CCP Technologies (ASX: CT1) has marked a significant reduction in its operating expenditure to the tune of $1.5 million and expects to break even in the second-half of 2019.
The Internet of Things (IoT) technology solution provider expects to reach a monthly cash burn of $50,000 over the next quarter, down from $150,000 thanks to a restructure of its operational activities.
Importantly, CCP said it had achieved the $1.5 million reduction in operating spend without negatively impacting revenue or sales.
With the target of being cash flow neutral by the second-half of 2019, the company told shareholders in a business update that it was also expecting to add to its existing cash reserves in the form of entitlement-based government programs.
However, the finer details remain uncertain and have therefore not been factored into the company’s internal cash forecasts.
“The qualified pipeline excludes several highly material and progressing subscription opportunities that if won, would add substantially to the forecast revenue numbers above,” CCP added.
The company is also anticipating a significant windfall of $460,000 in August as a result of an existing agreement with Penta Global Blockchain Foundation.
With a string of commercial projects in the pipeline, CCP has made a strong start to 2019, with good news occurring across the board.
Shedding light on its Indian engineering operations, CCP said its IT development subsidiary of 25 engineers was now profitable.
“The Indian operation is profitable and highly scalable, and the company is looking to leverage this team further to build operating cash flow for the group,” CCP said.
Leveraging development capabilities
The company, which is targeting the food industry with its award-wining data-capturing smart tags and advanced IoT network to deliver business insights, is also assessing several “exciting and synergistic corporate transactions”.
Occurring alongside its normal business operations, CCP said the proposed transactions presented opportunities to significantly leverage its development capabilities and technologies.
“While progressing, these discussions are as yet incomplete, and the company will inform the market in due course in accordance with its obligations,” it said.
The food industry IoT company has previously expressed intentions to extend its reach to over 100 customers and monitoring more than 210 sites in Australia, the US and Singapore.
CCP’s shares shot up on the business update, lifting 100% to $0.012 in afternoon trade.