Dear O'Lord. Sales have actually gone down! Down! How is that...

Dear O'Lord. Sales have actually gone down! Down! How is that even possible? They must have sold pretty much nothing via Telstra, and still lost some income from established accounts.

They came really close to going bankrupt. At the end of the quarter they had $181,000 left in the bank, and a burn rate in the region of $500,000 per month. So they had about 10 day's worth of money left, after which they would not have been able to pay the staff's wages and would have gone into administration. Some people seem to think it can not happen, or that there is always a money tree to go and harvest. There isn't. When the money is gone, so is the company, and all the shares are worth zero. They had a close call. So did the share holders.

It would have been closer had they not received a grant of $611,000. I wonder where that came from? They have not shared that information with their shareholders. Someone bailed them out. They would have gone under without that.

Staffing costs are interesting. In the previous quarter they were $572,000. Now the figure is $393,000. That will be the dumping of all their techies. The last death throes of failing technology companies tend to involve the retrenching of all the technical staff, replacing them with (cheaper) sales staff in a desperate bid to get income coming in. Sometimes the ploy works, but even when it does the company tends to collapse a short time later because they end up with customers whom they can not support. That leads to those customers becoming annoyed ex-customers. iWebGate have been dumping their technical staff for a few months now. At least getting rid of all the expensive technical people gets the wage bill down.

On the bright side, quarterly payments to the directors have increased from $146,000 to $170,000. So at least someone is doing well out of it. I wonder how much longer the shareholders will tolerate that sort of executive remuneration in the face of sales of $79,000.

Still, $3m in cash will keep the wolf from the door for another 6 months. Well, 5 months, because one has already passed since these accounts were finalised. They need another capital raising, and quickly. Another stock dilution! The money needs to have come in by next March, so Eddie had better get a move on.