Hi Josh and Bluebottle,AFW needs to show the market that its...

Hi Josh and Bluebottle,

AFW needs to show the market that its product are gaining traction. As counterintuitive as it sounds, revenue at this point is more important than profit in my opinion. Down the line when we have the revenue base, then we can analyse profitability, but until we are at that point, the bigger question is whether the product is gaining traction or not. That being said, taking out $500k of operating expenses has to be a good thing.

For the 6 months to Dec 31, 2020 staff costs / admin and corporate costs (in thousands) were $1,708 + $1,580 = $3,288. For the 3 months to Dec 31, 2020 staff costs / admin and corporate costs were $683 + $737 = $1,420. So costs for the first quarter were $3,288 - $1,420 = $1,868. Overall saving in this category alone is $448k quarter on quarter.@bluebottle18 I am sure this is something you would appreciate?

But as I said before this is about a revenue story. Revenue this quarter was $748k, and the new product 'go to market strategy' was launched in January 2021. The company pointed to "accelerated revenue growth" in the second half of FY21. If we annualise the current revenue it is about $3mm. We have a market cap of $16mm and $3mm in cash, so an enterprise value of $13mm. So we are trading on about 4x annualised revenue.

If we can get revenue per quarter up to say $1.5mm, that would be annualised revenue of $6.0mm. If we still trade on 4x that would be $24mm in enterprise value, or about 1.5c per share. If we can continue to grow revenue past this point, the valuation should be higher. In fact these sorts of businesses generally command 10x revenue multiples. So down the line if we can have annualised revenue of say $15 million, we could be worth $150 million, or 10x what we are worth now.

Of course there are a lot of 'ifs' but I am just trying to show the importance of revenue growth for a company like this.

I can't point to anything in the quarterly that shows they are not executing on their vision at Applyflow. The next quarters will be critical.

All IMO.