@PinchOfSalt I was expecting the quarterly to be a lot worse to be honest. They got an extra $1.2m from the R&D tax rebate in January so they will have $2.9m cash left. The reduction in cash burn was good but it seems unlikely that they would be able to get to cash flow positive without an external cash injection. They are just not quite growing quick enough. Disappointingly they didn’t mention the Cintra distribution channel, so I am guessing that the lack of traction here might be part of the driver to sell rather than persevere.

On the upside they still added a good number of new clients and churn is still low so odds are pretty good that the deal will go through at either 11c or a 2nd bidder could come in. The technology is cheap for an acquirer who has the resources to utilise it. Based on the market depth it looks like a lot of people think the same way.

In my SM portfolio I took a big hit but in my real life portfolio I had bought more at 6c a few weeks ago which took my cost base down to $0.109, so happy enough to cash out neutral.

It looks like the increased depth on the buy side is just Humanforce hoovering up any shares that they can get cheaper than the 11c offer price. They lodged a substantial shareholder notice today and currently have 15% and look to be still buying anything they can get at $0.105, so seems unlikely now that a competing bid will come.

@PinchOfSalt I am also waiting to see what the 4C holds. I am hopeful that the cash burn has been reduced to be around $2M and ideally closer to $1.5M. I think a higher cash burn rate without some very compelling reasons will make it very hard to raise capital that they look like they will need. They have stated a key focus for FY23 is to be operating cashflow breakeven and I can't see them doing this without reducing spending. I also think Matt Donovan as the CEO was partly to address the rate of cashburn. I am also expecting to see the distribution channels contributing more revenue.

I am not too fussed about them doing SPP. If they do need to raise cash I would prefer them do a quick institutional raise at a minimal discount to current price. I prefer this option as it gets completed quicker and it is a much cheaper way to raise capital when the amount is relatively small. I hate seeing the amount money that gets used up in the process of raising capital. I would expect that if they need to raise capital then we will be able to buy on market for the equivalent or less than the raise price anyway.

They also said they have a material R&D tax refund to come in before the end of the year so that will probably get them through this quarter and then the cap raise which is guaranteed to happen now, just a question of when.

I was a bit disappointed at the slow progress of the cintra channel, but they have guided for this to accelerate in Q2.

I guess it helps them to have Bevan Slattery as a major shareholder who will keep the show going if needed.

@Slideup @PinchOfSalt

Good conversation. Company obviously in a tight capital position here, I was hoping to see that burn reduced further to $1.5-2m, but it could have been worse.

I agree my main disappointment is the slow uptake of Cintra. It represents the short term opportunity to scale for IHR because Cintra is responsible for sales and support. The commentary suggests it will accelerate but we need to see it happen.

R&D coming in this quarter will help, but ultimately I suspect IHR's key backers (Colinton Capital and Bevan Slattery) won't want to be diluted too heavily at these levels. This is a business/product that could have an amazing future if it can manage it's way through the next couple of quarters.