IMO, there is absolutely nothing to fear from raising capital (or in US speak a secondary offering). Keep in mind, most US IPOs raise far more capital than the small amounts done in Australia (exhibit 1 here is the raising being done by Shipchain).
On that basis alone, YOJ balance sheet screams "undercapitalised" - to me anyway. I''m in if they are raising at $0.25 or above. Especially say 400,000,000 shares to raise $100M and make a bolt on cash generating acquisition in the USA with target customers (UPS, Fedex, Amazon come to mind) and that fits in their software architecture.
666,940,000 shares issued (per 9 Nov, 217)
$4,850,000 of shareholder equity (per 2017 Annual Report). To this I would add the $3.1M raised so at least $8M and maybe $500K in capitalised software asset dev.
Gives a book value of equity per share of just $0.013 vs the $0.30 it trades. Now I am not for one second suggesting using BV of equity to measure the value of an early stage software company in its hyper growth stage.
Our currency (shares) are richly priced ... mgmt should use it to expand the company quickly. This company needs to be able to scale up quickly ... setting up USA and EMEA sales will cost heaps!
This is the slide we really need to usderstand
And YOJ should be explaining how well they are doing in their Qtrlys and investor presentations.
Obviously the number of deliveries matters greatly. From the Sep Qtrly
Told the #Kgs delivered but not the number of deliveries for the Qtr.
As a proxy using $62,000 of revenue for 30,000Kg call it a flat $2/Kg. We have the info from Ed's interview saying "We’re more of a supply chain company so we have $1.20 a container, 40 cents a pallet, around 22 cents US a parcel " and the note that sometimes Singapore does 500+ deliveries/day. This is likely way off but assume 5,000 deliveries per Qtr. Means ~ $12.40 per delivery which is pretty close to the medium delivery price.
So at 100% sequential QoQ growth (per Ed) then 60,000Kg in Q4 plus Christmas spike or $120,000 in Rev using flat $2/Kg or 10,000 deliveries at $12.40 yielding $124K.
At 100% QoQ hyper growth (which should be minimum target at this stage) then 2018 Revenue is only ~$250K + $500K + $1M + $2M = ~$3.75M organic growth for revenue.
But its the subscription model which locks in the recurring revenue - for the large enterprises this could easily be >$100K/mth plus maybe some variable kicker on volume - which at scale wont matter (database software companies don't charge per number of SQL statements executed or by how many GBs of data are stored ... its usually the number of connections (users) or concurrent (at the same time) users). The customer wants predictable costs so subscribes accordingly.
My point was more, even at $5M in 2018, that revenue is not enough - the business needs more scale and that requires capital. Don't fear CR used for acquisition of assets (either existing cash flow or customers or operations in expansion territories). Only fear CR when its for "general working capital" as in we can't pay our bills.
FWIW.
Bring on the Happy New Year 2018!
YOJ Price at posting:
30.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)