Ann: Share Purchase Plan - Offer Letter, page-13

I wouldnt normally spend time on this sort of thing but I would just like to reveal my insight. Happy to be corrected as I have relatively minimal experience in this area.

STATS

31 dec 2017
Cash flow 1835
Operating expense 2371

31 oct 2017
Cash flow 1320
Operating expense 2703

30 june 2017
Cash flow 1753
Operating expense 2171

31 march 2016 (per quarter averaged over 9 months prior)
Cash flow 1179
Operating expense 1181

ANAYLSIS
look at how much operating expenses has increased and how little cash flow has changed in comparison. Sure you could say that many of these smaller IT companies need to be running losses initially, however I dont think this is the case for this stock. They are not (or have not announced that) they are doing any R&D into a new product that will provide increased cash generation. They are already at a point where I would believe that most companies providing IT services should be cash flow generating (given their claimed sizable large client base and the fact that the required infrastructure is already in place). The fact that operating expenses continues to rise is a massive alarm bell for me that this is not a profitable service and there is something fundamentally wrong with the companies scaliability. Furthermore, given the lack of improvement over the last 2 years, It does not appear that there will be an easy solution moving forward. It is now also apparent that they are in dire circumstances with regards to cash flow given the recent payment of operational services with company equity.

Finally does this company have any X factor? Possibly the service that they are providing is useful for smaller companies however once again this has not translated into a profit for the company.