Coffee Microcaps June 2025 Newsletter

Tax Loss Selling Incoming

Hi Everyone

May saw a decent return for S&P/ASX Emerging Companies Index, which finished with a return of 2.99% for the month of May. A welcome fill-up after three negative monthly prints in a row. As we enter June and tax loss selling season, be forewarned that June has historically been the worst month for ASX microcaps, with the index recording an average decline of 2.74%. However, July is traditionally the best month for ASX microcaps, with the index recording an average gain of 4.38% for the month. So, for long-term holders of various microcap stocks, it would be wise to keep an eye out for any usual price weakness that doesn’t seem linked to any fundamental news.

As many of you know, Finola Burke and the team at RaaS Research have been a long-term sponsor of our virtual events at Coffee Microcaps. The team at RaaS have now launched a subscription research service which will run alongside their traditional issuer-sponsored stock research coverage. Behind the paywall, you will find research on other stocks not currently covered by the team, industry and sector reports, and investment ideas identified by the analyst team. Finola has provided me with an affiliate code, which will give subscribers an additional discount for those who sign up, so please use this code CMC_L82F6EWFEB as part of your signup process. In the interest of complete transparency, there are a few $$ in it for Coffee Microcaps if you use the code.

Upcoming Coffee Microcaps Zoom Webinar Events

For anyone who doesn’t know, I regularly host presentations from ASX Microcap companies via Zoom Webinars.

We don't have anything coming up currently, as companies are generally in blackout mode heading into the financial year-end on June 30. However, rest assured, we will be live with plenty of companies and webinars towards the end of July, once 4C’s start hitting the ASX announcement platform.

The ASX Microcap companies that present generally have the following four criteria.

•Under AUD 300m in market capitalisation

•In revenue and approaching cashflow breakeven or already profitable

•Outside the resources and biotech sectors

•"Industrial Microcaps” Include microcap technology, financial services, consumer goods, industrial products or services business, healthcare stocks, etc.

I have created a separate email list for invitations to these Zoom webinar events, so I am not sending spam to all my subscribers. If you want to be added to the events list, please email me at mark@coffeemicrocaps.com, and I will add you. I would love for you to join us for these free events.

I want to thank Raas Research for sponsoring all the Coffee Microcaps Virtual events.

Coffee Microcaps Webinars

All the Zoom webinar events are recorded and uploaded to the Coffee Microcaps YouTube Channel. In addition to the ASX microcap company presentations, I interview leading ASX microcap fund managers about some of their top picks. Occasionally, we also have presentations or interviews with international microcap investors.

So, if you can’t join the Zoom webinars due to work, kids, life, or whatever, subscribe to the Coffee Microcaps YouTube channel and hit the bell to receive notifications when new content is added.

Also, the description section of each video on YouTube has relevant chapters, so you can jump to the start of a specific company presentation if that’s what you are after in a particular video.

Be sure to check out the channel, subscribe, and hit the bell to receive notifications of new content.

We have had a few events recently, so if you missed any, you can catch up on the content via our YouTube Channel.

Coffee Microcaps Morning Meeting May 13th

Brent Barnes, CEO of Clever Culture Systems Ltd (ASX: CC5), joined us and discussed the scale-up of their laboratory contamination machines, which are now experiencing strong sales and increased inbound interest from major pharmaceutical players seeking easier, faster, and more robust compliance solutions. Brent and the team have laid a solid foundation and are now entirely focused on sales and commercialisation.

Billy Tucker, CEO of Beonic Ltd (ASX: BEO), joined us once again, and the restructuring of the business since he took over some 18 months ago looks to be almost complete. With a significant reduction in its cost base, the company appears to be approaching the operating cash flow breakeven point in the near term. Some recent airport and retail customer wins should help push ARR higher than the $17 million reported in the last quarter as we move through the balance of 2025.

Adam Bennett, CEO, and Miles Drury, CFO, of Plenti Group Ltd (ASX: PLT), joined us just after their year-end update and have subsequently released their full-year results. The business continues to perform well in all divisions and across all metrics, with cash NPAT up 126% compared to the prior comparable period. The partnership with NAB, which launched last year and has undergone a period of integration and bedding in, now appears to be delivering volumes that have accelerated further into 1Q26, with run-rate originations per business day in May month-to-date up 105% against the average daily origination rate in 4Q25 according to thier full year results announcement.

NAOS Asset Management Microcap Fund Manager Interview Series

I was joined once again by Rob Miller, Portfolio Manager at NAOS Asset Management, to discuss two microcap stocks from the portfolio: MaxiParts (ASX: MXI) and Urbanise (ASX: UBN).

Maxiparts is a long-standing position in the portfolio, and indeed, Rob discussed it the last time he did an interview with me. The business is currently feeling the cyclical effect of a slow East Coast economy. Still, as a dominant player in the HGV aftermarket parts business in Australia and with an ageing national fleet, the structural tailwinds for the business remain favourable in Rob’s view. He compared MXI to Supply Networks (ASX: SNL), a similar-style business, although they don't compete directly with each other per se. Yet the valuation gap between the two looks compelling, according to Rob.

Urbanise has been on a tear since the start of 2025 and is up over 130% year-to-date. Yet, Rob still believes there is more to come from the business and that the strata business is finally starting to hit its stride, with Urbanise looking to offer a banking and cash management product to customers within the next 12 months. This could add both a further revenue stream and provide an enhanced product offering to both existing and prospective customers.

Coffee Microcaps Morning Meeting with Aroa BioSurgery

It was great to be joined by Brian Ward, CEO of Aroa BioSurgery Ltd (ASX: ARX), for the first time on Coffee Microcaps. The business provides surgical products to improve healing in complex trauma wounds and soft tissue reconstruction. The company has products in market and is considering adding a few more to its lineup. The majority of the workforce, with 70 staff in its primary market, the USA, is seeing sales start to climb, leading to them delivering a cash-flow-positive half for 2H25. The business has NZ$22m in the bank and appears well-funded to capitalise on its growth plans over the next 12 months. Brian also noted that R&D capital expenditure spending should decline over time, which will further boost profitability.

Content Recommendation

As part of this newsletter, I also want to highlight some good content worth sharing with my subscribers.

One of my regular investing podcasts is the Value After Hours show from The Acquirers Podcast, hosted by Tobias Carlisle and Jake Taylor. The team was recently on the ground in both Japan and China, speaking with corporate executives, fund managers, and private equity and venture capital firms. They had some interesting insights into both markets, and I found it a really enjoyable episode. You can listen to it on Spotify or watch it back on YouTube.

Thanks for reading. If you haven’t already subscribed, you can do so below.