Ann: Quarterly Activities Report & Appendix 4C, page-19

@Lollies

when you buy a product, with a plan to resell it for a profit - you have to buy the product first.

When you are growing 70% Quarter on Quarter and expect similar rates of growth in future periods, it necessitates buying more inventory than you sold in the previous period.

Thus, the cost of manufacturing and operating will necessarily be higher. This is a cash flow statement, not a profit and loss.

Its also promising in this update that there is some operating leverage coming through. You can see the same period last year they had nearly $1.5m cash burn for $1.08m revenue. This period its over double the revenue and a lower cash burn. A spreadsheet a few minutes could make some interesting numbers if those two trends continued.



There is no doubt that the company still spends more money than it receives currently. This is a growth story pure and simple.

If they can keep up the revenue growth, I am sure investors will be quite happy. If they don't, then the thesis for me is broken and I suspect the share price will tell the tale.