Active Member Straws
#Bear Case
Added 2 weeks ago

K2Fly announced a partially underwritten options deal today.  It looks dodgy.   

Underwriter appears to have also been an optionholder, and included a sub-underwriting clause in the agreement.  This could allow other optionholders to participate in the underwriting at a discount, and being awarded additional options in the process.  Free money at the expense of other shareholders.  It also gives the appearance of a quid pro quo between the board and K S Capital, assuming K S Capital (or intersted parties) are optionholders. 

Looks like the antics of a pump and dump.  I have written to the chairman for clarification.  

It may be a completely legitimate business, but this options underwriting deal is a red flag. 

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#FY2020 Q3 Update
Added a month ago

Key takeaways:

1) Invoicing of $1.61M fo rthe quarter (up 92% on pcp

2) New contacts wins with Gold Fields, Newmont, Soth 323, Vale, Sibelco, and Kinross Gold. SAAS contract extension from Anglo Gold Ashanti. THAT IS A LOT OF WINS OVER 4 MONTHS.

3) ARR now at $2M pa, growing at +200% pa

4) SAAS revenue now represents 52% of reveue.  The transition to SAAS revenue will mask underlying growth IMO. 

5) TCV now at $6M, growing at +800% pa. 

6) North America sales team established and off to good start wiith Newmont ans Kinross Gold sales. 

7) Significant interst reported from NYSE companies in the RCubed platform due to US SEC regulation changes coming inot effect on January 2021. 

8) only $800k in the bank, but Board expects K2F to be cashflow positive for Q4.   This is being assisted by:

  • In March, the reduction of staff /personnel by approximately 10 FTEs;
  • Until at least 30 June:
    •  The Board have deferred all of their remuneration;
    •  The CEO voluntarily agreed to defer 50% of his remuneration;
    • Some Senior Executives have voluntarily deferred part of their remuneration; and
    • Significant reductions in travel, marketing, promotional and non-essential expenses.

It looks like the board is keen to avoid a CR.  If K2F can continue winning work at its present rate (16% per month!), they may not need to do so, but it is a close call.  

DISC: I hold a starter position (<1%)

 

 

 

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#K2Fly CEO interview
Added a month ago

Key takeways:

1) 3 of the top 4 iron produces now use a K2Fly product. 

2) 5 of the top 10 gold producers now use a K2Fly product.

3) serving 460 sites worldwide.

4) Management report they have the only off the shelf solution for achieving the new SEC compliance requireents of NYSE listed companies. 

5) 30 NYSE listed clients attended webinar earler this week, and are looking for a solution to their problem in Item 4 above over the next 6 months. 

6) Q4 is traditionally the strongest quarter, with a promising sales pipeline.  

Interview here: https://www.youtube.com/watch?time_continue=276&v=YusujVBfbO0&feature=emb_logo

 

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