to avoid add'l ATM use in the Q. Basic assumptions: 1) SG&A + R&D will decrease to $13.8M (no cash bonuses in Q2). 2) No change in A/P. 3)60% of new business will be rec'd in the Q, 40% will be A/R. 4) Gross margins will be 94% 5) $1.57M was rec'd via ATM on 4/11 and there has been no more.
$2.256M (COH, EOQ1) + 4.35 (A/R, EOQ1) + 1.57 (ATM) = $8.176M. Less 13.8 (SG&A + R&D) = 5.624 divided by 94% margins = $6M cash needed from Q2 new billings. If 60% of new billings is rec'd during the Q - Total new billings required is $10M. It is doable.
EDIT: didn't consider non cash expenses such as good will amortization, depreciation, share based comp. thus it new business req will be less.
Note: the $1.57M via ATM is from recollection, thus not sure it is correct. This was quick and loaded w/ assumptions so feel free to point out errors.
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