Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-2

Hmm.. reduced revenue at higher margin makes sense, I applaud this strategy as many get fixated on revenue (vanity) over profit (sanity) which can be hard to resist.

Reading the text I was happy to further read that the positive operating cash flow was “driven by higher gross margins and cost management initiatives” And “A focus on higher margin salesdrove gross margin improvement and operating expenditure was well controlled leading toreduced cash burn.”

However, I’m not sure I agree with their statements at all. This quarter we received a $1.5m govt grant / tax incentive. Last year’s quarterly had no grant. If we remove the grant then H1 operating cash outflow would have been ($1.9m) vs ($1.0m). Excluding the grant, is almost say the OPPOSITE regarding with revenue / margins or cost savings….

any other interested investors - please correct me if I’m misinterpreting
to management - please do better next time than assuming we aren’t going to cross examine your words vs the actual cash flow statement

downgrading my sentiment from buy to hold on this basis