Ann: Annual Report to shareholders, page-55

15% QOQ is not a joke. As per my numbers, that translates to a 61.55% annual increase in revenue - and couple that with increasing margins you get some nice profits.

Forecasts are difficult to make because it’s a young company so there are periods of inactivity and then suddenly a big contract. Case in point, the Pegasus contract by itself is almost half of FY17’s revenue.

For this reason, I try to be conservative in my forecasts but of course, that doesn’t mean I’ll get it right. It could be worse or it could be a lot better.

Having said that, I think it’s been made clear that despite not pulling in revenues as quickly as many had hoped (e.g. military contract still in progress) their product does have a profitable market. Two years ago the price was around 70-80c based entirely on the military contract alone which was touted to be around $25M revenue. Now we have $25M revenue without the military contract but the share price is around 40c. Two years ago, none of us were sure AJX’s product would be taken up by the market – there was no real proof of product/concept. Now we have a number of large commercial contracts which do provide that proof, which means it’s significantly de-risked as a business but twice as cheap as before. And military hasn’t been lost, it’s just taking longer than expected (and not due to anything AJX did wrong – that’s government for you, they take forever).

I understand that many have gotten frustrated because the stock didn’t triple in value in a year as we were all hoping. However, I still hold a large loss because I believe it’s quite obvious that GIVEN ENOUGH TIME I will make a lot of money off it. Revenues are increasing, margins are increasing, and the last 3 months have been cash flow positive. Which means even if nothing special happens, at the rate they are going next year will be a net profit. Even if it takes 3-5 years, this company will end up very profitable and as they have no direct competitor, they will reap the benefits of the entire industry size as other chemical solutions become obsolete.

Note: If you add Pegasus revenues to my projections, 15% quarter on quarter is a lot more:

Q4 gross margin = 18.23%
Q4 revenue = $6.75M + $2.5M (Pegasus) = $9.25
Q4 qoq revenue growth = 15%

Then for FY18 we might expect the below revenues and profits:
Q1 revenue = 10.64M
Q2 revenue = 12.23M
Q3 revenue = 14.07M
Q4 revenue = 16.18M
Annual revenue = 53.127M

At 18.23% margin = $9.7M gross profit = Net loss of $3.3M
At 40% margin = $21.3M gross profit = Net profit of $8.3M

That would be a more optimistic projection but as I said, I prefer to err on the cautious side.