Member Info for Breq

Looks like SFX-01 is showing good signs of efficacy in a difficult late stage setting.

Mega Pharma 'We need to talk. These are serious results.'
Evgen 'We also have a sister molecule which in pre-clinical work shows 8 times SFX-01 anti-cancer activity.' (5 Mar 2018 RNS)
Mega Pharma 'We'll be round this afternoon for exclusive talks on licensing both molecules.'
Evgen 'We can't do exclusive.'
Mega Pharma 'See you later this morning.'

Can't immediately think of a more attractive opportunity for big pharma in this space.

Wonder what royalty percentage they could get outside China for NXP001 ?
Maybe 15 to 20% as will be derisked if this trial is successful.

Good news. Exciting times. Love the approach to developing drugs. Could be a £500m company (50 bagger) within a few years if NXP001 and others work.
Hope they cash up the balance sheet and so accelerate other co-crystals.

Gas price fallen 25% this year. Cmon IOG board. Close the deal soon. Don’t want LOG administrator to change mind.

Yes ResAnal1, interesting mention of pharma start-ups moving out of the Oxford/Cambridge/London triangle. No doubt Evgen, Redx and Tissue Regenix were pleased to be mentioned in this brief location focused article.

ResAnal1
40 to 55% royalties ?
Not previously known in pharma.

Breq - long Evgen

b1,GGTS, 600T - thanks.

The reason why I'm a bit thrown off balance by the IOG board so far is IOG is in a very binary situation because of LCF's insolvency. From the latest public info at Cos Hs, the LCF administrator could call in LCF's loan to LOG. In the absence of a new lender to LOG, LOG would then go under itself. IOG would then have to come up with a new funder ASAP. I kind of think if there were a number of possible lenders to IOG it would have taken up offers in the past as LOG's lending is actually on quite tough terms. Essentially 9% + libor plus around 2/3rds of IOG if all warrants and convertibles are applied.
Just hoping IOG shareholders get full information ASAP so they can work out what's best.

Also b1, I completely get the not wanting to give competitors too much info but in this particular case IOG do control the gas field licenses and pipeline. It's not like they are selling consumer electronics say and a competitor could see what new products are coming along. But I guess they have to cautious.

600T - that Slaughter and May doc is very useful. Thanks.

page 13 para 3 - suggests the board of IOG must allow IOG shareholders the opportunity to decide on the merits of the bid

So in this case the IOG shareholders can only decide on the merits of the RRE (or other) bid if the IOG board gives them maximum info about farm in progress and financing issues with LOG/LCF. The board can't really just say something like 'the farm in process is attracting strong interest'. I wouldn't think that is sufficient to give IOG shareholders sufficient info to evaluate an RRE ( or other) bid.

Hoping RRE make a firm bid. At the very least IOG shareholders should then be told exactly what's going on behind the scenes.

All IMHO.

Thanks GGITS. All good points.

trellis35
Thanks. Very interesting.
But the loan from LCF to LOG is only an interest loan I think. So the LCF administrator only cares about getting the loan principal and interest repaid. Presumably it shouldn't care whether LOG makes more money on their IOG warrants/convertibles by way of a farm out which is anyway unproven to date. That's not its legal concern.
If RRE pay 20p or a little more then LOG will make a decent profit on its warrants/convertibles, pay back all its LCF loans including loans used to finance lending to Atlantic, and LCF will have reclaimed all the LOG money owed and be able to repay that portion of its borrowing to LCF pensioner bondholders.

Otherwise the LCF administrator has - for no obvious reason - become a venturer. Which I'm sure it would prefer not to do unless absolutely necessary.
All IMHO. We all have limited knowledge as LOG and LCF have used accounting rules to delay filing accounts at Companies House. It is interesting that both LOG and LCF extended the time they had to file accounts with Companies House.

Thanks all. Really informative.
But what I'm wondering is as the IOG board have a duty to the company ( IOG) not to LOG, can they legally turn down a certain deal from cash rich RRE - giving the company funds to repay it's LOG loans with certainty - or are they allowed to 'bet the ranch' on another purchaser or farm out deal which may or may not occur in the future.
This is only a factor because IOG's loans look like they are coming up for repayment from this June onwards and IOG also need more money to fully pay for the Harvey well.
So it seems IMHO that IOG's board face 2 issues - can they risk the company knowing that they have loans to pay back in 3 months but also knowing RRE is offering them a solution, and also the LCF administrator knowing cash rich RRE is effectively currently offering LCF its money back but may disappear if IOG refuses to enter into proper talks/disclosure with RRE.

Anyone know the legal situation ? How long the LCF administrator can wait for LOG to repay their loan ? A month ? Two months ? More ?
My point is how long does the LCF administrator legally have before they have to accept the RRE offer or LOG find an alternative source of funds to repay LCF ?
As LCF pensioner bondholders are relying on the money what's the maximum delay the LCF administrator will tolerate as members of the public are affected by all this ?

GGTS
Sure but what about timing ? What if RRE said - show us the books, we'll pay x p, and complete by end April. Mega Oil says - we'll partner 50%/50%, we'll put up 75% of the capex, and sign by end July.
Could the LCF administrator prefer Mega to RRE ? Longer time frame - hey pensioners just be patient. Also not much cash coming your way until 2021.
Not sure the LCF administrator could run with a Mega farm out unless there is a quick upfront cash payment to IOG which is then paid to LOG which then pays LCF. LOG might be able to get replacement funding and repay LCF but no certainty.

BB
Looking at IOG's website there is no mention of a new director. At Companies House there is a mention of a new Company Secretary.
So I'm guessing IOG only have a LCF (administrator)/LOG board observer on (actually with?) the board not a director. I don't think board observers actually vote do they ? Although the board observer presumable is free to offer an opinion.
So IOG's unanimous vote doesn't include the LCF/LOG observer in a director position ? Besides LCF have a loan to LOG. All an LCF administrator wants is the loan plus accrued interest back.

jimmy00
You're right. Not much time for IOG and LOG to keep value. Any third party interest - if it exists - would probably take months to do their due diligence. RRE are one of the very few companies with sufficient cash and a very agile management team who can move quickly.
If I was IOG I'd be pretty nervous because if RRE's deal collapsed and IOG and LOG went under ( couldn't raise other finance and the LCF administrator pulled the plug on LOG borrowings) , would there be any board liability ? To IOG independent shareholders ? To LOG shareholders ? To LCF borrowers ? Just guessing but you would think there is some kind of explicit or implicit best practise clause in the LCF borrowing agreement which might be brought into play by the LCF administrator. Especially, as far as we know, IOG haven't even been willing to talk RRE through their various borrowing agreements with a view to RRE being in a position to make an informed bid.
Not sure there would be much sympathy for IOG if they stopped a RRE deal and the LCF bond holders - typically pensioners - suffered as a result.
Anyway let's hope it's all sorted out to everyone's satisfaction ASAP not least the LCF bondholders who are not covered by the FCA.

Mr T
The IOG RNS said:The Board's rejection of RockRose's approach was given with the full support of London Oil & Gas Limited
That can mean many different things - like LOG's CEO and/or Chairman fully supports...or the LOG board met and a majority board vote fully supported... or something else.
My guess is the LOG board discussed the offer and supported IOG but the Administrator of LCF on LOG's board would not be able to act in any way that compromised the public lenders to LCF. Maybe he abstained? We can only guess.
Anyway it is not actually in the hands of LOG if their borrowings from LCF are repayable on demand as they were on 31 May 2017. It's RRE or an alternative source of funding. LCF's demise means LOG and hence IOG have to come up with a funding solution very quickly.

Looks like RRE will probably succeed in buying IOG.

Looking at LOG's (IOG's lender) last posted accounts at Companies House ( year end 31 May 2017), it's own source of funds - borrowing from LCF ( now in administration) - is repayable on demand. So if those 31 May 2017 terms are still unchanged, LCF can at any time request their loan to LOG is repaid. Most of the administrator's legal role is to recover creditors' money. In this case LCF's creditors are unfortunate members of the public who lent it £250m.

So the Administrator of LCF has IMHO no choice but to request repayment of the loan to LOG. So LOG needs to gain liquidity so essentially has to cut a deal with RRE or similar. LOG will make a profit on its IOG warrants and convertible loans. So LOG can repay it's borrowing from LCF and make a good profit.
If IOG refuses to play ball then LOG will have to exercise it's warrants and convertibles - end up with a majority shareholding - and push through the takeover - gain liquidity and repay LCF.

It seems to me that only a third party coming in can stop RRE buying IOG.

My guess is RRE and LOG may be haggling over a few pence on the IOG share price as LOG have £10m of convertibles at 19p. 22.5 p is my guess on the final agreed takeover share price.

All IMHO and relies on LOG's terms of borrowing from LCF not having changed since 31 May 2017. DYOR as always.

Some misplaced comments here by posters claiming crazy valuations.

To value Tekcapital you have to go to the subsidiaries' patents. These are easy to find as Tekcapital helpfully give patent numbers. e.g. for Guident it's 9429943. So a quick Google patent search brings up the patent. Reading through the patents is hard work - unless you are a patent attorney - but worthwhile.

If you think the patent is key to that industry issue Tekcapital is addressing then invest. Ask yourself how you would get round the patent or do things differently if you had loads of cash. Stay well clear if you think the patent is weak or another approach works well.

Remember TEK's business is searching the world for valuable patents. Some posters have asked how much TEK has paid for it's patents. University IP doesn't work like that. Usually very little is paid upfront but the IP transfer agreement will include a royalty component.

The Guident granted patent is very interesting. It was originally filed in March 2013. It seems broad and powerful. It probably would only be granted in the US. It addresses the practical processes of enabling autonomous vehicles to be hailed from a distance on a mobile phone and delivered safely to different classes of passengers - owners and renters. My complete guess is Florida A & M Uni just beat the rush of activity in the cloud/AI/autonomous vehicle space. I'd be very surprised if prior art would allow a similar patent grant in 2019.

This may be why automotive industry big shots have joined. Maybe they see Guident has a core patent and hence software which Tesla, Uber, GM etc will have to license in the US.

DYOR as ever.

r _p

Reasonable point and why I'm long. But high risk way of running a company IMHO.

jay12

Reasons for optimism - company announcements to date positive though behind schedule

Reasons for pessimism - no broker since Mar 2018, no company pdf presentation, no company presentations at investor gatherings, reliant on hitting milestones and NSB to keep them solvent this H1