It's about scale...The buisiness model, imo, is designed around scale. At the moment collection of fines hasn't shown up yet because it is to small to recognize. In other words they aren't making money off of it.
This model is not based on revenue per bus, but revenue generated over time. The market has given them money to do it. And another possible cash injection via the warrants if they progress accretively over the next 18 months or so. In order to do that they will need to install a lot more cameras. Like a about a thousand. To try to base revenue on collection ability is folly, when you are only have 25 (?) busses running cameras.
So so there are certain milestones you will have to see or bet on seeing if you are investing in this company.
1) WAIT! Active installation of a lot of cameras in a lot of busses. We don't know if or when this will happen yet regarding their test areas. Without these busses the model is dead. But if they do consider the following:
5000.00 per camera in 1000 busses will cost 5 million dollars. Put that in Capital expenditures. One time expenditures btw.
2)WAIT! ..At least a quarter to see what the actual collection rate is. You can plug in whatever numbers you want. At present GSI has chosen not to since the numbers are to small.
3) WAIT! At least that one "good" quarter to filter out all one time items and stock based compensation, warrants, body camera sales and whatever other bs that you might find in a typical micro cap financial release ....to calculate gross and net margin.
This final step is the one you are waiting for if you are invested in this stock. If they can post even 1/2 a million or a million dollars of stop arm revenue ex delinquencies at 50% Margin this will open up a lot of eyes. The money will have been spent and now it's all about cash generation. The market can now scale this going forward, and markets always price good Margin favourably.
These are a lot of IF's but what do you expect from a 20c stock, or rather .16c stock.
So now you can plug in best and worse case scenarios and add a delinquency rate and come to a basic total. But once cameras are installed I would argue that it would generate a lot of easy money ie FREE CASH FLOW. But it won't really matter until they scale a measurable base of busses.
Eg,
?Quarter: 1000 busses at 10 COLLECTED tickets each at 150 avg per ticket is 1500 over the quarter per bus (camera). Or 1 500 000 collectively. Plug in a responsible Margin number and hope they are running the rest of the buisiness responsibly and you can end up with a pretty good number. Especially considering it only takes one guy/gal to run all this once it's set up.
BUT NONE OF THIS MATTERS UNLESS THEY GET ALOT OF CAMERAS INTO ALOT OF BUSSES. They have the cash. They now need to convert..
but there is is no use bashing the so called model because their isn't a valid one to speak of yet. And there's no use pushing how rich we will all bebecause there's nothing generating the money needed to make us all rich. Yet. But I own some just in case.
PS
To put this in perspective, Grande Prairie AB Canada, with 100 000 people including surrounding areas, generated over 2 million dollars of photo radar money in one year. This is mostly generated with 5-6 mobile camera vehicles that move around the city. Also note that in Canada you can't get insurance for your car or renew your license or car registration until these fines are paid. Can't get one without the other.
Yes its different country different rules, but it gives you an idea.
Good luck
BWB