We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
This is from the RNS:
The Company may elect not to repay the Advances that fall due (see below) and, in such circumstance, the Lenders will have the option to convert the Advance's principle and interest and any relevant outstanding fees into the Company's Ordinary Shares at a price equal to the lower of (a) 80 per cent. of the average of the two lowest VWAPs in respect of Ordinary Shares during the 10 business days immediately preceding the date of the Conversion Notice and (b) Fixed Premium Placing Price up until the Maturity Date.
Clearly a) would be the worse case. I did a rough cash flow fcast the other day based on the forward guidance and believe there should be sufficient funds to settle the initial advance whilst maintaining a healthy bank balance.
As a back up, I haven't seen anything that suggests DPVG can't take a 2nd advance to help pay the 1st if things get bad.
There are always risks but imo any conversions will be done no less than 20p. Significantly higher than today's SP.
Hey roleybirkin....! from the RNS.........
"(a) 80 per cent. of the average of the two lowest VWAPs in respect of Ordinary Shares during the 10 business days immediately preceding the date of the Conversion Notice and (b) Fixed Premium Placing Price up until the Maturity Date."
Pray tell, what makes ya fink DVRG won't be in a position to repay "No Advance may be prepaid. The Initial Advance is repaid by the payment of £500,000 on the last business day of months 7,8,9,10,11 and the balance of £1,500,000 on the Maturity Date"...........?
All the best (I do fink draw downs are not req also............! :()
There are two elements to the financing arrangement.
You have only spoken of the conversion at 20p should DVRG be in a position to repay the loan at each payment date?
Pray tell what are the conversion terms should DVRG not be in a position to repay the £4m drawn down to date?
Muggins, But is also means that DVRG would need to notify the market everytime they take a further drawdown (because they would need to issue further warrants). The fact that they haven't done so since the original announcement would suggest they haven't taken any subsequent drawdowns. Plus they need authourity to issue further warrants.
People also appear to have completely overlooked the fact that a reduction in forecast sales for the current year will actually put less pressure on DVRG's cash requirements. Beyond the initial drawdown, the loan facility is predominantly intended to help fund the gap between when sales are made and when payements are received (those government debtors often paying six months plus). Lower sales should actually help DVRG to better manage their cash flow. Hopefully in the future they will be able to negotiate part payments on despatch/installation (it's not uncommon to see payments for equipment purchases being made as and when certain milestones are reached; so much on order, despatch, installation etc. followed by a balancing payment at an agreed later date)
How is it death spiral. They exercise the warrants at 20p. If they decide to exercise then it's because the SP is 25p+ and thats another £2-3m in our bank. There is a good chance we won't need another drawdown. Death spirals go down not up.
The Trotsky - Thanks for this. I admit than when I read the RNS I did not pick up that there was a whole bunch of warrants issued on each draw down. If that is correct then that really shows how desperate they were. Death spiral funding indeed.
Not sure if folks saw this from Monday
https://www.linkedin.com/posts/gjbrandon_ambc-china-india-ugcPost-6962105647072972800-Sixl?utm_source=linkedin_share&utm_medium=member_desktop_web
ATB
smeeno, I suggest that you re-read the loan facility. Warrants are issued with every tranche drawn down; giving the lenders the right to subscribe for shares at a given price. c11.3m warrants were issued with the first tranche, exercisable at 20p. I'm not sure from the RNS whether there is a time expiry on the warrants. IN ADDITION, if DVRG is unable to repay the loan then the lenders have conversion rights to convert their outstanding loan(s) into shares.
I don't have a problem with Gerry tweeting alot. It's refreshing to have a CEO which is so engaging with shareholders and passionate about the issues his company are engaged in. His passion demonstrates commitment and I am fully confident that the tremendous progress being shown on all fronts will eventually be reflected in the share price.
the debt facility is to fund growth on multiple fronts, so when they are spending it, it is creating revenue. There are clear examples of STC being at maximum capacity, the spend on marketing provides very quick revenue turnaround.
Deepverge will have minimum triple digit growth.
if they can repay the debts, then warrants are issued and you get to know through an RNS.
Why the anxiety?
I’m with you Trotsky, does anyone else know of another CEO that posts so frequently on Twitter? It’s a shocker. Yes use it to update stakeholders but reposting rampy tweets from
Retail investors etc is unprofessional and quite frankly embarrassing.
We need to know if we are cash generative as we don’t know how much we have drawn down. They won’t give a running commentary on it so we know of £4m but could be more. 25% down on revenue so what does that mean for cash generation.
No doubt the interim report next month will pose more questions than answers and there will be a lack of transparency.
The share price says it all.
Yup ;-)
Your a tough guy to please Trotsky.
I could take most of the updates on the back of fag packet to be honest, the level of R&D, business development and marketing skill being demonstrated here, across 60+ countries with just 80 people in two divisions is pretty staggering.
Think how many markets modern water operate in;
- Public health pathogen sentinels
- BT development for medical use
- Water quality and zero discharge to semiconductor industry
- Water quality and zero discharge to industry in chemicals, textiles etc, multi billion market being opened up.
- desalination projects in Africa starting with a huge new market place, with a low energy solution.
- Water detection in Qatar for the world cup
- Throughout lockdowns in China growth is accelerating and China Resources are a key part of that.
Labskin
- ethical testing of cosmetics
- radiation effects on skin for USA gov, am sure this will be interesting when announced
- Skintrustclub market place which is six months old, and being pursued by multiple companies.
-Skintrustclub with major retailers a loyalty card announcement soon we all hope
- Hair/dandruff product development
-skintrustclub medical to be launched, psoriasis (3% of population have this) is the first of many skin conditions ....
I am sure as the contracts further roll in, and and the money comes they will be able to spend a bit of time making all the progress a little more presentable for you.
I've been ahead of the market before and the market never ever did catch up. I'm cautiously optimistic but need GB to now step up and act like a CEO rather than a kiddie in a sweet shop, get off Twitter and start improving the quality (information) and timeleousness of the company's official announcements. The last RNS was better but still fell short of what the market needs; I don't think that updates on EBITDA, cash/debt and loan drawdowns are covered by NDAs. PIs may not like to hear all of the facts but at least we can better gauge progress and feel confident that no bad news is being hidden (it's inevitable that fast growing companies will face a cash squeeze but as long as it's being properly managed it shouldn't automatically be read as bad news; it goes with the territory)
Ahead of the market is a great place to be, they will catch up whoever they are.
That equates to potentially 14,000 in a twelve hour period, 82% go on to buy products and don't forget the 6% conversion rate on June's 84,000 website hits (Gerry says both figures are growing) They're still to release it in China. I agree with the 'yet' Trotsky. If this was an oil stock, we've hit a gusher, pumping 1,000 bph!
trillsg, The market doesn't agree with you (yet). We have a lot further to go before the market is convinced and less Twitter and more financially informative updates would help. The credit facility spooked a lot of PIs and GB has not yet addressed the matter in any of the recent RNS (the market needs to see that growth and cash are being managed). There's simply too much speculation and we've been here before (the China deal that dragged on for over a year before GB saw fit to update the market again). GB has a habit of dangling carrots but failing to meet timelines. There may well be valid reasons (these certainly aren't normal times; China in particular hasn't returned to pre-Covid business as usual) but GB has repeatedly failed to address expectations when timelines have slipped; he prefers to go silent which does not help. I think Labskin and STC have great potential and I think it's right that DVRG should be exploring potential ties ups but I don't think we should be rushing for a quick payday.
£100m or £1bn is totally irrelevant. If GB runs a tight ship and can demonstrably show the market that rapid expansion can be managed without breaking the bank then the share price will inevitably start to move north.
They have to throttle it back to cope with demand. You seeing the £100m STC value yet?
https://twitter.com/gjbrandon/status/1556901314273153025?s=20&t=C70J6JlQYQ7G3mbDz2PGAA