@Slideup Great points. They recently changed up how they recognised Research and Development Tax Incentive Income to only recognise it annually, which has made comparing apples with apples hard (for me anyway) on a quarterly historic basis. It also flagged how much heavy lifting that incentive is doing WRT the profit margin. Another thing to keep an eye on.

@Lewis good points on the R&D rebate, but I think this is valid to include as income as they are doing real product R&D. From memory I think this stops being cash income when they make more than $50m revenue annually, after which it becomes a tax rebate rather than cash back. Still a while away before that happens though.

ABV has finally broken through the 9c barrier after multiple attempts over the last eight months after printing some great numbers with their latest 4C:

Looks well set up to inflect profitability.

I have been following for a few months without pulling the trigger, and was only thinking of initiating yesterday. Oh well..

What I liked about this is evidence of scale is emerging. Receipts from customers in Q4 up 47% compared with Q3 while payments for R&D, manufacturing and operating costs, advertising and marketing, leased assets, staff costs, administration and corporate costs only up a combined 4% compared with Q3.

Currently ABV has $300,000 loaned to pay for the their annual insurance premiums at 4.59% which seems reasonable. They have $2.9m in the bank after a cashflow positive Q + $1.5m on standby as a loan facility with NAB should they need it. The business should be sustainable under its own cash generation from here.

ABV are profitable and seem to produce high quality products that have market demand. If their products continue to generate a good reputation in the market they will build a business moat.

There is a lot to like in the last few releases, I'm a happy holder. Hopefully then can continue on their current trajectory.

They're quite small @thunderhead so 10% swings are normal for them. You might get another chance at sub $.09 if you're patient.

The only thing I didn't really like was the $60K gift payment to the retiring director and the loans extended to key personnel to fund the exercise of their options -- this is 500K charged at 6%. This seems like a relatively low rate of interest to tie up 500K for 2 years, I doubt you could get this rate as a personnel loan from a bank.

Neither of these are massive problems but more just a bit of a warning sign to me that the board and senior leadership might be starting to see the company as a bit of a personnel piggy bank. While the company has definitely been transformed over the last few years and i am still happy with its trajectory, it is definitely still not at the point where its throwing out more cash than it can use.

Yes @Slideup the $60K gift to the retiring director struck me as unusual. I'd be interested to hear from others with more experience if there is much precedent for this?

I thought the $500K loan to the executives at 6% was okay as this is more than you get from a term deposit but yes point taken re piggy bank.

Yes @Lewis , though this seems to be emerging on the radar of investors in the micro and nano-cap space more recently.

I am not sure there is much precedent to offering "gifts" to retiring board members, and even if there is, I doubt it is a good signal for corporate governance.