Ann: App 4C and Quarterly Report, page-4

Staff costs are up in part due to a bunch of redundancies they had to make in the takeover/merger transition this quarter. Operating cashflow still positive and the cash in hand is healthy at $4million despite having to pay for the business.

The borrowings can start to come down now and I believe the operating cashflow will improve dramatically as the services business picks up momentum. Staffing efficiencies need to be considered and I hope they are moving to optimise this as it represents around 25% of their total costs. Which will increase also as services revenue becomes a more dominate factor. The product division is likely to still be around cashflow neutral and never really contribute revenue but act as an intro to services management clients and keep older clients happy.