Ann: Response to ASX Query Letters, page-155

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davmarc

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23/02/18

14:37

Post #: 31292782
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Originally posted by ZMan ↑

This is all looking very dodgy now, imo.

In the quarterly report, what we were told was receipts from customers is mostly an advance from the finance company for work not yet performed. The money is received before the customer has the obligation to pay it. If the customer doesnt accept the video, the obligation to repay or find another customer remains with BIG.
It should be described in the quarterly report as proceeds from borrowings, not a receipt from a customer. Very misleading, imo.

What the quarterly report shows as "Cash on hand and at Bank" is mostly in a bank account nominated and controlled by the financier. There was no disclosure about who's name the bank account was in, but the BIG's internal accounts are described in more detail. But the cash is certainly not "On Hand" to BIG.

With this in mind, we must throw out our previous understanding of the company's cash flow and financial position.

Apart from FC capital, they now admit that there is 2 pilot sponsorship programs in the US, which generated over $2mil cash flow in the Dec 2017 quarter. Recently, 8 feb, they said they were only exploring options.

I consider this to be similar to a ponzi scheme in the following aspects:
1. Cash flow over reported by the use of a financial advance.
2. The share price increases because of the reported cash flow.
3. More shares are issued to pay for expenses, instead of paying in cash, because they have less cash available than reported.
4. Everyone is happy while the share price increases and the number of reported customers is increasing.

Its quite clear now that they are getting close to the limit of their financial advance, 19 of 20 mil used. Thus they cant keep growing in the same was in Aus.
The share price is no longer increasing, so all this could fall apart now.

No wonder the company didnt want to reply to my questions about the customer "pipeline".

Expand

Spot on and that is where the ASIC heavy hitters come in. I am starting to wonder whether the company will trade again and if it does whether it will be under an administrator.

Bloody nightmare for holders.

BIG Price at posting: $2.22 Sentiment: Sell Disclosure: Not Held
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