being accumulated, page-7

A couple issues holders need to recognise are:
+ All of the recent sales have come from the pipeline of previously announced “prospects” – there have been no updates from the company as to the number of future potential sales/installations.
+ The lead time between initial discussions with a potential client and sale/installation is substantial, I would suggest around 12 months at a minimum.
+ The company needs a substantial installation base (far more than present) to ensure a predictable and sustainable future income stream through maintenance agreements.
+ All financial institutions will already have in place risk management/measurement systems – how many of these either want, or need to scrap these existing systems? The probability would reduce the larger the institution. At large institutions their risk management system will be tightly integrated into existing accounting/reporting applications, both internal and external (eg CB reporting). As such any change of a core system would be a huge undertaking.

Finally, is the company exploring “partnering and/or merging” prospects through desire or necessity? To my mind it is the latter. Management probably recognises their product base and potential market is too small to for ITE to continue in its present form. Present cash flows are far too concentrated and as such unreliable – hence the need for the pending new issue which management admits is merely for working capital, as distinct from R&D.