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With a new boss at the helm, software company Dubber (ASX: DUB) is asking shareholders to show the embattled firm support as it launches a $25 million equity raise to strengthen its market presence and continue the recovery effort of its missing millions.
The company has been embroiled in controversy for six months since the board sacked former CEO Steve McGovernafter it discovered $26.6 million in corporate funds had gone missing, alleging that the capital had been misused by McGovern, trustee Christopher Warren Legal, or both of them. McGovern had initially been suspended as Dubber and ASIC launched an investigation into the lost money.
Now, Dubber is asking shareholders to pitch in and support the call recording software company at 15 cents per share (cps), reflecting a 48.3 per cent discount to the last trading price of 29cps on 10 October. Shares have fallen 71 per cent since the start of the year.
New CEO Matthew Bellizia, who has been in the top job for a month, has committed $1.25 million towards the placement. Before working at Dubber, Bellizia spent 20 years as the co-founder and CEO of MTData – a business that supplies a software platform and mobile technologies to a range of industries such as transport, mining and government.
Based in Melbourne, MTData operates throughout Australia, New Zealand, the US, Canada, the UK, Europe and the Middle East. The company grew to more than $70 million in revenue and staffed 160 people globally. In 2017, Telstra bought out the company in a deal reportedly worth $50 million. Clientele on MTData’s roster include Qube Bulk, Linfox and Wettenhalls.
Dubber director Peter Pawlowitsch, who had been acting CEO following McGovern’s departure, has committed to taking up his full entitlement of $378,000 of shares and sub-underwritten the retail entitlement offer for $600,000.
“This $25 million equity raising provides Dubber and customers with the confidence that recent growth in the business will continue,” says Dubber chairman Neil Wilson, who will retire from his role following the company's annual general meeting (AGM) in November alongside non-executive director Sarah Diamond.
“The funds provide the flexibility in Dubber’s balance sheet to accelerate sales momentum and execute a new sales strategy whilst maintaining a disciplined approach to costs and providing customers confidence that Dubber is fully funded to be able to execute on these objectives.”
Founded in 2011 by McGovern, James Slaney and Adrian Di Pietrantonio, Melbourne-based Dubber is a cloud-based service that helps businesses record, store, and analyse phone calls. It captures conversations from various communication platforms and organises them, making it easy for companies to access and review important conversations.
In its annual report, the company reported that revenue grew by 30 per cent in FY24 to hit $38.7 million, with the vast majority of capital coming from its customers in Europe ($26.3 million), followed by the Americas ($9.3 million) and the rest of the world ($3 million).
Revenue had increased in all segments, with revenue rising by 29 per cent year-on-year in Europe, while America grew by 33 per cent and the rest of the world saw a 25 per cent increase. However, the company posted a loss of $40.7 million – reflecting a reduction in loss of 56 per cent on FY23. Dubber incurred net cash outflows from operating activities of $22.8 million.
“The financial statements for the period ended 30 June 2024 have been prepared on the basis that the entity is a going concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business,” Dubber told shareholders in its annual review.
“The group’s ability to continue as a going concern is dependent upon its ability to raise sufficient additional funds in the near term to pay overdue Employment Taxes liabilities of $10.9 million and fund its operations over the next 12 months.
“The company is pursuing the recovery of allegedly misappropriated funds having lodged a claim with the Victorian Legal Services Board Fidelity Fund and is considering other recovery avenues. The company is also pursuing settlement of outstanding commercial disputes with customers, including avenues for enforcing a successful judgement in the US courts. The success and timing of these recovery actions is uncertain at this time.”
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