Spacetalk (ASX: SPA) – kids wearable phone watch developer
COMPANY SCOREBOARD
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ABOUT COMPANY
Spacetalk (SPA) (http://www.spacetalkwatch.com/) designs, develops and sells wearable phone watches for children and seniors globally. It also supplies software for school communication and student absence management.
In April 2022, the company announced that it will establish a mobile operator service branded as Jumpy SIM in USA, which will provide mobile networked SIM plans specifically designed for any brand of smart wearable device and other low data consumers.
CAPITAL STRUCTURE
| ASX Code | Share Price | Shares | Option (In) | Market Cap | Cash/Asset ($m) |
| SPA | 0.024 | 471021409 | 11304513.816 | 2/(5) |
| Holders No | Top 20 (Cur) | Top 20 (Pre) | Director Hold | Performance Right | Note |
| 1816 | 41.39% | 47.40% | 2.44% | 61603626 | last raise $0.7m@2.2c; pre raise $2.4m@3c+6cOpt |
Thor’s holding increased to 12% or 26.2m shares after the $10.5m@19c cap raise.From October 2022, Regal Fund started offload its holdings.
In August 2022, CFO resigned. In October 2022, Mark Fortunatow (12.3m), the founder, was forced to leave as well, all share are sold.
In Feb 2023, the company appointed Simon Crowther as the new CEO, he was the former CEO of NEA.
The company had over $7m inventory to pay off the $5m loans (9.5%, due in March 2024+20m@5c warrant).
BUSINESS
Below is the company’s past five years performance:
| SPA | 2023 | 2022 | 2021 | 2020 | 2019 |
| Operation Revenue | 13455 | 14879 | 15122 | 10487 | 6867 |
| Cost of Sale | -6622 | -6168 | -5835 | -3064 | -1929 |
| Gross Revenue | 6833 | 8711 | 9287 | 7423 | 4938 |
| Gross Margin | 0.5078 | 0.5855 | 0.6141 | 0.7078 | 0.7191 |
| Overheads | -10312 | -10168 | -8463 | -7671 | -5428 |
| Fixed Overheads | |||||
| Variable Overheads | |||||
| Total Operation Expense | -10312 | -10168 | -8463 | -7671 | -5428 |
| Operation Profit | -3479 | -1457 | 824 | -248 | -490 |
| Other Revenue | -6836 | -1188 | -106 | -2440 | -3150 |
| Interest Expense | -2277 | -1092 | -172 | -128 | -17 |
| D&A | -1783 | -3686 | -2994 | -2459 | -1985 |
| Income Tax | -250 | -620 | 656 | 1006 | 956 |
| Net Profit | -14625 | -8043 | -1792 | -4269 | -4686 |
| NOTES | $3.2m impairment; $3.4m debt restructure; $3.6m overseas | App rev $2.2; 650k Covid | App rev $1.25; big option payout; covid payment undeclared | big option payout |
The company’s children’s smartwatch, SpaceTalk, and the linked device managing app, AllMyTribe, is a very innovative solution for both kids, parents, and communication providers. The product has been marketed widely.
The company’s corporate overheads have gone through the roof in FY22.
The company has temporarily wound down the UK, EU, and US operations in FY24.
In Oct 2023, the company launched a family app for tracking and chat.
SUMMARY
The company has a suite of right products, which have been marketed reasonably well. It might just take some more time for the momentum to build up, and Thor’s involvement in the company will strengthen its management’s capacity.
The company’s board has been challenged for the right reasons, nearly 40% of the shareholders voted for removal of Mark Fortunatow.