Ann: Market Update, page-18

Hi patches1234 you're raising fair questions.

In the December 4C commentary the company refers to the lodgement of patents for the gas detection and LIDAR technologies. It could be that R&D was not anticipated to continue as they were moving to commercialisation of these technologies that they are seeking patents for. Makes sense to do the R&D before patent application.

On your point about revenues earlier for Jan / Feb being low. I think there is a continuing shift from sales of cameras to renting of cameras. In the December 4C commentary it states that 25% of sales is now from rental of equipment. In the latest update there is commentary that rental sales continue to grow faster than camera sales. The change in this mix will lead to lower revenues initially though over time will be more profitable to the company.

There is also the seasonality component where I'm sure we all personal experience January being typically a quieter month as people take leave and enjoy summer. This would have slowed down expansion into the Eastern states with chasing new leads etc as people were away / getting back into the new year peacefully. The camera technology is a disruptor to normal security services in many instances, purchasing decisions would be less likely to be made in January and I'm satisfied by that reason.

Even with the above they added 59 new rental cameras as per commentary in the update.

I anticipate similar sales to the December quarter. Hence the language shift to PCP rather than quarter on quarter growth as per previous updates. Can't blame them really, they need to sell the news somehow.

Am I concerned. Well no.

Will the SP dip, well that's up to people if they want to take a shorter term view imo. I'll buy more if it dips to the IPO price.

They are expanding into the Eastern states and were hit by the January month. They have more penetration to go before they really max out, there is growth there and these cameras save people money and are more effective than security guards.

There are trials underway for the thermal cameras and we haven't seen the gas / LIDAR cameras in action yet. If a national logistics company or building company take these on as their preferred product, we could see quite significant jumps in rentals or other sorts of deals flow.

With the backdrop of this we have a growing business if we take out seasonality of January.

So there's a lot going for the company tbh and a lot of things would need to go wrong for this to not end up being successful.

If I was overweight here with the above I may lighten because some others may and no one likes the share price to go down. But as someone who benefits from CGT discounts I'll ride the wave and buy more if impatient / overweight people look to lighten ahead of what may seem like average news in the 4C.

But I remain overall optimistic of future growth as explained.

Thanks for prompting the discussion, it's important to drill down and ask fundamental questions about our investments.