Cirralto’s Business Update Highlighting Robust Advancements and Future Potential

Summary

• The security audit report highlighted only low-level threats across all applications, which is a positive indicator for the cybersecurity health of the Spenda software.
• The infrastructure audit results have signalled areas of significant opportunity for enhancing the performance, with the Company’s focus on modelling its network for a growing transaction volume.
• Balance Sheet restructure has been completed resulting in a reduction in debt by ~$1.4 million.
• The remarkable security and infrastructure audit results are expected to bolster the Company’s expansion requiring the highest levels of cybersecurity along with cost-effective transaction growth.

Australian-listed business payments products and solutions provider, Cirralto Limited (ASX:CRO) reported a business update facilitated by significant undertakings pursued by the Company. The security and infrastructure audit reports are indicative of impressive software and cloud-hosted environment robustness.

The advancing stance of the Company has been consistently affirmed by strategic developments, including the successful launch of the Spenda Payment Platform. The digital payment suite has further complimented the progress of its digital payment solutions.

Commenting on the robust audit results, CEO Adrian Floate commended the team’s work and expressed pleasure to see increased value for customers, shareholders, and the expanding team. Mr Floate stated that the infrastructure audit results had indicated areas of significant opportunity for tuning the performance. At the same time, the Company is focussed on modeling its network for ever-enhancing transaction volume.

He stated that the Company’s focus is to ensure that the customer continues associating the Company’s brand with performance, reliability and security. Cirralto’s core behaviour involves a discipline of proactively seeking areas of improvement. Adrian Floate indicated that the Company intends to keep getting faster and plan for upper limits in the core systems. This focus on growth will enable Cirralto to leverage market opportunity created with the Spenda suite of payment products.

ALSO READ: Cirralto’s Quarterly Results Illustrating Remarkable Development During June Quarter

Independent Security and Infrastructure Audit complete

A CyberCX company and a leading specialist information security consultancy, Asterisk Information Security Pty Ltd conducted an independent security audit of the Company’s merger partner Appstablishment. Significantly, the core Spenda system, the Spenda App and Web applications, including software code, data storage protection and API access.

Only low-level threats across all applications were highlighted in the security report findings. It is a positive indicator of the Spenda software’s cybersecurity health.

Separately, Macquarie Telecom was also commissioned by Cirralto to conduct an audit of its cloud-hosted environment. Notably, cloud-hosted infrastructure costs the second-highest after human resources for CRO.

The Company commissioned the infrastructure audit for providing confidence that Cirralto is managing the current transaction load well. The audit was aimed at ensuring that CRO possesses the critical insights required for managing future transaction demands in a cost-effective manner. It enables the Company to improve the service quality to end customers at an increased scale.

Growth and Scaling

Utilising the insights from the audit reports, together with the Company’s R&D activities, the team is implementing scaling improvements that enable:

• An 80% reduction in the amount of data volume that is needed for integrating to an online finance system. It will allow quicker processing of more transactions.
• A 58% reduction in Azure cloud-hosted infrastructure costs.
• Improvements in the utilisation of infrastructure, enabling further scaling of the system and reducing quarterly secure transaction processing costs of 50%.

The results indicate the entire team is involved in the independent security testing of the Company’s suite of existing and new Spenda products.

The security and infrastructure audit results are especially important since the Company is focused on expanding relationships with global payments acquiring networks. This expansion will require the highest levels of cybersecurity, along with cost-effective transaction growth.

ALSO READ: Cirralto’s digital payment Portfolio well-positioned

Balance Sheet Restructure and Growth Strategy

The Company has restructured its balance sheet following the recent capital raise, removing $1.4 million in debt. It included the redemption of all remaining Obsidian Convertible Notes. Thus, post the significant balance sheet clean-up leave with no debt, and it has capital for meetings its immediate growth objectives.

Detailed Discussion at: Cirralto’s ~$2.7 Million Raise to Give a Boost to Spenda Business Payments Services

The Company has kicked off the recruitment of new east coast implementation, and sale resources as it moves closer to the merger and completes the migration to virtual business. The new hires are anticipated to join the team early in the 4th quarter of the year 2020. It is in line with the savings delivered from debt reduction and the Company’s movement to virtual operations.

Managing Director Adrian Floate stated that capital utilisation for growing revenue and customer delivery capacity would offer far better results compared to interest payments, rent and the on-costs of a traditional office.

Focus on Development of B2B pay later technologies

The Company, earlier in 2019, announced its relationship with the Sydney-based Fintech firm, Invigo. The collaboration is garnered towards the development of B2B pay later technologies, focussed on streamlining the application for and utilisation of debt facilities.

The Company has been engaged in the innovation of the ‘pay later’ space for reducing the margin impact placed sellers on service utilisation. It is expected to reduce barriers to adoption and would also enable more businesses to access much-needed working capital and liquidity that is locked up in their debtors.

The improvements will be released incrementally stringing along with the SpendaCollect V2 launch planned for early in Q4 2020.

SpendaCollect Release Plans

The team over the past quarter has been garnered towards the capability’s expansion of the Spenda Payments platform.

Kalkine Image (Data Source: CRO ASX Update, Dated 1 September 2020)

As with all products and new features to the Spenda payment suite reconciliation is automated, manual data entry is removed, and payments arrive accurately. New features added to SpendaCollect enhances the power of the software to provide error-free and efficient cash flow between supplier and customer.

Next Steps

Kalkine Image (Data Source: CRO ASX Update, Dated 1 September 2020)

As on 1 September 2020, CRO stock closed the day’s trade at $0.037. The stock has generated a massive return of 975% in the past three months

[ All currency is in AUD unless stated otherwise]