August 2015 Cash Flow Report

Today I’m starting a new monthly article to report our cash flow to those who are entitled to access this private blog.  We’re continuing to grow and that includes two new shareholders who joined us this summer (names withheld to maintain privacy).  As a company, we’re “on a roll” so to speak.

Past 3-Year Cash Flow Results

 

20150901-Past3YearToAugust

Above you see a chart showing the actual deposits to the Company’s bank accounts for the calendar/fiscal years of 2013, 2014 and 2015.  There’s something very significant I want to point out to you.  Prior to 2015, well over 90% of our deposits were the result of either capital investment (new and existing stockholders investing in the company) or loans to the company by officer (loans from my own savings to the company to keep the company alive during the final push to generate sales and revenue).  So when you see the year-over-year increase from 2013 to 2014, please realize almost all that money came from only TWO people investing in this company (me and one other).  Well-under 10% of these deposits came from revenue (sales) of PRG and Voifone pre-paid minutes.

What’s Cost of Keeping the Company Alive?

It’s simple.  For a good estimate just divide the deposits for the past two years by 12 months and you’re about 95% accurate.  Remember these deposits are the result of more than 95% investment in the company from TWO PEOPLE (Me and Sam) and NOT from sales.  So, when this company does almost NO business at all, here’s the average monthly cost to keep us alive and developing our product for the past two-and-a-half years:

  • 2013 average monthly cost:  $12,895.12
  • 2014 average monthly cost:  $16,647.29
  • 2015 average monthly cost:  $6,771.13

So why does 2015 show so much less deposited than last year as a monthly average? Simply because yours truly, ME, Richard Gaustad, ran out of personal savings, cash and credit, with which to prop up the company by depositing my own funds and borrowed cash to our bank accounts.  We had no other resources from which to cover the monthly costs and no new investment from our current owners or new shareholders during the first half of the year.  So I kept us alive by negotiating with creditors and borrowing small amounts of money here and there to pay the most critical payables of each month during the first half of the year.  Today things are MUCH better than during the first half of the year.

The result of our collective hard work and careful planning in the first six months started to pay off in April and May and REALLY hit in June – as you can see below.  The cost of “staying alive” (paying the cost of the data centers, software engineers, internet connection, office space, and the list seems endless) has for years averaged more than $12,000 monthly.  In 2014 that cost went up by about 25%, largely because I made 2 trips to the Philippines and BORROWED the money to do it, placing those borrowed funds into the Company accounts.  We lost a small fortune last year due to one customer who scammed us.  For those of you who don’t know the story and are curious, you can contact me directly. It was a nightmare for which we’re still paying – and one which I would prefer to simply forget.

Evidence of a Very Bright Future – Check Out This Year’s Cash Flow

Despite the difficulties and the low cash flow this year, we can FINALLY look back at the results of the first 8 months of the year and see it’s nothing short of a spectacular rise in cash flow!  We’re ready now to lay claim to a VERY bright future!  We’ve had 3 straight months of RECORD cash flow, and we believe September is going to beat August due to momentum that Randy has built around our Crowd Funding campaign.  Just look at what this year has produced so far:

20150901-CashFlowResultsNow, keep in mind, this chart just reflects DEPOSITS and doesn’t differentiate between capital, loans and revenue.  Of course the most IMPORTANT thing we’re looking for is revenue.  Nonetheless what you see above is like a “dream” chart that everyone in business wants to see, but few actually experience it.  We’re in the middle of what I think is going to be a very spectacular 2015.  Let’s “MAKE IT SO!”

Deeper Analysis of 2015 Cash Flow

Now, just to bring everyone down to earth after seeing such a great track record this year, let’s look at what the numbers above REALLY mean.  This table tells the real story, but don’t be alarmed by the sharp DOWNWARD turn in August:

20150901-RevenueAllSources

This is really, truly a significant chart. It shows REVENUE.  For the first time in our development history – and remember we’re STILL a prototype company with very few products fully developed on which we can really earn revenues – we have survived this year MOSTLY on revenue!  That’s absolutely remarkable, given our long history of R & D, having to rely on investment funds to stay alive.  This year, we’ll set a record for both investment AND revenue and do it simultaneously.

The sharp downward movement for August is the natural result of switching from an emphasis on PRG Membership sales in April through June, to an emphasis on Crowd Funding which started July 4, 2015, which is Independence Day in the USA.  I think the launch of Crowd Funding on that date was entirely appropriate, since it also signifies the start of TRUE independence for this company.  Our August Revenues are low because it takes 1 to 4 months to ramp up sales for a campaign like Crowd Funding. We fully expect that the year-end results will be something we can all be very proud of.

September 2015 Goal

Randy and I discussed sales goals for September yesterday.  Our goal is to hit $60,000  in Crowd Funding donations.  This week we’re launching a great incentive campaign which should be announced by Wednesday on the Crowdfunding Facebook page. Watch for it!

We’ve got another goal to add $75,000 of new capital to the company, which will be used for the dual purpose of completing our own Voifone soft phone application to the point where it’s one of the best on the market. This goal is finally within reach because we’re adding an entire full time India-based IT department to the company this week.  (Watch for an official announcement this month.)  The new invested capital will be used to support this IT department combined with support for Randy’s Crowd Funding marketing and sales efforts, primarily in the Philippines and throughout the OFW community (that’s “Overseas Foreign Workers” for those of you not familiar with the Philippines).

So now you see the tremendous momentum we’re in RIGHT NOW!  Let’s all band together and work hard to keep it and increase it. By doing so, the results for 2015 will be nothing short of amazing for all of us!