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Good morning, everyone, and welcome to the FirstWave Q3 FY '24 Shareholder Update. John Grant, our Chair, will now open the webinar for you. Over to you, John.
Thanks very much, Ruth. Good morning, and welcome to FirstWave's FY '24 Q3 Update. Those who haven't joined one of these updates before, my name is John Grant, and I'm Non-Executive Chair of FirstWave. I'm joined again today by CEO, Managing Director and major shareholder, Danny Maher; and Chief Operating Officer, CFO and Company Secretary, Iain Bartram. You can see the agenda for today on the slide. I'm going to make a few opening comments before handing over to Danny to take you through the highlights for the quarter. Iain will then deal with the financial performance in Q3 before handing back to Danny for a broader update. On this item on the agenda, as I hope you know, Danny relocated to Mexico for just over 6 weeks in the quarter. It was no mean feat. We'll tell you more about this slide and we came back with a video featuring our major customer in this region. And we thought it would be relevant and interesting for you to see what we're doing over there, how critical what we provide is to the customers' operations and the regard in which they hold FirstWave. Danny will then summarize Q3 and what it means going forward before we open for your questions. So to my opening comments. Three points to make. Firstly, I hope you've seen the announcement we made yesterday regarding the appointment of a U.S.-based Director, Daniel Friel. I cannot understand -- understate the importance of this. It is hugely significant. I give credit to our MD and CEO, Danny Mark, for identifying Daniel and bringing him to the table to talk. Danny will run through his skills and experience in some detail later in his update. But suffice to say, while he will be terrific for the business overall, he will, in particular, be fantastic for our operations in Latin America and the U.S.
It's also relevant to say that for an incoming Director, financial due diligence on our business is not a walk in the park as we continue to be challenged by sales conversion and the need to take cost out without too much damage to capability. This has not phased Daniel in the slightest. He has experienced the ups and downs of tech companies trying to crack new markets with new products, fighting for funding, fighting for resources and making difficult decisions. He wants to help and believes he can. We, directors, management and shareholders could ask for no more.
Daniel's appointment has allowed Ray Kiley to step down from the Board, as you would also have seen in the announcement. Ray joined FirstWave shortly after the acquisition of Opmantek. He'd been an adviser to Danny in the Opmantek Board and it made logical sense for him to join the FirstWave Board. He made it clear from the start that he wasn't a long-term proposition, as he could tell you now from somewhere in Europe where he is holidaying or long holidaying with his wife. But in the time he has been with us both as a Non-Exec Director and Chair of our Finance and Audit Committee, I can candidly say he's been as good a director as I've worked with over 30 years. But he now sees FirstWave is entering its next phase and sees this time as being an appropriate and opportune time for him to step away. On behalf of Danny, myself and the exec team, thanks go to him for his contribution, and we wish him all the best for his future.
Secondly, we negotiated the renewal of the Product and Services agreement with Telstra. Danny will elaborate, but I have to say this was no mean feat either. As is often the case with long-term contracts and changes in customer personnel seeking to make their own mark, the focus is brought to the terms and value of such contracts. And as is also often the case with large organizations like Telstra, one of the big consultancy firms was engaged to bring "an independent lens" to the contract and to provide a recommendation on renewal, if any. Had experienced -- having experienced a number of these sorts of reviews over my career, I can tell you, I absolutely love them. What I've constantly found is that if truly independent, they expose the customer to what the supplier actually does. And in this case, a comment along the lines of the following from one of the Telstra team during this review says it all, "I didn't realize you did so much for us. "
So the contract was renewed under terms which worked for both parties. There will be some changes to the services we provide. But, overall, it opens up new opportunities and provides revenue for some of the services we were providing for free. Credit goes to our CFO, Iain Bartram, and our team on the ground inside Telstra for this outcome. And that also regarding this is the fact that since October last year, we've had month-on-month increases in revenue under the contract. They are small, but they are positive. And thirdly and finally, the convertible note with Formue Nord. This was a referral from one of our external stakeholders, but ultimately was Danny's deal, and it is a wonderful deal from every perspective. As we have communicated on many occasions, we are running a very delicate balance between investment to ensure our products remain competitive and maintain the level of resources we need to convert our sales pipeline and what we can afford given available cash. We have had to stop things we would have liked to continue, and we've had to let people go we would rather have not. These have been tough but on balance, the right decisions.
The convertible note provides some breathing space that we can plan -- that we plan will take us to cash flow breakeven, but that's dependent in large part on converting the sales pipeline and this remained challenging through Q3. Danny and Iain will provide more detail on all of this, but I can assure you there is a good deal of tension inside the business as we consider the levers that are available to us to deliver the best outcome to you. More sales, asset sales and more capital. They're all on the table.
Let me now hand over to Danny and Iain to elaborate. Over to you, Danny.
Thanks, John. So just to reiterate some of the highlights that John ran through there. So $2.5 million was raised for the company via convertible note. So this is where the group called Formue Nord, who are from Denmark and Sweden. Now this is their first investment in an Australian company. They specialize in investing in publicly listed microcap companies and have made over 800 investments in the last 7 years. So we're really, really pleased to see the faith that they have in us to make their first investment in an Australian listed company.
And I'd note that they've invested with a conversion price of $0.036. So their expectation to make their money is that the stock needs to be above $0.036 in August 2025. And for every bit, it's above that, the more money they will make. So we appreciate the faith that they've had in us and their expectation that we're a stock that's on the rise. And they're great professional investors. We expect them to be long-term partners of ours. They're very flexible, and they're a really good organization to work with. So we're thrilled to be working with them.
Again, the PSA Agreement with Telstra was resigned. So it was extended by 15 months until July 2025. This was an important date for us to extend to as it underpins several strategic initiatives for us. including the launch of the ISM platform, which is a government-focused web, email and firewall security platform, sovereign base for Australia compliant with Australian government standards and focused on gaining some Australian government clients.
And this contract provides a mix of variable and fixed income streams for us. So within it, we hope to launch some new services with Telstra and some services like the GPA service, which will off at the end of life by Telstra as well. But great to have that agreement extended and lots of opportunities and lots of work to do with Telstra. As John mentioned, we did temporarily locate some key personnel, including myself to Latin America and U.S. to progress some sales opportunities over there. I'll talk more about that in detail a little bit later. But there's some significant opportunities there. And this is part of our sales-led culture in ensuring that head office staff, i.e., those based in Australia understand better that really, we're all working for the sales teams, primarily in Latin America and U.S.A. So it's great to see some of these deals progressing and at the later stages, start getting some key personnel across working hands on to close them out.
With that, I'll hand over to Iain. I'll come back with some more after him.
Thanks, Danny. Referring to the table you can see on the slide, ARR continues to grow quarter-on-quarter and was up by $283,000 in Q2 to $10.5 million. a 2.8% growth over Q2. Revenue was down by $164,000 quarter-on-quarter, even though the ARR was up. This is because nonrecurring revenue or NRR fell by $183,000, which is more than the fall in total revenue. So and -- I know NRR is unpredictable and lumpy between quarters, and this drop does not represent a trend. NRR at FirstWave is typically perpetual license fees that are 100% gross profit margin, and hence, the fall in NRR also reduces the gross profit by the same amount. The total fall in gross profit in Q3 was $166,000 and hence, the $183,000 fall in NRR accounted for more than the fall in gross profit.
As gross profit is a percentage of revenue and hence a smaller number than revenue, the percentage fall in gross profit was 7.2% compared to the 5.6% fall in revenue. Given the revenue decline was revenue with 100% gross profit margin, the gross profit margin also fell. This fall was 1.4 percentage points to 77% from 78.4% in Q2. So in summary, nonrecurring revenues were down, but ARR, the most important metric and the key to increasing future cash inflows, was up.
Moving on to the cash position, the closing cash was $3.50 million. This is $1.55 million up on the previous quarter and the result of 2 large inflows in the quarter being $1 million in R&D tax offset that was noted as pending in the previous quarterly update and $2.375 million being the net of the $2.5 million convertible note and $125,000 establishment fees. The cash improvement after the inflows shows the cash outflow in the quarter totaled $1.825 million. This outflow was higher than anticipated, mainly due to sales falling short of expectations in the quarter and a significant debt of being unpaid and overdue at 31st of March. This debt is along -- is with a long-term customer and the debt is not considered at risk just lagged. We have modified our normal cash usage definition In this update to include interest, which appears for the first time in this quarter as a result of securing the convertible note. The pre-interest figure was $256,000 per month, which is $127,000 improvement over the previous quarter. The interest inclusive figure is $281,000 per month, including $77,000 for nonrecurring revenue. This nonrecurring revenue is calculated as an average of the actual nonrecurring over the previous 12 months. And as noted, nonrecurring revenues vary significantly and are not relevant to the ongoing run rate of the business. Hence, a figure focusing purely on the run rate, excluding any nonrecurring revenues has also been provided. In Q3, this was $358,000 per month. I have also noted that the directors have elected to receive the bulk of their fees as share-based payments in-lieu of cash. This has assisted in the improvement in normalized cash usage over the previous quarter and is a good signal to the shareholders of their continued support and belief in the business.
Let me now hand back to Danny for a broader update.
Okay. Thanks, Iain. So I just want to touch on the business focus for us at the moment. So with limited resources we've got, we -- it's really been important for us to sharpen our focus. We've been working on some significant deals in the pipeline for some time now. And we're now aggressively pursuing some of those, in particular, in Latin America. So identifying those deals that are closer to coming through and putting the resources behind those. That's why I located myself in Mexico City for February and part of March to work directly on these significant opportunities in the region and work directly with our Latin American team headquartered there in Mexico City. That was a really, really good trip, and I look forward to seeing the outcomes in terms of sales from that.
Our NMIS development lead, Mark [ Durick ] almost temporarily -- also temporarily located himself in Mexico City, working directly with our Latin American team and directly with the key clients. In this case, it's Telmex, as part of an ongoing program visits to support the region. So we continue to put more and more of, what we call, our head office resources behind these deals in Latin America and U.S.A. to help see them come through. We also implemented further cost controls in the quarter, which will reduce cash usage, and I'll touch on that a bit more later. [indiscernible] What I wanted to do now was, as I was at Telmex and visiting them, we were walking through and we took a tour of the customer network operations center. So this is their operations center where they manage their clients from. While we were there asked Alberto, who manages that center, if you would mind if we took a little video that he could share. And I just wanted to play that video for you now, which hopefully is something you'd be interested in. These videos, when you play them on Zoom, can come through at different volumes. So depending if you're using a headset or speakers, you may need to turn your volume up or down. [Presentation]
Okay. So an amateur video, but a good job done by Hector Vadillo, one of our account managers over there in the U.S. taking the video. And I hope that gave you a little bit of insight into one of our leading clients. So I just want to summarize a little bit of that. So Telmex if you don't know them, they own and operate most of Mexico's telecommunications infrastructure and have annual revenues of over USD 5 billion. They're owned primarily by Carlos Slim, who for a long time tag-team Bill Gates as the richest man in the world, or richest person. I think he's got #10 at the moment. And they've got a -- Carlos Slim has a family of telcos across Latin America.
So Telmex, as [ Alberto ] described, there has 500 servers running NMIS software. That is a lot. And they have 8,000 customers that they're managing, that's a hell of a lot, and 200,000 devices under management. That's also a hell of a lot. Those types of metrics -- this would be one of the biggest implementations of network management software in the world and certainly, in a customer-focused operation center with 8,000 customers and 200,000 devices. So we're glad it goes so well for them. And has strong further growth potential for us. So really important for us to keep working with them. We also -- we don't just work with Telmex, but we work with their related companies and sometimes called in their sister companies, Claro in Ecuador, Dominican Republic and Guatemala.
And as [ Alberto ] explained there, the Mexican Telmex team work with customers more than just in Mexico, and that's the same with these teams as well. So for example, Claro, Guatemala are using our software to manage customers in, I think, 7 companies on behalf of 7 other different Claro organizations. So a really important account for us, and I hope that gave you some insight. So John mentioned the appointment of Daniel Friel. He asked me to go through a little bit of his background since I have known him previously. So it's been great to link up with him again. So Daniel joined the FirstWave Board as a Non-Executive Director yesterday. And he previously gave some advice to the Board of Opmantek, especially in regard to our entry into the United States. Daniel is based in Charlotte, North Carolina, and is a real experienced guy both in technology and technology investment and in particular, in our key market of U.S.A.
Daniel founded the Bank of America's Strategic Alliances and Investments Group and he manages the Bank of America's Investment in more than 40 tech companies in the security, authentication and payments and billing sectors. Notable investments with $1 billion-plus exits included Signio, Shopping.com and Archipelago. So we're really thrilled with the faith that Daniel is showing in us to join us in the Board and in particular, with his knowledge of the opportunities that we have in U.S.A. He's an outstanding tech leader and executive, again -- both on the technology business side and very connected on the technology investment side as well. And we're thrilled to have him on the Board. He's a great -- he'll be a great Director, but he's also a great guy.
So normalized cash usage. So our cash usage continues to decline. And one of the easiest ways to represent that is on a normalized basis, and I'll talk a little bit more about the difference between normalized and actual shortly. We've had further cost reductions, which we've made, which will continue to see our cash usage to decline in Q4. And I remind everyone that at the moment, the way I provided this red line to show a like-for-like basis because we've been showing normalized cash usage each quarterly update. So we've included in this the $77,000, which is an average nonrecurring revenues in this red line. So you can see a like-for-like trend, which shows us on a like-for-like basis, the continued reduction in our cash usage. On this graph, we have added a brown line, and we'll start to talk to this brown line a little more, but wanted to add both for the moment so that you could see graphically the difference.
So as our cash usage reduces, we will take the nonrecurring revenue out of our normalized cash. And of course, we're going to add interest payments in the normalized cash usage as well. So you see how those lines look there. So the cost savings, I mentioned before, will reduce normalized cash usage by approximately $150,000 a month excluding any churn and excluding any new sales. So new sales will reduce that normalized burn further, assuming it's recurring revenue and any churn will increase the burn of course. At this point in time, as that cash burn is getting a lot lower, I did want to particularly note that our normalized cash usage is not a proxy for actual short-term cash usage, right? So our short-term cash usage has periodic cycles. Sometimes, we get, for example, our R&D money come in, which comes in, in 1 day, which was $1 million for this last financial year. Sometimes, we have annual expenses that go out, it might be a large payment to Cisco or it might be something like our insurances. So our cash usage for month-to-month and quarter-to-quarter does vary quite a lot. And that's why we show you a normalized cash usage, so you can get a view of the trend of the operational expenses and the cash usage of the business on an average basis. But you shouldn't try and calculate that out into what we're going to spend the next month or the next quarter because that varies from quarter-to-quarter, okay, and month-to-month and day-to-day.
So in closing into summary, you can see really good trends around our cash usage. So we are managing our cash usage and our cash reserves quite carefully to balance the opportunities we have while our cash usage remains key. Converting sales opportunity in the pipeline is critical for us. That's the focus for everyone in the company. And it's a fine line balancing these 2 things, reducing our cash usage while continuing to pursue opportunities in the pipeline. But overall, obviously, we're burning a lot more cash. We continue to pursue these opportunities. So we always like to see more sales. We hope those are coming very shortly for you. But when they do, they're coming off a much lower cash usage base, which should put the company in a very good position.
With that, I'll hand back to John to manage some questions. And I know we've received some questions by e-mail. Over to you, John.
Yes. Thanks, Danny. [indiscernible] questions, just as we've done before, you can type them in -- on either the chat or the Q&A function, there's already some that I can see there, which is great or raise your hand. I'm going to hand it over to you in a moment but we did get some questions via e-mail. Thank you very much for those and for the thought that's gone into those and they're appropriate questions to be asking given the circumstances. You can't see them on the screen. So I'm just going to read them, but I really grouped themselves into sort of 3 categories. So there are 6 questions, but I'm just going to group them a bit. The first sort of 3 are saying, what's the problem with converting the pipeline? And what feedback are we getting from our market from the customers about things that are causing delays? What objections are there, what constraints? And then it goes on to say, are there any issues with the business model, for example, the pricing per user or are there any issues with deploying the technology, for example, the previous friction problems that we've referred to. So they're the first. I want to group those because I think they're sort of the same sentiment.
And just before I hand over to Danny let me just put some context around these. So we have 2 portfolio sets of product -- 2 portfolio as products. The one is CyberCision, which is cybersecurity, it's targeted at cybersecurity services, targeted at the end user and particularly the small-to-medium business, but sold through the telecommunications provider or the service provider. And that's an indirect business model.
We don't directly deal with the end customer. We do deal with the organization in the middle that then deals with the end customer. And our job in this business model is to convince the service provider that the service that they've got -- that we're offering them will actually provide a service for their customers that will be cost effective for them, cost effective for their customer and give a return to FirstWave.
So that's the business model. It requires people inside the company who know how to work with telecommunications organizations because they are very complex -- they've proven to be very complex in that when you engage with a large telco with a new product, you have to deal with their product people, their product people then assess the product as to its productization capability and its ability to be able to be let put it into the sales team to be then sold to the end user. We -- and this is a comment in terms of issues and the friction problems. We've put a lot of money into CyberCision to remove the friction both for the end user, and you saw, those of you who remember, the mobile front end that we had and the interactive nature of the information that was displayed and how customers at all time -- and the end user at all times would know exactly how they -- what the status was in relation to protection.
And we also built a whole bunch of software that allowed the service provider to be able to manage that environment of users, multiple users -- particularly thousands of users manage that sort of multiple user environment in a way that could actually integrate their billing systems and provide an automated process so that they can bill and collect and then obviously pay us. So that particular business model is an indirect business model. It uses people who are familiar with working with telecommunications organizations, and it's a global opportunity. And we have, in the past, pursued it globally.
The second business model is related to the second suite of products we have, which is NMIS. So it's a network monitoring, network management and audit software that we have, which came with Opmantek. Just so to say you understand these portfolios are not totally [ discrete ] right opportunities to connect these portfolios because at the end of the day, network monitoring will actually identify cybersecurity issues. And we haven't actually gotten there yet because that's going to take a bit of investment.
So the NMIS -- so we're taking NMIS to market directly to the end users. That's a totally different business model to the CyberCision business model. It's a business model where we directly deal with the buyer, and we have people who have actually worked in this, what I call, an enterprise sales market. So they understand how enterprises buy. They understand who they are going to deal within enterprises. And when we deal with large organizations, Telmex or any of the sort of large opportunities we're dealing within the U.S. or in Latin America to say, you deal with the technical people first because you've got to win the technical argument. When you win the technical argument, you've then got to win the executive argument. When you win the executive argument, then you got to win the procurement argument.
So it is a multistage business model that requires us to work deep within the customer organization at the technical level to gain their recommendation and then to move that recommendation through the other 2 phases, both of which can, from time to time, be interrupted by things that are totally outside our control that are occurring within that organization. And we've had exactly that sort of situation. That is some time ago started giving you information about the very large opportunity we were dealing within the U.S. And I'd back that up by saying that, that was organizational transforming. And we got all the way up to the final stage of that when the organization made the decision that it had to stop spending any money because it was in a situation itself where it needed to conserve cash. And the whole thing has just got on the back burner. And that's what happens in this sort of environment. There's lots of things we can't control. So we do our best job possible, but I wanted to explain those 2 business models to give you context. The second thing I'll say is that and we've told this before, but I want to be very clear about it now, we've had to make decisions about where we place our investment funds. And so we tried to back the horses that will give us the greatest return in the shortest period of time. The decision we made was, was to contract the CyberCision business activity to Australia and to Telstra to other resellers within Australia, which we've done. And we've had the story about Telstra earlier in this update, and we will slowly make progress, but there are great opportunities within that account, as Danny mentioned, but we've contracted, in so doing we've reduced investment costs. And you've seen -- you would have seen 3 or 4 updates ago, how we talked about reducing the development team, particularly on the CyberCision side. So we've had to contract that. It says nothing about the merit of the product. The merit of the product still stands in line. And the merit the product and the way -- and the people who can get value from it still stands in line. So we're pursuing other opportunities that where that will represent some value to organizations. And that's one of the activities that we're doing to try and maximize the returns to FirstWave.
What we've really done is, we've really invested and focused on the opportunities for NMIS and more particularly in Latin America and in the U.S., and that's exactly what we've done -- the things we've done as Danny explained to you. So that's the fact of life. The fact of life is we have not got huge amounts of funds to invest. We've had to make those decisions. So that's a long and, some would say, "wordy introduction, John ." But that's the sort of background that gives context to these questions. So, Danny, if you wouldn't mind just sort of taking over, talking specifically, I guess, about anything you've got to add to what's the problems with converting the pipeline and their issues with the business model or any issues deploying technology. And, I guess, we've got money to invest.
Okay. Thanks, John. Well, I think you covered a fair bit there, but okay, just to add a few more pieces. So part of the question was the feedback from the customers' constraints and objections. Generally speaking, the customers like the technologies. If we look at the NMIS technology, it's very, very, very powerful. We just saw that video from Telmex. That's one of the largest implementations of software like that type you'll find in the world. It's used by Microsoft, NASA, lots of blue chip cool organizations. At the mid-market level, some of the customers find it a little difficult to use. So there's a bit of focus from us to provide a simple user or interface for those that want it and a more advanced interface that those want it. With delays in objections, constraints on the NMIS side are typically deals slipping. We don't often lose a deal to a competitor. Usually, the customer just goes into a cycle where they're sticking with what they've got where they don't actually like it necessarily or they're not moving. So we've got to be patient. So in relation to the business model and those types of things, on the CyberCision side, it's difficult for us as a small company to get the entire sales force from Telstra behind our product when they've got lots of other things to sell. So that is a difficulty. And the churn we've seen off that service has been nothing to do with our tech, it's because those clients churn from Telstra. And I can -- I know what the next question is. So I won't address the things we're doing -- I won't mention the things we're doing to address these things yet because it's part of your next question.
The next 2 questions, I've sort of tried to group as well because I think it makes sense to do so. And they're in the category of, is the problem post sales conversion on the FirstWave's part? And how are you -- what are you doing to remedy this problem that will allow the company to scale. And, I guess, also what confidence can be provided to shareholders, particularly around the company achieving the necessary increased revenues to become cash flow breakeven. And of course when, that's the inevitable question that comes at the end of that. So grouping those two, Danny, maybe talking about sales process or sales conversion, scaling? Can you add anything to that? And then maybe we'll talk about confidence.
Yes. Well, I might do in a slightly different order. But in terms of confidence, look, we've got to remember, like, we just renewed the largest contract we had with Telstra, okay? We're adding new services to that. Yes, there's one service being end of life as well. And we've got to look at who our client base is. We just showed a video from Telmex. We've got their sister companies throughout Latin America. We have Microsoft. We have NASA. So we've got some pretty cool companies using our software that renewal. In the Australian government, we have Services Australia directly. We've got brand and IT. We've got -- so we've got some cool companies that use our software. They buy it under subscription and they renew their subscription, okay? So there's every evidence there that the technology is a technology that people want and do pay for and continue to pay for when they renew their agreements.
Coming from the history of the network management software is that it is lumpy, like there's -- if you look at those customers, Microsoft, NASA, Telmex, Claro, they're big organizations, they don't pop through every month. And we need to be a little bit patient. They need to be in the pipeline. Obviously, I get to be closer to it than others because I'm working in the business. But they are in the pipeline and they do progress, and we just need to be a little patient for them to pop out. It's painful. It's painful for me. I wake up every morning wanting these deals to come through and it's -- you see them progress, but it does take a little time, okay? But some of the other things that we're doing, we're constantly working on how do we create artifacts that help those tech guys, as John explained, create the business case for their managers and how do we -- and the mobilization of some of our more senior resources to get behind some of these deals, you can see as evidence that they're getting quite late stage. We don't fly people across to countries to go and sit on site with large organizations if it's part of an early-stage deal. It's part of the closing. So -- and that doesn't mean it's going to close. There's lots of funny things happen through these deals, but it does mean we have an expectation that they will.
So in Telstra's case, we're saying we're a small organization. It's very difficult to engage their whole sales organization. We recently got permission from them and hired and placed one of our salespeople inside their sales team at Telstra. So with Telstra badge, Telstra log-in, sitting inside Telstra as part of their sales team pushing our staff. So that's a big change. We have new platforms that we're launching like the ISM platform that I've mentioned, which are targeted at a vertical. So it enables us to focus on that vertical, which, in this case, is government and work on something new and cool that has a vertical -- a differentiated vertical focus. So it's increased differentiation, but it also increases our ability to focus. On the NMIS side, we're just looking at a -- we've actually built it and have products that customers running on it, but a cloud-based service for our network management software. So a different way of delivering it, okay? That will then compete with companies like LogicMonitor, Auvik that are in a new interesting part of the market. We've got exactly the right software to do that with. So yes, a variety of things that we're doing there that are new ways for us to take the market. But overall, I hate to say we need a little bit of patience, but it's true. We've always had lumpy deals. We're dealing with big companies. But look at the evidence of the logos that we have. Telstra has over 200 clients running on their platform. So they've signed 200 organizations on their platform. We have others outside of Telstra, NASA and we have on the network management software, a whole suite of blue chip clients. So we're actually doing pretty well, although we would like to sign more clients in recent times. A question then about cash flow breakeven. So certainly not cash burn. I did make the point, hopefully strongly that cash burn month-to-month and quarter-over-quarter is not average. It's not smooth. We have lumpy renewals from clients, particularly focused around June and December, and we have some lumpy expenses, and we have lumpy income from things like R&D as well. So you can't look at it as cash flow breakeven day-to-day or month-to-month.
So as we said 18 months ago that we are targeting this upcoming financial year as being cash flow positive. We have our cash flow -- our cash burn right down. And assuming we make the right sales and we don't have any unusual churn or anything weird happen, next financial year will be a cash flow positive year. As we stated 18 months ago we'd be and you can see the trends.
Yes. Look, just to pick up on that, the question specifically speaks to what confidence can now be provided to shareholders. All we're going to do is tell you what we tell you. We're really transparent with our shareholders. There's hardly anything unless it's competitive stuff and the pricing stuff that we withhold. So we've seen the disclosure requirements we have as an ASX company because we believe you need to know. So we do talk a lot about what we're doing in detail. And the question about what we're doing has just been reiterated by that but also in this presentation.
So we're doing different things as well to try and get the outcomes that we want. But there are no guarantees in life. And if you can draw the confidence from what we say in these conversations and the way we handle them, then that would be very good. If you can't, then you have other decisions to make. But we're doing our absolute best in communicating to everything that's going on, and doing our absolute best to run the business in the best possible way we can because we are all in this together. I'm in this, Danny is this, each of you as individual shareholders is in this. So we are all trying to get the outcomes because we all benefit. The last question is what marketing and Investor Relation efforts will the company commit to improve investor interest. Danny, do you have a correct bet?
Yes. I mean, sometimes, I look at how we've streamlined this business. And sometimes the growth that we're having is not recently, I guess, but just going back a short period of time, some of the growth that we're having is shielded or made seen less by some of the cleanup we've been doing. We've got a nice clean business now, and I talk about having a growth platform as a business. And for us, the most important thing we have to do is get the business right. So get the cash burn down, get the company focused on sales and have a sales-lead culture and get the growth. So with the cash burn down, the growth will make a big difference in my view. With the cash burn as high as it was previously, the type of growth we're going to get would not have much of an impact. But now it should. In terms of marketing, investor relations efforts, we do get inbound interest from investors. We just took a $2.5 million last quarter convertible note from Formue Nord, as I said their first investment in an Australian company. We manage the inbound investment. I attended -- I presented at the Australian MicroCap's Conference last year. I presented at things like [ Allbiz ] a few times. So -- and we do things on our social media. But in terms of engaging one of these organizations that we need to pay to do a broader scale investment to get our new investors, potentially in the U.S. as well as Australia, I want to see some of these deals come through before we do that more broadly. So I'm hoping to be able to do that soon.
Yes. And that comes and as you say to performance. And then everything I'll speak for that. We've got 11 questions on the -- look, I had just going back to those 6 questions, I hope that we've given you the answers that make sense to you. I'm not saying we give you the answers you like. We're going to give the answers that hopefully makes sense to you. And if there's no -- if you still got some outstanding concerns, please give us an e-mail and we'll respond separately.
We got 11 questions on the chat line. So let's try and move through needs. First one from an anonymous attendee. The company needs to spend, I think, some more on market support. Our directors, employees, networks, new investors looking at buying at these levels, referring to where the share price is currently. Surely, it's attractive here, absolutely. I wouldn't take too much to put the floor in it and would still encompass the market the most important existing shareholders that things are genuinely changing, not just talk.
Well, you're right, wouldn't take much of the floor on it. We're doing stuff that we hope can actually represent a floor on it until such time as we do. Unfortunately, we're just going to keep telling you what we're trying to do. So I don't know whether Danny, you have anything to add to that, but I think that's -- I think that the observation is absolutely correct that for those who believe and can see the future and can see the merit in what we're saying, it's attractive, no question about that. Anything -- Danny, do you want anything to add to that?
Just reiterating, we've got to focus on the business. We've got to get some of these deals through. And then, of course, when they come through, we'll announce them and hopefully, gather some momentum. I'm disappointed with the improvements, particularly on our cost base that we've made in the business. It's such a different business now to what it was 2 years ago and vastly improved. I'm disappointed that the share price doesn't reflect that. That affects me as well as all other shareholders. And it's a major focus for me to get that share price moving north. The first thing to do is to pull some of these deals through keep our costs under control.
Thank you. [ Leslie ] I know previous FirstWave comments made to the market around some larger potential sales. Have these progressed through procurement, if so, any thoughts on timing?
So I made the comment in my opening remarks to the first set of questions that the one that Danny had referred to specifically for a long period of time to shareholders, which progressed for a long period of time, stalled at the last gate because corporate decisions stopped expenditure, bottom line kind of thing about that. Danny, do you want to just make any other comments in relation to this?
No, but only that the other large deals are still in the pipeline. And that one that John just referred to is a good example. The ones that I referred to is a zombie, like, it's -- we're still the selected vendor. They signed contracts with us, everything was agreed. And then they just stalled spending, the CIO left or was sacked, we don't know. And everything was stalled and now the project is stalled indefinitely. So we regard that deal as lost. But in actual fact, it's just a zombie. It's just sitting there, neither dead or alive. And they may well come back to us at some point. But for these conversations and our internal conversations, we regard that as lost, and we stand by until they reach out to us again as we're still the selected vendor. They have not even announced us internally and trained their staff. It's quite unremarkable. I'd never seen anything like it.
But the other deals are still in the pipeline. There's a couple of really nice deals. There's some nice smaller ones as well, and there's one which is very exciting. Again, we don't -- we're not providing the forecast and we want to be careful about what we talk about because they do twist and turn. They're big organizations, they're big deals and anything can happen, but they're there. If the pipeline was empty, we wouldn't be -- we wouldn't have the sales and marketing people that we have. We're keeping our costs under control, but we're keeping that sales and marketing investment because of what's in the pipeline. And that's -- there's evidence in my trip to Mexico and Dino, our Chief Revenue Officer, went across to the U.S. and 1 of our 2 product leads for NMIS went across to Mexico. So you can probably read between the lines about why those things are happening. It's not lead generation, it's late stage stuff.
Okay. Thanks, Danny. Anonymous attendee. How confident as a percentage between 0 and 100 is the company Board of reaching the cash flow breakeven milestone in the next 2 quarters?
Unfortunately, I'm not a gambling man, and I don't do the 0 to 100 stuff. All I can tell you is that we're doing everything we can. There are no guarantees, but there are opportunities to do exactly what we're seeking to do. So -- and we can see that in line of sight to these things. We've also got a line of sight to diminishing cash, and I made my observations around the start in my opening comments about everything being on the table to figure out how we can continue to do what we're doing to the best of our ability to get the outcomes. So I don't think we can add anything more to that.
Again, from another anonymous attendee, since the Opmantek acquisition has done a great job of reducing cash burn, keep up the great work and the grind. The rerate will be very material when the market recognizes a global cash flow positive tech stock that is greater than $10 million in revenue, plus visibility of growing to $20 million, $30 million, et cetera. So that's an observation more than a question. Thank you for the observation.
An anonymous attendee again, can you please provide tangible evidence, numbers of pipeline expansion, conversion rates above the lift in ARR. The answer to that is no. We clearly have them from an internal management point of view. But no, we don't provide them externally. Because when you get into that, you get into a level of detail which investors will not profit from because the conclusions they draw will be either wrong or right, we don't want to draw any wrong conclusion. So, I'm sorry, apart from what we say, we can't provide you any specificity around the forward pipeline and conversion rates and what it would mean. The next one, what is being done to address the continuing decline in stock value. I think we've probably answered these questions. The continued decline in stock value represents a buying opportunity for some. Every shareholder -- for every shareholder who sells, another shareholder who buys. And if the price is at the point where belief is greater, then there will be a lot more buying. Clearly, we're trying to do that and give you the confidence you need. And we're doing a lot about it. We talked about a lot. We talked about the things that we do here, but it really comes down to and I'm pretty simple on this thing. By the way. I think performance is what is needed -- demonstrated performance.
And in that subset of things, demonstrated ability to convert the pipeline. And we have not convinced you of this nor have we convinced ourselves of this. So we'd continue to do the best job that we can, but I'm not going to provide any more detail on that. In the previous sessions from [ Mike Maiolo ]. Thanks, Mike. In previous sessions, there was talk of secret squirrel big deal. Where is that? Yes. I think we've talked to that, Mike. But Danny has also said other opportunities -- significant opportunities still exist in the pipeline and they're moving down the pipe.
And [ Kim Wingerei ] asks, is that really big deal any closer. Again, I've made my statements about that really big deal, Kim. There are some other deals that we're working on. We're not going to be as -- we probably won't be as transparent about where we are in the process with those because it creates expectations that are just unreasonable and can be more often than not as correct as they are incorrect. So I just don't want to go there.
How long is the Telstra contract extended for? 15 months, what will be put in place to add value to ongoing opportunities within Telstra lots. So while I said we've contracted our investment in CyberCision back to Telstra and the domestic marketplace here, we still have a team of our people who are working with Telstra and Telstra customers on a day-to-day basis. As I mentioned also before, we haven't trumpeted this earlier in these updates, and we have had growth in the Telstra contract revenues over all the months since last October. As I said, it's small, but still positive. And we've opened up more opportunities in Telstra that if Telstra can get their head around it, they're going to be working out very well for us. And I mean my comment absolutely there, working with large organizations is really complex. And just when you think you've got to figure out, they have a management restructure. And that's happened twice in the last 6 months inside Telstra. So -- we're maintaining our day-to-day activities. We've got same people working with the people who are not changing. It's the people who are leading businesses that are changing. We're working -- we've renewed that contract. And I mentioned to the independent lens that was brought to that. We passed a big test there. So we're doing everything we can to add value, and we're investing along with Telstra. We're investing to the degree that we can invest to make -- we can afford to invest. From Mike Maiolo again, given that the sales focus as presented is heavily on LatAm, does it make sense for the organization to be an Australian based in the medium to longer term? Well, I'd like to be in a position to start thinking about that, Mike. I think you've seen though, Daniel Friel. I've said about it and Danny has elaborated, that's a really big deal. I don't want to do this because it will mislead you by saying you can see the future map out in front of you.
But, look, we ask that question is, will it be the best thing for the company? We put a stake in the ground around where we're focusing our investment efforts. We've also put a stake in the ground with the appointment of the new Director. Take all that on face value, and I think you'll pretty much understand where we're heading.
From an anonymous attendee, is the reason for difficulty in closing sales due to a noncompelling value proposition for the products? And if so, what is being done to address this?
Danny, I might leave this to you, but I'll just say at the outset that NMIS, which is where we're putting massive effort when we are doing that, we're doing it with organizations who already have a network monitoring system in place because you can't run a telco without having that. So they've already got it. So we're working to displace that. And that is not easy, and it's always also an easy out just not to change. So we believe we've got compelling -- competitive differentiators in our product. But at the end of the day, they may not be enough to just -- to shift someone. So that's actually the environment we operate in. Danny, do you want to add to that?
Well, there's lots of organizations using the product and very credible organizations. Every tech company needs to improve their products. There is a compelling value proposition for the products. There's a noted focus in NMIS to expand the customer base to -- we've noticed that the technical capabilities of some of our key users has been reducing. So as the younger guys come through up the chain, they've actually got less of those hard-core tech skills. They're more used to point and click and move and swipe this. And so there's a noted improvement we need there to have an easier- to-use user interface available on the NMIS product. But other than that, we don't lose tech [ bake-offs ] very often. It's quite rare. The difficulty in sales is getting the deals through executive and procurement, more so than the technology.
From an anonymous attended again. Thank you for your hard work and focus. Thank you. You deserve public acknowledgment. As an extension to my previous question, can you provide numbers around what's at the tech stage? What's at the exact stage and what's the procurement stage side? Sorry, no, because it will be misleading for you when you all interpret in a way that's not going to be correct. So no, we won't. I'm sorry, just have to live with that. And then the last point, there is volume being sold at $0.02 this morning, crazy stuff, lead some on market buying ASAP. That's correct. I can't say more than that. Danny, do you want to make any observations on either of those questions?
Yes. Well, at the moment, like the lowest sale is $0.026. So it would only take $0.03 of buying and move it from $0.02 to $0.026, someone put a comment there that once the deal is coming, we're cash flow positive, they expect a significant rerating of the value of stock. As a major shareholder, certainly hopes that happens, but it's the last thing that we can control. It's just stock price, ironically, we can only control the business. So we just got to get these deals through, announce them. And hopefully, we've ever made that comment before. Hopefully, it does get a significant rerate based on that. But it's not very liquid. So once we get these deals through, we do want to see some more liquidity, some more investors, but we need more buyers, so anyone that can help with that. As I say, $0.03 would -- I just look at my screen here, $0.03 puts it at $0.036 and what is that, about $600 puts it at $0.027. So it doesn't take a lot of buying to really push the stock up. So once we start announcing some interesting things, hopefully, it can move quickly, but it's the last thing we can control, just focus on the business.
Okay. Thank you very much. Thanks, Danny. Thanks, Iain. Look, thanks to shareholders. It's a pretty robust set of questions. I hope we've been able to what we have been. The way we've answered them is giving you the sort of confidence that you need. And if it's not, then of course, you use the opportunity to make those decisions. So thanks very much for spending your time with us this morning.
We've gone for an hour. These things -- we normally finish these updates within 30 to 35 minutes. So -- and maybe we've just talked a lot. So from the point we are just talking a lot. But again our view is that, it just gives you more information that will help you make a decision. That's the appropriate decision for you, and that's all we can do aside from doing the best we possibly can with the business which you can be assured we are.
And I'd just like, in that note, to just give some acknowledgment to Danny. Danny's work -- Danny is a major shareholder. So he's got the most to lose. He's also got the most to gain. And his ability to be able to maintain a glass-half-full view on what the opportunities are in the midst of challenges that we've obviously got around sales conversion and cash is a testament to the way that this guy has survived for all the years he's been in this business. So I can't -- when you think about the way we are doing things, the way that Danny is doing things is as good as we can do, and he's got the most to win and to lose. So anyway, that's sort of...
[indiscernible] to the deals. So it's easy...
You're also close to the deal.
[indiscernible] back to the shareholder that's not involved in the conversation, it doesn't seem. I'm closer to the deals. And as I say, if the pipeline is empty, we wouldn't be investing in this sales and marketing. I wouldn't be going to Mexico every 6 months for 6 weeks to not have anyone to talk to. We wouldn't be sending our product lead. We wouldn't be -- Daniel wouldn't be going across. So I think that's the evidence that people can look at with the backdrop that we can't really go into the more details, which is what I'm talking to these customers, so that's what allows me to remain glass-half-full.
All right. Thanks, everyone -- oh, hang on, I think we slipped another question in here. There we got someone bought on market. Great. Keep it going. All right. Excellent. Thanks very much. All right. Bye. Everyone have a good day.
Before we get some more guys...
Okay. All right.
Bye?