TEE tele-ip limited

TO ZOX - TEE (APOLOGIES FOR BLANK POSTINGS)

  1. 4,941 Posts.
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    Hi Zox,

    Firstly, my apologies for the trigger happy blank responses. A bit cof the keyboard shudders, I think.

    In regards to TEE, I noted earlier this afternoon the Q1 results which, to my way of thinking, were woeful.

    In particular, TEE managed to generate receipts of $1.07m during Q1, whilst still managing to spend $1.25m.

    This type of cash burn means that TEE is precariously balanced on the edge of the abyss.

    At the end of March, TEE had just $18k left in the bank, having just experienced a net cash burn of $185k for the quarter.

    Without today's onfirmed share placement, therefore, TEE would have been left with enough cash to get to mid-April but not much further. Even now, TEE has managed to raise only $250k which, assuming that all goes well, will get it through to July, but not much further.

    Of real concern for me though was the extent to which salaries ate through the cash flow, accounting for >50% of costs, and ~60% of Q1 receipts.

    Inventory /COGS accounted for another $400k (or 32%) of expenditure for the quarter.

    To go forward, therefore, TEE will not have much choice available to it but to either scale down operations, require customer payments upfront, reduce staff, or seek out a merger with another company.

    The only real areas where TEE can cut expenditure for the time being, therefore, is either in staff costs (>$600k for the quarter), or in inventory (~$400k for the quarter).

    Another concern for me from reading through the announcement was the fact that TEE had experienced a slowing down in customer collections (ie: code for either delinquent customers, cashflow difficulties, or bad debts).

    For this and related reasons, it appears that TEE did not have much choice left to it but to seek the share placement of 11m shares @2.25c. On current indications, however, it is very likely that TEE will need another cash injection very soon in order to get by.

    In closing, I am reminded of the similarities between what TEE said today and what TMN was saying 12 months ago when, without warning, it went into receivership on 17 May and has never resurfaced.

    Your call on both TLE and BUU, therefore, represent much better prospects for success (even now) than TEE.


 
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