A very "pick and choose" 4C by the Directors.
Point #1. Trying to direct people to focus on "recurring revenue", i.e. recurring revenue grew 22% QoQ, but omited total revenue was actually down QoQ. I've also pointed out in one of my previous posts that they also omited non-recurring revenue from this chart for FY21 data.
Point #2. They said the recurring revenue growth was driven by the 2 new fixed term contracts. Funny enough, one was signed in June and one was signed in August. The June one brings in $46k in rev per quarter ($926k over 5 years) and the August one brings in $147k in rev per quarter ($1.7m over 3 years). This basically implies there has been no major contract win in the 2nd quarter.
Point #3: On 7 Dec last year, they said they'd expect to have the first report from the Uptime Institute in mid-Jan => Did not mention in this 4C.
Point #4: they keep making a big deal of the MD & other Directors buying shares. Justin spent $47k to buy shares. Shane & Blake spent $50k each. Big deal. Justin's salary package and the profit on sales of shares he sold to the market at the IPO, worth to spend a couple of thousands to calm investors. Didnt really work did it?
Point #5
perating cashflow has worsened again. Operating cash outflow of $653k. Staff costs jumped significantly in 2Q. Justin & wife's wages alone are $280k plus super per annum. DC2 basically would have gone broke if it wasn't for the capital raise. They have $1.356m of cash at the bank, so enough for 2 more quarters (using operating CF) or 1 and a bit quarter (using operating CF and investing CF). I guess there's another capital raise soon?
Anyway, a dog stock run by management driven by self-interest than stakeholders' interest. Glad I'm out. There might be some M&A going on but I'd rather sleep at night. Good luck to other holders.
