First post on HotCopper, but been reading these forums for the...

First post on HotCopper, but been reading these forums for the better part of a year.

Brief disclosure; I bought CV1 pre-IPO, IPO and on market. Watched SP hit the 70's, and watched a small fortunate evaporate. I've been holding since April 2015 and to date have never sold any CV1 (hindsight is wonderful thing). It remains my most heavily held stock, in terms of outlay.

Normally I am content to sit back, sift through the spin and glean my own truth, but this is the first company announcement in a long time that I've felt positive about and all I have seen are negative reactions.

I am hoping someone can point out how I am misreading this quarterly. Always happy to learn from my mistakes.

- $2.6m revenue, $1.2m loss = $3.8m expenditure
- Forecast revenue for remainder of FY17 = $9.9m to $10.4m (company has met or exceeded every forecast to date)
- Forecast expenditure for remainder of FY17 = $11.4m (advertising spend actually appears to be decreasing MoM)
- Forecast loss for remainder of FY17 = $1m to $1.5m
- With revenue increasing QoQ, the annual forecast should be weighted towards Q4, so it's feasible that company will break even by EOFY17
- NZ Children's Worker Safety Checks = 300,000 checks per annum @ $130 to $290 each by late CY18

In summary:
- Company tracking to be cash positive by mid 2017
- Company announces potential new revenue stream of $39m to $87m p.a. by late 2018 (gradual ramp up, so should begin to trickle in sooner)
- Company has current market cap of $27.1m (@ 11c)

The big question mark for me is over these NZ Children's Worker Safety Checks. The company previously announced 'CVCheck secures exclusive right to provide Child Worker's Safety Checks in NZ' and 'CVCheck appointed exclusive provider for the NZ Ministries of Health, Education and Social Development', but when something sounds too good to be true, it usually is. The sceptic in me is wondering what the catch is. Does anyone have more information? Is there a possibility that these checks won't be outsourced at all?

A Google search shows the Vulnerable Children Act 2014 affects roughly 280k workers (possibly outdated) and the safety checks need to be updated every three years (not every year). The implementation timelines match up. That would still be $12m to $27m of persistent new revenue for a $27m company that is already operating break-even. The other important question is what is the actual cost to perform each check? I expect it's a small fraction of $130.

This was my take from the presentation, but I am no analyst and the market clearly disagrees with me. I welcome any and all critique.