@Solvetheriddle It seems odd that they wouldnt have all the money they needed, given the recent CR.

Interestingly the "expansion of the platform" is mentioned a 3 or 4 times in the announcement.

@Solvetheriddle @Arizona

From my understanding, they are paying all the co-pays upfront with a 60-90 day leg on the receipt of the gross amount.

e.g. net 400 USD, gross payment (they havent specified but Matt said closer to 1000 than 500) so assuming 750USD gross, 350USD copay to the insurer upfront and they receive the 750 USD on a lag of 60-90 days.

they had 3000 patients end of March, if they added 2500 in april and May, that is 8000 units shipped end of May.

4.3m in Copay of which they won't receive any payment until end of June or July, if they are having the rapid growth that is suspected or even 2500-3500 per month, with their roughly 60-80m AUD annual opex, they would be chewing through this quickly.

Add in an additional customer acquisition cost for anything digital that is front loaded on hopefully the 11 refills we could really be chewing through the cash.

With a 60 day lag in payments end of August we end of with positive of $1.9m,

With a 90 day lag in payments end of August we are negative 15m.

If the gross is higher making the copay higher, we are negative for longer

If the growth is higher we are negative for longer and same if the platform is generating a lot of leads, we have a lot more high cost 1st scripts.

examples below,

Maybe my understanding of the gross to net isn't spot on, I am assuming that for a 750USD sale price if we net $400USD the copay is $350.

My money is on a partnership for the platform with something that costs us a bit to sweeten the deal as Matt mentioned in the last interview they could take an unprofitable 20m drug and turn it into a 100m drug with refills on the platform.

expanded ttable below with new arrivals capped at 4500 / month. All in AUD at 0.65 AUD - 1 USD

Disc: Held IRL & SM

Could it be that BOT are looking to load another product or products onto the sales platform?

@Schwerms , thanks for that, funding large working capital requirements certainly eats through cash. hopefully they don't have to do that for long.

@Solvetheriddle no worries, it made my eyes bulge a bit when I realised how long the copay's had to be covered for until funds are received

@Schwerms Great post.

Between the 60-90 days before receiving payment from insurers and the need to have enough stock on hand to fill demand, it is seems straight forward to see that the flow of cash can get held up quite substantially for months. It would seem to me that the need for cash at this stage is heightened, particularly if they are doing well. More product needed and payment from insurers being held up for 2-3 months.

My question for you BOT lovers out there is: Would the ability for BOT to secure this debt facility indicate that BOT is kicking goals? If things were not going well, surely this Blackrock subsidiary wouldn't want to provide said debt facility?

@Arizona

Yes I think so, if it was doing poorly I think they would have just raised again with good starting figures in another 2-3 months.

I felt we were kicking goals on the 2200 / month run rate in April, curious what happened as they turned the spend up on the digital side of things.

3.5m were in the Dermatologist office last year with the related HH code that is 67,000 opportunities per week on average for someone to receive a prescription, obviously not all of those are insured and suitable, even at 50% being suitable 32500 opportunities per week to convert someone to Sofdra which makes a weekly rate of 1000-2000 seem quite doable which generates big numbers over time with 6-11 refills..

Still have the wild card of the 6.5m to be targeted with the digital, they have made some nice changes to the getsofdra website as well.

Management will always put on a positive spin but in that webinar after the CR, they did say they have only seen this level of early success in a launch a couple of times and that is why they wanted the $$ to amp up the marketing and get extra supply online.

@Schwerms great analysis and other commentary from others on this post.

The cap raise was modest, so I am not surprised to see them increasing their debt facility like this. I take it as positive that management are using both equity and debt in a balanced way.

They have a lot of mouths to feed and the lag between revenue and cash creates a significant working capital requirement. In the early days, the more rapid the revenue growth, the faster the cash goes out the door.

I’m not reading much into “platform expansion” at this stage. They no doubt have to show potential partners they have good liquidity, and no doubt the team are jetting around coast to coast a lot in their business development discussions!

So, I can’t see anything in the announcement one way or another, to gain any insight into progress. For that, we need the next data on # scripts and # prescribers.Not long now.

Nothing here to budge me from my bullish view, but @Solvetheriddle sets out the risk side of the equation nicely.

Disc: Held