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Thanks.
I think the key point they need to answer is are they in breach of the minimum revenue covenants for the trailing 4 quarters to Q1'24 (which, based on the numbers they have provided, I believe they are), if so by how much and will they be raising 2x that amount as is stipulated in their agreement with SWK when a breach occurs - if not why not.
Will be interesting to hear what they say
Hi JAllis,
Yes I have found the information and read it. So I have fired an e-mail to the company to clarify their position as they repeatedly confirmed that they do not need to raise.
Riz - did you have a read of what I posted in response to your request for the source of min rev covenants? what are your thoughts on that?
Riz - did you have a read of what I posted in response to your request for the source of min rev covenants? what are your thoughts on that?
LMAO. It’s not working, bud.
The Texas issue was classic smokes and mirrors by Greg. To use it as the reason for poor Q1 2024 sales is deluded. I went back and looked at their slide (yes their own slide) and Greg's words didn't seem to fit with the data they showed. So a person left in Texas that impacted Medicaid sales. In Q4 2023 total Texas sales were 9,400 and in Q1 2024 they dropped to 6,700, a total drop of roughly 2,700 or 28%.
This drop incidentally was not just due to Medicaid, the graph shows the non-Medicaid sales also dropped, although Greg ignored this.
So if Texas didn't have an issue sales would have been say 3k higher and total sales in period would have increased from 28,800 to 31,800. So the increase percentage quart to quarter would have increased from the actual 1% to c 11%.
As we were expecting c50% increases they are still well off.
The breakeven in Q2 2025 are just words. As has previously been mentioned if the CEO had any confidence in his own words he'll be buying shares at these silly prices - he earns well over £500k a year.
Many want cheaper shares. Can’t blame them. They will be the biggest cheerleaders soon after they rob others of their shares
Did you just ignore the whole cash flow positive next year part?
@smythsmoneybox
The reason to disappear from this chat room is having to deal with people like you . Constant negativity . Makes one wonder why you are here in first place if you feel so strongly about how bad this company is . LSE chat rooms are just too toxic
At this stage prescriptions should have been at 60k followed by about 80k in q2 - if you think Texas explains that, fine.
LMAO! We know numbers were off cause of Texas and will be fixed. You know it. Stop trying to steal peoples shares
What does the longterm outlook look like?
It's very different from a realists perspective
HarChris has hit the bail on the head once again.
RIZ29, we all know your game, many like you have come before then suddenly dissappear. You can ramp to the cow's come but it doesn't change the facts. SWK are the king makers here, not forgetting that AOP might be up to something.
A 1% rise in prescriptions Q on Q isn't going to cut it.
Just curious… is anyone really dumb enough to sell at these levels with what projections and the long term outlook looks like?
Greg had two choices the other day - be brutally honest about the chances of being cash positive by H2 2025 without further resources and see the share price implode / remain at 1p max or go with the narrative that yes they have enough capital to reach cash positivity by H2 2025 and hope the market buys it.
The latter is, technically, true. They do have enough but what wasn't shared was the monumental improvement that would need to be seen quarter on quarter from here to mid 2025 i both prescriptions written and net price. I think the chances are probably 1% but as long as it's feasible he has a get out clause by saying that was the hope but events haven't unfolded the way we hoped and so here's the placing - at some point later in 2024.
Just for clarity, the $17.5m included $4.4m of money as part of the money given to STX to 'purchase' 45% of all future revenues. This was received in Q1 2023.
This is a one off payment that will not be repeated. As STX state revenues from sales were $13.1m ($11.6m from US and $1.5m from Europe).
So without this one off payment the covenant would have been breached.
Currently Quarterly revs are $4m in the US with maybe $0.5m from other sources.
In Q3 2024 the 12 month revenues jump from $16.5m to $22.5m, a jump of $6m in the quarter. This equates to an extra (not a total) sales of 40k prescriptions at $150 each. This is a big ask based on the last 2 quarters total sales have been 28k in each.
Already Q3 looks challenging. We are of course already in Q2 so not long to wait.
Https://youtu.be/fgeTZvm6XRc?si=ZYV_9krDVws3wWvX
Over and over confirmed they have enough capital to go into cash positive by H2 2025
How badly do you want our shares? Just curious…
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