Covata Ltd (ASX:CVT) has continued to focus on the data security, information governance and compliance markets throughout October with a primary target remaining on progressing commercialisation and sales.
In its recent market update for October the company stated its CipherPoint Eclipse product is now the lead asset for the company.
The Eclipse product was further improved this year, with Covata extending the solution to be able to provide greater security for documents stored in Microsoft OneDrive and SharePoint Online.
To reflect its focus, the company revealed that it plans to ask shareholders to approve a proposed name change to Cipherpoint Limited at an upcoming meeting.
In its recent market update the company outlined its geographic focus with intentions remaining on:
- renewing existing customers in the US;
- leveraging its channel relationship with Singapore based partner Total eBiz Solutions (TeBs) in the Asia market;
- building a solid pipeline of direct and indirect opportunities in the DACH region of Europe; and
- continuing business development in Australia.
Sales and Marketing
In May, Covata announced its success in securing the first European based Fortune Global 500 company as a customer of our Eclipse product.
At this time, the company already had secured as customers 15 US-based organisations.
This marked a major achievement for the company as its first European win.
In its October market update, Covata has highlighted that most of its sales and marketing efforts will now be directed at leveraging those installations into building a solid pipeline to convert into sales.
Executive director Steven Bliim said: “We have rebuilt all our sales collateral and use cases, including in multiple languages and requalified our sales pipeline of leads and opportunities.
“We intend to relaunch our digital marketing and lead generation activities in the first week of November.”
On October 24 the company appointed managing director and CEO Ted Pretty to the position of executive chairman.
Outgoing UK-based chairman Bill McCluggage retired from the three-person board at the end of October 2019 while top 20 investor Graham Mirabito will take a vacant casual spot on the board from November 1. 2019.
Covata noted its strategic direction in the October market update, highlighting the changes would increase the number of Australian-based directors on the board to two members or two-thirds of the board.
SafeShare business divested
The New South Wales company divested of its SafeShare business in the September quarter by selling its shares in subsidiary Cocoon Data Holdings Pty Limited to Cybr5 Pty Limited.
Covata banked $1.7 million of the $5 million transaction last quarter and now expects a late final $1 million instalment in the March 2020 financial quarter.
Cybr5’s late payable had been due on October 15, 2019.
The exact timing of the outstanding receivable payment is still being negotiated.
Although the company has not provided any forecasts, management’s objectives in the coming year are to ‘significantly’ increase Eclipse revenues, convert current opportunities in Asia into sales, secure further marquee customers in Europe and build a solid pipeline locally for its products.
Based on its current pipeline Covata believes it has the opportunity to reach cash flow breakeven in the 2021 calendar year.
The board has also resolved that the company needs resources based in the DACH (Germany, Austria and Switzerland) region of Europe.
Chief financial officer Steven Bliim will move to the role of COO and be based in Heilbronn, Germany from November along with one of the senior engineers.