Downside, Sensitivity & Correlated-Stress
A case is only as good as what it does when it is wrong. So we stress the model on every lever at once, not one at a time, and ask the only question that matters: does the business still stand. It does. Even with adoption slower, prices softer, costs higher and the grant gone, the company stays profitable and the cash hole stays small.
The stress, on four levers at once
This is a correlated stress — all the bad things together, because in the real world they tend to arrive together.
- Adoption 30% slower than plan: jurisdictions and clients sign later and smaller.
- Prices 20% softer, on top of the slower volume. Together these two cut revenue by about 44%.
- Costs 15% over budget, on the field and the build.
- The grant slips, so the platform is financed by concessional debt instead, on the no-grant path (see Funding & Non-Dilutive Backbone).
What survives
| US$M | 2028 | 2031 | 2035 |
|---|---|---|---|
| Revenue, base | 7.4 | 53.9 | 108.3 |
| Revenue, downside | 4.2 | 30.2 | 60.6 |
| EBITDA, base | 2.8 | 34.2 | 77.1 |
| EBITDA, downside | (1.2) | 7.6 | 24.8 |
| EBITDA margin, downside | — | 25% | 41% |
Downside figures apply a 30% adoption haircut, a 20% price haircut and a 15% cost overrun to the base model, on the no-grant financing path. All figures are management estimates. Negatives in parentheses.
The shape holds even under the stress. Revenue still compounds, the business is still EBITDA-positive from 2029, and by 2035 it earns about $25M of EBITDA on $61M of revenue, a 41% margin. The operating leverage is softer, but it is still there: a fixed cost spread over a revenue base that grows.
The cash hole is small
- The business is cash-negative only in 2027 and 2028, even under the full stress.
- The deepest operating trough is about $3.6M, reached in 2028.
- From 2029 the downside business is EBITDA-positive, and its cumulative cash turns positive in 2030.
A trough near $3.6M is a small bridge for a business on this trajectory, covered by lean burn and, if needed, the concession's own cash, which sits outside this data P&L. The stress does not break the model; it slows it.
The grant is the real swing, and we treat it as a co-base
The single biggest variable is not price or volume — it is the grant, because it decides who pays for the $19.3M platform and how much the founders are diluted.
- The grant is not yet secured. We therefore treat the no-grant path not as a remote downside but as a co-base, until a grant letter of intent is in hand.
- If the grant slips, the fallback is concessional debt, not a larger equity round. Debt preserves control; the dilution paths are set out in Cap Table & Dilution.
What the stress does not test
It is worth being plain about the limit of this analysis. The stress tests a business that works, just more slowly and cheaply rewarded. It does not test the binary risk that the first contract never signs at all. That is a different kind of risk — the existential one — and it is handled in two places: the asymmetric structure of the case, where a data business selling to companies and registries stands even if no government ever adopts the jurisdictional layer, and the Risk Register. Within the range where the business exists at all, it is resilient. Whether it exists at all still depends on GATE 0.
The honest read
Every figure here is a management estimate, and the downside is still a model, not a measurement. But the conclusion is robust to the inputs: cut revenue almost in half, run costs over, and lose the grant, and the company is still profitable by 2029, still margin-rich by 2035, and never more than a few million dollars underwater on the way there. The case is built to survive being wrong about the speed of the market. It is not built to survive never reaching the first contract, which is why everything points back to GATE 0.