Member Info for Adastra

The comment on this board has been excellent; positive and negative, let's keep it that way. To label those who disagree with the positives being expounded by the company as de-rampers is misinformed at best. The company has been long on rhetoric and short on contracts to date - period. This is going to divide sentiment and also bring in a degree of acrimony as those who do not see the predicted future coming into fruition, sell at a loss. I respect the balanced views of all as it allows informed decision making and allows perspectives to be seen from different angles perhaps not appreciated. I am in the minortity stick-with-it -to-see-how-it-evolves brigade. Dibs. FKN and others have called the current fall pretty much spot-on, even to the point of forecasting the fundraise needed to breakeven [albeit a little early]. Ideally, I would have sold at 10p and now be buying in again, but, as a believer in the developing picture, I'm prepared to hold fast but buy in when bigger contracts kick in. Contrary to those who are quoting Darwen as vultures, I see them as having evolved into very cute investors in innovative companies needing short-term liquidity. They can see the underlying scale-up to which we are not party; the acquisition of ASC is the key that unlocks the door for Falanx SOC. It is the highly regarded consultancy 'bridge' between ASC clients/Falanx Intelligence/Falanx Assuria and is already showing its immediate effect. Those who post cautionary appraisals should be given equal merit since this is an untried cyber security offering, albeit CERT UK qualified. It COULD very easily transform into a hugely successful and cash-generative operation; it could also however, fail to sequester the bigger contracts currently in the pipeline. I believe Darwen have made a very,very good investment here as they can see the value of ensuing contracts if signed off. With that in mind, the future is very much open. The fact that Falanx also has a very viable intelligence arm also seems to be being overlooked. Keep the comments flowing. The negatives are very much winning the battle at present, but history is full of instances where balance quickly shifted 180 degrees in short order.

The logic with ASC appears to be to engage a client-facing advisory service to facilitate incorporation of Falanx managed services. The cyber security market is still very much in its infancy and most commercial organisations (unlike Govt Dept's who are guided by GCHQ) do not understand the challenges they face, so they do not necessarily appreciate what they need to be cyber secure. This is a cutting-edge interface, hence the risks involved in investing in this space, but the rewards, if AND when they come, could be rapidly transformational. I agree with a huge amount of your arguement regarding funding and cashflow, but Darwen, despite being hard taskmasters, are also no fools. Not for widows and orphans but if you're listing my interest please add LEG to my list as I was extolling its virtues at 0.085p not that long ago and a list of others but not the right board here.

I appreciate all the pros and cons of being in Falanx and enjoy the lively platform that doesn't resort to acrimony. For the sake of balance on behalf of the directors 'not participating' - they were not allowed. All directors were precluded from partaking in the placing due to the guidance notes to AIM Rule 21- viz - — undertakings by a director or applicable employee to participate in a fundraising of AIM securities of the AIM company where the close period arises solely due to this fundraising itself being the only unpublished price sensitive information and where the director and/or applicable employee’s participation is on exactly the same terms as all other investors in that fundraising. Effectively, the acquisition also constitutes unpublished price sensitive information. It now, more than ever, offers an opportunity for those who are really interested in buying into a hugely undervalued technology story which generates real revenue as opposed to an over-pumped natural resources story. This is a high-risk-high-reward company as it is a prime mover in its approach to cyber security, but it is attracting highly competent and scarce talent that is constantly increasing the barrier to entry. I certainly think from this level and with the addition of ACS that the future is significantly brighter post-fundraise. Now we just need to sign the big contracts to turn sentiment which is at its nadir or just past it, depending on your stance.

To the 6 month loan note from Darwin contains overly detailed early redemption facilities for Falanx that would indicate probability of near term significant contract completion. Could be a red herring but we live in hope :)

Placing shares not admitted till 11/05. That's an existing holder I'm assuming.

Hopefully, a more balanced digestion of the state and prospects of Falanx should reverse today's fall. It's certainly overdone on fundamentals IMO. The downside has effectively been capped giving plenty of possible upside if contracts do indeed kick in.

Fair comment Jolly. It does make me think that the new chair and now Jay are seeing developments that indicate breakeven is close. In that case, the transition from burn to strong generation could happen quickly. We know they are validating several client ops but the size and nature has been withheld. Given today's announcements it would appear that the swing in sentiment and cashflow could be much closer than we think. It will take a £1m plus contract to ignite the price, but that may be in the pipeline. I have to agree that circumstances have certainly not favoured JB's optimism and his 'no fundraise required' stance. I don't doubt his integrity for a moment, but his business plan certainly didn't include the validation delays to date. I think he will be vindicated in short order, but the market is a harsh master and I suspect it may well choose to listen more to Jay as MD from now on.Battered and bruised unfairly today given the improved strength and cash to push forward. The rate of burn appears to have slowed markedly since last year which is a positive indicator. What we need now is signed contracts......lots of nice big ones.

Dibs/Fk/Jolly - would appreciate your balanced views on current outlook. A lot of the concerns surrounding funding have now all but gone. Contracts are coming in, albeit still waiting for the first significant one, but the £1m cash extends that breakeven a good 6 months. If, as I suspect from the timescale of this fund raise, bigger contracts are almost in the bag, then a gap jump up is highly possible is it not?

I find it bewildering! Falanx now have £1m in CASH to fund to breakeven which is imminent, they have just bought a thriving complimentary business [plus its MD with kudos] for a p/e of just 2 and brought in immediate earnings enhancing profit of £220k and yet the price drops. Cynics have commented on delays in signing contracts, need for more cash, etc etc which caused the big drop in price --- this has given the clarity plus benefit of scale that was being demanded; surely its time to look at the huge potential upside that is now in sight.

I omitted the £1m in the bank as working capital; that drops the proforma p/e to about 14......................

Interesting post from Dibs on 19th April with addendum.. Out of interest the sector PE ratio average is approx 18 but has been as high as 27. FLX have a little way to go yet until we start talking about PE ratios. ;) Ironically Falanx has just purchased ASC with reported 2015 profits of £222k - Falanx current MCap is £4.19m. So, valuing the whole existing Falanx operation at zero..................we are on a p/e of 19!!!! laughably oversold....

The combination of Falanx and ASC plus Jay Abbott plus £1m cash in the bank gives plenty of upside potential now imo as a lot of the uncertainties have just dissolved. http://www.channelbiz.co.uk/2016/05/05/falanx-group-acquires-advanced-security-consulting/

Falanx got ASC for a p/e of just 2 which is a good deal as its earnings enhancing straight away. The £1m in the bank represents 25% of the current MCap so it should give clarity going forward. Even with the share dilution there will be 100m shares in circulation and the BoD have plenty of skin in the game. Anyone buying in today should see a decent return IMO as its helped consolidate the company and brought in a strong cyber player. Certainly not out of the woods but one to watch as it could really surprise with chunky government contracts. The fact that the loan note runs till just November 2016 makes me think that this is a 'bridging' facility in anticipation of a significant contract[s] being signed off soon.

£1m in the bank; ASC acquired for p/e of just 2 and bringing Jay Abbott on board as MD. Sceptics have been asking for clarity. We have an underlying and strongly growing cyber offering, have just added ASC with annual profits of £220k for an outlay of £435k and £1m buffer in the bank as a bridging facility to cash-generation. Am I missing something??? Far from being weakened, this has strengthened Falanx and consolidated it for the medium and long term. I'd say it was a fair time to invest and hats-off to those who are taking the opportunity to buy in at this low. I think it will prove to be an astute move as its greatly de-risked the future.

Falanx Assuria provides world-leading Cyber Defence solutions that provide comprehensive assurance and protection for customer data and information infrastructure using the best technology on the market.

“Ransomware is the one attack that unfortunately highlights the failings of IT quite visually. Ransomware's ‘kryptonite’ is a simple backup, but more often than not they go unchecked in organizations and as such, when the attack lands, the issue becomes a burning platform.” He concluded by discussing what he refers to as the “overlooked” benefit of monitoring stating that whilst most companies don’t do it, they should. “If you have a good monitoring service in place, configured well and baselined, the second a ransomware trojan drops they will see a significant increase in activity on the file servers that will follow a detectable pattern. With this simple piece of intel they can alert you and this speed of detection is often the difference between recovering in a few hours versus a few days, or even weeks.”

http://www.infosecurity-magazine.com/news-features/ransomware-prevention-vs-cure/

Active at the cutting edge with government http://www.theregister.co.uk/2015/09/29/cyphinx_uk_cyber_gchq_kids_training/

Effectively Falanx will have £1m in cash to get to cashflow positive in H2 plus they've just bought ASC on an historic p/e of just 2, bringing in £220k+ p/a and the total post-placement number of shares in issue will still be only 100m. The company just underpinned its prospects quite significantly and this dip should be short-lived given the growing cyber-space arena in which it works. Interesting.........................

ASC Is bringing in profits of £220k plus which, given the synergies, should help build stronger foundations and accelerate the group swing to profits from H2 onwards. At least it's an aggressive consolidation move rather than a submissive admission of target shortfall. Set back for JB who said no new funds needed but understandable given the time-lag in roll out. Now we need to see the big contracts starting to coalesce in H2 2016. Work in progress.