It's only recently I have been negative, previously I have generally commented on wanting some financial information to accompany announcements on new contracts.
I am not qualified to assess the tech, but there seems to be a market for it and some reasonable customers have signed up, so on that basis, I assume it's fit for purpose.
Management have seemed to struggle in generating the revenue they believed was possible, or have failed to position the tech properly. They now find themselves in the position that rather than pursue growth, it is worth investigating a sale - in whole or parts. And low and behold, they need more capital to buy the time. Use of funds is $1.2m for US sales and marketing (would love to know what the return on this spend is expected to be), $0.5m for product development and $1.8m for working capital - but there is failure to provide any strategic insight into what that working capital provides - do they believe it will be sufficient to get to operational profitability, or is it sufficient for salaries and bonuses to get to a business sale.
They just come across as continually missing the mark, no transparency and take it for granted that money will be raised when they run out.
Shareholders taking up 50% of the entitlement was a poor outcome. I did not take mine up. Directors had no choice but to underwrite, so I take no satisfaction from that - they were not able to secure a broker or lead manager to underwrite (I'm assuming they tried), and now the price has dropped 17.6% since the placement settled. A good lead manager would have supported the price after a capital raise. There has been no trading today.
It may turn the corner, but I have little confidence at this point.
ADS Price at posting:
1.4¢ Sentiment: Hold Disclosure: Held
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