Ann: Half Yearly Report and Accounts, page-14

I have been through the document and I think the business is on the edge of something very exciting here. My logic. We can see from the 4c that they grew by over 100% in the last quarter. The revenue reported is around $2.3m for H1. If we brake that into quarters you can assume that revenue was around $800k in Q1 and $1.6m in Q2 (excuse rounding). From the cash flow forecast for Q3 in the 4c they are forecasting 100%+ growth for Q3. If you extrapolate that to revenue one can assume $3.2m in Q3 (double Q2). Many other software companies report ASR or annualised subscription revenue. If Novatti was to report ASR (or just annualised revenue) at the end of Q3 it would be $12.8m (4 x $3.2m based on the assumptions above). NOV has a cost base of around $7.6m per annum - so arguably by the end of Q3 they would be run rating profit before tax of $5.2m p.a. NOV has a market cap of around $40m (maybe a bit more with the recent raising). Compare this to say, LVT which has ASR of $10m an annualised cost base of $26m per annum and at market cap of $226m it appears there is plenty of scope for share price appreciation here. This all might a bit optimistic but I did note Managements comments about seeking to be profitable in H2.

With regard to the cash flows disclosed in the 4c I think the disclosure is poor and it is easy to conclude that this business has more scale than it actually does. Management need to wrap some commentary around the 4c so as to not confuse the market. I think they should make commentary on the annualised revenue run rates as well in the 4c so the market can get a better handle on what is going on. All IMO DYOR etc etc..