Thanks to major contract wins with an NFL and an NBA team and progressing with its existing product suite, software company IXUP (ASX: IXU) entered the third quarter with cash flow positivity.
Moreover, IXUP – pronounced “eyes up” – launched and, subsequent to the end of Q3 FY24, completed a $4 million partially underwritten non-renounceable entitlement offer. The funds raised will be used for debt reduction, to convert the Company’s late-stage commercialisation pipeline, and to secure additional organic growth initiatives.
IXUP is targeting the delivery of significant commercial contracts for its core secure data collaboration technology. It is pursuing a new partnering strategy for its North American RegTech business that is expected to speed up market entry and broaden IXUP’s RegTech product offering.
In Q3 FY24, the Company recorded a positive net operating cash flow of $53,642, supported by the settlement of the FY23 R&D refund of $1.2m. That said, its YTD cash burn stands at over $4 million.
Customer receipts totalled $1.5 million in the quarter. The material expense items for staff and administration and corporate costs were $900k and $1.6 million, respectively.
On an operational front, it continued running BetStop, the National Self Exclusion Register, which was launched in August 2023 under contract with the Australian Communications and Media Authority (ACMA). It recorded over 20,000 registrations and saw more than 12 billion match checks run.
IXUP is also pursuing new responsible gaming and consumer wagering protection technology opportunities in Australia and internationally.
IXUP announced a partnership with U.S. Integrity/Odds On Compliance (USI/OOC) to accelerate growth in global regulatory and compliance markets. USI/OOC provides betting and gaming compliance products and consulting services to over 200 customers across North America and Europe, including premier sports properties, betting operators and global regulatory bodies.
The IXUP-enabled data collaboration software solution, customised for the sports and sponsorship industry (datapowa VENN), is in multiple active pilots, and commercial discussion is anticipated shortly. The datapowa division’s annualised invoiced revenue for the quarter was over $455,000. Contract wins for US agency clients in the quarter included stadium naming rights valuation analysis for an NFL team, TRACK broadcast analysis for an NBA team across the 2023/24 season, and NHL team jersey patch partner TRACK analysis across the 2023/24 season (among others).
IXUP completed phase one of its paid pilot in late 2023. This phase focused on the technical aspects and functionality of the IXUP platform. Subsequent to the successful completion of phase one, pilot participants (including several major Australian corporates) undertook a successful independent security audit of the IXUP platform. Phase two of the paid pilot is now in the final stages of planning and will use the live data of those major corporations.
IXUP is also working on a number of smaller, discrete commercial opportunities for the Company’s core data collaboration technology. These opportunities would see the IXUP core technology deployed as part of larger data collaboration and analysis implementations. IXUP expects the success or otherwise of these opportunities will become known in the June quarter.
Finally, the Company’s CEO selection is nearing completion, with an announcement expected shortly. Right now, it focuses on appropriate cash flow management, which is being implemented across the entire business. The goal is to achieve consistent positive cash flow from all business divisions.
Alinda is a Business Reporter for The Sentiment
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