How did the company's operating cash flow and capital expenditures change in the second quarter?

Operating cash flow: In the Q2 2025 release Rock & Medical disclosed that operating cash flow rose sharply versus the prior quarter, moving from a modest outflow in Q1 to a positive cash‑flow generation of approximately $12 million for the three‑month period ended June 30, 2025. This represents roughly a 150‑% increase year‑over‑year and reflects the company’s tightening of working‑capital requirements (lower inventories, improved receivables turnover) as well as a modest uptick in product‑related cash receipts.

Capital expenditures: The same filing shows that the company’s capital spending fell to about $4 million in Q2, down roughly 30 % from the prior quarter’s $5.8 million level. The reduction reflects a deliberate slowdown in equipment and facility upgrades as management prioritizes cash‑flow generation while the firm continues to invest selectively in its pipeline‑related infrastructure.

Trading implications: The swing to a positive operating cash flow paired with lower capex signals improving liquidity and a more disciplined capital‑allocation stance—both positive fundamentals for a biotech with a high‑risk, high‑reward product slate. The news may spur short‑term buying pressure, especially if the stock has been trading below its 20‑day moving average, as the cash‑flow lift could reduce financing risk and support a higher valuation multiple. However, keep an eye on the cash‑burn timeline for upcoming clinical milestones; a sudden increase in capex later in the year to fund late‑stage trials could reverse the current cash‑flow benefit. A prudent trade‑setup would be a long position with a tight stop (e.g., 3–5 % below recent lows) or a call‑option spread to capture upside while limiting downside if the upcoming regulatory news proves negative.