Replies to post #226294 on Wave Systems Corp. (fka WAVXQ)

[tkc]

What is cash flow positive between 15 and 16 million ? More like $13M imo.

[knute97]

Semantics?

What was said, and I didn't fully understand it, was a distinction between cash flow contributing and cash flow positive.

In the case of Scrambls, it makes sense since there has been little or no income as yet. When the income starts, it becomes cash flow contributing. When cash flow exceeds expenses, then we become cash flow positive.

As to SKS comments on Q2 and Q3, Q2 should be pretty well booked by now. For SKS to put a number on any estimate would be foolish on his part and leave him open legal consequences.

K97

[dig space]

titlewave cash flow

you said "that is quite a jump in revenues"

revenues is not a cash flow value, that is why cash flow is measured, reported and considered by investors somewhat seperately. If revenue and cash-flow were the same thing, nobody would talk about cash-flow.

tkc is in the ball park, cash flow b.e. is about 12-13m give or take. If Wave was to ink a 5 m deal on top of 8m in regular billings, that would be $13m ... cash-flow b.e.

Most of the 5m would not show up as revenue, again an accounting measure distinct from cash-flow.

Indeed, if Wave was paid a billion dollars tomorrow, most of it would not show up as revenue for some time ... but a billion dollars is still a billion dollars.

It seems pretty clear that Wave believes they had $8-10m in new billings above SMB and bundling back in Q4-Q1 and they claim it did not pan out in part because of drive availability, and they just claimed that those deals are still on track, and that they expect to close them Q3ish. So, if they close this $8-10m in new large orders in Q3, they will only book 1-2m in revs from it.. but 8-10m is plenty of new cash for cash-flow break-even.

I agree, if those deals do not close, cash-flow break-even is highly highly unlikely. They believe those deals will close, so they think they will achieve cash-flow break-even.

Its pretty simple.