Hi TommyJR, Got to say I really appreciate your analysis. I...

Hi TommyJR,

Got to say I really appreciate your analysis. I model-up the coy/business too..but the business volatility is currently just too great to put out my numerical guesstimates.

The one thing it has been pointing to is the need for a CR.

The QTR cash at $986k and my estimate of unearned income (a liability) is at about $400k (was $285k at June 30). This means, effectively, that there is currently about $600k of freely available capital which becomes a concern when your qrtly outgoings are very assureably around $800k (and likely to grow) and receipts maybe $400k but +/- 50%.

(The build-up of unearned income versus Cash was the key ratio that I used to flag NEA's CR last year)

The 2 new hires are very interesting. They are a package team: Jamie the leader/mentor has been followed by Jill through 4 different organisations. Pointerra is their 5th together. They would not have gone if it wasnt mutually agreeable to PrecisionHawk. But they are an expeienced technical/BD team...a necessary combination to get new clients comfortable with a new system handling valuable mega-data. I'd put their combined rate at about US$240-250kpa and add 15% for operating expenses which works out at about A$400kpa or A$100/qtr.

I'm also really excited by their DPaas initiative, but it will likely require some additional horespower to give proper it effect to it and I'm not sure that the 2 new hires are on-board purely for this. I'd also have though this new initiative (and others) would have seen an increase in both R&D and admin spend...not a decrease.

My point is that I think their estimate spend for the Dec qtr may be light on and am factoring in a higher spend profile over the next 4 qtrs. But thats more than OK. Olson has demonstrated todate that he can be prudent with funds and has waited for the product/business models to refine and prove themselves sufficiently before bringing out accelerated initiatives so I'm confident that these will have <1yr paybacks.

I would like to see 3DP start reporting much like NEA (an amazing amount of detail that materially lowers analytical risk = higher valuations). A key metric for them was/has been 'churn rate' of clients which empirically showed just how 'sticky' their product was (and still is). NEA's churn rate started at about 10% and fell over time to a miniscule 6%. For any new technical product, this shouts its indispensible value.

....something I feel 3DP is moving toward.

Very happy giving them capital to take the next growth steps.

Cheers,