General Discussion / Social Media, page-760

The price action over the past week or so comes across as very controlled to me.

Selling orders put in very quickly as not to let the share price run ahead of itself. Perhaps someone is taking a position?

As an aside, I am confident that Q4 will again be cash flow positive (as previously reiterated by the management with the real question being how much cash has flowed into Alcidion's coffers) for the following reasons:

(1) Some proportion of revenues from new contract wins in both Q3 and Q4 would be recognised and flow through to Alcidion's financial position. For example, the $2 million deal with Dartford and Gravesham NHS Trust in the UK was announced near the end of March and would not practically allow for any milestone revenue to be recognised under the new accounting standard AASB 15 from 1 July 2018.

In my view, Q3 and Q4 are the relevant period to judge the 'new Alcidion' as the first half was more about integration of MKM Health into the 'old Alcidion'. It is therefore important to consider this if anyone is intending to do a straight comparison between FY18 and FY19.

(2) Putting aside management's reiteration that no capital raise is required, I also queried the company over whether or not a debt facility is required to to provide an alternative source of capital to finance growth and more appropriately tenor-match the medium term and recurring revenue profile of PaaS contracts?

The company has responded that, at this stage, they do not foresee a need for a debt facility.

This is particularly important to my line of thinking because it can mean either:

(a) management has no clear visibility over their financial position/cash flow position, or

(b) management has clear visibility and confidence in the clear pathway to cash flow generation and profitability, and that it can self-fund itself into an international business (focusing on the three key markets of Australia, New Zealand and United Kingdom).

Given management has consistently delivered what they said they would do, I am inclined to put my trust in management and lean towards position (b) at this stage.

It is also important to recognise that our current market is pricing in a premium for companies with an export focus or offshore operations. These are not just weak Aussie dollar plays; rather the large addressable markets that are available to those companies.

What I like most about the Alcidion investment proposition is the potentially significant international opportunity -- because if the company can expand profitably on a global scale, then it will be worth many multiples of what it is today.