@Schwerms @SudMav and @rh8178 I know it looks a bit disconcerting, but you neeed to recall that back in FY23, $OCC took an upfront $21 million cash payment for its global distribution deal for its dental product Striate. Basically, this was an upfront cash payment on the exclusive, multiyear, global distribution contract and it was designed to give $OCC the funding to develop its product pipeline and specifically to commercialise Remplir.

So, the revenues are booked for the contract each quarter, but most of the cash has already been received. And that's why consistently, every quarter, $OCC receives less cash than revenue. In fact, over the last 10 quarters, it appears that total revenue booked is $22 million, whereas cash received in the same period is only $12m. So this has some years to run.

Now, while that explains the bigger picture, I still think that Q2 receipts came in lower than I was expecting. So, I will be looking for a reversal of the magnitude of the gap in Q3, otherwise there are questions to be answered.

I've seen elsewhere sloppy collections practices in medtech, but this is usually in the US, where it is a known seasonal factor - often at the small end of the market. Given that $OCC doesn't have material US revenue yet, that doesn't explain it here. So it may be that $OCC's finance team took a bit of a premature summer holiday, or its ANZ customers did!!

Something to watch going forward, but not of undue concern, as $OCC are now cashed up for a couple of years.

The step up in payments was expected due to the focus on driving promotion, marketing and training across the US and other markets. Over the next 3-4 quarters I will be monitoring closely how receipts and payments track, as this is an early warning sign for these types of businesses. You would expect that $OCC should be OK, as it is following the distributor model. However, it does seem to follow more of a hybrid model as it launches in each market, doing direct work for early engagement of KOLs and raising awareness among surgeons and training them.

One to watch, but not an immediate concern.

Disc: Held

While I'm not an accountant, my understanding is that this is based on the accounting methodology. The difference in figures is based on the fact that they don't have the money in their account yet, which lines up with the messaging in their 4C.