RE: NREs24 Apr 2024 13:41
Trickey -
Nice to see how I stated "key issue here is the 2.2-3 isnt product revenue, it engineering" has led further research - I thought I posted a pile of tosh? But good to be of assistance.
So why it is the key issue.
1. you cant extrapolate the 2.2-3 forward in any meaningful manner. So a further potential revenue / cash cliff Q1/2 25.
2. the money doesnt flow from an end user with the product in the field as royalty / product
3. it is a heavy investment from the customer, it will go through a lot of approvals and investment appraisal - hopefully with the statement of absolute numbers this is 95% complete - but the final 5% is always the pain in the backside.
4. still dont know whether it is an enhancement to an existing product which has a run rate for ENET, or a completely new product subject to launch. end user acceptance etc.
5. the enet product is not plug and play and therefore still needs work to ensure it works as part of this OEM stack, or future potential opportunities
6. Vs royalty or product the cash flow might be very backended or even 2025 (income can be recognised in accordance with work undertaken even if not billed)
7. Development / testing always takes longer / costs more than you plan for
Having said that
1. If they do get an order there should have been due diligence and an ROI evaluation from the OEMs that they can recover this amount from a given number of units in X time period.
2. Hopefully from a shareholder perspective it is effectively 100% margin with the costs embedded within the run rate DL has spoken about, not additional developers / testers on top