back to raise price, page-7

I'm skeptical of this company for 2 key reasons:

1. Effectively, this is a professional services firm not a scalable software business (albeit with some level of scalability via their products). Thus, although ARR may double (and did double), costs will likely also increase at a similar pace. As an example, simply look at the doubling in staff members over the past 12 months.

2. The capital raising will dilute existing holders and balloon out the market cap. At 8.2 cents and a market cap of $19m, we would see a market cap of c. $30m at a similar share price once the full CR is complete. For a company that has FY18 rev of c. $3m this would then be trading at a rev. multiple of 10x, which is exceedingly high for a company that is not yet profitable nor has demonstrated consistent proven growth.

I expect the share price to fall back to 7 cents or lower and will personally consider an investment at a market cap of $10m or less (c. 3-5 cents).

However, I would love the company to succeed because encouraging green business will be a critical step towards mitigating climate impacts. The corporate world must also play their part.