If you're a holder, I highly recommend you read this. Please. I am not giving financial advice here, but please, I urge you to read this so you can form your own opinion about NOR given my below findings.
Note: I have emailed Shane some queries relating to the CommSys agreement (not what is below, below is new research). I was polite and simply outlined facts, with my question relating to why the real revenue was so much lower than the projected revenue. No response so far. I wonder if the ASX asked, if they'd have a good response?
Now for new research!
Under Listing Rule 3.1 the ASX gives some examples that would require a market announcement. One of which is
"the fact that the entity’s earnings will be materially different from market expectations;"
After the projected revenue of $300,000 annually from CommSys clearly not being met with three of the next four quarters (this quarterly just ended will be the final of the year since that announcement) showing $184,000 total company revenue, I would reasonably believe NOR is required to disclose the fact that the $300k projection isn't going to pan out.
The $500k projection is definitely not going to pan out.
Later in the same announcement it states "Following this agreement, the total value of signed Corona sales contracts for Norwood now exceeds AUD$500,000 in annual recurring revenue. "
That's not even a projection. It states, as fact, that they will make $500,000 annually. The clearly aren't making that revenue. They probably need to update the market about this (I'm not aware of any time they have). This announcement was published on the 3rd of April, 2017. Therefore, in the 12 months following, till April 3rd, 2018, NOR was projecting $500,000 revenue from Corona alone (without revenue from other avenues). To meet this, NOR would need to have made a further $316,000 in the quarter ended March 31st, 2018. If they have not, then it is my opinion they have failed to disclose material information relating to projected and actual revenue.
In the RAC agreement they state
"Norwood estimates that it can expect approximately 10,000 to 20,000 customers per annum at an expected average revenue of $30.00 per customer from this Agreement, which implies annual revenue of approximately $300,000 to $600,000"
Now I believe they state in a future quarterly that RAC revenue has been lower than expected (very vaguely). But I'm not sure one sentence in the quarterly counts as continuous disclosure and fulfills obligations. Especially given they are quoted here estimating $600,000, a very large number. This would result in $150,000 per quarter from RAC. NOR hasn't even made $100,000 per quarter total!
In the Affinion announcement from Feb of 2017, it states:
"The parties have forecast up to a $3million dollar annual revenue stream, based upon agreed commercial terms and modelled deployment and uptake of services within Affinion’s client base"
The ASX states:
"If an entity becomes aware that its earnings for a reporting period will materially differ (downwards or upwards) from: earnings guidance it has given for the period;
it needs to consider carefully whether it has a legal obligation to notify the market of that fact. This obligation may arise under Listing Rule 3.1 and section 674,136 if the difference is of such magnitude that a reasonable person would expect it to have a material effect on the price or value of the entity‟s securities. Alternatively, in the case of an entity which becomes aware that its earnings for a reporting period will materially differ from specific earnings guidance it has given to the market, it may arise under section 1041H, because failing to inform the market that its published guidance is no longer accurate could constitute misleading conduct on its part."
also
"an expected variation in earnings compared to its published earnings guidance equal to or greater than 10% should be presumed to be material and therefore ought to be disclosed."
Over the next few days I will be compiling a complete list of revenue forecasts, partnerships and such that have been announced over the past 24 months and will be sending these to the ASX so they can determine if NOR has failed its disclosure requirements.
All of the above is my opinion. I have compiled quotes from NOR and the ASX and these have been quoted correctly and accurately. I am not stating that NOR haven't complied with ASX rules, I am just juxtaposing NOR announcements against ASX rules and stating my opinion that perhaps NOR should have made an announcement. I am not an expert and will be contacting ASX for their professional opinion. As I said at the start, if you're a holder, you should consider this stuff important.
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