Ann: Results of capital raising and Share Purchase Plan, page-23

I find Tesserent's business strategy over the last 2 years bizarre.  Absolutely staggering.

I would have thought the first thing you want to do if you are running a business is - BECOME PROFITABLE.  

First thing.  Absolute first thing.  BECOME PROFITABLE.  Then, guess what you are a BUSINESS.  AND THEN YOU CAN PURSUE OTHER BUSINESS STRATEGIES SUCH AS CYBERBIZ USING YOUR OWN MONEY - NOT SHAREHOLDERS MONEY.

Tesserent seems to forget that IT IS A BUSINESS AND IT EXISTS TO MAKE A PROFIT.  PROFITS are what gives a business its strength to pursue other opportunities.  To fend of competitors.  PROFIT IS KING.

Tesserent listed on the ASX, and prior to listing it was A PROFITABLE BUSINESS (not making a huge profit but it was profitable).  Then it got the 7 million and it go way way ahead of itself.

Like a kid in a candy store, after receiving 7 million of shareholders money they couldn't hold themselves back.  Had to rush and make an ill fated acquisition of Blue Reef, which they never had the resources to absorb.  They got super lucky that Family Zone bailed them out.  Super lucky.   

For the life of me I can't understand why Tesserent didn't use the 7 million shareholders gave them to add a basic sales and marketing team and try and get a few more big corporate clients, like the ones they already had.

SIMPLE SIMPLY STRATEGY.  But Tesserent don't like simple strategies.  They already had an impressive client list.  Why not just use the 7 million to get a sales and marketing team to target more Blue Chip clients.  

You become PROFITABLE and put the balance sheet in good shape AND THEN, AND ONLY THEN do you pursue other opportunities such as Cyberbiz.

In my view Cyberbiz should never have been pursued by Tesserent - UNTIL TESSERENT WAS PROFITABLE.  Tesserent never had the resources to properly develop and market Cyberbiz.  

And guess who is paying for all of these business strategies which are being made up as they go along - shareholders.  Targeting the SMB space was never mentioned in the IPO documents as far as I am aware.

In my view Tesserent has an arrogance about them in pursuing these sorts of business plans, BEFORE THEY ARE EVEN PROFITABLE.  The burned through the 7 million they obtained at the IPO, and have never been cash positive, and then come crawling back to shareholders for more money at 7c.

No wonder big investors don't want a bar of Tesserent.  They can see what Tesserent is doing. Putting the cart before the horse.  They are probably thinking - you are spending millions on this SMB strategy that no other business has ever tried before - AND YOU ARE NOT EVEN PROFITABLE.  And further more, the business was apparently profitable before listing on the ASX.  Arrogance.  Arrogance.  Arrogance.  And all at shareholders expense.  

Keep it simple Tesserent.  Become cash flow positive.  Become profitable. Then pursue these other markets that no other managed security provider has ever targeted before - with your own money (profits) - not shareholders money.  Easy come easy go as they say.

And THEN embark on these business strategies and target markets that no other business has ever tried before.  With your own money.  

At the moment you are just burning through shareholders money with no end in sight.  Big institutional investors see exactly what is going on - putting the cart before the horse - and why they won't invest a dime.