Where on earth did you get those figures? A 37% margin! That'd be actually fairly reasonable. I generally work on 40% when dealing in the software industry, but 37% wouldn't be too bad. Unfortunately, that isn't the margin earned by ISX on the integration contracts, no matter who you ask...
ASIC say: "ASIC alleges iSignthis failed to disclose that in the fourth quarter to 30 June 2018, it had recognised approximately $3 million in revenue that was one-off and non-recurring. It is alleged that the revenue was derived from the integration agreements. In addition, ASIC alleges that iSignthis failed to disclose it had incurred approximately $2.85 million in one-off costs for out-sourcing services, which ASIC contends was for the supply of the integration services. "
Assuming no internal work by ISX employees of any kind, that would be a margin on integration of... 5%.
ISX state in their defence against the ASIC SOC that they had integration revenue of EUR1.9m with costs of EUR1.64m. That results in a margin on integration of... 14% (again, assuming no internal work at all).
The truth may be one of these - 5%, 14%, or somewhere in between. But I promise you, it isn't 37%.
Using JK's figures (not ASICs which would look worse), the directors earn 300m shares (a third of our company) for netting us EUR260k. If we value the shares at 10 cents (which I think you'll agree is reasonable), that means that they made the company $400k in profit, with minimal ongoing revenue to shareholders, and used that to claim $30m from shareholders.
ISX Price at posting:
$1.07 Sentiment: None Disclosure: Held
