Member Info for Adastra

Accumulation time for the MMs. Happy to take stock off impatient investors knowing that all the directors have been buying recently totalling almost £150k - all that is, except Steffan and we can certainly expect him to take a chunk as he makes his mark which will continue to raise the MCap. Shares are tightly held and the outlook appears increasingly positive in a share not exposed to any one sector. Excellent new MD with a seasoned and ambitious BoD; careful cash-management and growing fee income........ Comfortable hold with more to come IMO.

With the three cyber and five intelligence contracts recently announced and under way we should be seeing cash flowing into Falanx. The May fundraising was specifically aimed at securing the 3 year Assuria extension and for marketing. The latter of those two has been bearing fruit according to last two RNS. There is no doubt that cyber security is the key to transformational growth here, with intelligence and resilience providing valuable diversification and cash flow. Cybercrime is reaching epidemic proportions with a lot of unreported events and reputation all damage eg TAlkTalk immense and costly and lengthy to repair. The current MCap of Falanx is only £7.5m, close to historic lows, yet it has built a unique, fully functioning, CERT and ISO qualified operation. This operation is protecting CERT UK, the U.K.'s cyber alert security watchdog. Barriers to entry at this level are high - it would certainly cost several times the £7.5m to enter the game as a qualified, certificates player at this level IMO. Principia is currently jointly trialling a joint insured cyber protection for SME's (a first-mover), with roll-out in Q1 2016 followed in the same quarter by the inclusion of mobile and tablet into the 24/7/365 Pteotective Monitoring umbrella. That's a fair list of opportunities secured for organic growth as, no doubt the analyst brief will verify. Whilst a fund raising is a possibility, If, as I suspect, we are mid-transition from cash consumer to cash generator this year, the banks will be falling over themselves to provide any prior funding required. They cannot afford to be out of stocks like Falanx given the outlook IMO. Do the research, set your entry and target prices. The nature of our cyber contracts necessitates non- disclosure of clients, especially government departments so the financial benefits could be interesting.

Yet another big director buy. There has been an increasing stream of director buying for two years now. Follow the money IMO. The purchase price and value is increasing. The next trading update should be a cracker.

DW and Steffan are on the cusp of a transformation and Bob Morton knows it - he's been a keen supporter and buyer since inviting DW into this role in 2011. As a key investor and seasoned player who likes to see a threefold return on his investment, do your own maths. I believe all BoD are looking for a stable £100m MCap and beyond.

You have to look at Assuria to see the depth and excellent degree of the security package grown from this tie-up http://www.assuria.com/solutions/falanx-assuria-uk-cyber-soc-joint-programme.html Add in all the refinements, extensions and additions in 2015 to date, plus the Principia roll out and inclusion of bring your own mobiles and tablets in Q1 2016 and you begin to see the trajectory.

The shareprice spiked upwards in early September as the Falanx-Assuria tie-up with Principia pilot went live. http://www.investegate.co.uk/falanx-group-limited--flx-/rns/cyber-insurance-joint-venture/201503020700111620G/ It obviously landed on the desks of some very affluent insurance underwriters and consequently aroused interest and investment. The fact that Falanx-Assuria is CERT qualified and will roll out this pilot in early 2016 is potentially huge given the vulnerability of many SME IT systems to cyber attack. An insurance policy that specifically protects against loss from cyber attacks [physical and reputational] is a big leap forward - Falanx-Principia has verified that the system in place can be used in litigation and in court and is validated. Add to that, the inclusion of BYOD mobile phones under the protective monitoring umbrella in Q1 2016 and the future looks interesting for Falanx which is why I have been accumulating. DYOR and note, as already stated, that Falanx is not just a one trick pony, concentrating on all aspects of defence and intelligence; actual and cyber.

Corero (CNS) MCap £22m contracted to provide DDOS services to FTSE 100 company in their last RNS .... Totally useless for SQL attack...... Falanx-Assuria MCap £7m - 24/7/365 perimeter protective monitoring 100% effective - and underwritten insured by Principia!!! Which one would you choose as a CEO??? Outlook brilliant...

The departure of Dustin Dryden was highlighted at interims but held back till obligations were met. They have been met and the BoD are happy to release his shares held as collateral. From that we infer that all transaction monies to November 30th have been settled and that new contracts have been commercially secured with existing customers. This is excellent news, especially with the accompanying interim statement that he Board is particularly pleased that management and staff at all levels fully embraced the integration process and adopted best practice from the original pre-merged groups to the benefit of our customer service offering going forwards. Crucially, the business retained the key management personnel within each of the two combined businesses to ensure a seamless transition for the customers. Adjusted earnings per share at the interim were 12.5c or 8p with significantly more due in H2. Excellent news IMO as its taken away the share overhang and clarified the payments received and contracts signed.

The appointment of Steffan is opening a lot of 'big' doors - personally I am looking forward with interest to his maiden assessment on the next update when he has had time to stamp his mark and evaluate the prospects. Exciting times.

To Talk/Talk to Falanx-Assuria: their 24/7/365 CERT approved cyber protective monitoring would have presented a steel barrier to the DDOS/SQL attack that floored TalkTalk. This is the third cyber attack this year and could have been easily prevented.

You are probably right on cash-burn at around £150k pcm; must admit that I was being over-cautious as I always prefer to be pleasantly surprised when verified. Talk-Talk is really focusing attention onto the failings of industry to seriously address cyber security - this is a real wake-up call on vulnerability. The DDOS barrage followed by SQL attack would not have breached Falanx-Assuria systems as it would have been bounced at the periphery.

in early 2016 when Falanx extends its protective monitoring to BYO mobiles - that could be 'electric'.

Just did!

Great minds all thinking alike and the ball starts rolling........ b*ggar.....should have bought more.......

I share the 2016 view and agree that previous high should easily be taken out next year with big contracts - and we are only a couple of months away from 2016. It's a bit illiquid now and requires stealth to get 200k plus. That said, once we get the increasingly bigger cyber contracts liquidity will rise to match demand. Given the tightly held market and amount of skin in the game that the directors already have, this could hop skip and gap-jump quickly. patience is the key as the ink dries on contracts.

Porta gave trading statements at end October last year and end November in 2013 so I expect we are building for one due very soon. The rise, on the back of £115,000 director buys and a very positive interim outlook, bode well for the future. We are now firmly in the £25m 'above the radar for growth stock' barrier, and once we go over par of 10p we should motor as we will have entered David's blue zone. Renegotiated loan debt, a chest of off-settable tax losses and strong growth are a heady mix for the re-rate that is now under way. Expect more with Steffan steering the boat with a seasoned BoD on board imo.

Embedded or cyber security software is no match for monitored peripheral cyber security - Falanx hits attacks before they damage systems not when it's too late. Unique sp and hence the Principia tie up.

We ARE massively undervalued on the cyber set-up we have in place with associated Assuria/Principia/CERT contracts. The barrier to entry at this level and offering of cyber protection is now high. We have the ops and the knowledge so don't underestimate the actual asset value of this to both shareholders and potential acquirers.

I reckon the cash burn, without contracts, was running at around £250k a month which would take us into 2016. The non-cyber arms are generating cash, albeit at a low level, but cyber should be paying into the coffers looking at the contracts announced in September. The nature of the cyber security industry necessitates confidentiality of contracts, particularly with government departments, so the rate of cash-burn should be slowing as contracts are signed off. Given the frequency and profile of recent cyber attacks and the fact that we are CERT supplier puts us in a very strong position, particularly with the Principia tie-up. As the process of this cash stream is seen, then I also expect increasing interest from investment houses who will be watching closely. IF (as I suspect) the conversion rate from enquiries to sales is progressing strongly, then any future funding should not be a problem at this level. Given the outstanding prospects and limited availability of shares, I would expect any funds, if required, could be accessed at a premium to the current price. Having said that, we are also a very tasty morsel at any MCap up to £20m if traction is apparent from the Falanx-Principia tie up.

Falanx- Right company - Right place - Right time. The marketplace rules apply as always - we have the insurance protected product that the customers are queuing up for. The big test is how fast we can manage the increase in interest IMO. The good news is that JB built up his team and facilities in anticipation.......