If we skip the promo and go straight to the bottom line, on the surface it’s a repeat of the last 4C – cash burn of roughly $700k a quarter which is at least $200k above what is required to nudge the market’s attention.
However, the last quarter’s figures were boosted by a $251k government R & D rebate.
There was no government rebate this time, so what we do see here is marked financial improvement in expenses this quarter.
To be specific, operating costs are well down and below cash receipts (for the first time in the company’s history), which suggests the business can be profitable at a much larger scale.
The last 4C:
View attachment 6354783And today’s 4C:
View attachment 6354786Forget Cricket Australia and Inverleigh. IMG have added Linius Whizzard’s search engine to their extensive video archives; there is no greater vote of confidence the product is the real deal.
Nonetheless, it is abundantly clear that the speed which cash receipts are growing is insufficient to inspire the wider market.
While receipts are growing, when you have to raise monies at these levels with the level of risk involved, growth needs to be sexy.
It is stated that 94% of receipts were from recurring revenue. This is very healthy, but what is not stated is the split between monthly licensing fees and variable revenue.
We’ve been informed on numerous occasions that variable revenue is the key to growth.
Reading between the lines, variable revenue is still yet to take off, which raises the big question how does the company get a slice of the ad revenue on uploaded mp4 rendered videos edited with Whizzard?
I.e., where is the money?
Not in archives apparently unless we can scale enormously from here.
The money we know is in automated highlights; American investors have literally thrown millions at both WSC Sports and Magnifi, both private companies.
View attachment 6354795View attachment 6354798And now Linius have a strategic partnership with the 2
nd biggest name in automated highlights, Magnifi.
On one hand, Magnifi will sell Whizzard to their clients including the IPL, which sounds bonza but the archive money isn’t lighting up the market.
On the other hand, Magnifi and Linius will join forces to go one step beyond automated highlights to personalized fan engagement. There is no doubt that cashed up Magnifi are a much more exciting partner than UK based Swan Bay.
Linius’ personalized highlights gets the benefit of Magnifi’s A.I. with an aim to produce a much more professional, slicker fan-engaging product.
Personalized highlights is a new product that is ripe to disrupt the sports highlights market. It is the natural evolution of sports highlights and this is the company’s potential rainmaker as advertisers are targeting more personalized advertising and with this product Linius get their fair share of the ad spend.
More than this, the company is now surrounded by big American names: IMG/Endeavor/Silver Lake & Avid.
The last is an interesting opportunity, and it seems mutual director John Wallace has finally come through in the U.S.
I don’t see the company failing at this point, rather the opposite.
Venture capital companies would be licking their lips at buying the tech on the cheap in liquidation and repackaging the opportunity as an up and coming sports tech company to American speculative investors.
There should even be competitive bids from our biggest customer IMG, new partner Magnifi and their biggest competitor, WSC Sports.
Of course there are no guarantees with speculative stocks, but thanks to JB's actions the company is finally positioned where miracles can and do occur. It's not an accidcent.
The cap raise, according to some on here will be a large one and to sophs only; i.e., major dilution.
This could also suggest juicy options are involved, which if so will only further alienate every day shareholders who have endured alongside the sophs.
The board has skin in the game and their friends are onboard in a big way.
Ideally for shareholders, our largest customer has seen enough to want in and join them as an active shareholder. As this is Linius it is safer to assume the former.
Imho
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