First Global Data (TSX,V: FGD) is a rapidly growing Fintech company that I introduced my subscribers to in December 2016 when it was trading around $.10/share. I recently had a chance to interview President Andre Itwaru again.
Thank you Andre for taking the time to update shareholders. I understand you are conducting many media interviews and are busy accelerating growth for shareholders.
Question 1: First Global recently reached a high of $1/share. Even as the company turns profitable, the share price swiftly declined to less than half the amount of the high to where it currently trades. Can you explain why?
Andre: Kal, the stock market functions organically and as a result there will always be buyers and sellers. Our stock has enjoyed terrific appreciation through a lot of hard work. Notwithstanding the retracement in the share price, our corporate development continues to evolve at an accelerated rate. We believe our drive to fundamental growth will ultimately adjust the share price so we are more aligned with our peer market group who enjoy far higher valuations.
Question 2: First Global’s share count fully diluted is close to 380,000,000 shares. How did the amount of shares issued and outstanding balloon so high?
As well, does the company have any short-medium term intentions of diluting further?
Andre: We had 2 Private Placements and some significant debt conversions and consequently our float size increased. Having said that, if you really want to consider a fully diluted share count, you also have to factor in the money that would come into the corporate coffers which would be in excess of $50 million. We believe given the dynamics of where we are today, the fully diluted count will remain static. The company is financially sound and well capitalized and, we are now ramping to accelerated revenue mode.
If we were to contemplate any future financing, it would have to be strategic and well above current market pricing.
Question 3: Can you explain the parameters of the loan repayment to “715 Manitoba” and the significance to First Global?
Andre: 715 Manitoba have been big supporters over the years. They helped the company pay off millions of dollars of old debt. A history of all this can be found in our MD & A.
We were fortunate that 715 accepted debt conversion to equity and forgave the equivalent of millions of dollars. The debt conversions were supposed to have occurred in early 2016, but because of delays with the TSX approvals, were only recently approved. These folks are big believers in our Fintech vision and continue to support the company.
Question 4: You must be pleased with both the recent Q4 and 2016 year end revenues and profitability. As reported: The Company's cash flows before working capital changes for the year-end 2016, of the Company, was USD $1,885,291 or CAD $2,497,736 as compared with 2015 year-end cash losses before working capital changes of USD $3,750,637 or CAD $4,795,598.
This represents an improvement of USD $5,635,928 or CAD $7,293,334 and a significant turn-around from the Company's operating loss position in 2015 into profitability in 2016.
AND
Net income for Q1 2017 was USD $418,173 as compared to Q1, 2016 of USD $97,716 representing an increase in net income of 428%.
How significantly do you think the company will accelerate in terms of profitability?
Andre: We are amplifying our efforts for accelerated global deployments. Our downloads for PayQwik are increasing exponentially in India and we are pushing to obtain the balance of our Money Service Licenses in the US. In addition, the LianLian initiative has just been launched and we expect that to contribute significantly to new revenues. Things are humming and we are positioning to turbo charge our revenue growth. We are not a startup but a profitable FINTECH company growing quickly to maturity.
Question 5: Can you update what is transpiring with LianLian? When do you expect to monetize?
Andre: The initiative with LianLian has already been launched. We have started with the State of Illinois and are now in the process of rolling out to other States. We expect full US coverage over the next 120 days.
Monetization for this deployment is already in play. Kal, you have to understand, no one besides us has a social messaging remittance technology for sending money from North America to China. Not only do we have first mover advantage, we also beat our competitors in speed, pricing and convenience.
Question 6: In a recent news release it stated, “First Global is also pleased to announce that user growth continues to accelerate in India and the VPayqwik app has over 500,000 downloads.”
Are you happy with this number? What is the approximate revenue per user? By the end of the year, what is your forecast on the number of total downloads?
Andre: We are pleased with our growth in India although there is always room for improvement. We are stepping up our marketing efforts and expect further significant growth. The revenue per user in India is not the same as say North America. It's an entirely different economic demographic however we are looking to achieve strong transactional revenue through greater scale.
Questions 7: Anything else you’d like to add Andre both in regards to the share price and the company’s prospects looking forward?
Andre: Kal, we are all about building shareholder value at First Global. We take pride in our efforts and accomplishments. We will continue to drive the business forward and grow our revenue to maintain economic sustainability and profitability. With all the deployments taking place they will contribute to increased top line revenues and profitability and ultimately take us and our shareholders to new levels. We are humbled by all the support we have had and continue to receive from our shareholders.
I was impressed with the scope of Mr. Itwaru's answers to my pointed questions - he continues to put shareholder's interests first.
I remain encouraged by First Global's prospects as the company moves towards greater profitability.
I look forward to keeping you informed.
Happy Investing!
Dr. Kal KoTECHa
Disclosure: I own shares in First Global Data. The company is an advertiser. I am biased. Do your own due diligence.
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