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That is correct LTbeliever, a loan would considerably offset any asset value from a "net assets" perspective. I don't know whether it is owned outright, but potentially something Gerard could answer? I can't see this as being sensitive information
Net assets is the same as equity, and isn't an indication of total assets owned.
The fixed assets section of the balance sheet (top of the balance sheet) is where to look to identify whether they own any property
The quote is the top paragraph only, i forgot the speech marks!
RNS of 2nd August 2021:
Consideration of £45.2 million to be fully satisfied by way of the issue of an expected maximum of 9,578,937,499 new ordinary shares in the Company ("Consideration Shares") at an expected minimum of 0.472 pence per ordinary share ("Issue Price")
So, at least 0.472p per share. So roughly half of the 1p you are hoping for. I can't see it being worth too much more than the mimimum, personally. If i can get my money back, perhaps with a small profit, then i will be happy.
I bought in following CF's raglan capital investment. A punt by all means, but i felt that mountfield (as it was at the time) would become one of the ORPH spin offs, as did a fair few others.
The best scenario for DVRG shareholders is that the company makes the repayments when due. If they don't, or willingly allow the lender to convert, then shareholders will be diluted.
The current conversion is 20p, but don't forget, the SP was over 30p last summer. A conversion of 40p would be a true sign of where we are going. The current SP is so low due to macro economics and the war in Ukraine.
Hopefully the 20p conversion rate will feel "low" in the not to distant future.
The danger with many death spiral finance agreements is that the conversion price is, say, 90% of the 30 day average SP. A lender wouldn't want shares to be converted at £1 if the SP was only 90p as they would lose money upon dumping them, and thus usually a lender will push for a discount.
Arguably a lender could hold onto the shares, but usually they don't care to as they want their money back. So dumping into the open market is the usual outcome, and the effect of this dumping is that the SP falls
I feel confident we wont see such shenanigans at DVRG. We have only borrowed £4m so far (not the entire £25m). At 12% we are looking at interest of £480k per annum, or roughly 5% of annual turnover to December 2021.
We should be generating sufficient cash from operations to meet these repayments. The capital will no doubt loom over us, but we can probably replace it with better finance in the future as the company grows
It isn't the rate of interest that makes death spiral finance so controversial, it's the fact that the company can opt to convert debt to shares at a discount as opposed to repaying the loan/interest. The lender always then dumps the shares to get their cash back, which crashes the SP down to the level they converted at, all before it happens again. The SP falls lower and lower each time, no matter where the MCAP is.
Sometimes the companies involved with such finance cannot even afford to repay the interest and thus the capital is never dented but the shareholders are diluted time and time again to allow the company to maintain the "repayments"
See Iconic labs. They used death sprial finance. The BOD didnt own any shares personally and so they couldn't care less what the SP was. In just under two years the SP went from 1p to 0.016p before being suspended.
That's a £1k investment becoming £16!
I don't expect that to happen here as GB has too many shares to dilute himself into oblivion. I also consider him to be a decent person and i dont think he would decimate shareholder value like that.
But death spiral finance should trigger alarm bells for shareholders if they don't think the company can meet the repayments. It is catostrophic in pre-revenue businesses
A PSC needs to own more than 25% of the issued share capital.
I cant imagine CF ever owned 25% of the enlarged share capital, and was perhaps only a PSC from when the original entity which now houses POLB was set up.
Just admin/cleaning up loose ends. Can anyone recall CF's ownership % of POLB?
To think some sorry souls sold for 4.16 on Monday (3 days ago!). 56% increase since then, and long may it continue. Sentiment for everything ORPH is rock bottom, but imo the business is as strong as it ever has been. POLB is a free hit and worth holding onto for the ride, again imo. I certainly am not desperate to sell at any price going, like many a shareholder upon receipt of their shares in recent weeks
STC could absolutely take off if it catched the imagination and the various water monitoring devices will be required more and more in the future with the effects of climate change, if not already. Arguably either could very quickly outgrow the capabilities of the present infrastructure in place at the moment.
CR seemed like it would be a major move to address the potential rocket in demand, but right now we have not heard anything of note for months.
STC seems to have large testing capabilities so hopefully we can meet a significant uplift in demand should it come.
I feel labskin will be the most overlooked by society, at least until laws and regulations change to prohibit animal testing.
BT could be massive but is dependent on passing trials and providing an affordable and reliable diagnosis tool. Still in development so a complete bonus if that comes off. Certainly the NHS needs something to help it out and a diagnostic device could give patients a once over in the GP surgery with less GP hours required
I feel that DVRG is a great investment with a lot of potential, but we are yet to get any major interest from the institutional investors. Hopefully yesterday was a good advertisement and we start to see an uptick in news, interest and ultimately SP
It certainly seems like we have three core avenues that could prove very successful in the future, and potentially a fourth:
- waste water monitoring
- STC
- labskin (putting an end to the testing of cosmetics on animals)
- (potentially) point of service diagnosis with BT
I do wonder whether we have the resource to develop each avenue effectively. Would DVRG be better off following the open orphan model of spinning off the various opportunities, with each having it's own BOD? (I appreciate LTH in ORPH are yet to see this model bear fruit)
JR knows he needs the SP to be well above where it is to get any sizeable placing through and keep current LTH on side
If he proposed raising £8m then he would need to double the shares in issue. That would p1ss off every shareholder and also dilute his own shareholding.
Big news is needed to shift the SP. Hopefully the results carry evidence that the company is growing
AMC are selling a pre development nickel mine in Russia. I would imagine that the various sanctions have slowed that process down considerably.
For RBD to RNS the SPA suggests that it is already well underway. Hopefully it won't be another two months before we find out the value!
We don't yet know the form that the consideration will arrive in. I have my doubts that it will be 100% cash upfront. It could easily be, say, 30% cash upfront, with the remaining funds being paid over time. Any such agreement will have a relatively muted effect on the SP as the cash would take years to be received in full.
Hopefully i am wrong, as i have been under water here for a while, but i think the form and timing of the considerstion is almost as important as the overall return, certainly from an SP perspective. All imo
19 days until 31 May.
News could drop anytime.... or it could be pushed back again!
At least the price was more or less secured prior to the Russia/Ukraine crisis and so this investment should hold up quite well vs others in my portfolio that have taken a hammering!
MODE either kills it and propells to billion pound+ MCAP, or it fails.
I really can't see them floating in the £10-£50m mcap bracket like so many on aim. The business has the ability to exponentially grow
For me it's a hit or miss. I won't sell nor will i buy at these levels. My average is a lot higher, but i suspect i will have a smile on my face eventually. If i dont, those buying at 8p wont either. All imo
Amazing really, isn't it? A portable water contaminatiom detection machine for use anywhere a road is. Why wouldn't it be a success and in major demand? Who would prefer the alternative of manual samples that take days to analyse? I can only imagine that cost would be the differentiator, but that effectiveness and accuracy cannot be rivalled
DVRG have the tech and are well ahead of the competition. Hopefully this is the year we see that potential turn into the big bucks
It certainly won't be a live bank feed to the mode company bank account. At worst it's outdated, at best it is an estimate, and it won't be a very well educated estimate given the company wouldn't release that sort of information
My HL account shows my poolbeg shares in green at the bottom of my portfolio (via the app). It mentions the total number of shares and has apportioned them from my total cost in ORPH.
Therefore, to me, HL already know all they need to know? To receive shares in certificate format via the post seems a bit archaic. If i receive paper shares how can i then "import" the shares into my online account? Seems a lot of hassle for only spin off one... potentially 3 to go...
Values are unlikely to be published until the SPA is binding/close to conclusion. This will be at the request of the buyer as they dont want any competition trumping them.
RBD are always going to state "satisfactory" in any public communication as they dont want their buyer to think they have over bid. RBD would be foolish to say "an amazing offer, more than it's worth, kerching!!"
Essentially, we can only speculate until the deal has progressed far enough that either party is willing to release numbers. Once numbers are released i would expect us to be close to conclusion. Could be many months yet.
I've been invested since before the colter drill, just after the wick duster (around Feb 2019), so this is great news for a long suffer shareholder. Hopefully it results in the first significant monetisation! GLA