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Riz - read the RNS of the 28/9/23 (titled 'Shield Therapeutics - $20m secured debt facility &proposed equity raise'), ive copied the relevant section below note that the minimum revenue covenants detailed below were renegotiated lower (albeit are still substantial)- the revised figures are in the RNS of the 30/4/24
Additional details on the SWK Financing
Shield has entered into a Loan Agreement in connection with the SWK Financing pursuant to which Shield has, conditional inter alia on Shield repaying the Existing AOP Loan and lien release on IP rights and satisfaction of other customary conditions precedent for a transaction of this nature, obtained a commitment from SWK to fund a US$20m term loan with a maturity date of 28 September 2028. The first nine quarters following closing will be interest only periods and the interest rate will accrue interest at an initial margin of 9.25% plus the greater of: i) 3-Month CME Term SOFR ("SOFR"); and ii) 5.0%. Interest will be calculated on the basis of a 360-day year and paid in cash with the first payment due in Q4 2023. Shield is required to pay SWK a 1.0% origination fee on the value of the term loan and a final payment fee of 6.0%. Post the interest only period of nine quarters, quarterly payments of US$1m will be due for capital repayment. The SWK Financing will be secured by way of perfected first-lien interest in substantially all existing and future assets, including intellectual property, subject to the release of the AOP's lien on IP rights in connection with the Existing AOP Loan. Financial covenants apply with minimum revenue targets and minimum liquidity of no less than the greater of i) trailing one quarter of cash burn or ii) US$2.5m. Warrants over 8,910,540 new Ordinary Shares will be issued to SWK with an expiration date of six years after closing and a strike price of 11.1p per Ordinary Share. The table below details the minimum revenue covenants:
Trailing Four Fiscal Quarters (i.e., 12 months) Ended - Minimum Group Revenue
Q3'23 - US$8.5m
Q4'23 - US$14.5m
Q1'24 - US$22.5m
Q2'24 - US$31.5m
Q3'24 - US$38.9m
Q4'24 and each fiscal quarter thereafter -US$45.7m
In the event of the breach of a minimum revenue covenant, Shield can avoid default by raising equity or subordinate capital equal to, or greater than, 200% of the breach. Shield has a period of 40 days from the date of breach to evidence to SWK the raising of sufficient capital to cure such breach. Shield can utilise this cure route three times over the life of the facility and not more than twice in any 12-month period.
The SWK Financing is not conditional on completion of the Equity Fundraising.
Hahahaha clowns spent all day here talking about covenants and placing LMAO. Shield confirmed $17.5m revenue for 2023 so no covenants breached form 2023. $10m financing secured for 2024 so even if they breach Q1 and Q2 requirements, they’re fully covered. Shield literally confirmed in their update that there have been no breaches of covenants but the clowns on this board think they’re Buffet and know better LMAO. Someone’s scared 🤣
Where can I find this 'Covenant' you guys speak of?
It’s “you’re” not “your”… sorry, pet peeve of mine.
Where will the company be 5 years from now? Safe to say 100+ million revs ? 200 million? 500 million?
Sure, there will be ups and downs.. but it’s mainly the impatient or scared short term investors. The longs will be greatly rewarded here IMO.
Good luck!
You've showed your hand as a ramping clown.
No one has ever doubted the product -the product is not the issue.
The issue is the frame to profitability before dilution leaves us with nothing.
Are you working for sheild in some capacity?
Your on the watch list.
Don’t complicate it. It’s an FDA approved product with a proven track record of success, that’s expanding and just hit the US market, and improving every quarter. This has the potential to be a life changing stock IMO. I’m putting everything I can in to this.. before Accrufer becomes a household name. With no competition, seems very likely. GL
Jessiredd.
You seem to miss the elephant in the room. SWK.
What research have you done?
How long are you invested in STK?
Have you read & completely dismissed what SWK have set out as "minimum" targets, some have already been missed.
Do you know of all the fundraises?
Do you know that the goalposts are on wheels here they move so much?
A £1.50 fundraise & we are c 1.5 pennies, + all the much more recent raises.
In hospital terms, we are just been removed from life support, we are now in ICU but we may never get back to the ward. It's that simple.
Directors buying can be viewed in many ways for good or bad reasons. Directors not buying at this supposedly ridiculous cheap price tells its own story.
Have a great day GLA, DYOR
Hello all. I really like this product and really like the chances of success here. I’m in for the long haul. Ignoring the noise, sounds like some are trying to get cheapies. Not from me. This is a no brainer. GLTA
The broker notes have Shield break even at about $90m revs. Forecast for 2024 was previously $62m revs which translates as ~330k prescriptions at ~$175 net price Rx ++ minimal royalty payments), to reach cash flow break even in 2025 without additional resources that'll need to be achieved at a minimum - are you confident of it?
Have a look at the covenant details. They need to raise 200% of any breach by raising equity or subordinate capital. That $10m accounts receivable financing hits all the markers so don’t see any issues whatsoever
The need to raise comes from the fact that they have breached the SWK covenants
Yes, these are just Accufer revenues. The $17.5 m in the update included the one off payment from Viatris and the Texas revenues. Going forward there will be no Viatris payment. Excluding Viatris they made $13m so would still have been $1.5m short if the Viatris payment hadnt got them over the line. So granted, on this occasion they're ok for the Q4'23 period but are in breach for the trailing 4 quarters to Q1'24 by about $1.7m and need to raise about $3.4m for that. The Q2 revenue target is 16.5m so they would need a c.25% increase over the Q1 and they are going to have to achieve that without Texas as it still was not back online by Tuesday. So with almost half the quarter gone without TX its looking unlikely (given they only hit a 1% QoQ increase in Q1'24 over Q4 without TX) they will hit the target for Q2'24 either.
Whats more concerning
I am not talking about the sales figures @KC . Talking about this raise stuff . I spoke to the company representative about 30 mins ago . They said they have no idea where this information is coming from . Hence the question about the source
The update CLEARLY says 2023 revenues of $17.5m which far exceeds the $14.5m required LMAO
Update:
I found the actual updated sales figures, they're in the RNS of the 21/2/24:
Q Sales Avg selling price Total $ Sales Trailing Target Gap
Q1 10.1 119 1,201,900
Q2 14.9 119 1,773,100
Q3 23.3 145 3,378,500
Q4 28.6 145 4,147,000 14,500,000 -3,999,500
Q1 28.8 140 4,032,000 15,000,000 -1,669,400
As STX have to raise 200% of the gap it needs $8M for the Q4'23 period and $3.4M for the Q1'24 period - that is a total of $11.4M to address the SWK breach. 40 days are up for the Q4'23 period and we've not heard anything so they are late on that and have about 10 days to address the Q1'24 period. The next week or do should be interesting to see what happens. Extremely poor form the management did not even discuss this major issue in the investor call on Tuesday
Riz29 are you serious?
if you are asking that question then it is clear you have been here less than 2 days.. go look at the latest RNS 30/4
@JAllis,
Can you tell me the source of where you got this information?
JAllis has nailed it - those newbies have no idea about the covenants smh - they are absolutely in breach and will either need to reneg, swap out, or raise new funds to make up the shortfall.
You have been warned - massive elephant in the room. 40 days and clock has already started ticking. This should have been mentioned in the results but they could still be talking/arranging /settling this in the backround which is why they said financial results would come 10th May
Your last five posts have been aimed at me, gosh anyone would think you fancy me.
Try adult networks may have more joy Mich
Gordon strikes again ☠️
Is the US quote for SHIEF suspended? For what reason? After shooting up it has flatlined. The UK quote in £pence is still well short of the USD equivalent, suggesting that the US quote is suspect..... Can anyone explain?
Great start buying strong
I feel for those whom have lost money including myself but if you are still upset and didn't buy or hold into the current rally then perhaps you need to move on.
I hear all what others are saying but there is still money to be made here perhaps 50% in 2 days, that doesn't happen often, the SP is clearly oversold.
2-2.2 ion Bloomberg all quotes sxreenatm
Looks like 2p will be taken out soon . 4vs 1 on level 2