Spenda Limited

Thank you for joining us today for our quarterly results presentation. Firstly, I'd like to take the opportunity to apologise for taking some time to communicate with you all. I know there has been a number of unaddressed questions. I've seen some of the communications coming through, but I'm hoping today that I'll be able to answer all of those questions for you. It's taken me a few weeks to really get a firm handle on the business. I need to ensure that we can very quickly focus only on the correct initiatives that we're really going to drive the business forward to scale and grow. I'm confident that we know what those things are now and I'll be sharing those things with you today. A little bit about me. I'm Corrie Hassan. I've been in the finance industry now for well over 30 years, and my skill sets are really around execution, risk management, and operational discipline. I feel that those skill sets are a really good fit for where Spender currently is. We've got a very strong leadership team and I'm very excited to step into this role along with my team to drive this business forward together. So in today's session, I will talk through the quarterly results. I'll talk to what my focus is going to be and how that focus will translate to results. And then I'll finish up by working through some of the questions that you sent in for me. Okay, so moving through to the quarterly results. So as you can see, we've consistently grown our payments volume year on year. So far for the first quarter, we've landed 200 mil for the first quarter, which really is almost half of the entire of last year. So we are seeing that continued growth, mainly within our payments platform, but also there's additional growth coming through via our APG partnership. We do expect this trend to continue across the next financial year, as we'll be acquiring new customers in this space. And cash receipts, not so high number for our first quarter. We've seen a reduction as our long-tail projects have concluded. So what we will now start to see is a continued growth in annual reoccurring income, which is driven by those technology pieces that we've now finished. Cost management, this is a really big area of focus for me. I'm a little bit of a micromanager when it comes to this. We are, I guess, right-sizing the business at the moment without impacting our ability to deliver. So far, we've already reduced our cost base by 185K per month recently, and we plan to really continue to reduce that as we move forward. So focusing on what I think is our pathway to success, I guess I'll just recap in terms of what we are doing and what our key strengths are as a business. Our solution, as you know, is an end-to-end digital workflow, enabling us to then seamlessly pass data into those small business systems. and injecting flexible finance options throughout that supply chain.

That hasn't changed. This is what we will continue to do. In terms of why we're different, we do have a holistic platform.

We can include SaaS payments and lending income into the mix, which I think is a very powerful mix of income in terms of making our customers sticky and being able to scale quite quickly. We have a one-to-all strategy, so dealing with a franchise to many franchisees or a big corporate to many customers. That strategy enables a quick scale-up, which we'll continue to do this year. Spender pay, that's our product, which is bridging the gap between our buyers and sellers and embedding finance all the way through.

My big focus is execution.

We need to execute on the plans that we have. We have a very simplified product vision now, really just focused on those products that are going to bring us reoccurring revenue.

We have a very highly motivated leadership team and we are implementing a very sensible cost base. In terms of product strategy, we're introducing our three pillar product strategy.

really just three core product lines that are really focused on the revenue and removing key customer reliance. Spender Retail, that's the rebrand for SOE, and that's focusing now on scaling what we have with our Cornerstone customer, Carpet Court. We believe that the capabilities of the current technology is suitable for 70% of that network, but then also suitable for the next two or three cohorts that that product fits. Spender Pay, which is our AP product, the plan there is to roll in SWIFT statements and then build in extra capability around that product, so building in rewards, offering lending in the mix, and we're going to be launching that early next year. So it will enable us to scale our SWIFT statement customers faster by offering additional benefit, but also bringing in new SME customers. And then thirdly, Spender Ledger. We just need to do some small pieces of work around building the dashboards and enhancing the lending capability in there, ready to relaunch early next year. So some of the feedback I've had in the past around our products is that it's really difficult to talk to and difficult to explain exactly what Spender does and what Spender products are about. So I have tried and spent some time trying to simplify how we talk to that, how we can talk to our customers, to our investors, to our staff. So Spender Retail, it's one platform to quote, track jobs, build clients and process payments. Quite simple. It sounds simple, but we've really solved some difficult aspects within that flow, and it's a really sound piece of technology that I believe can scale very quickly now. We're in pilot or just finishing our pilot with two carpet court stores, and then we'll start to scale out from there. Other cohorts that it really does suit are plumbing cohorts, property maintenance, equipment hire, those types of industries. So they'll be our focus from a sales and marketing perspective soon afterwards. Moving through to our second pillar, which is Spender Pay. That's our old AP. This is our SME lending product. And again, a simple explanation, one platform to securely pay invoices and earn reward points. By rolling in the SWIFT statement capability for those Capricorn members, it also provides that natural uplift where points can be achieved on paying bills, invoice uploads can happen in a digital format. Security is a big piece here. We're checking the bank accounts for the supplier payments that they're making to make sure they are paying who they think they are, and there'll be funding options embedded into this app. And our third pillar, Spend a Ledger. This really talks to the line pay acquisition that we recently made. It's a very robust piece of technology. It underpins a lot of the payment processing across all of our applications. One payment to handle payments and lending. So we've been working with our partner APG Pay to build out their travel product and we'll continue to do that and scale that with them. And we'll also focus on white labelling the product for other marketplaces and reinvigorating that strategy. There's also some compatibility with offering out this payment to loan management platforms or fintechs. but we'd need to really spend a little more time tweaking the product to make it compatible there.

But that's definitely a focus and a plan for the future. And lending will run through the threads of everything that we're doing.

We have finalized our SME lending product. We have 10 customers in pilot, and that's running really successfully. The characteristics of that lending piece really are unsecured loans to pay suppliers, backed by insurance, and a healthy SME will qualify for that product. So it's integrated with SpenderPay, and customers will be able to apply within the technology.

So underpinning all of those products will be our three-pillar sales strategy.

It will be a mix of sales and marketing activity that directly reach out to our target markets. So reengaging with franchise network, engaging with our accountants and broker networks, targeting specific marketplaces and obviously digital marketing, all of those good things that we can easily step up to help scale the business.

And then looking forward to 2026, I'll just give you a little taster of what we're doing behind the scenes.

So there's a lot of focus on AI at the moment. So Spenda have an AI focus and are implementing this in two different ways. Firstly, in our design and development. So improving our product speed to market. For me, it's more around a communication piece and very quickly being able to show what you want to achieve to who needs to build it. So it really does make a big difference in that area. And then secondly, we'll be integrating AI into our technology, making capabilities so that our customers can use simple commands over a broad data set to complete complex tasks quickly and efficiently. So that's something that we're all quite excited to work in.

And it's real, it's not hard to do, and it really will enhance our product significantly.

So I guess to finish off and to summarise what I think our path to success is, December quarter, it's all of those things I was talking through, cost-cutting, new product strategy, stabilising the product, aligning the workforce and the leadership team, setting up accountability across the business, designing and planning our new spender pay build, adding in a few extra features to Ledger, and then setting our sales and marketing plan. All of that's well underway. That will set us up nicely for the next quarter, where we will then be relaunching our Spender Pay product, relaunching our Spender Ledger product, continuing our retail rollout, looking at our next cohorts for retail, continuing and driving our sales and marketing activity, and then building in our AI strategy. So it's a real consistent approach for the next few quarters. This will... provide a good growth trajectory across these quarters. So you can see I've put through a 15% growth spurt in March to 38% to 47%. These are numbers I haven't pulled out of the air. There's a formula behind them, and that's a real, I guess, mix of product payments, lending together based on some real assumptions and conservative assumptions, because that's really how I usually work. We obviously test those assumptions each month to make sure we're in the right ballpark, but I'm very confident that we are and that we can scale this out at these sort of growth rates so that by the end of quarter, September quarter 26 will be in a really good place from a financial perspective. And then after that, it's just scaling very, very quickly from then on. This path to success I think will build shareholder value. It will show that by being consistent, executing this strategy, delivering those growth pieces in repeatable and scalable income, it will add that value very quickly. so now i will move over to answering the questions that you have so the first section is on our customer base so what are the uptake numbers for capricorn and carpet core and what percentage of carpet court payments are being captured so the uptake numbers for capricorn in terms of so statement is stable around 120 We have listened to the feedback from those members, and our main strategy, as I discussed earlier, was to roll the SWIFT statement into spender pay. What that means is that those members will have a large uplift in benefit for the same cost, so I'm very confident that that will enable us to scale at a much faster rate. Carpet Court, we're just finishing our pilot with two of the stores, and then we're targeting to bring on a bunch before year end, and we'll continuously then roll month on month. At the moment, we capture 100% of Carpet Court payments from the store to the head office. Being as the statement has had a low uptake, would it be worthwhile to half the price to attract double the customers? Well, as I explained, we decided to increase the functionality and benefit. I feel comfortable that that will actually help us to scale. But we will, of course, monitor this closely and then make any pricing tweaks that are required as we move through the scale-up. How are you managing relationships with key partners that were personally driven by Adrian, such as Capricorn and Carpet Court? I'd say the relationships continue to remain strong. The level of engagement is across the leadership team, not just one person. And so I actually don't believe there's been any impact directly related to Adrian's relationships there, which is good. So statement users stalled at 120, which is true. But we haven't really marketed or done anything further. What we've done is just shifted our focus onto spender pay. What are the targets for quarter two and quarter three F26 once marketing resumes? So our internal conservative goal is to target 1,000 customers beginning quarter two, 27. Commercial viability sits around 500. Are there any new large enterprise or network customers in the pipeline similar to Capricorn or Carpet Corp? We have started to develop a few different relationships with a couple of networks, and we will just continue to develop those because we will have a large sales focus moving forward. I expect to see some healthy activity in this area early next year. The Capricorn e-commerce payment project was stated to be nearing completion and expected to conclude 26. Can you confirm if it has now officially gone live? Yes, it has. I believe we announced that in November and the DSD initiative is live. Governance. How did Adrian Float manage to get a loan from the company and were all appropriate governance measures adhered to? Okay, so the payment to Adrian was a payout of long service leave. Obviously, anyone can request that as an employee under WA law. Upon retrospective review of the payment by management, the actual value required further investigation and as such we decided to treat this as a loan given the payment had already been made. The cash value of the payment to Adrian was $88,000 and the balance is PAYG. The board does continue to investigate the amount. It's quite tricky because there's a few entities involved and the term of service is over 20 years. But this loan will be classified as such until the matter is resolved. And if any monies are due back to the company, they will be recovered. There was no breach of governance. However, changes have been made internally and I've moved HR directly under finance so that HR, finance and payroll are all together in the same team. Moving through to financial performance and cash flow. What is the current recurring monthly revenue base and what level is required to reach operational break even and when is this expected? So approximately 700 to 800 is our current reoccurring revenue base. Operational breakeven will achieve, once we get that mix of lending, payments and SaaS at a blended rate of 30% margin across the three product lines, and we're targeting breakeven for September 26th. The report notes 177K per month in cost savings from a 25% cut in staff costs and a 30% reduction in headcount. How has this affected the company's ability to deliver and scale projects and maintain customer service? I would say the reductions won't and haven't impacted our ability to do the things that we need to do to make this business move forward. We've right-sized things, we've focus down on those products that will drive that revenue.

So we have the right team and the right numbers to be able to deliver and scale. The Appendix 4C shows roughly three quarters of funding runway.

What's the contingency plan if cash receipts do not accelerate in quarter two? We have multiple scenarios mapped as contingency. So we just need to monitor and react quickly to anything that is not taking shape as we expected. We do have undrawn facilities in excess of 1.5 million, which are available within 2026. What is the total target payment volume for 2026 and how much of it is expected to convert into revenue? We actually have no set payment volume. We expect current growth trends to continue, and our focus is to convert that existing flow into increased revenue. APG pay. APG processed 50 mil in quarter one. What is Spender's direct revenue share from that amount? So Spender earns 0.2 on every dollar going through that network for travel, and there's also a percentage on lending. Currently we have a pilot phase in play. So I think we generated about 130k per quarter and expect this to grow month on month as APG increases and as their payment volume increases. When will phase two of the platform launch and what industries are next in line? So phase two principles and credit criteria are currently being finalised. So we will update the market accordingly. There is a big focus on the SME lending with APG pay, so that will be a big part of our future. So thank you for all your questions. I will always be open and transparent in all my dealings with our investors, and I'm always happy to answer any questions, no matter how difficult they are. I just want to finish by thanking you for your support. I hope you feel reassured that there is a robust plan for the future, and I want you to know that I am very committed and determined to drive things forward. I have an amazing leadership team standing alongside me, and I do intend to introduce them to you in the future. I look forward to addressing the market on a much more regular basis.

Thank you again.