Ann: IOUpay Provides Product Development Update, page-21

Presume you’re being sarcastic Aussie But FWIW the good news is this is the “first” product development for the upcoming FY so obviously there’s more to follow. It’s also good to see them innovating outside of just an app and going with a card. I guess I struggle to read these announcements with too much excitement because I’m biased towards the fact that I think they’ll be needing to do a capital raise soon, I can’t think of any other reason why they’d be issuing another roadmap (and the whole cash balance / TTV drop speaks for itself there). In ASX microcap world, sudden news flow on low cash balance companies often means something.

The one problem I have in the announcement is this: “...reinforces IOUpay’s best-in-class brand positioning”. You have to question this sort of marketing rhetoric, it’s a bit like the infamous “first-mover advantage” that we all heard so much about over 12 months ago. I’ve said this before: remember that they’ve scaled their core-business merchant lending (TTV) right down to protect their cash balance. Think about the impact on the customer: unless demand for the product has suddenly gone off a cliff, the only way they could drop TTV from $9.4M down to $1.6M is by declining customers who are trying to use the product (both new and existing customers – do the simple numbers). In real terms that means people are in store trying to use their myIOU, and it’s not processing for them, or the amounts available are tiny. They either have to pay upfront, or use another competitor’s app/product. Clearly what gets impacted here is the brand. Customers won’t understand what’s happening the background, they don’t care about IOU’s cash balance – they just want an app that works. There's so much competition in the region and it feels like a free leg up for the others.

So on the surface this is good news – but it’s yet another ‘agreement’ they’ve signed. What shareholders need to see is actual execution of these deals within the promised timeframes. That's my take. Cheers