My take, page-29

You have to ask questions:

Opens @51c and about 17 minutes later its @47.5c on around 480,000 shares...

My take is really simple:

This company has lost the audience and the fan club is just making it worse.

I decided to wait until the 4C and to see what I thought without the noise of the forum.

The 4C wasn't all bad as the market suggests but the company has only itself to blame with a sprinkling of blame on the forums optimists ...

The cash in was okay $6,6 million.

The confirmation of the company doing more than $2 million a month in recurring revenue.

So annually we should do $24 million and a confirmation of at least a 30% margin. so that is $7.2 million gross margin.

The confirmation that the running costs are around $2.1 million a quarter so $8.4 million annually.

Worst case we are at a loss of $800K or we need to increase monthly turnover by $225,000 Well this last quarter was already $2.1 million per month in cash flow so lets assume we are almost there.

So we have to fund trials - that's not a never ending cycle and we have to fund research which is probably around $2 million a year and you get some back from the ATO...

Assuming the monthly turnover is $2,1 million and that this grows to $2,5 million by 30 June and we want to fund the $700k monthly over head and around $160K R&D plus around $50K in Trials ... That makes a monthly bill of $910K so @ 30% we need turnover of $3 million or a margin of 36.4%. We probably need a little less as the R&D attracts a partial refund...

So its all doable ...

However Mr Market no longer trusts anything said by the company.

No explanation for the costs blowing out this quarter other than suggesting a timing lag. Possible but just as likely its a catch up of payments to suppliers...

Personally its time to stop the explanations and to get the communication down to reality.

The Pegasus deal was put out there but it seems very little has actually been booked ...

The company has put too much Blue sky out there without clarification. The Pegasus deal could easily have had a rider that sales are expected to only ramp up in the 4th quarter of financial year 2017. If they did not know that they need to at least start being conservative.

Really I think DVH can and will do the job but he has been given a legacy to overcome that wont be easy.

To put out a 4C with a blowout in Product manufacturing and operating costs... without a real explanation is just plain crazy and got the response they did not need.

Forget all the spruiking, this is a slow progress with a huge upside but these shocks are getting all to familiar. They are still over promising and under delivering - in my opinion and whilst it could be better communicated it needs credibility to be communicated and believed.

I also think the military avenue is never really going to be much and that maybe Department 13 should be shouldering some of our lobbyist costs be they one or 2 people ... Personal opinion.

I still think its an investment with the risk at least as good as the upside potential but the time for over optimism in reporting and communication has gone IMO.