I have read the report carefully and come to the conclusion that...

I have read the report carefully and come to the conclusion that the report takes a disproportionately negative interpretation of facts. I can only guess that the intention is to force NEA's price lower so they can close out their positions prior to the half yearly results. That would suggest that when the Trading Halt is lifted, the smart action may be to buy, but DYOR.

Here's a couple of examples of skewed interpretations:

Page 6 "We estimate Nearmap has churned 28% of its current clients since entering the North America market. That means that more than one in five clients who have trialed the service has chosen not to use it."

Sounds really bad right?

What if you compared those same numbers to Australia, using the same Analyst Pack and methodology J Capital derived the US numbers from (see footnote on page 6)?

The same numbers for Australia are: 2017 (1,127), 2018 (876), 2019 (899), 2020 (927), total of 3,829 out of 8,602 total subscriptions or 44.5%, even WORSE than the US. Despite that, the Australian business has "generated cumulative profits of $120m since the US venture began" (paraphrasing from J Capital's report page 14). So maybe that 28% US churn is actually not so bad, when put in context.

Page 12 highlights another possibly concerning fact. That unearned revenue as a percentage of earned revenue fell across FY19 and FY20. The facts are indisputable - it's what Nearmap's audited accounts report. However, the interpretation is entirely up to the reader.

Thinking logically, one might consider some obvious factors that could affect this ratio. Timing of payments is one - if a customer happens to pay on 29 June, the bulk of the payment will end up in unearned income. If you pay 1 July, you won't show up at all. During FY20, there was a noticeable increase in trade receivables >30 days. If one recalls that the COVID-19 pandemic hit during March 2020, then one could conceive that some customers may have had difficulty renewing their subscriptions. In that scenario, would it possibly make sense that Nearmap may allow some customers to defer payment to help them through difficult times? In that scenario, would those $ perhaps show up as trade receivables, and less unearned income?

In fact, I wrote to Nearmap investor relations in August 2020 to query the trade receivables and that was exactly the explanation I received. J Capital could have asked Nearmap the same questions. Don't know if they did, but it's not in their report. Instead, J Capital chose a different interpretation - that Nearmap must be bringing forward revenue to manipulate EBITDA.