Ann: Half Yearly Report and Accounts, page-29

Only just getting to this now (busy weekend) and let me tell you, this is not good news at all, but it is not game over either... yet.

Lets break this down and look at the 'going concern' warning first which in my books is pretty serious. It appears that Spenda will need more funding or a marked improvement in their cash flow. Its no doubt the next 6 to 12 months will be critical for them (and us). Scaling payment volumes, controlling their cost and continuing to land solid partnerships could turn this around for them. The risk here is if they can't be nimble enough to make these adjustments and keep burning cash at this rate, things could go south very quickly.

On the other hand, while Spenda’s cash burn and widening losses is a problem and becoming a red flag, they are also growing revenue fast. They’re shifting focus by offloading lending risk to Grapple and doubling down on payments and SaaS, which makes sense, but as I have always said, execution on their strategy is everything and for those looking to get in or out, perhaps understanding this part should be where you invest your time and energy. The Capricorn deal is a massive piece of the puzzle for scaling B2B payments, but whether that translates to profitability depends on how well they manage costs and secure more deals.

I think its also important to remember, this isn’t the worst financial position they’ve ever been in, but it’s one that needs immediate attention. Personally I will be watching for increased cash flow, significant cost cutting efforts, and any funding announcements closely. I still believe there is long term potential in this business, but they need to get through this next phase without running out of money and being very transparent about their strategic initiatives.