Ann: Acquisition of Business - Core Banking Platform Provider, page-43

Another point @michaelhp is that if you look at the fundamentals for ISX I believe the fair value territory at the moment is between 14.5c to 17.5c based on EV/Sales multiple using forward looking Annualised Run Rate (ARR). EV/Sales is an appropriate valuation method for a pre-profit immature tech company that has rapildy growing recurring revenue.

Last quarter ISX had revenue of $3.95m. now approx $450k of that needs to be removed as an R&D rebate. We are left with $3.5m of revenue that can be considered recurring.

This expands out to an ARR of $14m.

Current enterprise value is $155m. That is the $160m (16c) market cap minus current cash balance of $5m.

So $155m/$14m = 11.

So current SP has an EV/Sales multiple of 11.

Research I've done indicates that a junior SAAS/Tech company with rapidly growing revenue should have an EV/Sales multiple of between 10 to 12. Though ISX is quite unique as it is more and more needing to be considered as part of the banking/financial services industry. Again this is another industry that my research indicates a rapid growing junior should demand a similarly high EV/Sale multiple.

That EV/Sales multiple range translates to a SP of between 14.5c to 17.5c.

Thoughts?