After the AGM the CEO Justin Miller presented. (These notes do refer to the graphics in the presentation). I took note of things that were new to me or confirmation of understandings around issues.
Margins:
Australian retailers are asking for 20% more margin that that Nuheara are giving companies overseas. Hence, money and time are better spent negotiating those deals than any here. Nuheara definitely want to be in the Oz market, and are confident Amazon Oz are going to change the landscape re retail margins.
AGM Resolution 5:
Resolution 5 re Constitutional change was to move from the Wildacre Constitution to one more standard with the industry and ASX. It in no way implied any purposeful action re takeovers.
Nuhearas big advantage
Only Nuheara offers the "processor in the ear" (he did say "out of those on the presentation" page 6). This gives us massive power in that we can upgrade firmware and change the performance of the buds. This gives us a product edge for the consumer but also a manufacturing edge for the business.
New products
These are close. They will address the upper end of our market and the lower end of our market – leaving the IQbuds in the middle ground. Imagine the target pyramid here in the presentation (page 7). We will broaden our width.
New product will push into the OTC market without the need for FDA definitions. WE aim to corner that market via technology advances. Nuheara knows what tech is on the way and how we can use it to do this.
Lean & mean
We have raised $20m AUD of which $9m is left. Look how far we are on that. Doppler raised $60m US and spent it all then failed. Nuheara has management that are good with our $.
We will scale as the market scales. Doppler went too hard too early, hence going broke.
Doppler
Doppler spent a lot to run the narrative in the market around augmented hearing. With their demise we now get to run this narrative, without spending too much money.
BOSE
Now our closest competition. Has some augmentation, but not as good as IQbuds. Plus they are not truly wireless. Plus they are more expensive.
Current situation:
Approximately 1,000 stores have stock. 2,000 expected to have stock by years end. Our current deals/brands (page 10) have about 6,000 stores in total (but we are making more deals as we go.)
Our online store – nuheara.com – now is delivering 6 currencies and soon to be a 7th. These are all direct sales (high margin) to the consumer.
The online sales now offer the purchasing plans.
Infomercial
A lot of new advertising items are being created. The 5 minute infomercial is the most significant. It is destined to US cable TV (eg Discovery channel etc). It has actual IQbuds users featured. They will be able to "Dial 1800 now" and buy on a purchasing plan – from their lounge chair This starts to air in the next two weeks.
Funds investment
Wilsons had a 15% STOP/LOSS – crazy for a small new tech listing. They are completely out as of yesterday.
They have been talking to Fidelity for over two years. Fidelity are aware and watching Nuheara progress.
Dr Mike Ottaviano (Independent Non-Executive Director) spoke and was supportive on the issues around getting funds on board. Its not an easy thing to do and can have its good points (stronger register) but not always as witnessed by WAM Microchip Fund setting a 15% STOP/LOSS then bailing out. (They are fully out as of this week).
Ambassadors
The Fred Hollows Foundation (USA) has a dinner in the US next week. IQbuds will have a strong presence and will be "available" to Leonardo DiCaprio, Joel Edgerton and one other "star".
Cash burn
If they were making nothing and selling nothing cash burn would be about $400 to $500K per month.
Airlines
Deals with two big airlines re onboard use will commence soon.
Forecasting
It is still not possible to forecast anything. The data simply isn’t there.
NUH Price at posting:
6.3¢ Sentiment: Buy Disclosure: Held
This starts to air in the next two weeks.
(20min delay)