We’re Hopeful That Black Swan Graphene (CVE:SWAN) Will Use Its Cash Wisely

We can readily understand why investors are attracted to unprofitable companies. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.

So should Black Swan Graphene (CVE:SWAN) shareholders be worried about its cash burn? For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. We’ll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

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When Might Black Swan Graphene Run Out Of Money?

A company’s cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. When Black Swan Graphene last reported its June 2025 balance sheet in August 2025, it had zero debt and cash worth CA$6.4m. Importantly, its cash burn was CA$3.8m over the trailing twelve months. So it had a cash runway of approximately 20 months from June 2025. While that cash runway isn’t too concerning, sensible holders would be peering into the distance, and considering what happens if the company runs out of cash. Depicted below, you can see how its cash holdings have changed over time.

View our latest analysis for Black Swan Graphene

How Is Black Swan Graphene’s Cash Burn Changing Over Time?

Black Swan Graphene didn’t record any revenue over the last year, indicating that it’s an early stage company still developing its business. So while we can’t look to sales to understand growth, we can look at how the cash burn is changing to understand how expenditure is trending over time. Over the last year its cash burn actually increased by 50%, which suggests that management are increasing investment in future growth, but not too quickly. However, the company’s true cash runway will therefore be shorter than suggested above, if spending continues to increase. While the past is always worth studying, it is the future that matters most of all. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

Can Black Swan Graphene Raise More Cash Easily?

Given its cash burn trajectory, Black Swan Graphene shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end up issuing new shares to fund future growth. We can compare a company’s cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year’s operations.

Black Swan Graphene has a market capitalisation of CA$62m and burnt through CA$3.8m last year, which is 6.1% of the company’s market value. That’s a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money.

So, Should We Worry About Black Swan Graphene’s Cash Burn?

Even though its increasing cash burn makes us a little nervous, we are compelled to mention that we thought Black Swan Graphene’s cash burn relative to its market cap was relatively promising. While we’re the kind of investors who are always a bit concerned about the risks involved with cash burning companies, the metrics we have discussed in this article leave us relatively comfortable about Black Swan Graphene’s situation. Taking a deeper dive, we’ve spotted 4 warning signs for Black Swan Graphene you should be aware of, and 2 of them are potentially serious.

Of course Black Swan Graphene may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.