Look what they have been doing is sound, they realise that in...

Look what they have been doing is sound, they realise that in order to grow they need to continue to extract more revenue from their enterprise clients and they are looking at adjacent revenue streams. The strategy makes sense purely from a a higher level - not sure if it will work but adding functionality to 2,7m licences that is high gross margin is a sound strategy.


Anyway a new CEO is so far into the distance that its not really what matters, if it even can happen.

1) get delisting shelved and failed so that shareholders can move onto next hurdle
2) Take $4m via convertible note (effectively 20m shares at 20c if it converts or we pay back - either way in current market conditions its not really material in terms of dilution but hugely important for cash runway. But it requires management to be held to account and not spend it on themselves.
3) that's were AGM in November comes into play. 2nd strike and hopefully some negotiating on cost control and re-alignment of remuneration.

If anyone is still around once the delisting fails then I suggest you read some of the annual reports of other SaaS companies or tech companies remuneration structures for management and you will likely see that most have something that will look like this :

50% max is usually paid in cash as their salary + super
50% will be "at risk" or variable which means its based on achieving medium and long term targets and often is share based. So for instance they might get 25% of that years pay in shares if they meet a short term target, and another 25% of that years pay at a later date if they meet a long term target.

For Karl and Peter I would recommend that they remuneration structure is no more than 50% short term as salary and the rest tied to meeting performance targets and paid in shares so that they are incentivised to align with shareholders.

To put into context, if Peter and Karl had this structure for the last few years the company would have saved $1m pa between the two of them in CASH and they wouldn't have received any share payments as they didn't meet targets. I don't mind if they get paid in shares as if its tied to shareholders returns then we all benefit.

So if anyone is still around if the November AGM goes ahead then look for something that has a high portion of their total package in shares - OR any company they own for that matter. That is of course unless the found has a 30% holding plus and doesn't need any more skin in the game.

A lot needs to happen between then and now,..not to mention Karl and Peter potentially not getting loans extended, meaning they would sell their shares at prevailing market prices....I can't remember the exact amounts but $1m in shares at 4c 25m shares or 1/4 of their holding ...


If the delisting fails, again I think it will re-rate short term to remove the illiquidity discount. Then if they can trim $1m in OPEX through restructuring their remuneration they will already be tracking toward CF neutral just off that,. but I fear the next year will be more cost cutting that requires redundancies and increased costs, but with $13-17m in the bank and stable revenues its not the most immediate issue.

Delisting really is just more about about Karl and Peters interest and not at all about shareholders.