Ann: Appendix 4C - quarterly, page-9

So after whacking the numbers into the spreadsheet, what I have come up with assuming the same expenses as 2018 which were about $5.9m per quarter:

- if they averaged 40% growth on the pcp for all quarters for CY 2019 and 2020, they would be cash flow positive in the 2Q of CY 2020 with $3.16m to spare
- if they averaged 30% growth on the pcp for all quarters for CY 2019 and 2020, they would be cash flow positive in the 3Q of CY 2020 with very little room to spare (only by a couple of grand).

All this assumes no new cash, and no use of debt facilities.

I think the 30-40% growth scenario is what the market is factoring in which does not leave a lot of room for missteps and explains why the share price remains in the doldrums.

This expectation is completely at odds with the guidance from the company that they will breakeven by the end of this year.

I have thought about why guidance is much more optimistic than market expectations and the obvious answer is firstly that ICQ has underdelivered in the past.

On the other side of the coin I think:
- there are potentially more costs to be cut and some the costs involved with product development has been complete which should taper off which will not significantly impact on sales growth
- they have only started to monetise their Indonesian market late last year - which is the biggest in terms of population by far - so this can potentially have a dramatic effect on overall performance. Indonesia goes from marking probably stuff all in revenue, to something potentially very meaningful.
- there are other initiatives to generate revenue that have started to kick off such as auctions.

The question is... who will be right? Hamish Stone or Mr Market? A good quarter or two may send this soaring past the options price, making it well funded through to breakeven.

A bad quarter or two may cripple any hope of reaching breakeven and raise the prospect of more dilution.

Hang onto your hats fellas the next two quarters is going to be very interesting.

I'd be interested to hear everyones thoughts.