Hi all
Thought I would try and put my thoughts down on the AGM, I am sure Elpha will provide a really great summary, better than mine.
First there were about 40 people in attendance clearly a number would have been employees who were there to help with the setup. All the board were present except Dr Sheng, which was a pity but understandable. I sensed the board were perhaps a little nervous about how the meeting would pan out, in reality the meeting was very cordial, the directors were quite forthcoming in their answers and were quite willing to engage and expand on the answers.
The formal part of the meeting was completed first, the usual guff and then it was handed over to Marty to do his presentation, which he is very good at. When looking at the slides of the presentation it made a big difference to have Marty talk to it and go through the 3 stages of XIP. After the meeting I had the opportunity to have a long talk to Marty and suggested they need to do a video of him going through the presentation.
Marty explained that primarily they are focusing on the healthcare aged care space because this is the leading edge now and that as they progressed through this segment then systems and solutions they develop with have applications into the industrial segment and lastly into the home automation sector, which Marty felt was a good 2 to 3 years away from really gaining traction and that XPE will have a presence there as a result of the work they had done on the healthcare side, to which the importance of JCT to the company could not be underestimated.
Marty went on to say that the very big players will develop their own systems like google nest regardless of what ADRC can offer as they have their own software/programmers to do it, but where the ADRC fits in is that it can assimilate all these systems through the RML. Marty is looking to target all the smaller OEM's etc that make a lot of the components that go into so many branded products that do not have the programming capabilities. To do this it is not much use to say to them hey we have this really great technology you have to make kits of the technology to show them how this works with their products, ie give them the answer. This all takes time and this is where they need to crank up the engineering effort to get this done, hence one of the key reasons for the extra capital now.
So Marty explained the 3 stages of XIP and was very clear that the real money would start to flow in streams 2 & particularly stream 3 from page 11 of the presentation. Talking to Marty after the meeting he indicated that he is still trying to work out the best way to articulate the timelines for all this as he has taken on board the message that SH need greater clarity around the time it takes for these processes to come to fruition. We should see more clarity in future announcements with regards timelines.
Marty was very excited about 2017 and what they are looking to achieve, my take is that 2017 will be primarily the year of stage 2 and that the real revenue may start to flow in late 17 but mostly in 2018. Check out page 12 of the presentation.
It was interesting that Marty spoke about checking out his fridge when he gets home from a trip, on it it has photos and bills to pay, notes about food that needs to be bought, social events that are coming up etc, sounds like our fridge, this is represented in the graphic of phase 3 on page 10, he even mentioned Dominos pizza, which I have long thought would be a great early fit for xerts given their much vaunted technology focus, JMO here.
Marty spoke about the chip/solution they have developed for the audio partnership and he explained that there are millions of cars in China with no Bluetooth and thus they cannot use the stereo in their car to play their music off their phones, this will allow them to do it, I wonder if a similar situation exists in India, is so the numbers would be massive, this is only my musing and India was not mentioned at all.
Talking to Marty after the meeting he was very friendly and open and very willing to listen, he told us that he has a disable child, hence his passion for the tech to be rolled out into the healthcare/ disability care sector, he has a great deal of knowledge of what carers need. He also spoke about his dad, who had a significant medical event whilst he was overseas and thus he jumped into the automation of his parents home big time and has a very good understanding of what the challengers are.
Next up was John who gave us a bit of a run down on some of the tech and organised a few demos for after the meeting. I am sure Elpha can give you a good run down on those. But what was really interesting is that he explained in detail how the discover bus works and how critical it will be in the data centre business. Vital xsense is chomping at the bit for the boys to complete their side of the bus, hence one of the reasons for more staff.
Then the meeting moved on to the resolutions with the first 4 going through without any questions, then we came to resolution 5 where, as expected, there were a number of very candid questions asked, to the boards credit they did not back away from any question and both John and Chris reinforced the message that without Athan XPED would not exist, these are 2 guys that had a dream that they chased for so long and until Athan came along they thought it was all for nothing. Now they see all the work they have been able to achieve in the last 10 months and all the opportunities they have in front of them that it is really quite a dream to them from what was fast becoming nightmare.
Resolutions 6 & 9 should be passed without any problems.
There was a fair bit of discussion around the Seneca shares and the KTM shares, which were a bit like a trailing commission type arrangement as explained by the company lawyer. She was very good and did not talk in legalises. Seneca as explained by Athan has some serious Asian money behind it and they are confident they will be there for the long haul. They acknowledged the concerns raised from the floor about the quality and perceived lack of value of previous advisors.
The last key element that came out from the SH holders present was the need for a dramatic improvement in communication by the company to shareholders, which they took on the chin and gave an undertaking to raise their game.
The board was happy to engage with shareholders and allowed lots of questions and nothing was off limits, nobody was shut down at all and there was no hint of any anst from the board unlike another company meeting recently where it was reported the chairman railed against shareholders for about 10 minutes, cannot remember who the company was but I think someone here on HC mentioned it.
All in all a very good meeting and we now have a far more realistic idea of the relevant time frames for the various phases to progress, the strategy they are employing as they go forward makes a lot of sense and it is clear that the board members are all on the same page and working very hard to take advantage of the many many opportunities.
Marty indicated that he was meeting with the tech team today to map out their priorities and development plan for the next 9 months so that he knows what he has to take to the OEM's and ODM's and when.
Feeling very comfortable now going forward and will look to take advantage of any opportunities the DT's may present with the games they play.
Sorry for the poor grammar and the spelling, hope you find it useful and I await Elpha's summary, it was also great to meet him.
Regards
Rayda
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