On 10 January 2019, Cyber safety platform Provider, Family Zone Cyber Safety Limited (ASX: FZO) released an update on operations across its business units and Cashflow breakeven acceleration plan. In the update, the company informed that it had witnessed record sales in December quarter of 2018 led by rapid development in the education sector. Following this release, the share price of Family Zone increased by 7.143 % (as at 2:39 PM AEST, 10 January 2019).
During the December quarter, the company signed a record number of school contracts resulting in an annual recurring value of around $800K which is 175% higher when compared to the previous corresponding period.
In December quarter, the company witnessed an accelerating sales momentum in the USA with A$140,000 of recurring contracts signed during the quarter, a 100 percent win rate with USA proof of concept deployments, and a qualified sales pipeline growing beyond A$2M.
During the December quarter, the company received commitments for $2.5 million through a private placement at $0.225 per share and the company also earned $1.82 million in tax incentives. Due to the completion of capital raising and receipt of tax incentives, the financial position of the company was further strengthened. As at 31 December 2018, Family Zone Cyber Safety Limited had a cash balance of $3.6 million.
The company has implemented a program to reduce its cost base by simplifying its operations, and since October 2018, the Company has already achieved around $1.1mn of annual savings from measures implemented. In addition, the company’s senior executives and a number of consultants have agreed to support the Company’s cash flow by converting cash-based to security-based remuneration for the Calendar year 2019. The Non-Executive Directors have agreed to receive fully paid ordinary shares instead of their entire salaries and Managing Director Mr. Tim Levy has agreed to accept Performance Rights in place of his entire salary. Further, the company has also agreed to issue 402,667 Shares to consultants instead of paying them cash consultancy fees. Senior executives of the Company, including director Mr. Crispin Swan, have agreed to convert 20 percent of their salaries to Performance Rights.
The Company is expecting its effective annual overheads to reduce to between $10mn and $11mn per annum within the next 3-6 months. Further, the company is expecting its top line revenue for FY 2019 to approach or exceed $9mn.
The company is evolving its commercialization model to accelerate the scale of its customer base. In 2019 the company will be focusing on scalability. Currently, the company is involved in the development of Family Zone Insights to drive customer acquisition and scale. Family Zone Insights will be a free monitoring tool which will be available for parents to download on their children’s devices.
Meanwhile, in the last six months, the share price of Family Zone witnessed a fall of 56.70 percent as on 9 January 2019. FZO’s shares traded at $0.225 with a market capitalization of circa $31.48 million (as at 2:39 PM AEST, 10 January 2019).
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