Eqtec Share Chat (EQT)

what are the odds of a quickly arranged modification to the agreement?

Riverport are a bunch of vultures so are always on the lookout for a quick buck !

A bit of a double edged sword this one as personally I would prefer them to pay with equity at circa 1p (given current SP) as instincts are they are going to need every penny they can get their hands on.

The reality however, as previously discussed, is that they likely have no option given the lenders right to refuse equity.

I think we are destined to bounce along at this level for at least the next couple of weeks

Not sure anyone is expecting anything on Deesside other than a further deferral, but key to the markets confidence in the next 6 months is how they deal with the loan repayments.

Pay with cash and the market will gain some confidence that they do have the finances under control and the recent placing was to "maintain momentum", Pay with equity and the market will assume a further mismanagement of the finances, that they really have over stretched to the point of breaking and don't have a handle on the current market conditions.

Let's hope the CFO can actually drive a calculator !

You tend to get chastised on this board if a word is spoken against this small research and development company . . .

‘Why the negativity, we should know that the aim index is exposed to risk’ - we do, investing in the stock market is a risk anyway, even with large established companies.

If you challenge over the views of world events etc. that have caused all the issues for EQT, you are wrong - those other companies who have risen more sharply today have also had the same challenges.

At the end of the day the belt should have been kept tight at all times, you can’t afford to throw money around, irrespective of what’s happened in recent times. It’s been damaging as have the continued delays.

The business model is reliant on other companies stepping in and footing the bill at various stages in the project, ones who have also been exposed to the constraints. Whether they have deeper pockets or not, they will be doing what we should have done - been super cautious about our next move.

And . . .
EQTEC 1%

The question previously was whether DP was steering the ship or holding on for his life in a green tech wave, I suppose if there is another wave we will see if his crazy spending has beached the ship.

To name a few energy shares that have gone up today
PHE 7.3%
AFC 11.5%
ITM 12.4%a
And . . .
EQTEC 1%

Conditions seem perfect for another green tech boom

Eqtec is now valued at only £43m, which is probably the value of just a few of their deals but of course any placement at these levels rebases the share price considerably and it appeared DP had averted this issue by its loan. DP knows that a placement cannot be on the cards as it will impact everyone so i am sure DP and team are working overtime to get these projects financed and those in development operational. It is time to forget the pipeline and close deals to avert difficult choices in 6 months. If DP can close 2 decent projects this year we will have plenty of revenue to not require a hefty dilutive raise in the New Year but we have good levels of cash for now so it is allow DP and team to get these projects off the ground. i am very confident we are at a turning point in the history of a company that will grow significantly over the next 2-5 years but today they have some growing pains that need close handling.

I can’t understand why a lot of investors have money in AIM companies if they are not willing to take the risks that come with their investments.

Fund raising has its place of it enhances the value of the company but if it just keeps the current book running then it's just dilution and should be resisted. Now is the time when the BoD show they are a cut above. Modest promises which are achieved is what is required.

No. No more fund raisings sub 1.5p.
The company should start to live within its means.
It has a great product but is being brought down by foolish spending, running up debt, and trying to drive expansion that is not responding at the speed the company would like.
Money is tight everywhere and it's going to get an awful lot tighter.
Many companies will go to the wall.
EQT is way out of order and if it doesn't change now it could be one of them.

Wood have their earnings report on the 23/08

Further fund raising shouldn't be necessary this year. Best thing for future fund raising would be for Wood to take 1or 2 bn to raise up to £10m. Small change for them but life changing for EQT.

"I think we can raise 9 billion shares if we really need."

Oh good, i'm sure DP has already spent the cash !

Each share nominal value = €0.001

Computer909 you do realise that €4.5m nominal value - 4.5bilion shares which at today's price is almost £22m and not €4.5m so we can still raise further in placings if required. Actually there were two resolutions, 4&5 so technically I think we can raise 9 billion shares if we really need.

I’m here for the duration too aandi but you have to admit it’s been very frustrating to see some of the decisions. Not being unkind and hope I’m not an arse - my comment was posted with a wink. Have always appreciated your detailed postings as said several times on here, wish I was as positive but I find it concerning for sure.
. . . and yes I enjoyed my breakfast with thanks ;-)

Exactly. Time for DP to prove his worth by closing finance on projects and forget the magician techniques of distraction. we have several projects close so lets just close them and use revenue from those deals to finance and close the next projects and so on. Its a snowball but it starts with closing finance on the first project. We are not short of projects thats for sure.

The company has entered a new phase. Instead of frequent project updates on Twitter there is radio silence except for a few general postings. Is this due to Summer holidays or more likely a fundamental change of approach?
Maybe DP has finally seen the light that he can not recklessly pursue growth into the teeth of a recession, raising funds 3 times in just over a year at an ever lower sp then spend, spend, spend like there is no tomorrow. The market has now imposed a dicipline on this company that the management failed to impose on themselves. There can be no more fund raising at these sp's because the dilution now is penal!
This means the company has to change gears from 5th to reverse instantly. No new spending, staff expansion in the New Year cut back, salaries trimmed, projects either self funding or put on the back burner. Parterships where partners, not us, pay upfront.
DP has made the wrong call at the wrong time and is responsible for the present catastrophic valuation of the company. He should be on a diet of humble pie for the forseeable future ....

"Do we think this is factored into cashflow predictions"

We have to hope so, We have to wait to find out, But if it isn't then no amount of "it takes a 6months to be proficient in a new job, 12 months to be good" will cover up for the CFO not being able to count.

With the £3.5m (€4.1M) placing in july there isn't much headroom (in the €4.5M shareholder approved) for the issuance of many more shares before they need to seek additional approval, as they haven't started that process and they only have 19 days left before they have to pay we can hopefully surmise they have the cash available.

Repayments due to commence 5 months after initial loan, so 29th Aug (I think at 1/7 of £5M plus 7.5%) in 7 monthly instalments.
Do we think this is factored into cashflow predictions or do we need to borrow the other £5M to repay the first? Given we've already paid the 2.5% commitment fee on the £10M and 7.5% is not looking too bad now, why not?
At least we haven't triggered any share price performance clauses.

Can see both sides of the debates here:
AIM growth company will inevitably have growing pains and need to borrow. Similarly there will be "unknowns" which trip up project timelines.
Financial planning has been poor (seemingly optimistic and short term) whilst project execution has failed to meet promulgated timelines.

As an alternative illustration, Aviva results out this morning and a 10% uplift in SP - not for any new information but they have come in on target for profit, debt reduction and dividend. Today's market rewards accurate forecasting but doesn't seem to believe your promises until you deliver on them.
There may be a significant lag between the health of the company and the SP reflecting that.
I'm holding but not adding until we complete a few things and sort out loan repayments.

Aandi - you make fair points but I am starting to have doubts. Great technology, potential contribution to green energy and even good idea to eventually just license the tech. BUT... Timescale, cost, revenue, profit????

That will be why Northfork is to be a showroom then for America and not a MDC.....

"Some of those forecasts were likely made pre war." : Yes pre Falklands most likely !

"Look all around the Aim, there are companies failing all over" : I think that is the point we are seeing companies not adjust to the situation, spread themselves financially thin then struggling to recover the situation, DP's attitude to spending seems to have no bounds.

North Fork is an absolute disaster of a money pit, But we are in so deep now we have to keep committing funds $6.4M already, a possible $4.5M more for a project that will produce $4M revenue at god knows what margin, its likely to be a decade before we see any kind of return at least.

The use of North Fork as a MDC, what does that show investors? that it takes decades to commission and decades to get your return.

North Fork should have been cut loose, but DP's ego wouldn't allow it, so we have to keep paying but see little or no progress.