Earnings are still positive - the bottom end of the EBIT forecast is $700k, say $500k after tax - and there has to be a fair bit of cash on hand, as they had more than a million dollars at 30 June last year. (The half-yearly says NTA at 31 December was 5.6c/share, but that must have been an accident of the invoicing/salary cycle.)
So company failure still seems unlikely, even though fundamental risk has clearly increased with the revenue and earnings decline.
$5 million seems rather too low a valuation for a company with $35m in revenue, 400 employees, and positive earnings and cash flow.
KKT Price at posting:
7.0¢ Sentiment: LT Buy Disclosure: Held
