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Peakhope, I think you hit it n the nail, TF is a financial support mechanism in the short term while SYME establishes their new asset classes. GLA
Fredintheshed. The recent agm gave them the authority to issue over 10 billion new shares, not 1.6 billion. Id only expect them to use what was needed to cover the TF aquisition and maybe a bit extra (and i do mean a bit) until the 1st IM occurs in the next couple (again hopefully) months tops.
Tradeflow will cover all working capital, cash burn and going concern issues as they are already up and running - the valuation in part was based on Tradeflow projections until 2023/5 that's without the new client revenue syme will add to Tradeflows own projections - TB in US has been very busy - look at the bigger picture and try to get your head around how big syme is going to be - those who can't see/comprehend the enormous potential don't wish to see it !!!
Best wishes all LTH
Looking at the AGM resolutions maximum new SC is £32,750 – 1,637M shares. Do I have that right – happy to be corrected? If so and the issue is at a 15% discount to today (.31p issue price) the max cash raise is £5.2M. Less issue cost (must be at least 5%?) leaves c £4.9M. After consideration of £4M, £900k max will be left for legal costs etc of deal and working capital to plug into Going Concern calculations to cover cash burn (if any) over next 12 months. If more is required, they do not have time before 30 June to get the authorities they will need.
Zzzz
Not sure this bit is quite correct : .." with subsequent performance based cash or share considerations based on performance the forward valuation targets of TFC @ £31m total consideration through 2025. ..."
Total consideration (amount unknown) is based on delivery (between Jan 2021 and Dec 2023) of targets commensurate with a business plan to 2025. The valuation itself of £ 31m is based on the business plan through to 2025
SYME hasn't stated what the relationship between 'valuation' and 'consideration' will be, in particular what happens if TF either (a) underperforms or (b) exceeds its business plan numbers.
As others have pointed out, if the synergy works as hoped for, TF could exceed its business plan.
Which would be a 'nice problem' to have.
Some of these 'unknowns' might be addressed in whatever transaction updates are RNS'd.
IMO
Exactly Hefonthfjords - it also ensure's that SYME don't in effect overpay for TF and it shows confidence in the TF BOD that they will meet their business plan.
1.7b is min IMO
So the new investor would be getting above 5% (est) on that math.
If they were given more shares.. obv a TR1 re a new and substantial investor!
SYME will also need to issue £4 million for cash proceeds plus whatever it needs for working capital until funding arrives.
Issue size will depend on price but at present it’s around 900 million shares for £4 million.
So in total 1.7 billion more shares a modest 5% dilution.
RNS
'the Company will issue 813 million new SYME shares at market price to the TradeFlow sellers which represents less than 3% of the Company's issued share capital.'
So new shares..
IMO the new investors will also take equity in Syme as part of their capital injection, 4m min to be used to TF and who know how much more etc.
THE news due is accounts by end of June.. I would assume the TF piece must complete before then so they can issue a decent forward statement, i.e. TF done, new investor and funding done etc!
Interims and AGM dates tbc
The big plus point of the deal is that the further considerations beyond the initial cash and shares are performance based and linked to targets in the TFC forward valuation so at least in theory TFC will be paying for some of it's own acquisition.
I stand corrected.
"· the Company will issue 813 million new SYME shares at market price to the TradeFlow sellers which represents less than 3% of the Company's issued share capital."
Going to check that now... Not sure it was explicitly stated either.
Do we know that the 813m is coming from the existing pool? I don't recall that being explicitly stated in the RNS.
Tradeflow Capital acquisition is underway. Transaction entails £4m cash provided by new third party investors and 813m shares (£3.3m equivalent) taken from existing pool without dilution upfront, with subsequent performance based cash or share considerations based on performance the forward valuation targets of TFC @ £31m total consideration through 2025. Completion of acquisition process expected by month end.
2020 Audited Accounts expected around the same time as acquisition completion.
That's about the state of play at the moment.
I’ve stepped back from all my shares of late as was getting frustrated with the lack of progress (& of being thousands in the red) - just wondered if any informed/well researched folk have anything positive to share here regards timelines? Cheers