Ann: $2.48m Non-Renounceable Rights Issue, page-25

A market cap of $15-$20m is not out of the question for 1ST group over the next 12 months. 

With a revenue multiple of 3-4, that could come as soon as 1ST hit $5m in ttm* revenue, perhaps in early FY2020. Once we hit that level of market cap, the illiquid nature of the stock may improve and we may see institutional investors consider taking a stake.

As long as 1ST see a return to top line revenue growth in Q2-FY19 and continue to close the gap on breakeven, it is a hold for me. If we don't see a return to top line growth in the next few quarters, that would be a red flag. 

The retention rates of the product are strong. My only concern is the small chance that the reason retention rates are so high is because of price leadership (i.e. loss-making price leading in order to take market share). Financing is now clearly not an issue and I think we will see a return of revenue from advertising contracts. 

For those individuals who bought in prior to 2017 at 10 cents+ and are now significantly in the red, I can understand concern and frustration. But I think we are at the turning point of this stock in terms of its share price. My average entry price is below 4 cents. I'm not buying more, but I am certainly not selling. 

As was famously said, the sharemarket is a mechanism of transferring wealth from the impatient to the patient.

The current market cap stands today at $5.79m (at 2.8 cents) and may dilute up to c. $8m post raise. But, I believe we will see a market cap of $15-$20m in the not too distant future for 1ST group. It is just a matter of how patient you are.

GLTAH. DYOR.

 
* trailing twelve month