Short thread on my opinion about the published annual report (2019) of United Mobility Technology $UMDK $UUMTF, the current situation and if it affects my investment thesis. As always this is not investment advice. #DYODD

Disclosure upfront: After I sold a lot of my shares yesterday after the report was published, because I was shocked by the high accounts receivable, I bought back shares (mainly this morning) at prices slightly above and below 6€.

1. Do I think it is very surprising that the share price fell this much as a reaction to the report? No I do not. The company reported around 12,5 M€ in accounts receivable up from around 0,3 M€ in 2018. This figure is as high as the whole revenue for 2019.

2. There may be good reasons for this, but no explanation was provided for this increase. This shows at least a very poor communication to the minority shareholders of the company. I was shocked by the figure and sold a lot of my shares in a first reaction.

3. The sharp drop in the share price is probably due to the fact that many shareholders doubt the recoverability of these receivables. I don't think this is a legitimate concern, as the financial statements were prepared in August and therefore under German law...

4. ...all information available at that time had to be processed. Therefore, if any of these receivables proved to be irrecoverable, they should have been written off in the 2019 financial statements. Likewise, the company had only about 40 T€ cash at the end of 2019...

5. ...if the receivables or a large part of them had defaulted, the company would very likely have had severe liquidity problems in the past months, which might even have put the going concern in question in the annual financial statements.

6. For me, I came to the conclusion that although this sharp increase in receivables is worrying, it does not call my investment thesis (see link) into question. Of course there are a lot of unknowns. But it was high risk/high reward and it still is. https://seekingalpha.com/article/4375693-united-mobility-technology-german-growth-monster-still-on-sale

7. So let us see if there are some indications supporting my thesis (which essentially is based on the theory that all of the revenues derive from Payback Pay): One indication could actually be the source of all the worries at the moment, the high accounts receivable.

8. It at least indicates a big shift in the business as the figure is totally different from the one in 2018. As the amount of receivables covers the entire revenue in 2019, this suggests a dominant customer with significantly different payment terms than in 2018.

9. The confidential contract with Payback was signed in December 2018 so came in effect in 2019. This is only one possible explanation and it would also be a possibility that the revenue came from another new source.

10. Despite the many announcements by management, I have not yet found any evidence to suggest that significant revenues are being generated from other businesses. Of course this does not mean much.

11. One of the topics discussed at the supervisory Board meeting on February 5, 2019 was the current developments in the payback project. If Payback would only pay a fixed license fee or no more income from Payback could be expected, there would have been no reason...

12. ...for this item on the agenda. especially as a supervisory board meeting was held on december 3, 2018, before the agreement with Payback was concluded, at which, among other things, the user behavior at Payback pay was thematized.

As I said before, this is a high risk/high reward investment because a lot of things are unknown. Do your own due diligence and consider what conclusions you draw from the available information.