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I believe your being very unfair on Julian Challingsworth (JC),...

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t1obrien

1,359 Posts.

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23/08/24

20:42

Post #: 75350228
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Originally posted by weekend_cook: ↑

This is starting to look like lipstick on a pig. Every move seems to be covering cracks. This acquisition, on the surface (I need to look deeper) is quite expensive and will hardly move the revenue and margin needle. The cost of the acquisition is:
$5.2M cash
$1.6M shares
$0.8M deferred
2 (?) x $0.3 shares for KMP @$0 strike.
This totals $8.2M. "Underlying EBITDA" (which suggests actual is worse) is $1.4, so it is more like 6x.

But it doesn't stop there. The only growth is coming from cyber - and this is ladened with acquisitions. So not sure what organic growth looks like. Nevertheless the non-cyber divisions look doomed. Which means that we should only look to the cyber division as the others will probably erode over time. The CEO is cyber, so has possibly no interest/experience in the non-cyber stuff.
The company suggests an underlying EBITDA profit. However, operating cashflow is way down. So this company is a long way off being able to be operating cashflow positive. This is my criticism of the cyber business model.

Finally we look at the balance sheet - Current assess $38M. Current liabilities $52M. So, my guess is that this acquisition and associated raise, coupled with the underwriting, was to provide the auditors with comfort that this is a going concern. Why else would a $125M revenue company but a $3M revenue company - Lipstick on a pig

One last thing - The ongoing changes in board structure may back up my point of view - significant turnover, which does not show a good governance structure.

... and if you're wondering, yes, I am pissed off

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I believe your being very unfair on Julian Challingsworth (JC), with your reference to the CEO being "cyber" and the subsequent comment which i will not repeat.

As I understand it, Julian has a broad experience in technology and management.

I think he is going a great job. However, I am also sure JC and the Spirit Technology Board would be the absolute first to acknowledge there is a long way to go.

Keep up the great work JC. Tesserent was lucky to have you on board and so is Spirit Technology.

ST1 Price at posting: 6.1¢ Sentiment: Buy Disclosure: Held
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