Member Info for BoringBernie

Now now Pukkers, your challenges of anything overly positive are normally better than that !

I don't think direct sales of FF+ were as good as they'd expected, but , given the info to hand, it's not true to say "Only logical assumption is they have a large inventory of unsold goods.".

Inventories just under 12 months ago ( which is the latest info we have ) were 22k. At roughly £5 box cost to us ( you can calculate this from the accounts ), that means there were roughly 4500 boxes left just under twelve months.

So, yea, it was likely more than they'd anticipated holding, but it's not unduly large, and all that stock from 12 months ago is likely sold now.

BB

Farmgal

Re "BB, you speak to IF from time to time, I assume you've known for perhaps as long as me..."

I've not spoken to him for a while. The last couple of times I've communicated with him was by email, when he replied at some godforsaken time, so I kind of assumed he was spending some time in a very different time zone, which, given his accent I presumed would be that part of the world.

If what you say is accurate ( rather than dot joining ! ) then he should complete the relevant form for Companies House so his country of residence shows up as Australia.

I'm no expert in company regs, but given I think you're supposed to inform them of a change in a director's residential address within 14 days, I'll let you tell him that next time you speak to him !

BB

CB

Not that it really matters where he lives, but if you really feel strongly about it, you could always drop Ford an email and ask him if the information recorded at Companies House about his residency address is accurate ( it shows him as being UK resident ).

To be honest though, this is just Farmgal beng mischievous in a "me knows" kind of way !

BB

Gixer

Profit, rather than revenue, will be a better measure of what the IP's currently worth, and what it may be worth in the future. When the Alliance Agreement was signed, DSM effectively took out a twelve year lease on our IP, of which there's roughly four years left ( I'm assuming, but don't know for sure, it was for exactly twelve years so would expire in June 2022 )

We should really wait for the results to come out to see what our share of the profit was for the last FY, but where's the fun in that, so if you assume it's roughly 200k, then why on earth would DSM spend millions on the IP now when they have an agreement in place which values the IP on a profit share basis ?

The only reason I typed anything on this subject is because one or two holders like the idea of us selling the IP now rather than issuing new shares to keep us going. Unless the board are actively looking to sell the FF IP on to a third party ( in which case they should inform the market ), then basically I'm saying be careful what you ask for because you might not like the result. ( Wellsite's post is spot on btw ).

Wind forward a few years to when the AA expires and we should be in a much better position to either renegogiate the terms or just renew ( that assumes that FF sales still grow ). The downside of that for some holders is it would mean that the board members continued to get paid excessively for what they do. When you look at their renumeration in comparison to other AIM companies, it's not excessive, but when you take into account that they're pretty much running a shell, then it certainly looks excessive. That's not likely to change, so you either live with it, moan about it on a regular basis or sell up.

BB

Gixer

Why ?

DSM are making money without owning the IP. The only reason they're sharing the profits is because we own the IP. To take us out if the equation they would need to pay us what could be considered a sensible value for the IP, which basically would have to reflect what they're currently paying us as part of the AA, and what the forecasts for that are over ( say ) the next two to four years.

To put a value on the IP you need to demonstrate a way to monetise it. Within the confines of the AA, that's basically what I've done based on the info to hand.

As time goes on and sales ( and therefore profits ) hopefully increase, then the value of the IP will increase ( hence why I think it's a good idea to get more funds ).

But DSM don't really care what our market cap is, they also don't really care how much it's cost to develop Fruitflow over the years. They mostly care about it being profitable for them, so, at this moment in time, they're very unlikely to throw 10million+ our way for the IP - because it just wouldn't make any financial sense to do so.

If someone else showed an interest in buying the IP then that would change things, but there's not a sniff of that, and likely won't be until closer to the end of the AA ( 2022 if memory serves me right ? )

Feel free to put a reasoned argument forward for DSM buying the IP for what it might be worth in five to ten years time, but they're not a charity and lack of cashflow can kill companies, so why would they bend over backwards to help out a few small shareholders in PXS ? They're delivering what they're contracted to do under the AA, and they've also helped out with FF+, so they likely feel they're squeaky clean.

BB

CB

Re "We were supposed to break even at Ca 20/30 products."

Nope, that was never the case. What happened was that some people on bulletin boards took a quote from someone ( Moon if I remember rightly ? ) and, accidentally or on purpose, twisted it to suit their own ( overly positive ) agenda.

Moon was partly resposible for this because he's not stupid and knew what he said would be twisted.

What was actually said was that DSM would reach critical mass with 20 to 30 products. All that means is, at it's simplest level, Fruitflow would be profitable for them and, as the number of companies buying Fruitflow increased, then they'd be more profitable.

Roughly speaking, that's turned out to be true because they're sharing those profits with us.

Maybe Moon was guilty of over-egging that statement ( I'm pretty sure he was ), but if people are stupid enough to believe what was subsequently misquoted and/ or misinterpreted, then it merely shows that the market is a cruel place and is very adept at taking money off the naive.

If you ( and many others ) have only recently learnt that lesson, then that's unfortunate, but bleating on about the unfairness of it all won't help, and will probably just give you ulcers ! Learn from the experience, and you stand a better chance of making a few quid on the markets here and there.

Fruitflow is making money for DSM, so will doubtless survive and grow.
It's also making a contribution to Provexis. Not enough to cover the company's costs, but it still has some value.

You probably feel like you've been shafted, but, in reality, you put money in a high risk business which hasn't ( at least so far ), delivered, which is something which happens all the time.

If you'd wanted less risk, there were 100's of other companies to choose from. The fact that Buck and Ford have made money over the years while you've lost some is just a lesson to be learnt in that accountants and gobby chief execs almost always come off all right !

BB

CB

Re "they don't deserve to raise any funds so they need to sell the IP and go away."

That's a possibility, but you're posting that from an emotional viewpoint.
For the last full FY, income from DSM on the progit share was roughly 150k.

For H1 this FY, income from DSM on the profit share barely moved from the previous year, so the profit share for the full year could, waving a wet finger in the air, be between 150 and 200k.

So, at the moment what's the IP worth to someone ( probably DSM ) ?

Take your pick on metrics. On 3 or 4 times revenue, you're talking 460 to 800k
On 10 to 20 times profit, you're talking 1.5 to 4 million.

Any valuation, which isn't based on a fire sale scenario, is likely to be more profit based than revenue based. DSM wouldn't need Ford and Buck, so you'd immediately strip out over 150k from the business. They also wouldn't need the bits and pieces which go with maintaining an AIM listing, so that's another 50k or so saved.

But, at the moment, Provexis pay the patent costs, which I'd guess would be betwenn 50 and 100k, which would reduce their profit so would likely reduce the current worth of the IP, so maybe it's only worth circa 2 million at the moment ?

I'm assuming that they'd take the hit on what our current R&D budget is.

Current market cap is approx 8 million, so I'd rather they raise more cash and then we'd hopefully see an increase in our profit share to something closer to justify the current market cap ( patent costs will likely be roughly fixed per annum )

I don't think FF+ is worth much. End of the day it has no usp and could be replaced by pretty much anyone who could buy in a bit of consultancy from the likes of O'Kennedy and Duttaroy if they wanted to.

But heh, if you want the company to issue an RNS saying they can't sign the accounts of as a going concern and they're "exploring all avenues etc etc but may end only being able to return a % of the current market cap to shareholders" then be my guest.

In those circumstances it's quite possible there'd be an EGM asking shareholders to approve the sale of the IP ( probably at below market cap ). If it wasn't approved then you'd be saying hello to administration.

So, if you want to see them fail to raise more funds, then bully for you. Personally I'd rather see more funds raised and take another dilution

*posted in the dark, on a tablet, so this will likely be full of typos

BB

Havn't a clue to be honest Farmgal.

At 20 million'ish, that's approx 1% of the shares in issue, but whether it was a PI or something related to Darwin, I suspect we'll never know.

Can't be long now till we get some info from the company.Until then I'm assuming they're busily trying to raise funds so the accounts can be signed off with a tick in the box for "going concern".

Plainly ( opinion not necessarily factual ), we're goosed if they can't raise more funds, but I'm 90% confident that more money will be raised and the ball will keep rolling for at least another year

BB

CB

You've not read the RNS properly, or you've dreamt it.

Presumably the one you're talking about is http://otp.investis.com/clients/uk/provexis_plc/rns/regulatory-story.aspx?cid=1569&newsid=962162

That states that ~41 million options were due to expire in August 2018, and 10 million of those were Ford's

Both Buck and Ford were issued another 10 million options , but the exercise price for those is 0.55p, can't be exercised till April 2020 and they expire in 2027, so you've probably read something, fumed, and then convinced yourself of something which isn't the case.

As for the other options, well most of them are exercisable at prices well north of where the sp currently sits, so, at the moment, the people who have been granted those options are sat on pieces of paper which are worth absolutely nothing.

Plainly in your crazy mixed up world, it would be a bad thing for the sp to rise to a level where the options are actually worth anything, so your bitterness is explainable.

Heh, you put money in something in the hope of making a quick multiple of your investment and it didn't come off.
That's tough, but presumably you knew that losing money was a possibility, and presumably you also knew that people who were taking a salary from the company were pretty much the only people involved in this risk free ?

Are Ford and Buck overpaid for what they're doing ?
Yea, I think they are.

Are their options something to worry, and fume about ?
No, not at all. If the sp rises then we'll all be better off, and will have the opportunity to take some profits or reduce losses depending on your buying price.

BB

CB

The options weren't nil-paid, so the option price would have to be paid, which means the sp would have to be above that level to make any profit to make exercising their options to make it worth their while. The options were EMI ones so I'm not sure what the tax liability there'd be on them ( if any ).

Basically any holder who is glad the sp is way south of 0.6p is cutting their nose off to spite their face and allowing bitterness to cloud their judgement.

Oh, they didn't lapse today by the way, they actually lapsed last weekend.

Also, chances are, they'll soon have another set of options issued at a lower price than those which have recently expired, which will give you something else to pointlessly fume about !

Oh, and I don't think Buck had any options expiring this month, and Ford had 10 million which have just expired, rather than 20 million, but, apart from that, yea spot on !

Nowt so queer as folk though :)

BB

Their turnover is in the order of 400 to 500 million per annum.

I don't know how many products they have in store or online, but if it was 500 then that'd be an average of a million per product. At £20 / box, you'd be talking 50,000 boxes, so I'd say up to 10k boxes per annum as something to aim at in year one is pretty sensible.

BB

Alf

The 5 million trade is delayed from yesterday, so, from the time of the trade and looking at the trades around it, it's actually possible it was a sell. To be fair, if I had to bet on it, I'd have it down as a buy though.

The 2,955,767 trade however, was slightly delayed and could only have been a buy

BB

Looking back through the old "paperwork", I believe those options expire on the 26th.

BB

Re "NPFT stands for a Non Price Forming Transaction - if anyone knows what that is ????"

It's from an Asian website, but I reckon the explanation still stands for the UK

From http://www.asifma.org/uploadedFiles/Research/171009_Linklaters_TR_MiFID%20II_Trading%20Obligations.pdf

***

Non- Price forming – A list of 9 types of transaction that are
non-price forming are specified in RTS 1 Art.2:

(a) the transaction is executed by reference to a price that is calculated over multiple time instances according to a given benchmark;

(b) the transaction is part of a portfolio trade;

(c) the transaction is contingent on the purchase, sale, creation or redemption of a derivative contract or other financial instrument where all the components of the trade are to be executed only as a single lot;
(d) the transaction is executed by a UCITS management company or an alternative investment fund manager which transfers the beneficial ownership of shares from one collective investment undertaking to another and where no investment firm is a party to the transaction;

(e) the transaction is a give-up transaction or a give-in transaction;

(f) the purpose of the transaction is to transfer shares as collateral in
bilateral transactions or in the context of central counterparty (CCP)
payments;

(g) the transaction results in the delivery of shares in the context of
the exercise of convertible bonds, options, covered warrants or other
similar derivatives;

(h) the transaction is a securities financing transaction;

(i) the transaction is carried out under the rules or procedures of a
trading venue, a CCP or a central securities depository to effect a
buy-in of unsettled transactions.

Take your pick really, but, in terms of likelihood I'd rank the top three as :-

g - Bond conversion
d- Transfer from one fund manager to another or
c - Derivative trade of some type

BB - I'm pretty clueless really

The negotiations for off takes for Brazil and Europe were mentioned in the last quarterly update at the beginning of July

"Active engagement on multiple commercial discussions for new supply agreements in Brazil and Europe"

In the same update, talking about Stage 2 financing, the company said "The Company is on track to achieve financial close in 2018.", so within four months, which, in the grand scheme of things, is pretty close.

I think Ed Brown's job is pretty safe. Price-sensitive information can't be leaked if it's already in an RNS !

BB

Alf

Re "Who in there right mind ... "

Veggies might buy from Swanson rather than buying FF+, though, to be honest, they'd likely be better off ( financially at least ) buying Circulease

BB

Alf

I'm not going to trawl through years worth of posts to see whether "every time" is accurate or not, but it's not far off !

Anyway, as I said, so long as we're supplying H&B on a wholesale basis, then we're in a much stronger position than we've been before. Obviously if we're supplying on a "sale or return" basis ( unlikely, but possible ), then the situation would be very different because we'd be taking pretty much taking all the risk under those circumstances.

Anyone who thinks that it's unlikely that the BoD won't be trying to raise money from the markets over the next few months has got their heads well and truly buried in the sand, so I'm glad you don't fall into that category To be honest, I doubt our bank would give us any meaningful overdraft facility and, while I think there's a possibility we could fund supplying H&B without tapping the markets, the chance of the companies overheads being funded in that way are slim to say the least.

We probably had between 200 and 300k left at the end of the FY ( March 2018 ), and, come the end of September, we'll have done well if there's more than 100k net cash, so I'm reasonably sure the BoD are currently looking at raising at least 250k ( to ensure the accounts can be signed off on a going concern basis ) and ideally close to 500k. They never seem to have struggled to raise cash previously, so I'm comfortable with that scenario.

Plainly, if any HNWI are interested, then they'd want as large a % of the company as possible for their money, so a drift down in the sp would kind of suit them.

One way or the other, it'll hopefully be a lot clearer come the end of September.

BB

Gostoso

re the sp and it turning round :-

On the plus side ...

Selling FF+ through H&B gives us a much better chance of FF+ creating any meaningful cashflow
ByHealth- though it's gone quiet, should eventually increase DSM's profits and so increase our cashflow

On the minus side ...

We're likely burning cash at ~400k / annum, so will likely need a cash injection relatively soon. I'd be surprised if something to that effect isn't announced by the end of September, and astonished if no cash is raised by the end of the year.

Alf has highlighted various alternatives to issuing more shares, but, every time the subject comes up, he raised the same alternatives, and, so far, the BoD have gone to the market for more money. To be fair, this time is a little bit different because, if our contract to supply FF+ to H&B is on a wholesale basis, then we'll have something to bargain with, so there is a possibility of effectively borrowing against that contract, but I doubt very much we'd be able to raise enough cash that way to cover working capital, so I'd say it's pretty much nailed on that we'll need to raise cash from the market again.

Hopefully there'll be enough interest in that to keep us going as a going concern. I'm confident there will be, but don't feel the need to chuck any more money at Provexis. I'm a very small shareholder ( ~1m shares these days ), so it's less than 1% of my meagre wad, which means it's nowhere near as important ( either in actual number of shares or as a relative percentage of peoples holdings ) to me as it is to some, so, I think and hope that the sp will rise, but, if it doesn't, then it won't be the end of the world and it'll end up being added to my list of investment mistakes !

BB

Err Sphinxy ... A trading update RNS came out on the 10th May 2017 (See http://www.lse.co.uk/share-regulatory-news.asp?shareprice=PXS&ArticleCode=ktu7lxur&ArticleHeadline=Trading_Update ) , and, one of the things in that update was "In its preliminary results statement currently scheduled for early September the Company expects to report on a strong year of progress. ... The Company expects to report revenues for the year ended 31 March 2017 of �228k, a 148% year on year increase (2016: �92k)." So it's quite possible that they were advised to inform the market of that change because it was considered material, though, to be fair, that trading update came out on the same day as the results of a placing were announced, so that change in revenue might have just been an aside, but it seems unlikely. I'd be surprised, but delighted, if the YoY revenue change for the FY just ended is more than 30% At 30%, I wouldn't expect that to be considered particularly material, so wouldn't necessarily expect a trading update, but if it was more than say 50%, and the company sat on that info until the results came out in September, then, as well as being even more delighted, I think I'd be asking questions as to why the market hadn't been informed. If we don't get a trading update in the next two or three weeks, then I'm sticking to what I said last Friday, and will be assuming that no major news needs to be brought to the attention of the market for the FY recently closed. The upshot of that would be an expectation of total revenue in the order of 250 to 300k for 2017/18. If anyone wants to hope /believe anything else, then that's entirely up to them ! BB

I'm not convinced that there'll be a trading update this year. If revenues, from either DSM and/or FF+ have grown at a reasonable rate, but not significantly , and there's no new news to report, then I don't see a need for the company to issue an RNS Doubtless there will now be a trading update on Monday to prove me wrong ! BB