It's not that the actual bad debts as a percentage of TTV are...

It's not that the actual bad debts as a percentage of TTV are all that high considering the soft credit checks, the real problem is that the entire business model does not work.

This should have been obvious to management from the outset.

If you are working on a 5 percent gross margin ( trending that way) your gross income is 1/20 th of TTV

Transaction processing costs which are paid to the banks etc account for an increasing percentage of that income and in the reckless quest for growth with pay anywhere at non integrated merchants that percentage is increasing every quarter and is currently 20 percent of Gross Income.

So before bad debts your gross income is 4.0 percent or 1/25 th of TTV

So bad debts at 3 percent of TTV wipes out 75 percent of your income.

As a non deposit taking institution Interest costs will account for the rest of the remaining margin.

There is essentially nothing left to pay huge operating costs of employment and marketing to attract and service customers for all these micro transactions, hence operating costs represent a total loss to the bottom line.

The larger the company grows the greater the losses as the business model simply cannot work.

When management come out with statements that Expected Credit Losses are in line with management expectations they are essentially saying that they know the business model does not work.

Their only hope of survival is to dramatically reduce bad debts but given the operating nature of the business that's highly unlikely.

Added to this gross margins have trended downwards for the last few quarters and now interest rates are creeping up so they are being squeezed from both ends.

While I see people saying the $148 million will ensure they last longer I believe it can't all be used as working capital as warehouse funders are going to reduce the percentage advanced given the precarious nature of the business and some if not all that $148 million is going to be required to self find it's loan book.

in my view they will be gone inside 12 months.