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#Bear Case
Last edited 11 months ago

General Notes:

•Illiquid – founder owns 75%, top 13 own 89%

•Market Cap $2.1M

•Founder and board member were willing to loan $50,000 each to the company unsecured and interest free with founders’ loan now at $500,000 - $1M

•CEO/founder modestly paid

•Nearly $1M annual loss

•Negative shareholders’ equity

•Multiple CRs since listing

•$0.75M op cashflow negative down from $2.2M negative pcp

•Multiple ASX query letters regarding viability of remaining listed & negative operating cash flows

•As of March 2020 – 0.66 quarters of funding available

•Negatively affected by Covid-19/lockdowns

•No moat/competitive advantage

On the surface revenue growth trending positively and the financials promising with a modest $30k profit before tax. However, on reading note 5 it can be seen the majority of their revenue is derived from “R&D tax incentive rebate”; totalling $805,000 half year ending Dec 2019 and $1.09M annually as of June 2019.

When looking at user growth numbers keep in mind this may include freemium users.

It's an interesting product essentially offering digitised buy 10 get one free cards for cafes etc. It's possible it was a bit ahead of it's time talking about society moving towards cashless payments back in 2014 and the use of mobile phones to pay for purchases.

If I've missed anything please let me know.


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