IAM Market Activity Discussion, page-358

I think RAP is a great guide to what IAM’s share price could possibly do over the next 12 months or so.

Don’t sweat the day to day movements of the share price if you believe:

• The Sentry HOA will be formalised
• A 2^nd HOA will be executed with a “household name”, hopefully in December but worst case in February
• A 3^rd HOA will be executed in early 2017 with a dealer group the size of Sentry or possibly larger
• MF’s confidence that he will achieve the $40M cumulative NPAT target by 30^th June 2019 to receive his 880M ordinary shares

If you don’t believe the above will be achieved then you shouldn’t be holding any IAM. The risks are that none of the above will be achieved, which would mean a share price of probably 1c or less (mkt cap $10M or less). That is 75% downside risk from current levels.

I’m not saying we will hit 50c but if we look like we will achieve most or all of the above then the share price will be significantly higher at some point in the next 12 months than the current 4c it is today. It simply has to due to the explosive revenue/profit growth that is likely to be achieved. How high??? I’m not sure at this stage and we can only really go off management comments that they think the $40M cumulative NPAT is easily achievable by 30^th June 2019. I would be disappointed if that didn’t result in a share price of 15c or greater at some point. That is pretty much 300% higher than here, so gives us a reward to risk ratio of 4x (300%/75%). Personally, I’m comfortable with that at this stage.

Here’s the RAP chart over the past 12 months with the IAM chart underneath showing how early we are in the12 month journey. Interesting to note:

• RAP rose from a similar price level to over 50c in less than 12 months
• High early volumes on both charts is the ‘smart’ money getting set early and look uncannily similar to me
• I’ve marked the periods of consecutive weekly falls on the RAP chart as well as a 50%+ fall in the share price over a month period back in June – nothing ever goes up in a straight line despite a strong underlying up trend
• The IAM chart stops at 6c – I couldn’t get it to go to 60c to show it on exactly the same scale as the RAP chart