numbers.
I agree, these are absolutely critical times, the company really needs revenues because somewhere in the second half of 2006 they must live by their own money. According to the forward-looking statement of the company profitability is about 6 to 9 months away. This is not too long away.
Just my opinion right now
One deal -in one country- and a lot of things look different instantly. What will happen when the market sees first clear evidence that the company makes money ?
Good luck
Cal
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