Ann: Unsolicited,Non-Binding,Conditional Offer from SQN Investors, page-23

However, unlike many ASX-listed small cap tech stocks, the business is verging on profitability. On an adjusted basis, removing one-off costs and costs related to acquisitions, the business reported positive earnings before interest, tax, depreciation and amortisation of $4.1 million for the year to June 30.

This is one of the reasons why Forager Funds Management chief investment officer Steve Johnson says SQN’s 80¢-per-share bid undervalues the company “is opportunistic”.

“This business is growing nicely, it made a bit of EBITDA last year and it’s saying it’ll grow that this year. It’s not a cash burn tech stock, it won’t need to raise more capital,” he said.

“The share price, like most of the tech sector, is down significantly. It’s one of the largest investments in our portfolio, and I don’t think 80¢ is even close to the right price, and I’d be surprised if the board thought differently.”

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