Member Info for chilting

MKS currently a strong 76th in the FTSE100 and moving up - outperforming the index.

Actually, I think that the Grand Old Duke's Horse is knackered and will take look for pasture at the bottom of the hill,

I take your point about the books being unaudited Scrodingercat.

But we have to take it at face value that they have enough reserves, plus loans, to keep going until H2 2024.

Assuming this is the case there is probably enough in the pipeline for the business to make a fresh start in the way they anticipate using their ten year plan as a guide.

Investors will ultimately have a choice at the next equity raise if they want to make what will effectively be a new investment. However, we could easily see a takeover before then.

As for our current investment this still remains a hold but it may be many years before we even get back to profit.

The best outcome may be a takeover, to end the agony, but its unlikely that would be profitable.

Overhanging all this is the absolute imperative that they get the Italian power plant working properly - if that's a failure then the business fails.

I am not sure how much use the charts are at the moment Boyobach.

It might be better to ask the Grand Old Duke of York what he plans to do next.

Spacerat

Tech companies were massively overbought a few years ago in all sectors, not just hydrogen.

Then reality hit with the downturn, especially in China, and high interest rates.

Now I think that tech companies are heavily oversold and the next move will be a general recovery in valuations.

However, we need an improvement in the macro to see this happen and that always seems to be just around the corner, but we never quite get there.

Yes certainly a hold now but not a buy.

SP is likely to remain around this level until after anticipated equity raise that will likely be in H1 2024.

After that existing investors can review progress and asses if its worth averaging down.

Awful results - but we expected that.

Talk of a ten year plan and better funding - all good.

CFO to go - a relief to many.

Solvent to H2 2024 - much better than anticipated.

Prospects - actually looking good.

Remains a hold.

Trading results better than expected.

Most significant development is in the other RNS with the change of Weichai representative on the board.

The new man is much more senior and a REAL tech expert - sounds very good to me!!!

I don't see the results having much impact on the SP - maybe a short term dip because trading is likely to be lackluster.

I think the cash position will be OK - the company is excellent in this regard.

Its news on the future that we obviously need, but I think this will still be pending, although we might get an encouraging update?

The problem with AIM is that there will always be conflict between the BOD's and shareholders because of dilution.

The directors job is to grow the company by raising equity, but this is at odds with the shareholders wishing to keep value in their shareholding.

Underlying all this is the abject failure of the AIM index.

Compared to the FTSE 250 that has grown in value by 315% since 1996, AIM is down 27%. It seems that with a few notable exceptions its not until a company moves up to the main index that the SP really accelerates.

So basically AIM is just a punt - a series of small investments spread over multiple companies will probably give you one winner that will eventually deliver good returns but accept that many will end up like EQT in the doldrums for an extended period of years.

Forget the retribution until the finances are sorted - then look to the future.

Its not a question of trust - the current BOD will certainly know what needs to be done in the short term to maintain liquidity.

It may be better to leave the current BOD in place to sort out the current problems and bring the business back on an even keel.

Then questions about future leadership can be answered.

Sometimes the devil you know is the best option.

Except the unexpected.

Questions about the quality of the tech are also reassuringly answered.

Hold.

Yes, still a hold but certainly not a buy - not long term anyway - traders take their own chance.

Dilution still to come - probably multiple times - back to year zero.

SloppyG

It could be that they have already refinanced their debts to reduce payments in the short term.

I would have expected more strongly worded warnings in the last RHS if there was any danger that their financial situation was terminal.

This is still a hold in my view.

Simms

Foxyjoe talks about a burn rate of £400k per month, that doesn't seem unreasonable and could easily be managed for the short term even with the restricted revenue.

Also as you say, they probably still have around £5m left to drawdown on their loan.

Most of the recent bad news has related to money wasted on going nowhere projects rather than hard financial hits - historical now.

My guess it that the actual finances are not much different to where they were in June at the last update.

So credibility may be shot but this is still defiantly a hold.

So cash flow is very tight, but how tight.

The company had loan facilities totalling £12m in June - apparently it has already drawn £5m - maybe more.

The following was in the last RNS

"In addition, French client Idex's France MDC project has rescheduled the completion of front-end engineering design work to December 2023, such that orders will not be placed for equipment until early 2024 and delaying anticipated revenues from this project. Furthermore, client projects in Belišće (Croatia), Livadia (Greece) and Wilseyville (California, USA) are experiencing delays with securing full funding, thus delaying revenues previously expected in Q4 2023 into 2024, subject to securing such funding.

As a result of these events, and in light of the Company's publicly announced rationalisation of other, legacy projects with unmitigated risks and liabilities, the Company has updated its overall FY 2023 revenue forecast to €2 - 3 million."

Cash spent on the cancelled projects is now irrelevant - its gone unless the courts say otherwise - but a least no more cash will be needed apart from legal costs.

So going forward - do they have enough cash in the kitty to survive until they start to get more revenue in 2024?

Off course they need more cash to grow, hence we will inevitably see another equity raise and more loans.

If they can survive short term, I think the company does have a future.

For a larger company, like Wood for example, the risk involved for the UK projects would have been acceptable and probably normal but for a small company like Eqtec this was clearly not the case when looking back in hindsight.

In mitigation, I think the BOD probably thought that cash would be flowing in for other projects by now, therefore, the risk would be covered by higher cash flow from elsewhere

But the poor macro with higher interest rates, higher construction costs etc has certainly taken its toll post Covid and added to their error of judgement may have cost the BOD their business.

Making an error of judgement isn't against the law.

If they had pulled it off, we would all be sitting pretty, but unfortunately more often than not it doesn't work out that way, especially when there are so many players involved.