Thanks for the detailed post @Access2020, always enjoy your...

Thanks for the detailed post @Access2020, always enjoy your contribution.

But it sort of felt like listening to Michael and Dean, trying to justify that there is value where the market is ascribing a big fat zero. Let's be clear, the market is sending clear messages as to what they think.

In time, you are likely to be proven correct, but that might take another 18 months - 2 years and in the interim, it makes no sense to ignore the clear signals being sent by the market over the last 4 years. To keep ignoring these do not make sense. Look at trading over the last 10 days, not even $88k in shares traded over that period. There is simply no buying interest in a company that has $4m in EBITDA, a market cap of $16m and $5m in the bank.

Why?

This has been a smoke and mirrors show from the start, go back to the initial JV announcement. There was no disclosure of the territory royalties, just that the JV was 50/50. And we've had to wait 3 years to get this basic information on key numbers, it's been very poor.

The JV has really been a transfer of wealth from Beam shareholders to Roadpost shareholders. They gave us a US$600k interest free loan and in turn, Beam created a market leading product, where Beam takes a HUGE hit on normally accepted product margins, basically selling the product at cost price (ie: 10-15% margin) to the JV, so that we can get 71k subscribers and Roadpost get $6m+ in high margin, annual recurring revenue.

And are the latest figures really that impressive? Last year the JV did $30m in revenue, but now it has only reached US$27m this year. That's assuming the same time period, which I expect it must be. I am not sure that is to be celebrated, but maybe that is just me.

Meanwhile, the loss making JV has some unusual staffing costs if you ask me. Each respective territory is meant to incur their respective costs, so why is the JV taking on $2.6m in staff costs? The ZOLEO JV only has roughly 25 staff and a fair few of them have joint roles across either Beam or Roadpost. Seems expensive to be averaging $100k a role for the JV with some of the split responsibilities and the individual responsibilities for costs in each territory. Who does the JV really benefit?

The PAC note also makes a horrible assumption towards the end that as the Australia (70/30) / Europe (50/50) market develops, they will somehow balance out the US / Canada (30/70) split. That is just dream world stuff that lacks any credibility if you know anything about the relative size of the respective markets.

You are right that equity investments is buying the future value of cashflow from a business and the recurring revenue number ($800k) just isn't sizeable enough to get any new buyers interested at this point. Needs some chunky enterprise deals to come on board to support this and get it growing consistently at a solid pace, otherwise the market isn't going to care.

The only other way to extract value would be to sell the interest in the ZOLEO product / JV, which might generate a short term capital return, but really sends you back to square one.

But don't worry, Michael is getting paid A$900k this year and the Chairman is sitting on his hands making no purchases, so it's all good.