Slide 1: Company Update and Capital Raising
Company Update and Capital Raising 11 October 2024 | dubber.net This investor presentation has been approved for release to ASX by the Dubber Board of Directors. Not for release on US News Wires.
Slide 2: Disclaimer
Disclaimer This investor presentation is dated 11 October 2024 and has been prepared by Dubber Corporation Limited You should carefully read and consider the Prospectus in full and seek advice from your financial, tax, legal or other (ACN 089 145 424) (Dubber or the Company). By attending an investo
Slide 3: Disclaimer (cont.)
Disclaimer (cont.) Certain figures, amounts, percentages, estimates, calculations of value and fractions provided in this presentation Disclaimer are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures The Offer is fully underwritten by
Slide 4: Contents
Contents Executive Summary 5 New CEO 7 Business and Company overview 8 FY24 Financial Overview 17 Other updates and FY focus 26 Capital Raising 29 Thorney & Regal Arrangements, control implications and capital structure 34 Key risks 39 Appendix 49
Slide 5: Executive Summary
Executive Summary • Dubber is a market leader in conversational intelligence and unified conversational recording which is embedded in over 225 Communication Service Providers (CSP) networks and services Overview of Dubber • Existing partnerships with CSPs has enabled Dubber to activate general attr
Slide 6: Delivering on the plan post the Event
Delivering on the plan post the Event* Key Focus - Initial Key Focus – 1st 90 days Key Focus - next FEB APR JUN AUG OCT Key Focus - Initial Key Focus – 1st 90 days Key Focus - Next → Stabilise the business → Align the business around → Accelerate sales momentum → Recapitalise the business strategy →
Slide 7: New CEO
New CEO • Matthew Bellizia appointed as Chief Executive Officer (CEO) from 10 September 2024. • Over 20 years’ experience as CEO/Co-founder of successful technology companies. • Matthew comes to the role with extensive and relevant global technology business experience. His most recent role for 20 y
Slide 8: Business and Company Overview
Business and Company Overview • Growth in products and revenue off a lower cost base compared to the prior corresponding period (pcp) • New CEO appointed and Board undergoing its renewal programme • 10 years building out hard to replicate channel to market through Communication Service Providers (CS
Slide 9: Capital Raising and Investment Opportunity Overview
Capital Raising and Investment Opportunity Overview • Fully Underwritten $25.0m Capital Raising • New CEO Matthew Bellizia has committed to subscribe for $1.25m of New Shares under the Placement. Director Peter Pawlowitsch has subscribed for his entitlement of $378,000 and sub-underwritten the Retai
Slide 10: Current board
Current board Neil Wilson Peter Pawlowitsch Sarah Diamond Gerard Bongornio BBA; FCPA B.Comm; CPA MBA MA (MH); MA (IR) BEc (Acc) FGIA Non-Executive Executive Non- Executive Non- Executive Chairman Director Director Director Retiring post the AGM Changing to Non- Retiring post the AGM Executive 1 Janu
Slide 11: Part of the AI Mega Trend with first Dubber products in market
Part of the AI Mega Trend with first Dubber products in market Dubber Moments: Delivering Immediate and Continuous Value for Users Today • Immediate Value Delivery: Dubber Moments begins delivering from launch for businesses being able to provide value through our ready- Generative to-deploy solutio
Slide 12: Dubber Platform: Providing Value to Communication Service Providers for Over 10 Years
Dubber Platform: Providing Value to Communication Service Providers for Over 10 Years For over 10 years, Dubber has delivered a platform used by some of the world’s largest communication networks by unlocking the potential value in every conversation. The ability to turn every conversation into imme
Slide 13: How CSPs can provide scale
How CSPs can provide scale Immediate Access Connect the network once and immediately available for all users on network. Partnering with CSPs enables Dubber to activate the general attributes of their organisations to drive growth, with specific benefits to them by: • Product differentiation and new
Slide 14: Powering Partner Revenue Growth
Powering Partner Revenue Growth Every aspect of our operations is geared towards empowering our partners to stand out, achieved Our Partner: through: 1. Enabling out-of-the-box solutions that harness conversation capture and AI powered conversation 2 Scale intelligence, 2. Scalable solutions deliver
Slide 15: Solution evolution driving revenue growth with CSPs
Solution evolution driving revenue growth with CSPs By investing in our capability to capture conversations at scale and develop innovative AI-driven solutions, we position ourselves to deliver heightened value to our partners. This, in turn, is expected to fuel revenue growth for Dubber. Existing R
Slide 16: AI Moments product has won multiple Awards
AI Moments product has won multiple Awards Best in AI Product Most Innovative Best AI Product in Telecom Product of the In AI Year - Enterprise
Slide 17: FY24 Financial Overview
FY24 Financial Overview
Slide 18: Revenue growth quarter on quarter
Revenue growth quarter on quarter Reported revenue by quarter • Solid trend of quarter on quarter revenue 11,000,000 growth over the most recent periods. 10,000,000 • FY24 revenue of $38.7m up 30% on FY23*. 9,000,000 8,000,000 • No CSP Partners have been lost as a result of the Event, and most Partn
Slide 19: Direct costs efficiencies are delivering improved gross margin
Direct costs efficiencies are delivering improved gross margin • Platform optimisations and efficiencies have Direct Costs and Gross Margin lowered Direct Costs across FY24, with a 4,500,000 80.0% programme to deliver further underlying 4,000,000 70.0% direct cost efficiencies underway for FY25. 3,5
Slide 20: Operating costs continue to be well controlled
Operating costs continue to be well controlled Operating Cash Based Costs* have reduced: Operating Cash Based Costs* (incurred basis) 25,000,000 • 47% from Q2 FY23 to Q4 FY24; and 20,000,000 • 11% from Q2 FY24 to Q4 FY24 reflecting tight cost control and the early benefits from the underlying 15,000
Slide 21: Targeting operating cashflow run-rate breakeven in FY25
Targeting operating cashflow* run-rate breakeven in FY25 Revenue and Total Cash Based Costs* • Significant cost reductions to right size the Group’s cost base alongside $30,000,000 revenue growth over the last 2 years with a further $4m+ in annualised $25,000,000 savings identified and expected to b
Slide 22: Significant reduction in costs delivered
Significant reduction in costs delivered Other Costs FY23 $m FY24 % Change (Restated)1 Key points Operating Costs • Salaries and related expenses Direct Costs (13.6) (14.0) 2% reduced significantly on FY23 due to implementing restructuring programme in H2 FY23 that reduced headcount and related over
Slide 23: FY24 Cash and cashflow
FY24 Cash and cashflow Cashflow FY23 $m FY24 % Change (Restated) Key points Receipts from customers 39.9 36.1 11 • Receipts from customers up 11% on pcp, which was below the revenue increase of 30% principally reflecting reduction in Other operating cash outflows (62.7) (87.3) 29 deferred revenues i
Slide 24: April 2024 Capital Raising - Use of Funds
April 2024 Capital Raising - Use of Funds Per Actual Use of funds ($m) Prospectus cashflow Difference Key points Additional working capital 5.1 3.9 1.2 • Payments to bring creditors back into ordinary terms (including ATO/SRO payments) continue with remaining payments pending finalisation of payment
Slide 25: FY24 Statement of financial position
FY24 Statement of financial position 30 June 2023 Consolidated Statement of financial position ($m) 30 June 2024 % Change (Restated)1 Cash and cash equivalents 10.6 2.0 430 Key points Trade and other receivables 6.5 10.1 (36) • Reduction in trade and other receivables of Total current assets 17.1 12
Slide 26: Other Updates & FY25 Focus
Other Updates & FY25 Focus
Slide 27: Investigation and recovery of funds
Investigation and recovery of funds • Dubber continues its focus on recovery of funds. • No material updates to findings of Dubber’s investigation as reported in the Prospectus dated 10 April 2024. • ASIC investigation is ongoing and Dubber is providing assistance. • Claim against Victorian Legal Se
Slide 28: FY25 Focus
FY25 Focus Our focus areas • Continue to build market awareness of our solution capability, particularly in the new area of conversation intelligence. • Fully align the operating models and structures of the business to our strategy and requirements in different global markets. • Ensure the Dubber t
Slide 29: Capital Raising
Capital Raising
Slide 30: Offer details
Offer details Offer size and structure Capital raising of approximately $25.0 million comprising: • A fully underwritten1 placement of approximately 242.9 million shares to institutional and sophisticated investors to raise approximately $3.6 million undertaken in reliance on a standard ASX Listing
Slide 31: Sources & use of funds
Sources & use of funds Sources of Funds A$M Uses of Funds A$M Capital Raising 25.0 Additional working capital 16.5 Reduction of ATO/SRO’s liabilities1 3.8 Costs associated with recoupment of allegedly misappropriated funds2 1.5 Restructuring costs 1.0 Capital raising costs 2.2 Total 25.0 Total 25.0
Slide 32: Pro-forma Balance Sheet
Pro-forma Balance Sheet1 Proforma Balance Transaction Costs of Options issued under 30 June 2024 Capital Raised sheet as at the Offer prospectus2 30 June 2024 Consolidated Statement of Financial $m $m $m $m Position Cash and cash equivalents 10.6 25.0 (2.2) 33.4 Trade and other receivables 6.5 6.5 T
Slide 33: Timetable
Timetable EVENT1 DATE Announcement of Placement and Entitlement Offer Friday, 11 October 2024 Entitlement Offer Record Date 7.00pm Tuesday, 15 October 2024 Placement and Institutional Entitlement Offer Placement and Institutional Entitlement Offer opens Friday, 11 October 2024 Announcement of result
Slide 34: Thorney and Regal Arrangements, control implications and capital structure
Thorney and Regal Arrangements, control implications and capital structure
Slide 35: Thorney and Regal arrangements and potential control implications
Thorney and Regal arrangements and potential control implications Thorney • Prior to the offer Thorney currently holds ~179.6 million shares representing ~19.4% of issued capital in Dubber. • Thorney Investment Group has agreed to take up $2.7 million worth of New Shares under the Institutional Enti
Slide 36: Thorney arrangements and potential control implications
Thorney arrangements and potential control implications Total Number Total Number Thorney Sub- Shortfall Percentage Percentage Percentage of Shares to be of Shares to be Underwriting allocated to Shareholding Shareholding Shareholding Shortfall % issued to issued to Commitment Thorney under of Thorn
Slide 37: Regal arrangements and potential control implications
Regal arrangements and potential control implications Total Number of Total Number of Regal Sub- Shortfall allocated Percentage Percentage Shortfall % Shares to be Shares to be Underwriting to Regal under Shareholding of Shareholding of (Percentage of issued to Regal issued to Regal Commitment sub-u
Slide 38: Securities on issue following completion of the Offer
Securities on issue following completion of the Offer Shares Number Ordinary shares on issue pre-Offer 926,089,870 New Shares to be issued pursuant to the Placement (including utilising supersize waiver) 242,913,480 New Shares to be issued pursuant to the Conditional Placement 500,000,000 New Shares
Slide 39: Key Risks
Key Risks —
Slide 40: Key Risks
Key Risks This section includes details of the key risks attaching to an investment in shares in the Company’s business. Furthermore, the Company is co-operating with an investigation into the Company. These risks may affect the future operating and financial performance of the matter by ASIC, and t
Slide 41: Key Risks (cont.)
Key Risks (cont.) In particular, the investigations undertaken by the Company at any point in time are Dubber’s ability to continue as a going concern is dependent upon its ability to execute all of necessarily only based on the information available to the Company at that time and are, in the above
Slide 42: Key Risks (cont.)
Key Risks (cont.) Reliance on third party platforms and operating systems Continued and uninterrupted provision of products and services The Company’s products and services are intended for use across a number of internet access The Company employs a team of technicians and engineers along with auto
Slide 43: Key Risks (cont.)
Key Risks (cont.) Regulatory and compliance risk In addition, the Company’s platforms and products are, or will, be offered in many different Notwithstanding the Company’s ongoing co-operation with ASIC in its investigation into the jurisdictions, many of which are developing nations that may not ha
Slide 44: Key Risks (cont.)
Key Risks (cont.) Furthermore, unresolved tax liabilities, pose a substantial financial burden on the Company's operations, potentially impacting liquidity, cash flow, investor confidence and the ability to secure Misuse of the Company’s products and services debt or equity financing. Users of the C
Slide 45: Key Risks (cont.)
Key Risks (cont.) Control implications (Thorney) If this occurs, Regal will have a significant influence over matters that require approval by As noted on slide 35 and 36 of this presentation, Thorney Investment Group currently holds Shareholders. The shareholding held by Regal may result in it havi
Slide 46: Key Risks (cont.)
Key Risks (cont.) The Company and its directors are also exposed to class actions brought by current and management’s attention from operating the business. It may also divert the Company’s funds former shareholders of the Company. There can be no assurance that significant class action away from in
Slide 47: Key Risks (cont.)
Key Risks (cont.) Underwriting The Company has entered into an underwriting agreement with Morgans Corporate Limited No assurance can be given that the new shares under the Offer will trade at or above the issue and Unified Capital Partners Pty Ltd (Joint Lead Managers) pursuant to which the Joint L
Slide 48: Key Risks (cont.)
Key Risks (cont.) No guarantee of future dividends The Company currently has no plans to pay a dividend. There is no guarantee that the Company will generate sufficient cash flow from its operations in the future to pay dividends. Force majeure events Events may occur within or outside Australia tha
Slide 49: Appendix
APPENDIX
Slide 50: FY23 financial report restatements
FY23 financial report restatements Consolidated Statement of profit/loss Originally reported ($m) Adjustment ($m) Restated ($m) • Salaries and expenses / finance costs Revenue 30.0 (0.3) 29.7 Salaries were increased by $1.1m and Direct costs (13.7) (0.2) (13.9) finance costs increased by $0.4m as a
Slide 51: FY23 financial report restatements
FY23 financial report restatements Originally reported Consolidated Statement of financial position Adjustment ($m) Restated ($m) ($m) Cash and cash equivalents 2.9 (0.9) 2.0 • Cash Trade and other receivables 37.0 (26.9) 10.1 $0.9m of cash held in deposits subject to security for property leases re
Slide 52: Underwriting agreement summary
Underwriting agreement summary The Company has entered into an underwriting agreement with Morgans Corporate Limited (Morgans) and Unified Capital • the Company ceases to be admitted to the official list of ASX or the Shares (or interests in them) cease trading or are Partners Pty Ltd (UCP) (togethe
Slide 53: Underwriting agreement summary (cont.)
Underwriting agreement summary (cont.) • any of the following occurs: (i) legal proceedings are commenced against the Company or any other group member; (ii) the • there is introduced or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any Company become
Slide 54: International offer restrictions
International offer restrictions This document does not constitute an offer of new ordinary shares registered addresses in New Zealand to whom the offer of these restrictions in Singapore may be applicable to investors who acquire (New Shares) of the Company in any jurisdiction in which it would be
Slide 55: Forecast Information
Forecast Information The Group anticipates achieving a breakeven operating cashflow run-rate position by the final • There is no material litigation that will arise or be settled, to the benefit or detriment of month of FY25, assuming no material changes to market conditions or strategy. This is Dub
Slide 56: Forecast Information
Forecast Information Specific assumptions – Cash based Costs Direct Costs: • Volume-related platform costs are expected to increase in line with expected growth in revenues, being partly offset by platform technology efficiencies delivered across FY25. Cash based costs are direct costs, salaries and