Moved from main board - the points are relevant to graphite miners and may not be only to ZEN

So I finally found time to read the Zenyatta Financial statements and MD&A and I am having trouble understanding the math. Here are some statements from the MD&A:

“The Corporation remains in sound financial position to fund its currently planned and anticipated exploration programs, operating expenses and contractual commitments for calendar year 2015, as well as meet currently known contractual commitments beyond the 2015 work program. “ (Page 17, MD&A)

“The Corporation will need to raise additional funding to finance future exploration programs and development activity. The availability of equity capital, and the price at which additional equity could be issued, is dependent upon the success of the Corporation's exploration activities, and upon the state of the capital markets generally. Additional financing may not be available on terms favourable to the Corporation or at all. If the Corporation does not receive future financing, it may not be possible for the Corporation to advance the exploration and development of the Claims.” (Page 17, MD&A)

“The priority for the Corporation at this point is to continue market and business development, metallurgical testing at SGS and a preliminary economic assessment by RPA Inc. on the 100% owned Albany Graphite Deposit in the next quarter with a remaining budget of approximately $300,000. Additionally, a drilling program is underway on the other Claims held under agreement with Cliffs Natural Resources Exploration Canada with a budget of approximately $200,000”. (Page 16, MD&A)

Financial Analysis

I have considerable experience doing financial accounting and reading financial statements and a business degree. I find it difficult to see how Zenyatta can survive financially beyond April 2015.

“As of December 31, 2014, the Corporation had a cash balance of $176,768 as well as $1,062,708 in temporary investments to settle current liabilities of $355,159 (P19 of MD&A)”

I would also include other receivables from the unaudited statements of $73,843. So this results in the following:

Current Assets

Cash 176,768

Temp Inv. 1,062,708

Receivables 73,843

Total Assets 1,313,319

Current Liabilities

Accounts Payable 355,159

Net Liquid Assets $958,160 (Dec 31, 2014)

Monthly Expenses

For the 3 month period leading up to Dec 31, 2014, monthly expenses excluding stock compensation averaged $117,588. The same figure for 9 months ending Dec 31, 2014 was $131,369. For this purpose we will assume the appropriate average monthly expense to be the lower of the two ($117,588). Now we need to add $300,000 to complete the PEA (assume 6 months) and pay for drilling $200,000 (assume 3 months). Add equipment lease payments of $1213 per month. This results in a total monthly expense (burn rate) of $235,467. Without a further injection of cash, Zenyatta would be able to finance operations only until the end of April, 2015.

QUESTIONS

So the company states that they are well financed to meet their financial commitments beyond 2015? Can someone show me how they arrive at that conclusion? They have not indicated that they will stop paying the rather hefty salaries they have outlined in their MD&A!