Hi all,
The below is my recollection of the main points discussed at the AGM. But before you attempt to read this, please understand that none of the below should be considered as financial advice of any kind. This is because my understanding and interpretation of events as they occurred on the day could be incorrect, and in any case I am not a licensed financial advisor. Also please refer to XPE’s disclaimer (not shown here but contained in the full AGM presentation that is available online for everyone to read) and please, as always DYOR and seek professional licensed advice when necessary.
For those who have been patiently waiting for this detailed summary, please accept my sincere apologies for the delay. To everyone else, you may need to grab a coffee or tea and a biccy before your start reading this (and rest assured that this will be my last lengthy post this side of Christmas
).
Xped 2016 AGM detailed summary of points:
1. Chairman’s Intro - refer Chairman’s letter released on the 30th Nov for details. Nothing more to add.
2. AGM Presentation presented by Marty Despain – refer parts of official AGM presentation below and some notes/commentary that I’ve added underneath each slide.
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Introduction and Progress To Date
Key points (as I understood them):
2016 has been about the establishment / foundation of both technology, strategy and leadership. Marty (don't call him Martin
) talked about why he joined Xped.
He is a 20 year veteran of the silicon industry. He started working for a Japanese semiconductor co. and in the last 12 years he has been predominantly with Intel.
According to Marty, Athan was very persuasive and pretty much stalked him for several months trying to get him to come on board and after scratching his head initially, the more he looked at our technology the more he recognised that there were some key components that are different and that will allow the company to grow over time.
2016 for Xped was all about setting a path and establishing a foundation.
2017 is all about the growth i.e. turning technology into actual product, and that’s why he was hired (to help fast track that transition).
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Share Price
You'll notice that I have updated our performance as at 5th December on the above slide (in black). It is interesting to note the following points with regards to yesterday and today’s close;
XPE is currently trading 10% below the proposed SPP.
We are again back near multi-month lows, testing the strength and validity of the recent double bottom at 2.8c and also the bottom of that very large and bullish green candle posted on the 18th Nov (which was the result of the announcement re: successful completion of porting the ADRC proxy to our 2 MOUs).
Incidentally the bullish hammer that occurred on the weekly chart a few weeks ago is still yet to be invalidated. i.e. we’ve been trading within the range of that candle for more than 2 weeks now, yet we’ve also had a record 12 consecutive trading days without a green candle. Go figure - and yes, by that I mean that statistically we are well overdue for another green candle or two to pop up at any time. The question is how big will it (or they) be, and will it be enough to confirm the possible new trend that I opined on a couple of weeks ago in a post under the ‘Long Term Investors’ thread.
When looking closely at the last two and a half weeks of price action, it does make me wonder whether we are indeed still in a downtrend, even though that is the common perception if you are listening and talking to others. Remember that the market is a master of conditioning its participants into believing that the situation is hopeless, forcing people to sell at exactly the wrong times in the cycle (unless that stock and/or sector really is a long term dog in which case it will eventually sit and do nothing or at best, attempt a dead cat bounce before dying a slow death).
The market also understands that investors are, for the most part incredibly impatient, and when under-researched how easy it is for negative human emotion to creep into the picture and potentially hijack one’s portfolio . This is especially so when all that they see on their charts is one red day after another, whilst the stocks that they don’t own are going gangbusters. IAM anyone?
Looking further afar, the YTD return on our investment is +3.45% i.e. virtually flat since the end of 2015. Still a bit better than parking your money in a normal bank account, however given the heightened risks associated with investing in the junior tech sector, it's not what most of us had in mind I'm sure.
To make matters worse, the rolling 1 year (12 month) return stands at a dismal -37.5%.
Incredibly (or not), the current SP is lower than the re- listing price on 5th April, 2016 (3.3c) and when MOU no. 2 was first announced.
But I digress with all this TA. The key point from Marty’s presentation, with respect to the above slide, is that he seemed very confident that they will have some more announcements in the next couple of months (less six days and counting) that should help the SP ‘turn in a positive way’. John and Athan also reiterated the same sentiment at different times throughout the AGM, as you’ll see in the commentary below. Make of this what you will.
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The Road to Success
Marty put together the above slide after receiving recent feedback from shareholders.
Another reason that Marty decided to come on board is that John and Chris and their team are very good at developing technology and they will continue to invest in technology (specifically IOT) in order to help them keep moving forward. He said that the investment has to keep going and the energy has to stay.
Marty’s still working hard to on get the MOU names released but they are big companies and they have lots of hoops that partners have to jump through to approve releases.
The intent of the MOUs is to take the technology and prove it up, making sure that the technology works in their environment, and that has been done over the last six or so months as they has been finalising those MOUs. Now those MOUs need to be transitioned into formal licensing agreements to be able to move forward and they are in the process of doing that.
Next step is to transform the components of ADRC into use cases or user experience i.e. vertical or expanding the product. Use case priorities are Health, Buildling Management and Home (in that order).
JCT was a great acquisition to help us get into use cases.
Marty spent the last 5 years working on home and the reason he put it as third is it’s a very fragmented segment. The value propositions with Health and Building Mgmt are very clear and ready to go so they want to get into those first and then they’ll transition and continue into other areas that are important.
As opportunities come up they may expand their priorities because bigger companies may want to do something different, but that’s where the company sits as of today.
Marty acknowledged they have to grow the sales force. But there’s no need to grow it internally. The intent is to be able to use large companies that already have a channel presence to be able to start pushing the technology forward i.e. a collaborative effort.
So why JCT? Marty's view is that not only does JCT provide Xped with added certainty in the short term, but more importantly it provides some industry expertise on how to develop use cases in the Healthcare market. i.e. how to take Xped's tech and create the user experience that is necessary. He said that they will probably do some more acquisitions that way i.e. get the industry expertise, bring it in and have an established channel for the ADRC components and then be able to scale to other channel partners.
IOT’s a growth market and they have to start with brand awareness and Marty would rather get that brand awareness through partnerships than trying to establish and market our own brand. Own brand marketing is very expensive and so the intent is to go with established brands. As we see more MOU announcements come forward over the next year, they are going to be targeting large companies that already have their own brands.
Marty recognises that most of the weight resides with him and Athan to get the agreements done. Xped has to transition from a silicon vendor and engage with OEMs and their manufacturers, service providers and also the retailers with their directions in the market. Xped will need to do agreements with each one of those 'phases' and they come in that order. He said that they’ve made good progress but there’s much work ahead that they’re excited about.
With the progress so far (as per the demos) it’s a lot easier to walk in and show a customer something tangible than it is to present concept, so again Marty was very excited about that.
How Xped will achieve significant Revenue
Revenue will come from licensing ADRC tech. There’s also a royalties component. The difference is licensing is a one time fee whereas royalties are recurring revenue stream and that can come from the royalties of a license, it can also come through things like yearly maintenance contracts.
API management and metering will come when we get to scale. He doesn’t envision revenue from API next year. This will come when we get to millions in volume. That’s when Xped have gathered a tremendous amount of data that others will want to access.
Marty added that to be clear, Xped is not in the data business. He said that 'we are in the technology infrastructure business' but that Xped will be aggregating the data (i.e. that only Xped will have) that people will want to access and we will meter those APi’s and charge for access.
The next few slides is Marty trying to clearly articulate what our strategy will become. How we are moving from a tech company to establishing products and how we will do it.
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Xped's key technologies
When Xped came in to meet Marty when he was at Intel, he said that the One Tap solution was clever but that’s not what got him excited initially. He mentioned that it’s great tech and all but it’s just one of a number of solutions that are out there in terms of an on boarding provision. Although seamless and great, what really got Marty excited was the RML and the Xped app. Those are the differentiators in his opinion i.e. what makes ADRC different from other products in the market.
On boarding with a tap is the start of the user experience, the simplification which he said is a nightmare for most companies which Xped has taken care of, but then it’s being able to take the RML that allows you to describe any product and then represent it on an app (in this case the Xped app) in a clean and seamless way. It is industry transitional in the sense that every time a new device is added, you don’t have to re-write the app. The RML will re-populate that feature set for you and that is the differentiator. The final piece (still in development) is the gateway software itself. But why is that important?
Marty mentioned that we have to recognise that we are not here to win the protocol wars. The protocol wars are going to be fought by the likes of Google/Microsoft/ Intel/ Samsung etc. What Xped is doing by creating the gateway software and the RML language associated with that, means that it doesn’t matter who wins. Xped is going to be able to represent any IOT device on our app using the IOT gateway.
Chris has been spending a lot of time with OCF. The big deal about that is that Xped is with one of the big groups fighting the protocol ‘gaps’ as he put it. By being a member of OCF, Marty said that we’re going to be able to take advantage of all the investment that Intel/Samsung/Microsoft and the 200+ other companies that are part of OCF, and then put an RML agent across the top of it and represent those devices, even if they’re not truly ADRC compliant, those devices will be represented by an app that is ADRC compliant. So that’s why the gateway software becomes so important.
To summarise, Marty said that as you think about IOT, Xped is going to have one of the best applications and user interfaces in the industry. And to be clear, it’s not just the application that runs on your phone, it’s the fact that they’re going to be able to take advantage of mobile access, voice and gesture, as part of the Xped app and RML. In terms of on boarding and discovery, the traditional install of a cable provider where someone has to install a smart home solution is 6-8 hours. Our one tap process takes a few seconds so that is a huge advantage.
With the gateway component, some of the solutions don’t require a gateway but if you want the full privacy, protection and breadth of range, then that solution is going to be based on Wi-Fi, BLE and whoever else is winning the war on protocols.
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Xped Infrastructure Platform
Marty referred to the above slide as the 'messy slide'. Apparently Chris & Marty worked on this slide for almost a month with a bunch of architects in an effort to best describe on what they are trying to do here. He said that he wouldn’t go into full depth as there wasn't enough time.
But to simplify;
Phase 1 - Xped app available now engages with devices that have the ADRC proxy solution or the running of it. Marty said when we (shareholders) see announcements about US listed companies that we’ve now ported the ADRC proxy to, that’s Phase 1.
Phase 2 - controlling devices that aren’t part of the ADRC ecosystem, that’s why they need the other components as shown on the slide. With OCF and the work that Chris is doing, that’s all to do with Phase 2. Xped are developing some of this, they will be licensing some of this but within the next quarter or so they will have this solution ready.
Another key point that was mentioned: As far as the back-end service goes, they’re not going to talk to a silicon vendor or an ODM, as they don’t have software solutions.
Those guys are gonna say something like 'ok, I’ve got this 802.15 transceiver that I want to sell.’
Problem is there’s a bunch of other ODMs out there (their direct competitors in many instances) that make an 802.15 transceiver so how do those guys differentiate and maintain an advantage?
Marty and co. can then walk in and say words to the effect of ‘we will port ADRC to your 802.15 transceiver, but we also have an app that will connect to it, and we have a back-end filed service that we are developing with Microsoft that will allow you to go to your customers'.
Imagine being a silicon manufacturer that wants sell to a refrigerator manufacturer. They now have the ability to give that refrigerator manufacturer (who has no idea about IOT) an end-to-end solution that they can start engaging with immediately once they integrate that piece of silicon into the device.
So Xped will provide differentiation to its silicon partners who can say to their customers something like ‘not only are we selling the silicon, but we're now delivering an IOT solution to a lot of companies that have no idea how to go about it, and you ought to be on board.’
Now according to Marty, that value proposition doesn’t happen at say Samsung or Lenovo who are going to use their own resources doing that. But there are literally thousands of companies that know they need to get into IOT but don’t know how to do it, and Marty said that ‘we’re gonna just hand it to them’.
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Phase 1 - Xped Lite
This is where Xped is today and this is also what they demoed at the AGM. The Complex Semi Car Audio Accessory solution is a round board that is bluetooth enabled and integrates with the Xped app so that it can be discovered using our One Tap tech and then be represented in the command and control. This is a great start assuming that ADRC was immediately available on every device, but on its own that’s not quite enough (according to Marty) for the company to become a massive success story .
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Phase 2 - Device Aggregation and Control
Marty pointed out in the above slide that they’ve added a gateway to the solution and therefore not only does one have the ability to command and control when their phone is on, but he or she can leave the building and still do command and control and still be able to access the device via the gateway. In addition they have the ability to control other devices that are not ADRC compliant.
He used Nest's Thermostat as an example. The Nest Thermostat is a proprietary protocol that Marty spent 4 years negotiating at Intel to try and get them to break, and they wouldn’t. So he didn't think he could win that negotiation with Nest in the next couple of years at Xped. But he and the team still wanted to be able to represent Nest on the Xped app and they can do that using the Phase 2 architecture. That effectively allows anyone to aggregate all of their devices in the home or building etc. in a single app, which makes it a very seamless and easy user experience for people to engage in. That’s the exciting selling proposition that he believes we have – and a key ingredient to achieving success in a landscape filled with Tech Giants and numerous other competitors.
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Phase 3 XIP - Home Page for Life
The first two phases are all about device discovery and command and control. Phase 3 is about taking all of those subscribers to the Xped app and aggregating other services i.e. the cloud portion of it.
The Xped app goes from being something that you use to turn off the lights or check your blood pressure (examples) and it becomes the app that you use everyday. Marty used the example that it is his refrigerator door (pictures, invitations, bills, family calendar) where he can catchup on home.
Marty wants the Home Page For Life (the Xped app) to become that for everybody’s home, businesses, health services and so forth, where now we’re not only aggregating devices, but aggregating services - the ability to order 'Uber' from the app, the ability to order a pizza. For example you might walk into the kitchen and you use Xerts and it sends you a coupon that says something like ‘Can’t be bothered cooking tonight? Why not order Dominos and get a free Garlic Bread...’ This is an example of a typical use case that Xped is intent on delivering. Marty's views are that this will come when Xped achieves volume, because that’s when API metering and management comes into play i.e. Xped has scale and the businesses that have third party services will want to engage with us. So that’s Xped's stepping stone to achieving strong recurring revenue, according to Marty.
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Value Proposition
Key points:
Revenue Stream 1 – Marty mentioned that he expects that much of the revenue will be generated via service providers and OEMs. He added that when we see agreements with Silicon vendors and ODMs (Revenue Stream 1), those are there because we have to have our product integrated with their chipsets and devices in order to scale it to OEMs and services.
Revenue Stream 2 - professional services and monthly contracts. Xped will be launching its own services around Health, around Data Centres, Building Management etc. and are intending to charge a recurring monthly revenue for these services. The Xped app has already been launched but many customers don’t want an Xped app, they want their customer name app, so Marty and the team recognise that they will need to be able to offer white label, or customisation that comes under professional services. According to Marty, as the company gets the design win, Xped will also make additional revenue as it makes modifications to its base platforms.
Revenue Stream 3 - API metering and management. i.e. when third party services want to start accessing the data, and that will be generated when we have OEMs, services providers and third party services.
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Path to Revenue - 2017 Goals / Commitments to Shareholders
As per the above slide, the
first commitment / goal is to have agreements with 4 silicon vendors minimum (we currently have 2 MOUs). Marty mentioned that he wants more than that but that’s what he’s going to commit to as a minimum.
The second piece to that is the ODMs. i.e. manufacturers that build but don’t brand. The majority are located in Taiwan or Shenzhen and that’s where Marty spends most of his time. Once they have all the silicon vendors in mind, they need to keep ODMs in mind because they will effectively be the channel that lets them 'go time to market' with the OEMs. Marty and co. are going to be able to walk into OEMs and say words to the effect of ‘look we’ve got this cool technology and by the way we have three ODMs that are already going to build that gateway and we also have a bunch of other devices that have ADRC technology on them.’ In effect they can start handing them kits and finished solutions rather than just say here’s the technology.
Second commitment: 3 x ODMs and JCT branded solutions for Disability Care and Home Health. JCT will give us monthly recurring revenue streams and according to Marty these will be the first two branded solutions that the company is going to start pushing.
Third commitment: OEMs and Service Providers - the meat of the revenue. Marty wants 3-5 partners that we not only have design wins with, but we have kitting agreements, so it’s not just the gateway but the devices around it to create the comprehensive solution.
So folks, those are essentially Marty’s commitments for 2017, at least as I understand them. He said that although it may not look like much, there's a lot of work to be done in a very short period of time to get the job done properly, but added that if the company can establish itself this way, then we are in a tremendous space to grow exponentially in 2017-2019 and Marty was ‘super excited’ about that.
End of Marty’s presentation.
3. John Schultz presentation.
According to John, since the acquisition it has been all about fulfilling Xped’s vision to build technologies (hardware/software/cloud solutions) that fulfil a use case. He said it was no good having technology that doesn’t do something really meaningful for the end customer. John said that since Marty has come on board, he’s been able to help identify some of the key use cases (because that’s what he did at Intel).
Primary use cases at this stage are Healthcare for JCT. He said the cool part about our tech is that every time they build something for one vertical, it generally fits very nicely into another vertical. Because they have a platform technology, they build a whole lot of technologies and things that they can then customise, and then hit a whole heap of verticals simultaneously.
So although they have a primary drive to fulfil the needs of the Healthcare industry and that’s what they’ve been working on, the great spin off of this is that a lot of those things that they are building are going to go straight into the smart home and the smart building. And with some of the other technologies they’re also going to get into the commercial space as well, and that’s why they chose to partner with Vital Xense (VX) in Singapore,
John said that VX are chafing at the bit to get their products to put into Data Centres and the general IOT space that they’re involved in Singapore. That will be the foundation for Xped as they will have a solution to give to them and then Xped are able to step in and repeat as many times as Marty and co. are able to find channel partners to be able to scale.
He also highlighted that everything that he and his team are developing translates to an end customer. That might not be Xped's direct customer, but it will be JCT’s or VX’s customer or another channel partner for use cases. By identifying use cases, they’re able to build solutions that fulfil those needs with the end customers.
John joked that Marty had underplayed the One Tap on boarding process a little bit in his presentation, because in reality it solves so many painful points with on boarding products these days, including the massively reduced amount of time that it takes to set up with the node.
He thanked us all for attending and made the point that whether we’re happy or unhappy at the moment about things, that’s not relevant at the moment. He acknowledged that we were passionate enough to attend the AGM and hear their story and they really appreciated the fact that loyal shareholders are still on board. He hoped that we’d be able to walk away with a better sense of understanding of where we’re going and why they’re doing things and although they’d love it to happen in a microsecond, business development takes time and that we’re on a great journey together.
They recognise that to grow ADRC and associated tech, they needed to go beyond the One Tap on boarding process. John has a lot of experience in building things for industry, and as much as he loves radio, he knows that AM and FM radio is not a reliable transport layer. For high reliability settings such as data centres, commercial fit outs for buildings etc., you need a more reliable transport layer. i.e. over wires.
Xped’s solution to this problem is called the Discover Bus (protocol over wires). The philosophies of ADRC carry through i.e. simple on boarding but instead of tapping the device, you just plug it in. So imagine a hub in a home / office / data centre where you can plug in sensors e.g.. temperature sensor, or an actuator that allows you to control motors on and off, light switches to a building etc. All you need to do is plug a device in and it auto discovers itself to the hub, but it all happens over wires. So doesn’t matter if someone is using a welder in a workshop or the radio drops out, you have a reliable transport layer. John mentioned that Xped in a sense has two backbones - wireless and wired.
VX said that they had to have our wired solution.
Typically there could be 4-5 sensors within one rack and a wireless solution means that 4-5 batteries per rack have to be maintained or replaced for every rack in that data centre.
Fully wired, VX calculated that by using Xped's system, VX’s customer would save $300-400k in installation costs, because they don’t need complex switches or massive amounts of wiring.
John explained that Xped’s solution is a combination of both wired and wireless. Eg. you have a rack of computers and a wireless node, then you tap that and it connects almost instantly. Then you can grab some sensors and just click them in one by one, they all discover and now they are all setup and ready to go. The ease and speed at which that is able to be achieved (by using Discover Bus) is another major selling point IMHO.
He said that the same technology translates beautifully into Healthcare and that currently Healthcare as industry has no clue about IOT. JCT are the only company that they know of that seem to have some understanding of IOT, but certainly aren’t in any position to develop IOT solutions so that’s why the synergy between JCT and Xped is so good.
John mentioned that the Nurse Call range of products currently requires qualified installers to set up. Xped’s solution allows JCT to take those wireless solutions and actuators, power switches and so forth and allow anyone (the nurses even) to setup these networks in homes etc. Eddie Jackson and co. recently viewed the latest tech and apparently they were astounded at how easy it was going to be for them to setup in the Disability Care Centre.
According to him, the products that Xped are developing are very transformative for these industries because they don’t have to have qualified high tech engineers to install this stuff - the nurses can do it all, so that means if they need an easy solution like a simple remote control for the TV (for example), the nurse can power up the IR blaster and the solution is there. Key point: Simplification is not only for the installer but also the end user.
Referring back to the Data Centres (DCs), John mentioned that one of the requirements is to monitor batteries (which they have hundreds of) to run the computers when the power goes out. Every year or two they need to replace these batteries with brand new ones and throw the old ones out. If they don’t do that, then what happens is one battery might fail or explode and it then takes the whole lot out, which is a massive cost to any DC. Xped's tech allows them to monitor each individual battery and do a replacement as necessary. That is a very big step forward for DCs and a massive cost saving as well.
Thus not only can Xped/VX provide DCs with a massive saving on installs, but they can save them a lot of money on their maintenance costs as well. There are many DCs all over the world that could benefit from our technology. Marty also made the point that Discover Bus relates not just to DCs but also any form of enterprise solution, eg. Xped has received interest from the farming sector as well.
End of John’s presentation.
4. Chris Wood comments (very short presentation).
Below photo courtesy of
@prospects
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Complex Semiconductor Car Audio Accessory:
Chris explained that Xped built the app front end for Complex's Car Audio Accessory solution, which is a phone charger and an FM transmitter that accepts Bluetooth so people that buy them for a phone charger now have the ability to play their music via Bluetooth in their cars.
Complex's earlier version sold millions according to Chris, and this new solution allows you to play music from your phone on your car FM radio. As many cars in China don’t have a Bluetooth solution for their radios, people buy these things for $10-$15 in order to stream the music from their phones into their cars.
5. Resolutions and various associated comments made during the meeting (as I recall)
Resolutions 1-5: no questions or comments from shareholders that I can recall.
Resolution 6 - Michelle (legal counsel) advised that this resolution allows the company to issue loan shares to its employees in the future. However any director loan share arrangements still need to be approved by shareholders (as per Resolutions 7 & 8 which were cancelled prior to the AGM).
Resolution 9 - After John and Chris were commended by many shareholders in the room for volunteering to forfeit their performance shares, John made the comment that their vision for the company is for it to succeed, and it’s important to them that they themselves don't have a large dilutive effect on the company. John said that they wanted to minimise that as much as possible and they also wanted to acknowledge that there are other key players within the company that are helping Xped go to market and getting the company to this next stage of commercialisation.
According to John, Athan and Marty have done a fantastic job of 'foreseeing the future' and by doing this it makes it easier to offer them performance shares in the future. He said that it’s all about making this company successful and that they intend to do that and the idea is that we’ll all benefit from it.
Chris added that Athan has been with Xped since last year and said that he’s put in a great deal of heavy lifting behind the scenes (i.e. work that the majority of shareholders are unable to see). John and Chris tried to raise some money years ago and the managed to raise $50k. They’ve seen what Athan has done, he’s brought Marty in etc. and felt that if it was just he and John being given all the rewards, then it wouldn’t recognise all the heavy lifting that these guys were doing, and doing it this way minimises the dilutionary effect.
Resolutions 12 & 13.
Q. from shareholder (as I recall)
What has Seneca done for Xped?
Athan commented that there are certain things that go on in the background that shareholders don’t see, it could be whether it’s relative to raising capital, introductions, length of time service offering. According to him Seneca have come a long way with Xped and prior to coming on board, there was a lot of work that they completed. They travelled with Chris, John and Athan, and also spoke to Marty and others prior to him coming on board. So the 30m options is in recognition of their services. Seneca also apparently paid for their own travel costs prior to coming on board.
Athan mentioned that he believes that with good news flow and the fundamentals flowing through, the SP will take care of itself. John sais that he also believes that the current lows in the share price are temporary.
Q from shareholder (as I recall)
Understanding the recent share price plunge given the current sentiment and the perceived lack of communication, why did the company push ahead with offering 50 million shares each to Athan and Marty?
John basically said that both he and Chris have seen the work that Athan and Marty have done and in hindsight there should have been performance shares built in from the start and he and Chris wanted to rectify that. He referred to the many hours that Athan works and although the share price now might be lower than it has been, we should keep things in perspective. He mentioned that if it wasn’t for Athan, they wouldn’t be sitting here and we wouldn’t have a company to invest in. He acknowledged that the SP is low now, but added that he wasn’t joking when he mentioned that it was temporarily low. He still believes that we all have an investment in a very positive and progressive company. Athan was apparently offered 100 million shares but recommended to John and Chris to give half of those shares to Marty (due to his many talents).
The need for better communication was hammered home by shareholders at the AGM (from recollection at least 5 shareholders raised the point during the meeting) and the Board aappreciated the feedback from its shareholders. It was also suggested by one shareholder that the company’s media strategy needs improvement.
For example, John and Chris should tell their story to the media and highlight Athan’s achievements since he’s been with the company, as this would negate a lot of the negative things said and published about Athan’s abilities. A lot of people probably still don’t believe that Athan has done a lot of good things for the company, but hearing it from the founders definitely puts things into perspective IMHO.
With respect to RYG, Athan mentioned that they picked up a company that was on its knees, recapitalised it, tidied it up, changed the nature of the business so he thinks it's clear what he and Michael Clarke were able to achieve for RYG shareholders. He said that it has been heavy lifting (long nights etc.) but more importantly they’ve been able to bring results forward and Athan seemed pretty confident that they’re going to further deliver great results for Xped.
He also mentioned that 'typically guys like guys us stay away from the company once a transaction has been built in', but in the case of Xped they went out and hired further talent and stayed inside the business to grow the business because (according to Athan) they care about this business.
Athan also mentioned that although they would rather not spend company money chasing individuals, they also want to make it clear that they have grown tired of all the negativity that appears on social media, and as a team they are really proud of what they have achieved to date. Athan feels like they have a great team of people in place and a good balance of different skill sets within the organisation.
I forgot to raise the point that potentially separating the roles of Chairman and CEO might be a good idea in the future, in order to improve the many aspects of good Corporate Governance. However I did email Chris and John the following link /article some weeks ago, so I'm sure they are all well aware of the potential benefits that such a move might incur.
http://www.russellreynolds.com/newsroom/splitting-the-ceo-and-chairman-roles-yes-or-no
Another shareholder raised the point about the need for more accurate detail in terms of revenue and timelines and how they are going to deliver on their commitments etc.
Athan’s reply was that he expects the next couple of months to be quite strong in terms of news flow, and they are very conscious of the timelines that they have committed to (not surprising given the overwhelming feedback by shareholders in recent weeks).
Athan also said that revenue events are what is going to cut it for the company, and they will get there as fast as they can. According to him these priorities are on 'red alert at the moment internally', and that’s what they are working towards.
Martin added that the reason they put together the chart that shows the different mountains is they wanted to start communicating the process of how they aim to deliver their commitments to us. One of the challenges he mentioned is that these design wins are with very big companies that he spends up to an hour a day just going back and forth and chasing up we’re they’re at in terms of the approval process. He mentioned that one company came back and said ‘yes we’re going to approve it, but it’s going to take one and a half months to do that’. He added that with respect to current and new deals being negotiated, he would do the best he could and be as transparent as possible as they work their way through the process.
He also added that it was important to time the verticals in the right spaces.
Q from shareholder (as I recall)
Why haven’t directors been buying shares on market recently?
Athan acknowledged that the Directors would like to buy more stock on market because a) they would like to show more support and b) they think the current price (3.3c at the time of the meeting) is relatively good value. But the reason that the they haven’t been buying on market now and recently is because they have been and are in blackout periods where there’s 'a hell of a lot going on', and there are things that they simply aren’t able to talk to us about. Thus it would be in breach of their fiduciary duties and the law for them to purchase any shares at the moment.
He said that they are continuously reviewing other opportunities, and there are many other things going on that they couldn't talk to us about today, so what we heard at the AGM is not necessarily all that is going on.
6. Close of formal business (prior to demos, informal discussions and tea and coffee to round out the afternoon).
To close out the formal part of the meeting, Athan thanked us all for coming and said that they want to make us (their shareholders) money and they all want to see the share price go up, and when we see the SP go up it will answer a lot of critics as well. And they believe that the value being added will translate in the SP.
In summary, I walked away from the meeting feeling much more informed about the company that I have invested quite heavily in, and am optimistic and supportive of the direction in which Xped appears to be heading. I was extremely impressed by Marty (talk about a breath of professional fresh air) and how clearly he was able to communicate the company’s objectives, and as a team I thought that the Directors overall seemed to be very cohesive (a good sign IMHO). After speaking to each of them individually post the formal part of the meeting, I sensed no tension or doubt in their minds about the road that lays ahead. And in any case, the goals and commitments that they have made to shareholders are now very clear IMO, and thus I am confident that they can and will deliver the goods from here on.
Finally, it would be remiss of me not to mention that when pro-active shareholders work together to achieve a fair and equitable outcome for all shareholders, then we can make a real difference (when necessary) and contribute to the company's decision making process in a positive way. Four resolutions were scrapped prior to the AGM due to overwhelming shareholder feedback, and a First Strike means that the BOD are under no illusions with respect to recommending and implementing excessive remuneration packages at this early stage of the company’s lifecycle.
As pro-active holders, we should also be proud that shareholders from other companies have been watching our progress with increasing interest.
GLTA and thanks for taking the time to read my summary, assuming if you made it this far.
Cheers
Elpha
(20min delay)