Clever Culture Systems (CC5: $0.021) released its quarterly cashflow report this week. The company achieved cash receipts of $1.1 million with a cash outflow from operations of $1.1 million. For the six months, the cash outflow was $0.9 million.
The company is operating with a small cash burn, whilst it penetrates the top 20 pharma companies, having secured sales to five already. It's not just the one sale to these customers, but the potential for multiple sales (around 10) plus an ongoing income stream.
In the March quarter the company sold one APAS Independence (US$350,000 each) to a pharma customer and surprisingly two to the pathology sector, which was not expected to be an active market.
In the current quarter the company expects to secure two new top 20 pharma sales. It now has an installed base of 30 instruments worldwide. The company expects to place at least 11 systems this financial year (9 placed already), which is the same as last year, but widening its customer base providing the potential for ramped up, multiple sales in subsequent years.
Once the company can reach around 20 annual instrument sales, it can expect to become a profitable and strong growth business that will arguably become an acquisition target. A global installed base of 50 instruments will be a very good 18 month target for the company.
Clever Culture Systems is capitalized at $46 million.
Bioshares recommendation: Speculative Buy Class A
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