Novatti - The $1 party, page-1906

PC is very transparent & explains everything in detail.

The revenue of $5.3M consists of $4M for payments processing growing at 103% YOY + $1.3M for technology sales which is relatively flat.

Q1 last year was $3.56M - $2M for payments processing = $1.56M for technology sales last year so down about $260k this year dragging down the total revenue YOY growth rate to 49%.

Looking forwards 12 months the payments processing revenue should double to about $8M + $1.5M technology sales + $935k from ATX allowing for 25% YOY growth = $10.435M x 4 = $41.74M run rate + banking business revenue.

$10.435M / $5.3M = +96.9% YOY revenue growth. Total revenue growth will exceed 100% YOY with the banking business revenue & increased margins with Visa & Mastercard acquirer licences.

Extrapolate forwards another 12 months & the $8M payments processing revenue should double to $16M + $1.5M technology sales + $1.2M from ATX allowing for 28% YOY growth = $18.7M x 4 = $74.8M run rate + banking business revenue + new acquisitions revenue. Most likely total revenue will be circa $84M or about $21M per quarter / $10.435M = +101.2% YOY growth.

The total revenue YOY growth will increase from about 50% to 100%.

PC mentioned that the company is at peak cash burn this quarter & the next due to rapid expansion. Following quarters will see cash burn reduce as revenue increases.

The RKN dividend is not included this quarter as it was paid manually in October so will be recorded this quarter. Also $261k in interest/government grants was not included in the revenue as PC doesn't want them to obscure the actual revenue.

Restricted banking licence is a matter of when not if so more or less 100% certain. Will aim to get full banking licence within 6-9 months following the restricted licence being issued. Assuming the RADI is issued by end of this year should have the ADI by June-Sept 2022.

The bank will do a series B fund raise when ADI is obtained. This is expected to dilute NOV bank holding from current 70% to 50%. Don't get this confused with actual NOV shares being diluted 50% as it is not the case. It applies to the banking subsidiary only. Over the next 1-2 years PC expects further dilution due to more fund raising for the bank as it grows. The banking business will ultimately run independently with it's own capital which may lead to an IPO.

$5.3M x 4 = $21.2M x10 = $212M + $19.9M cash + $23.22M RKN + $24.5M NBHC (70% of $35M ) = $279.62M MC or about 86c SP.

$139.94M MC currently - $19.9M cash - $23.22 RKN - $24.5M NBHC = $72.32M / $21.2M run rate = x3.4 an absolute bargain.

$10.6M x 4 in 12 months = $42.4M run rate thus $72.32M / $42.4M = x1.7 & should be about x15 with 100% YOY growth rate.

I am forecasting $2 SP by the end of December next year & minimum of $1.50 SP.