Investor documents 2017

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Company overview AGM, 4 Dec 2017

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Chairman commentary on accounts, December 2017

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 Investor Update for Q3 2017

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This is a confidential document for Corlytics Shareholders only. There should be no distribution of this document.

CEO SUMMARY

This is the third quarterly shareholder update for 2017.

As a reminder of who and what we are,  Corlytics is the world leader in regulatory risk intelligence. We analyse enforcement data (including Fines) and other important regulatory information to provide evidence based intelligence to our clients. Our clients are Regulators, global Financial Institutions and their Advisors and we are able to do this by using the skills of our multidisciplinary team of legal analysts, risk professionals and data scientists. We also apply artificial intelligence to this data.

The intelligence we provide includes identifying the root cause of a fine, the contributory and weighting factors, the business controls that were compromised, new regulations that are coming down the line, and recommending mitigation and remediation actions that should be taken going forward.

Because of both the increase in the level of fines being imposed, and the ever changing regulatory environment, we are seeing a significant demand for our solutions, which represent a new approach and new set of offerings,  across all markets.

GO TO MARKET & CUSTOMER UPDATE

Our primary objective this year from a sales perspective is to win a number of “launch” clients, to be the basis for growing our revenues in 2018. We have been able to announce our contract win with the FCA (Financial Conduct Authority) and a significant amount of it has been rolled out and is already in the public domain. This is driving a lot of regulator and large FSI attention.

Our online marketing activities are paying dividends in terms of market awareness and we are seeing a strong uptake in brand recognition and inbound customer and market enquiries. We were selected from a field of 70+ companies to be a launch partner for Allen & Overys’ Fuse Innovation centre in London. Allen & Overy, offer regulatory advice electronically to a large client base and have introduced us to a number of their clients.

We are making solid progress with our targeted launch customers and continue to build momentum within our key Tier 1 accounts as well as strenghtening our 2018 pipeline. Our major focus being on the key UK and North American markets, however, the sales cycle is long.

OPERATIONS UPDATE:

We continue to make good progress with our key regulator engagement with the project on track and the customer reporting high satisfaction levels with the work the team is delivering. We have also delivered our first Risk consulting engagement which was delivered at a regional level in a Global Bank. We are leveraging this success to build futher relationships and to penetrate the account at a senior group level. 

PRODUCT MANAGEMENT & DEVELOPMENT OPERATIONS

The Product Management and development team is responsible for building the Corlytics data and analytics platform. The first production ready version of our flagship RiskFusion project was released on schedue in April. This is now being actively used by end-users and we are gathering highly valuable customer feedback which is being fed back into our core product using an agile two weekly sprint methodology. In addition the team is working hand in glove with sales colleagues to prototype further offerings are we gather more product use case information through direct customer engagement.

LEGAL ANALYST OPERATIONS

The legal analysts team is responsibile for conducting indepth legal reviews of regulatory enforcements and using this analysis to build up a comprehensive data base of regulatory fines. The team continue to work on improving both the quality and coverage of our data in line with market needs. We are continuing to invest in process improvement and automation to help us scale the team as we extend our market coverage.

CAPITAL STRUCTURE

The company is seeking an additional funding round of €2m. This funding will come from our existing investors by way of a new 2017 Redeemable Convertible Loan Note. It is intended that €750k will be invested by Kernel, €500k from Infinity, €397k from Champoluc and €150k from BJM Nominees, with the balance from other smaller investments. In order to accept this 2017 Loan Note we need to update our constitution to accommodate this new instrument so an EGM will be held on 12th October to consider and approve these changes. The Notice & Proxy form for this EGM is attached.

 Investor Update for Q2 2017

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This is a confidential document for Corlytics Shareholders only. There should be no distribution of this document.

CEO SUMMARY

This is the second quarterly shareholder update for 2017.

As a reminder of who and what we are, Corlytics is the world leader in regulatory risk intelligence. We analyse enforcement data (including Fines) and other important regulatory information to provide evidence based intelligence to our clients. Our clients are Regulators, global Financial Institutions and their Advisors and we are able to do this by using the skills of our multidisciplinary team of legal analysts, risk professionals and data scientists. We also apply artificial intelligence to this data.

The intelligence we provide includes identifying the root cause of a fine, the contributory and weighting factors, the business controls that were compromised, new regulations that are coming down the line, and recommending mitigation and remediation actions that should be taken going forward.

Because of both the increase in the level of fines being imposed, and the ever changing regulatory environment, we are seeing a significant demand for our solutions, which represent a new approach and new set of offerings, across all markets.

GO TO MARKET & CUSTOMER UPDATE

Our primary objective this year from a sales perspective is to win a number of “launch” clients, who will provide not just our planned revenues in 2017, but be the basis for growing our revenues in 2018 and beyond. They will also “prove” our solution in the marketplace, and provide global references and credibility as we reach out to the broader market.

Our Go to Market strategy combines both direct outreach to leading FSI organistions, as well as establishing a number of alliances and partnerships to provide a complementary channel to market.

We are happy to report that we have signed a major global regulator in June where the initial deal value is £300K . This success is already giving Colytics credibility with other regulators and banks, and represents a significant break through for the business.

We continue to engage with a number of Banks under our direct outreach model, with a particular focus on the key UK and North American markets. While the sales process is long, we continue to see strong interest in our value proposition and have kicked off our first pilot project with a major universal Bank in June also. Our overall goal for 2017, is to have pilots with a number of global Financial Institutions in our key markets.

On the partnership side, we have established relationships with a number of the top four accounting firms, who are leading players in the regulatory technology ecosystem. We expect these relationships to identify engagements that will drive 2018 revenues.

 

OPERATIONS UPDATE

Product management & development operations

The Product Management and development team is responsible for building the Corlytics data and analytics platform. We also have risk analysts (quants) that develop risk models based on our unique regulatory data. The first production ready version of our flagship RiskFusion project was released on schedue in April. This was well received in the market.

 

Legal analyst operations

The legal analysts team is responsibile for conducting indepth legal reviews of regulatory enforcements and using this analysis to build up a comprehensive data base of regulatory fines. This data base is the underpinning raw material on which we build our risk models and front end applications. The legal analyst team has worked hard to put in place robust processes to help both improve the quality of our data analysis and to help scale the team as we expand our regulatory coverage footprint. The team have developed automated quality assurance tests and have rolled out robust workflow management tools. We have improved both the quality and coverage of our data in line with client requirements.

 

Established UK operation

All revenues in 2017 and over 80% of 2018 revenues will be UK based. In May we incorporated a UK based entity (Corlytics Solutions Limited) and have established an experienced London based sales, marketing and delivery team. We have also opened a London office to help faciliate our growth in this key market. This will also ensure that we are eligible to bid for UK public bodies.

Capital structure

As part of our plan in December 2016, we are now raising an additional funding round of €2m, led by Kernel Capital and Infinity Capital, with an end of July close date. The terms are the same as in the December 2016 round. All existing shareholders will receive pre-emption letters shortly inviting you to participate in the funding round should you wish.

 Investor Update for Q1 2017

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This is a confidential document for Corlytics Shareholders only. There should be no distribution of this document.

CEO SUMMARY

This is our first shareholder update since the closing of our last funding round in December.

As a reminder of who and what we are,  Corlytics is the world leader in regulatory risk intelligence. We are unique in the marketplace in that we analyse enforcement data (including Fines) and other important regulatory information to provide evidence based intelligence to our clients. Our clients are Regulators, global Financial Institutions and their Advisors and we are able to do this by using the skills of our multidisciplinary team of legal analysts, risk professionals and data scientists.

This intelligence includes identifying the root cause of a fine, the contributory and weighting factors, the business controls that were compromised, new regulations that are coming down the line, and recommending mitigation & remediation actions they should take going forward.

Because of both the increase in the level of fines being imposed, and the ever changing regulatory environment, we are seeing a significant demand for our solutions, which represent a new approach and new set of offerings,  across all markets.

GO TO MARKET & CUSTOMER UPDATE

Our primary objective this year from a Sales perspective is to win a number of “launch” clients, who will provide not just our planned revenues in 2017, but be the basis for growing our revenues in 2018 and beyond. They will also “prove” our solution in the marketplace, and provide global references and credibility as we reach out to the broader market.

Our Go to Market strategy combines both  direct outreach to leading FSI organistions, as well as establishing a number of alliances and partnerships to provide a complementary channel to market.

We expect to sign our first key client (a major global regulator) in the March / April timeframe. This success is already giving Colytics credibility with other regulators and banks, and will represent a  significant break through for the business.

We are engaging with a number of Banks under our direct outreach model, with a particular focus on the key  UK and North American markets. We are targeting  signing 2 pilot projects in mid year, and our overall goal for 2017, is to have pilots with a number of global financial institutions both in Europe and North America.

On the partnership side, we are working on a number of strategic partnerships with leading players in the financial services ecosystem, and we expect to be able to announce more positive news on this in Q2.

MANAGEMENT TEAM:

Based on the fact that we have a unique product and a strong demand for solutions in this sector, we have recruited a management team that is capable of executing globally. Our management team have grown companies in the regulatory and analytics space that have been global leaders in their market and have managed successful exits.

Significant members of our management team include:

John Keane, Chief Operating Officer, formerly head of US & Development at Norkom (sold to BAE) and CEO of The Now Factory (sold to IBM)

Liam Griffin, Chief Commercial Officer, formerly CCO of both Norkom technologies and The Now Factory

Ray O’Donnell, Chief Technology Officer, formerly Chief Architect of Norkom/BAE Systems.

Kevin O’ Leary, Head of Product Management, formerly head of product management Norkom/BAE Systems.

Rory Flynn, Head of Legal, formerly commercial, regulatory & IP Barrister.

OPERATIONS:

Our operations is made up of three different areas:

PRODUCT MANAGEMENT & DEVELOPMENT OPERATIONS

The Product management and development team is responsible for building the Corlytics data and analytics platform. We also have risk analysts (quants) that develop risk models based on our unique regulatory data. The key focus for the team is to release the first production ready version of the flagship RiskFusion product which is on schedule for release in April.

LEGAL ANALYST OPERATIONS

The legal analysts team is responsibile for conducting indepth legal reviews of regulatory enforcements and using this analysis to build up a comprehensive data base of regulatory fines. This data base is the underpinning raw material on which we build our risk models and front end applications. The legal analyst team has been focusing on putting in place key processes to help scale our business.

PROFESSIONAL SERVICES OPERATIONS

This is the team that is responsible for ensuring that the system is configured to meet customer requirements and that customers continue to get ongoing value from their investments in Corlytics technologies. The focus of the Professional services team is to work on delivering first engagements / pilots and helping the sales organisation with pre-sales activities. The professional services organising will be ramped up in line with new customer acquistions.

BUILDING A WINNING CULTURE

In addition to building our our core competencies, we have also put in place a number of staff-engagement processes such as establishing a regular all-hands Info-Exchange session, monthly staff newsletter, staff referral program for new hires and staff teambuilding activities. We have also engaged in building out our training and upskilling capabilities to get new hires as productive as possible as quickly as possible.

CAPITAL STRUCTURE

In March we concluded the final pieces to the December 16 funding with the following ordinary shares and option issues which had been highlighted in the Cap table as part of December funding.

In order to conserve cash we allotted 9,650 ordinary shares to convert loans and liabilities totalling €193,000. We introduced an ESOP and Option agreements of over 49,053 ordinary shares in order that we could attract top quality management and incentivise employees. Following these issues the total number of shares on a fully diluted basis is 364,657. This has been authorised by the Board and appropriate investor consents. In addition John Byrne will make two small share transfers for 3,200 ordinary shares (as part of the post completion deliverables from December’s funding round) to two Executives of the Company.

The Board has been strenghtened by the appointment of Cyril McGuire, one of Ireland’s most successful technology entrepreneurs, who is also a investor. In addition to improve corporate governance we have have split the CEO and Chairman roles in accordance with best practice. Dennis Marnane has been appointed as the Non-Executive Chairman.

 

Directors report and financial statements for year ending 31 December 2016

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