I dont agree it's a professional services firm. They got rid of...

I dont agree it's a professional services firm. They got rid of the consulting arm and have said they'll have the reseller network up in 3-5 years, in the meantime they are filling the void selling the product themselves.

I've had experience with a very similar product cycle - Totara LMS (similar to Elmo on the ASX). They created a Learning Management System and were initially the primary supplier of both the software and the services for installation. Then pulled back as they set up a reseller network, and now only run the software - and the network brings in all the sales, of which both parties get ongoing commission, and the reseller gets the initial setup and ongoing consulting.

So costs will go up, but to a point, and the changeover is already planned in.

I also agree that the raise has diluted shareholders holdings, but the reality is that they expect to be cash flow positive in 1.5 to 2 years, this isn't going back to 3c-5c - those days are gone. Where will it settle... only time will tell, but I personally expect it to be between 7c-10c for the next while. Shares will release and some instos will sell for a quick profit but ultimately I believe these will get soaked up on market.