Is LQWD Technologies (CVE:LQWD) In A Good Position To Deliver On Growth Plans?

Even when a business is losing money, it’s possible for shareholders to make money if they buy a good business at the right price. For example, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you’d have done very well indeed. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.

So should LQWD Technologies (CVE:LQWD) shareholders be worried about its cash burn? For the purpose of this article, we’ll define cash burn as the amount of cash the company is spending each year to fund its growth (also called 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 LQWD Technologies Run Out Of Money?

A company’s cash runway is calculated by dividing its cash hoard by its cash burn. When LQWD Technologies last reported its May 2026 balance sheet in July 2026, it had zero debt and cash worth CA$2.4m. Importantly, its cash burn was CA$2.1m over the trailing twelve months. Therefore, from May 2026 it had roughly 13 months of cash runway. That’s not too bad, but it’s fair to say the end of the cash runway is in sight, unless cash burn reduces drastically. You can see how its cash balance has changed over time in the image below.

View our latest analysis for LQWD Technologies

How Is LQWD Technologies’ Cash Burn Changing Over Time?

Whilst it’s great to see that LQWD Technologies has already begun generating revenue from operations, last year it only produced CA$29k, so we don’t think it is generating significant revenue, at this point. Therefore, for the purposes of this analysis we’ll focus on how the cash burn is tracking. Over the last year its cash burn actually increased by 12%, 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. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years.

Can LQWD Technologies Raise More Cash Easily?

Given its cash burn trajectory, LQWD Technologies 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. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By looking at a company’s cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year’s cash burn.

Since it has a market capitalisation of CA$29m, LQWD Technologies’ CA$2.1m in cash burn equates to about 7.3% of its market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year’s growth by issuing some new shares to investors, or even by taking out a loan.

How Risky Is LQWD Technologies’ Cash Burn Situation?

Even though its increasing cash burn makes us a little nervous, we are compelled to mention that we thought LQWD Technologies’ cash burn relative to its market cap was relatively promising. Cash burning companies are always on the riskier side of things, but after considering all of the factors discussed in this short piece, we’re not too worried about its rate of cash burn. On another note, we conducted an in-depth investigation of the company, and identified 4 warning signs for LQWD Technologies (2 are potentially serious!) that you should be aware of before investing here.

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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.