I haven't commented for a long time on SCT, but still follow...

I haven't commented for a long time on SCT, but still follow their progress after bailing out a long time ago.

A few mixed messages in the latest quarterly and this market update. They now have recurring revenue of $1.1 mill on an ARR, which is really the reason for the update. They had already indicated that it was 'over $1 mill' quarterly report issued just over a month ago, so not too sure that is so impressive.

Also, the exponential growth may come to a fairly sudden halt unless new partners also start to sell. The quarterly report highlighted the significant slowdown in receipts for hardware (explained as a seasonal event after the holidays?). I am not sure seasonality comes into selling of security equipment. And if hardware is not being bought, then this will be a leading indicator that white label sales rates will slow.

My concerns would be firstly that $1.1 in recurring revenue sounds ok, except the company costs around $4 mill per year to run. Then the hardware sales slowdown that could be reflective of the telco partner not re-ordering as it may feel that sales growth at these rates have peaked (my opinion only, but they only have so many customers to sell to or require this service). Also, concerns that SCT's other partners do not seem to be having a lot of success in adding to sales despite having had agreements signed for some time now. Finally, the biggest short term issue is no cash and growing debt to keep the company alive.

This is all in addition to not having a well known brand name (little retail buying of their products) and relying totally on white label sellers in what is a highly competitive market.

Lots of headwinds. Still precariously placed. Just my opinions.

Milesy