important re cash flow analysis

123 raised an excellent point and was the only other outside MJR to understand it.

QTK have a "annual billing cycle" for its clients.

That is........clients are billed in advance for monitoring fees either yearly,quarterly and even monthly.

So you have this uneven revenue cycle and of course this cycle will occur on these time frames.

Most of QTK's clients will be billed yearly as they are "corporate" clients.

And as such........we are seeing the "original" 6000 QTK clients "renewing this last quarter (12 months since relisting)

and it is also impacted by additional new sales......roughly 600 to 800 units per month at this point in time.

as the billing cycle moves on.......the larger revenue increase will come in the March,June quarters of 2007 as this is when "new sales and clients" came into QTK (only had new stock to sell in feb 2006)

In broad terms.........6000 clients in the Sept quarter 2005.

or $1.8m divided by 4 equals.....roughly $450K

Note the Sept quarter 2005 showed revenues of $650k.......$450k plus licence fees from China

In short......QTK are invoicing its 6000 clients from June 2005

$450k annuity PLUS......$600k in NEW SALES for the September quarter.

As the business in Australia is an annuity model......in effect.

say 20k clients as at the end of June 2007.

would give QTK annuity revenues of $6m

and so on.

The Chinese model is NOT annuity based.

I hope this makes it clearer for everyone.