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Morning JAllis,

You wrote,

"Q4 is a slow quarter generally due to the holiday period and reduced scrips being written."

That is not a typo. That is a clear statement.

In answering I pointed out that Q4 2023 saw,

"a 26% increase in actual scrips" compared to Q3 something I believe you may have missed because the scrip numbers were subsequently updated due to the 3rd party reporting issue seen in the second half of 2023. Before this, the difference between those two quarters was much smaller.

You have now switched your focus to revenues, which I agree saw little increase between the two quarters, but your argument emphasises a pattern that is for me too short in duration to be a valid marker. Especially when I consider how new the product and sales team were in 2023 + the clear work that has been done to advance agreements with insurers and ensure payment.

For instance, it was only in Sept 2023 that STX reported the "addition of the two largest Medicaid programs in California and New York" which according to the interim presentation from 28th Sept 2023 took total coverage from around 40% to c. 50%. That was a big markup in two of STX's most focused and successful markets.

Insurer coverage today is stated as being 60% (see Q&A answer 13 from interim presentation). That improves STX percentage chances of getting fully reimbursed for each patient by c. 50% since Sept 2023. These coverage improvements will not have had an instant impact. There will have been teething and bedding in problems but the Q2 2024 figures demonstrate the first real progress that could be expected to come through from these efforts. This is why we should be cautious in employing patterns from earlier days to predict the future.

This then needs to be coupled with the introduction of prior authorisations which I recall also came in around Sept last year. Again, it was reported that this system would only truly kick off in Q1 2024 when a new team dedicated to their completion was implemented. Everything before that was a rearrangement and a scramble to improve whilst awaiting the more complete and better-functioning system to come online.

Those two elements alone compound the argument that the improvements seen in Q2 on the pricing side are real, sustainable and in time likely to improve further which is why STX said in their interim that,

"As we move into the second half of 2024 and 2025, Shield and our partner Viatris expect to achieve continued growth in ACCRUFeR® prescriptions in the US along with further improvement of other financial metrics."

That is much more believable today than it was even 6 months ago. The change of leadership further solidifies it.

Previous patterns and metrics always have some worth but we must be careful not to ignore the reasoning for their existence or changes that can undermine their ability to repeat in the future.

To place that Texas comment in proper context here is the expanded text from the Q2 update. Texas is certainly noted as beginning to rebound (so more to come) but the large states are also influential and there is no reason at this point to think that cannot continue in H2.

"Large states such as California, NY, and Florida continue to drive a significant portion of the increase in prescriptions, while Texas begins to rebound. Our efforts on the operational side also showed outstanding progress, with an increase in our net selling price of 23% which is a direct result of strategies and investments over the past few quarters."

Point 1 accepted JAllis the amended covenants do indeed look to be the revised sales targets.

I disagree with the next part. It was net sales revenues that rose 69% which was created by a 23% rise in scrip prices and a 26% increase in actual scrips. In the same Q2 update, they are stated that "Texas begins to rebound" not that it had fully. So it's a partial correction at best and if Texas had never gone offline then arguably Q2 would have been stronger.

So the jump in scrip levels is 26% and not 69%.

According to the interim presentation even with the stumble in Q1 2024 (Texas-related we are told) STX and Viatris have achieved "average quarterly growth of 25% following field expansions with Viatris in Q2 2023."

So the form supports the argument that some form of growth will continue and that my earlier 20% figure isn't that much of a stretch. Also, as demonstrated they can get to that Q4 required revenue figure without any further increase in average scrip prices. Through the interim presentation, I understood that exact control over this average is dependent on the type of patient each practitioner sees each visit. By this I mean do they have full coverage or do they require support i.e. discounted product. But even with this, it is clear that STX has made solid progress because the jump in scrip pricing was so pronounced and I must admit unexpected between Q1 to Q2.

In terms of Q4 scrips dropping off the STX figures show a rise from 23,400 scrips in Q3 2023 to 28,500 in Q4. That is c. 22%, not 5% as you state. The presentation is enclosed below for you to check, slide 15.

The other point here is that actual percentages become less telling here vs. what is required revenue-wise and that is being helped (we assume) by the higher scrip pricing ($171). So for the c. $4.5m shortfall that I calculated earlier, that equates to c. 26,000 additional sales in H2 2024 meaning total H2 sales of c. 99,000 at $171 per scrip. But I will point out that this anticipates no growth in Ex-US revenues and ignores the Canada payment which translated to c.$334,000.

https://www.shieldtherapeutics.com/application/files/4117/2587/6521/STX_H1_2024_Interim_Financials_Sept_4_2024.pdf

This doesn't mean that it is a given nor do I wish to completely dismiss your concerns. It is more a case that I think you are overplaying the downside on each element whilst ignoring too much of the upside. For instance, even just a $10 improvement in the scrip price would reduce the revenue pressure by $728,000 based on the Q2 scrips remaining stable throughout H2 (36,400 x 2 = 72,800) then that would reduce the additional scrips required from 26,300 to c. 22,000.

EXR is already expanding at a good pace in the education and training sector. A much cheaper headset widens their net in terms of businesses that would be interested in licenses because the initial outlay just became much lower.

This is not about comfort but capital costs and the benefits that can be gained.

The new Meta headset is expected to be launched today and be c. $200 cheaper than the previous model. So 150 pounds cheaper.

This is not about sales to individuals but sales to the education and corporate training sector which is growing because the outcomes are demonstrating far better results through VR usage. That is why I am invested and Meta clearly believes there is mileage to be had there also.

https://www.neowin.net/news/leaks-say-meta-is-set-to-announce-a-300-quest-vr-headset-later-today/

It took gold 12.5 years to break out from the resistance line formed in Sept 2011. Since then it has done 28.5%.

After 12.5 years of waiting that is nowhere near enough for this move to be completed.

To add to this the vast majority of retail still hasn't bought into the move yet.

I am reading about the SWK finance revenue targets with the indication that there will be consequences but without any wording around severity and so risk.

Firstly, I agree that the annualised 4-quarter group revenue target in Q4 2024 is $31.5m.

With H1 coming in at $12.1m that leaves $19.4m.

It is not unfair to assume that Ex-US sales can match H1 which would be $1.1m.

That would leave the US with $18.3m to achieve.

With a starting base of $6.9m they require 20% QoQ growth through Q3 and then Q4. They managed 69% between Q1 and Q2. Does that guarantee 20%? No, but it certainly indicates that it is more likely than not.

But if they did fall short it is likely going to be by a small margin and then the covenants kicks in.

These are the original ones from Sept 2023.

"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."

It says equity or subordinate capital.

But and it is a big but the covenants have been renegotiated recently to be more favourable to STX (the last Investor meet presentation made this clear). However, I cannot find these renegotiated terms in the interim or anywhere else.

There is risk there but I no longer see it as being quite so severe as in late 2023 when the numbers were all going south. Q2 was certainly a confidence builder along with the change of the top leadership which look far more capable.

We must also not forget that sales growth and indeed pricing improvement are as much about time in the market and in terms of the sales force's time in the field as they are about anything else. STX doesn't simply start from afresh each quarter. Repeat business is growing. Deals with insurance providers are getting done and the product is becoming more established. So growth is inevitable and given the fact they are only 3% into their first target market, there is far more that can go right at the moment than wrong. Especially now that more serious people are in charge ans this is all coming from someone who has been burnt by this company in the past.

My take only.

That's an interesting bit of insight Schmidt1. 4,000 oz ties in with my thoughts around 22,000-23,000 oz production range in Q3 which would mean c. 27,000 oz in Q4.

The $45m current number still seems high but I respect it and means that THX is heading towards payables being "current" by YE and c. $35m - $40m in cash. That will transform their working capital position.

Add in some positive drill results + Douta PFS and a reserves update in Q1 2024 and the correct level of re-rate should finally take place here. Patience is required but lots to look forward to.

In this interview from 6 days ago, the CEO said the first Segilola drill results were 'imminent.' So they must be close.

But realistically this is just thr first pass and they should run right through until YE.

https://www.youtube.com/watch?v=M0pfVz1xb-I

The beauty of being a gold producer with large cash flows is that technically they don't need to wait for FID to commence the build.

SRB is a great example of this be it on a smaller scale.

According to the Q2 update capital expenditure and exploration expenditure at Segilola and Douta amounts to c $12m for the remainder of 2024.

That can get Segilola ozs converted (remember there is already 76Koz of indicated resource + 65Kopz of inferred to firm up). Segilola satellites are already drilled but require the costings to be defined.

Douta drilling will complete soon and should define the front-end oxide resource which is easier to mine and sets up the finance to build the plant and then revenues should allow for further CAPEX for the more difficult resources to be extracted. However, I think they can define more oxide elements first once the mine is up and running.

Cote d'Ivoire budget will be limited at first and designed to expand the resource throughout 2025. So minimal expense.

Douta CAPEX is the biggest and we will need to see the PFS to establish the outlay but I would think that THX can get up to 70% debt financed. Still, it could require a healthy lump of cash from Segilola to get it built. But they have stated they can get it built without dilution and I am happy to believe this until told otherwise because current cash flows from Segilola are ridiculously good.

It's important to take some time to appreciate what Douta can do for the valuation here because after this latest drilling programme it is clearly going to be a +2m oz resource.

In a world where gold trades anywhere near these levels that will turn far more heads than it did even 6 months ago. Demonstrate that they can finance it with cash flows and sound debt financing and we should be looking at a share price well beyond what we see today.

Douta is completely disrespected at the moment but could well be under construction by mid 2025.

Firstly, THX has a new mine called Douta and I believe the PFS next quarter will demonstrate an eye-catching NPV which even at an initial c. 10% valuation can work wonders for the SP here.

Once they complete the DFS, achieve FID and demonstrate that it will be built without further dilution (as stated by the company recently) then said NPV inclusion should start to rise past 20%. There is a chance that this equates to the majority of the current valuation.

Lastly, the idea that THX doesn't add 2 years to the mine life by Q1 2025 is for me highly unlikely and it should be merely the first upgrade. So whilst I get the base case scenario HarChris it is merely that because there is much more to come here.

Great find Oldtramp. I will bolt that onto my thread.

These guys don't sell themselves well enough with investors and that has really hurt the SP these last few months. But they are moving this business forward and Meta is clearly aligned with their business model and the new headset demonstrates Meta VR isn't going away.

Yesterday's presentation captured this very well and along with the above makes the current share price an absolute joke. Something I have gladly taken advantage.

Here's a thread I produced on yesterday's update and the importance of the new Meta headset launch.

I have been adding here the last couple of days because I feel the SP has been beaten up well beyond what is reasonable.

This business is growing even whilst in transition. Next year that transition should be much further down the line.

Customers clearly like what they see because they are returning for more work. That is a healthy signal of what the future holds and EXR has enough cash to push things on over the next 12 months or so.

Get it right and this can be a 10-bagger easily by this time next year vs limited downside because it's already about as beaten up as it can be.

https://x.com/BigBiteNow/status/1837094964716527979

HEX stated on 5th Sept that they "remain fully funded & extremely positive about significant shows."

On 6th Sept the CEO then stated that they had already identified a rig which it is fair to assume is the one announced today.

This makes sense because Helix came to market with c. $10m in cash at IPO.

On 22nd July HEX stated that "the combined budget cost of the two well programmes are estimated at approximately $4.1m."

Even if I ignore the fact that the Clink #1 drill only took 11 days vs the 3-4 weeks that were communicated on that same RNS from 22nd July) that equates to c. $5.9m in cash.

Admin costs ran at £107,000 ($141k) in the 6 months (see interims RNS 25th June) to March 2024. This may have risen a little but it will be immaterial. The scoping study cost a bit but again it's pennies compared to the cash pile.

$100k paid for Rudyard in cash.

To this, we then need to add the deal that was agreed upon today but if anything it should add confidence that cash levels are sufficient to cover the Clink #1 additional works because they have closed it prior to returning to site.

Up until YE, I am seeing a maximum $500k in running costs, scoping study, Rudyard + the new Rudyard license costs.

That leaves around $5.4m for drilling and then (if successful) detailed study commencement.

My view is that any noise around placings or the cost of the new rig is based on floored reasoning.

@Valuation-it-is I agree there are valid reasons why the bulk deals wouldn't have been done yet. The delay to the US DOE and UK cap and floor projects, I am sure, is a central part of all of this and have forced Invinity's hand. That has then been coupled with a significant risk-off event in the UK small caps which meant that the trading update created maximum pain for the share price.

When the dust settles the market should also settle in a place where more risk is factored in but the great potential along with a very solid cash balance is also recognised. But the BOD does have a lot of explaining to do on 27th Sept.

@Ilovesushi you don't seem to be able to grasp the concept that Mistral is a work in progress. It is still 3-4 months away from launch. Yes, they are behind on costs and they have definitely stretched the truth in terms of progress to date.

They have a very large pipeline of potential work and if it weren't for the delays in the cap and floor mechanism + the US election timing then they would have secured record work in H2 2024 and this conversation or this price drop would never have happened. Yes, that work would have been grant-supported but that stage of development was clearly communicated in the last FY Report.

They have a lot of work to do to improve Mistral and repair investor confidence but it is utter nonsense to present such a final assessment of Mistral before we have seen the plans and progress associated with reducing its overall costs.

There are risks. There is work to do and some may not be up for that and so will sell. But that does not mean that this business is dead in the water and you repeating it every day won't make it any more true.

As things stand at 8.75p Invinity is being priced on Q1 cash levels without LODES. With LODES it is being priced at June/July 2025 cash levels. That is way too harsh even for this market.

This was my thread on THX from this morning for those who might wish to read it.

This break out in gold pretty much seals a $2,450/oz average gold price in Q3. A solid set of initial drill results from Segilola would be the icing on the cake.

https://x.com/BigBiteNow/status/1834121065326366935

Well, Bo Sears did say in the Zak Mirs interview that "it wasn't until we came out of the hole that the shallow mowry formation was starting to come in on us." So yes the problem was identified at that point which presumably was 23rd Aug or very close to it.

Whilst the month guidance was given on 3rd Sept he also said in the interview dated 4th or 5th Sept that they wanted "to get after this thing in the next 2, 3 or 4 weeks" as of 4th/5th Sept. So yes I take your point that an announcement in the coming days is possible.