As promised here is a detailed summary of the EGM which I attended today. Jarvis, Digby, AF and Dave Wood were present in person. The rest of the board were connected via zoom. Dave is Appstabs chief product developer and was a welcome inclusion. The highlights of the meeting are as follows:
1. Adrian gave considerable detail about how Appstab have evolved since their inception in 2001. They started as an EDI company and were very early adaptors of mobile solutions. this was fine way back at the start but the market needs and wants more now so, they now have a suite of products that AF said, “ is very hard to compete against”.
2. “over the next 3,6,12 months the results will speak for themselves”- AF
3. In 6 weeks the trial period with selected customers will be over and things will ramp up considerably .
4.Dave spoke comprehensively about the products. There are 8 live and in use now and 6 more being developed. One of those is Spenda Service Automotive targeting small to medium Mechanical and automotive franchise groups. This will launch in June.
Also in the workflow payments pipeline is Pay by link, Quote to Pay and Drop in Payment Widget.
6. Spenda Wallet is also in the making which is the first application designed specifically for consumers in the retail environment and is completely terminal free. This will launch next year.
7. Everything is integrated from wholesaler to consumer with end to end growth. It is the ONLY system of its kind in the world.
8. CFO Jarvis spoke of their strong cash position and the key advantages of customers on boarding to Spenda- they reduce or eliminate hidden costs, save customers significant money at every link in the chain and it is easily integrated will ALL existing business systems. He stated that the company had moved from a R&D focus to a growth company on boarding and maintaining increasing numbers of customers. By moving from being largely just a SaaS provider, the revenue potential is many multiples more.
9. He spoke specifically about Invigo and said the $2m loan to them unlocked $20m of funding in the BNPL space which provides businesses additional ability to manage cash flow- fast and efficient.
10. Final words from Adrian were some we should all take note of;
a) their recruitment of talent has been beyond expectations with a number of new team members coming from significant roles in much larger companies because they can see the potential of CRO
b) they are aggressively attacking BPay with a payments system that allows customers to pay anyway they want- via bank, visa, MasterCard , Amex, credit arrangements etc and doing it faster
c) the Invigo deal is currently in pilot mode, but when it becomes fully implemented it is worth $4m a year
d) they have no intention of further share dilution. Any further cap raise to allow for overseas expansion will not be until the share price is many many times higher
e) To allay some naysayers who seem to think they are cold calling customers from some call centre in Mumbai, they do absolutely ZERO telemarketing, in fact, many companies are now contacting them to onboard including some large companies, but all their leads are not the result of any form of telemarketing and the sales team is located in Sydney.
f) there are several acquisition targets but they have no intention of sucking up too much cash on acquisitions
g) they have enormous respect for ‘square ‘ but A F again pointed out that ‘square‘ are not their competitors because square deals only with companies turning less than 500k
h) the target markets are expanding into agribusiness which leverage revenue streams here and overseas- these include wine and alcohol, livestock, fruit&veg and grains and A F was quick to point out that Peter Richards is Chair of GrainCorp. Very convenient! He also pointed out that pre COVID he has done considerable work with the Victorian Govt and Austrade
i) the company aims to onboard 4 ‘Nodes’ with around 1000 customers eachEVERY MONTH and by gaining just 5% of each node as customers to start with their growth will be very rapid. They are basically cashflow neutral now so profitably is imminent.
To sum up, all 3 presenters were jumping out of their skin with enthusiasm. All 3 gave a raft of compelling evidence that this company will be seriously large. All 3 know their stuff and after today is be willing to bet my house that my investment is very safe.
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