Please see attached a Research Report I've compiled together about last week. I see 8CO as a classical play as a Company with relative downside risk together with a high upside potential. Their core SaaS business is stable and growing, recently hitting breakeven, while further blue-skies growth is viable through it's CardHERO product.

8Common (ASX:$8CO) Current share price: 0.06c Market Cap: ~11m -
Cash flow positive SaaS company selling to Government entities
-Very sticky flagship product, Expense8 with an extra product 'cardhero' to contribute materially in the short term.
-Defensive, with high upside compared to downside.

8Common is a company which floated in 2014. Since then they have slowly grown their business under the radar ~4x from 1.15m to 4.15m, achieving cash flow positive along the way in FY20. The company sits in the payment space, providing expense management solutions of issued pre-loaded cards such as claims and travel for employees and monitoring of expenses and reporting to employer side. Their customers at this are 28% fed gov, 41% state gov and 31% corporate.

Upcoming product: CardHero Their upcoming product is called CardHero, which is a digital pre-paid fund disbursement card.

Here's why I like their upcoming product CardHero. This product is currently in trial with one of the largest NDIS providers , which if given the go ahead, can potentially increase ARR significantly, capturing 0.5-1% of all disbursements.  From my conversation with a few holders, It seems like the trial was successful and it’s just a matter of time now of nailing the final details. I think as COVID-19 accelerates the move to digital payments, there is a need for funding programs to continue for NDIS providers where Banks and ATMs access is not available, merchants are not accepting cash. NDIS providers are often required the create multiple bank accounts for users, with little ability to monitor the disbursement usage and ability to use this information for reporting. This will act in favour of the product acceptance rate, speeding up the adoption of CardHero. With this deal being done in the near future, it will validate the product further, which we have already been informed as per the company’s recent announcement stating they’ve been approached by a number of other NDIS providers. The NDIS disbursement opportunity is 4.8Billion, which is huge.

Q3 FY20 recorded a 10% revenue growth vs pcp (pre-covid), while for Q4 FY20 has recorded a decrease of 11% on pcp (during-covid). Q3 2020 SaaS ARR was up 48% vs pcp, while Q4 FY20 was up 5% vs pcp. The reduction in revenue growth was due to challenging economic conditions represented for new integrations of the software. Although this occurred, it is evident that ARR continued to grow. With management stating that work in FY21 has started to return to normal, the core business breaking even, more federal government wins expected and the CardHero launch, this company has a huge upside to grow in my opinion.

Had about a half n hour conversation with management earlier this week involving both the Chairman and CEO. 

• Management seemed confident on the prospects of the deal with the NDIS provider. Said they are working very niche with a number of these companies, leveraging off their existing customers in the gov and corporate area.  They are essentially taking this opportunity away from the banks by providing a better solution with their strong existing relationships

• They mentioned the Department of Finance Shared Service Delivery Office is providing a gateaway into the government entities, so they do not need to invest heavily on manpower to sell. Their technology is also quite advanced which reduces the need for additional employees, a very capital light structure

• They were talking about transitioning into the payment space, they mentioned they know the EML team very well when I brought them up as an example. Management said they thought about applying for a banking license or acquiring a company that has one, but said it's not the right time as it would be too expensive.