I am not too phased about the staff turnover. A new team needed to come into execute on a sales strategy this will play out over the next 6 to 12 months.
The reality is they listed with a market cap of around $ 40 million. One of the reasons they did list when they did was that it is hard to get funding in the market for regtech so it made sense to list when they did. The past few years they have been spending money into improving the product and continue in discussions with banks. The Main knock too date imo is the slow lag times from engaging with a client to signing a deal. But banks are historically slow to move. They will need to move a lot faster in the future with the mandatory changes with ISO20022 implementation changes required over the next 3 years to even receive payments. They will be forced to change and the discussion with be do they build themselves or engage a fintech or regtect such as Identitii. It will be much cheaper for the banks to use Identitii compared to building it themselves no question about that.
They also need to implement once approved which can take up to 6 months. Now that is an issue however the silver lining is once they do sign contracts they will be long term deals with recurring revenue on a yearly basis over 3 to 5 years deals. Once they continue to scale the costs with come down and they will enter cash flow positive on a quarterly basis. This may still be a year away it depends how many deals they can get done over the next 12 months. I would be hoping for 5 to 10 deals. If you look at the first Q compared to the second yes it was heavily reduced. One of the reasons being they didn't have the capability to go on sight to do the HSBC australia integration which is now signed. Once they sign a new deal they will earn ongoing implementation fees as they go on premise, This could be in the range of around 100k a month i may be wrong but that is my understanding.
I also believe that once they start to sign more than just a foundation bank into other banks such as Standered Chartered more investment will come to scale. When I mean scale its about really going into Europe and Asia etc to get more contracts signed. They have signed quite a few partnership agreements that the company see as the way they can scale longer term. That is yet to play out and time will tell if partners have the connections and the capabilities to scale.
In terms of price after next week you would think we are looking minimum 25 plus as we scale as a start. It all depends on how big the contract values are. I am invested around 11.5 break even and in for the long haul until things change. If things were all rosy they be already over 1 dollar hence the current market cap around 15 to 20 million. That is more of an opportunity to see this get to 50 cents to $ 1 dollar over the coming 6 to 12 months.
Excited to see what contract they have signed Tuesday. Nick is great he easily explains this the best out of them all as the founder. The CEO has some work to do to sell this product but just lets hope the new sales team kick some goals over the coming months.
Lets hope for a new bank is signed and this could be the start of a new run into the 30s
(20min delay)