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Looking aback at the agreement RF knew that if SAR owed over a million and SP was low then agreement meant that RF could not lend anymore money to SAR. If RF were looking at reverse takeover of SAR (like RF have just done to another company) then SAR being unable to draw down anymore funds from RF was exactly what RF would have wanted.
The more I look at it the more it makes me angry. Who the hell recommended the deal to SAR. At the next AGM or Investor meets meeting it will be the first, second and third question I will be asking the board. If it was Peel Hunt then serious questions need to be asked as to whether they were acting in their Client's best interest. James at PH may have some questions to answer.
Thank god us PI's stepped in to save the day. The more I think about it the more I am realising how close we came to the scenario above actually happening. I hope the board realise how close they came to losing the company.
Hopefully all now back on track and SP & SAR will go from strength to strength and that the board have learned a valuable lesson, never to be repeated.
Have agreat weekend everyone.
Elcap
AAAARGGHHH! The sooner we get rid of RF & PH the better.
W
With the greatest of respect to all those who have asked questions on this ... And they are very valid and important questions that need to be answered ... Isn't this something we should be asking the BOD to answer? LH&K Mafuta
I meant to say, is there a requirement for SAR to issue shares to RF once they have run through their current allocation. Is all that SAR is committed to is repaying an outstanding balance (I guess around £750k) in Aug 25 - one way or another?
Given that SAR are no longer intending to draw down on the RF facility and the maturity date for the loan is Aug 25 is there any requirement for SAR to continue to issue shares between now and next August?
· If disposals and/or subscriptions at the Placing Subscription Prices have not been completed so as to fully settle the principal amount of Deposits (and any associated interest) outstanding during the term, the amounts drawn and outstanding shall be redeemed on the Maturity Date.
I'm in agreement that if the SP start to rise, it won't matter. Mainly because there are 24 million new shares bought at 10p. Some of those are in sticky hands but 20p is double your money, 30p triple and so on do we will see some profit taking. We all know this is going up but the RF facility is a phycological drag and I personally don't think the sp will rise much if we keep seeing the afterhours sells. Having said that, I think we probably have more RNS due.
I would like the BOD to clarify exactly where we are with RF, how many shares they have left, how many warrants are outstanding and at what price. Surely we are due an update on this mess. Hopefully this will end the protracted mismanagement on the financial side of things.
RF must be out of shares now so if we do issue anymore or the Bod decide to settle then we should get notified next week. At least no more warrants will get issued as we wont be drawing down further so the agreement is finished in that regard.
I can't say I completely understand the arrangement with RF, but having originally bought in at 1.4p in old money,70p in today's currency, and seen the SP drop down to 0.2p and also seen it race up to 9p in August 2021 which is £4.50 in new money I decided the opportunity to buy at these levels was too good to miss. I had two top ups yesterday morning and another this morning. After many. many years here we are now expecting data from the trial in Q2 2024 ie any time in the next 12 weeks and if that news is positive I'm not sure it will matter how many shares RF sell the SP will only be going in one direction.
As far as l can understand the issuing of any new shares will carry a 10% discount to RF.
However, as such it remains that all amounts owing to be repaid by Aug25.
When and how Sareum chose to achieve this is a tad vague.
Do they pay in installments or pay in whole by the termination date.
RF may request the total amount in a single payment.
If this were the case then the agreement would end at this time.
If Sareum chose not to pay in total until the Maturity Date then this would also be compliant with the original finance agreement.
Of course this being subject to fine detail clauses.
I dare say there are some additional fine detail in the contract we are not aware of such as penalty clauses.
Regards.
Yes, I thought that. If they wait until say 15p. They will get out with more cash than if they sell all cheap and sareum make up the difference. This is more difficult than the science to get you head around.
Bridgedogg1 - I had never really taken notice of clause (a) part 2. Looks like all further shares to be issued to RF can be sold by them at any profit they can get over 10p, and SAR is only credited with 10p.
It makes the calculations easier, and could even give RF an incentive not to lower the SP by indiscriminate selling.
Perhaps the end of them really is in sight!
I also note the below. Do they lose 10% then on disposals?
During the Term of the Facility, RiverFort may from time to time, to settle the amounts drawn and outstanding with respect to the deposits, interest, default interest and/or any fees specified, elect to dispose of the Initial Placing Shares and any subsequently issued Placing Shares. The amount outstanding under the Facility deemed to be redeemed by such disposals will be equivalent to the number of ordinary shares disposed of multiplied by the lower of: (a) the lower of 130% of the Reference Price applicable to the relevant deposit, and the price at which the Company has issued any Shares in an equity fundraising whilst any balance is outstanding (if the placing price for such equity fundraising is below the Reference Price) (the "Fixed Premium Placing Price"); or (b) 10% discount to the average of the lowest 4 daily VWAPs in the 15 trading days preceding each relevant subscription notice (the "Adjusted Placing Price") (together, the "Placing Subscription Price").
Terms a, b and particularly c are pertinent to conditions of drawdown.
https://www.lse.co.uk/rns/SAR/equity-prepayment-facility-of-up-to-1635-million-q3lhb7mwxv6y6f3.html
Regards
I cannot envision any way that RF will not clear the debt by selling off all the shares they are given by SAR.
EG - 200k shares sold every day for 10 weeks would raise £1m @ 10p.
I don't think SAR have any option to withhold shares from RF, the way I read the original August RNS.
Yes its 10% more dilution, but I expect the shares will only appear in moderation, not all at once.
10m shares is not many for the market to absorb, even on top of the current placing. In the last 4 days 16m have been traded - probably in excess of 4m again today.... Say half are sells, and the majority are those dumping placement shares or RF ones and it doesn't look too bad.
Good afternoon Bridgeddog1
Further drawdown of the facility became unavailable due to tes in the finance contract.
Mainly the company in this case Sareum not having debts less than 1 million at point of drawdown.
There are other clauses.
With regards to warrants
Potnak,
Warrants are an obligation and a company are in no way obligated to buy. They have the option to purchase only.
Regards
https://www.lse.co.uk/rns/SAR/equity-prepayment-facility-of-up-to-1635-million-q3lhb7mwxv6y6f3.html
So RF must use the warrants to settle debt, if they don't fully settle, Sareum settle the outstanding balance on or before the maturity date? If this is the case, then RF need the SP to rise the sell the warrants before the maturity date. This way, they will make more profit.
I don't fullly understand it but does this apply? Are there any amounts outstanding if we have issued shares for the principal amounts? - Principle amounts do not include un-drawn facility.
I also dont see anything that prevents us from drawing down additional amounts?
Note carefully the first part.
If disposals and/or subscriptions at the Placing Subscription Prices have not been completed so as to fully settle the principal amount of Deposits (and any associated interest) outstanding during the term, the amounts drawn and outstanding shall be redeemed on the Maturity Date. In the event the principal amount of Deposits outstanding (and any associated interest) has been fully repaid at the Maturity Date and the Investors still hold any Placing or Subscription Shares, such shares will be disposed of in consultation with the Company and 95% of the net sale proceeds will be remitted to the Company.
We cannot draw further funding as per conditions of the contract, on the plus side the amounts owing do not have to be settled until termination date.
Any opinions contrary to the above?
Regards
I think we can assume they will keep asking for shares until the debt is paid. Then they will buy the warrants at 10p, wait for the sp to recover and the sale of those will be the profit.
Agreed Pot we cant see the contract so we don't know if they can keep requesting shares until the balance is settled or if the amounts of shares they can request are limited to certain times etc. Hopefully the Bod can give some clarity or its a wait until they ask for more...
Unfortunately, we don't make the decisions. All I really want is some plain English clarity on the Situation. How much do we owe them? How and when do we intend to settle the debt?
Personally I would rather SAR pay them from the extra funds raised in the WRAP. We can then cut ourcloth accordingly without RF involvment
As of March 26th the balance was still £1.1m owed. Which we will give the shares to cover. RF looked to have sold heavily in the last week, maybe the whole lot of shares we have them but that would still mean we own them £1m. My question is can we wait until the sp is higher, if not, that's upto 10 million extra shares on top of the last dilution, they will flood the market with these shares and that will suppress the price until they are gone. Or do we pay them off with the extra £800k raised from the wrap?