A company with huge upside, but...

This is a very promising company and the potential was enough for me to create a HC account. However, I nearly stopped researching it after the irrelevant, tit-for-tat and mind-numbing posts of a number of posters on the DW8 thread. But anyway, here I am.

The CEO's credentials are just about perfect for this company. Having worked on the periphery of the wine industry, there is massive demand for this type of service i.e. a distribution/sales path that shifts a greater profit margin back to producers. I've had a look at recent numbers and I'm expecting a nice update come the next quarterly. On the numbers provided in recent company announcements, it's becoming much easier to calculate the revenue coming in. A 50% increase in the run rate suggests the company is on track for $1,092,000 revenue for the year. Adding the further increase in run rate predicted by DT in today's update (let's assume a conservative 30%), that puts annualised recurring revenue at $1,419,600 - not bad for a company currently valued at $6.948 mil.

Having said that, I don't think we will see the required revenue and cash inflows to skip a capital raising. A big part of this is DW8's strategic use of a 'support package' for wine producers. This will bring on a number of new customers that will drive revenues for the soon to be launched B2B platform, however it will come with a short term hit to cash inflows. The waiving of onboarding costs, $500 free credit and 3 months free storage will reduce cash inflows as a sales credit (although top line revenue numbers won't be reduced). On balance, I like this decision by management as it will expand the revenue earning capacity of the B2B platform with additional customers on board.

I've reviewed the wine club schedules of some of DW8's largest clients and there is an April and/or May shipment for most of them - again, this points to a nice upside come the next quarterly.

All up, I'll be taking a small position in this company over the coming days, with the intention of taking part in a future capital raising over the coming months. I wish I stumbled across this company a few months back when prices were even lower. Best of luck to holders, it looks like it's been a bumpy ride so far - I'll be sure to put my seat belt on!