Member Info for hunkymonkey

They have $200k+ monthly recurring revenue at a low fixed cost of $30k per month - this is true, however isn't enough as they still lost over $1.2mln last year

Also a £1.25mln banking facility as RNS in April 2020 - this is true, however £739k is used and they are currently in breech of the terms of the agreement, therefore it is likely that it is not available right now

and also Grant's and government loans as per October 2020 - true however these are spent, as they had less cash on the 31/12/20

This is why you need to read things for yourself. Everything in this post was true, however with context, it's a very different position

Definitely read all the rns, theres also a lot of useful information of the distributor (s) on social media and LinkedIn

That's been the frustrating aspect for all shareholders tbh. The tech is good, however, getting contracts over the line had proven inadequate. The BoD have undoubtedly supported, but keep reading and good luck

£230,000 government loan 10/12/20
£175,000 grant 10/12/20

So £405,000 was received in cash on the 10/12/20

Yet there was only £264,000 Cash as of 31/12/20. Things were absolutely critical, they were literally out of cash and some.

Genuine question, if you're worried about insolvency, why would you invest?

Fwiw, I wouldnt be worried about that though. I think that you are correct in stating there is a funding gap, until any company is providing a net profit, there will always be a gap.

£158,000 cash 31/01/19
£243,600 loans 25/03/20
£230,000 government loan 10/12/20
£175,000 grant 10/12/20
£739,000 banking facility used 25/03/21 accounts

£264,000 Cash as of 31/12/20 here are all the figures to confirm

But there are 3 options imo

1) more BoD loans
2) dilution (at these prices)
3) large order received*

* In the last rns it stated that the BoD are cautiously optimistic for H2

What's the significance? How does this plug the fund gap?

Given that the banking facility is in "breech", given they are in "negotiations" with the lender- I think that it is fair to assume that they are unable to draw on this presently. So everything is currently dependent on the 350k cash and revenues

I wanted to seek clarification on the "breech of financial covenants"

I can confirm that the matter still isn't resolved, however it is a matter of negotiating with the bank. Star are cooperating and anticipate the situation to be resolved by mid year

Great post nig - I would definitely agree with you there

There are 3 sides to this deal, cropx, nasa and star. Currently I think it is unclear what it means to star, specifically this

"Over a 12-month time period with the integration of NASA data and international partner agency satellite data, the pilot program will quickly establish the parameters for water usage estimates"

Star represent the data and connectivity for cropx, the ability (quite literally) to see data and what's happening in the ground. What are nasa doing and what is star's role?

Truth is, no one knows. Personally, I'd like to see better communication from the BoD and have this rns'd.

Why is it up to sh to find this information? Why are the BoD not updating?

For cropx however, they will be an absolute npowerhouse globally, that's plain to see

Excellent links, it is only a "pilot" at this stage though. It does say that it is going to use "nasa's extensive satellites".

I draw comparisons to the bosch deal, what did they do. They built their own SaaS back office and don't use star's, that's way the real profitability is. Will nasa do the same? Who knows, I'm not saying either way.

What in will say is, crop x is the crown jewel for star, I'm going to assume that our SaaS system is used. What does that mean? It means approx $3pm per sensor for every 40 acres. Look beyond the name and that is what it equates to in pounds and pence. It's going to take time for that to be scaled up

Last year we burnt $100,000pm because of a lack of deals. That's in the accounts black and white. These deals albeit are a great endorsement for crop x and subsequently us, isn't exactly what we need right now. We need to stem the financial hole that's in the accounts (which is worse this year because of the compounded interest) and it's plain to see.

I do say potentially, as when the rns was issued on the 06/07/20 about the rolling credit facility which has been utilised to 66% of it's maximum

With a rate of 3% above israeli base rate. A little over 4% per annum, resulting in interest charges of £34000 per yr. But the issue is "The RCF is for an initial period of 12 months", nothing guaranteeing it being extended beyond this point.

"Starcom is required to have a deposit of 15% of amounts to be drawn on account with the lender prior to drawdown." This is where the banking issue is, as at the time of writing the rns, they did not have the 15% deposit.

But it must be noted that this is not unsecured, it is "secured by way of a cross group guarantee and a floating pledge over the assets of Starcom G.P.S Systems".

So it is only for 12months, there are no guarantees that it will be extended, if it is extended there is no guarantee of the rate either and they do hold a charge over all of starcoms gps tracking products.

I do say potentially, as this is only an uncertainty, what would they do with the products is what i would suggest. I don't really believe that they would enforce it. But given there was a breech on this loan, it's certainly noteworthy. I think that it is plausible that there may be a rate increase, buy admittedly that is just my musing

I do respect this BoD, I think they should have delivered more but they have done all they can to support lth over the years. However, recently, a few got into a little bit of a stir over social media comments from starcom. Specifically, regarding "proud to be involved in the covid distribution", obviously this was not an official news chanel, but rightly or wrongly certain investors got excited about being involved in a multi billion $ distribution.

However, in the rns yesterday, it was stated that the covid distribution was "modest" and in panama. With this, I would question whether or not this information should have been shared via social media, which clearly gave the wrong impression to both current and potential investors.

I don't believe that this came from the BoD directly, which is why this was addressed in the rns "officially"

Given the rns stated yesterday, that there are issues with the raw materials and delays upto several weeks, this is likely to impact the ability fulfill contracts should an order be in the offering. Couple that with, increased costs in the raw materials, I see that the profitability will be lower this year (unless the costs are passed onto the clients). Which is unlikely imo

£158,000 cash 31/01/19
£243,600 loans 25/03/20
£230,000 government loan 10/12/20
£175,000 grant 10/12/20
£739,000 banking facility used 25/03/21 accounts

£264,000 Cash as of 31/12/20

I often find people seem to focus on the SaaS payments as a comparison to mcap, however all of the above includes the increased SaaS payments too. It's still over $1.2mln.

Given the cash used last year, coupled with no contacts this year in Q1, and the increased debt payments required. I suspect that either A) further draw down on the banking facility and further debt or B) now capital is required from the BoD or market.

It's a very good trial, however it is currently fine tuning. Crop x is truly the crown jewel long term. The impact of cropx had already been seen in the accounts with SaaS payments up by 9%.

But the rns stated H2 they are cautiously optimistic. (Rns)

6/7/21 the banking facility is to be reviewed (as per rns)

30/09/21 BoD loans to be monetised or diluted

So much information to digest and review..........

Good luck recouping you're losses, you deserve to after so long. You're right about about the BoD (they're not bad guys) but this is less to do with covid imo, and more to do with failures to cement contracts that the tech truly deserve in previous years.

So I think that the breech relates to not having 15% of the drawn amount in an account, as per the conditions of the original loan.

'The RCF will be secured by way of a cross group guarantee and a floating pledge over the assets of Starcom G.P.S Systems and is subject to certain standard banking covenants. In addition, Starcom is required to have a deposit of 15% of amounts to be drawn on account with the lender prior to drawdown."

Therefore, $739k equates to a $110,850 to satisfy the demands of the loan agreement, it's worth doing as the rate is reviewed after 12months. And breeches "could" affect the this rate

Thanks for pointing this out, I have reached out to seek clarification on this

"NOTE 12 -

SHORT-TERM BANK LOAN

During July 2020, Starcom Israel signed a loan agreement with an Israeli bank in order to receive loans and credits in an aggregate principal amount that will not exceed NIS 5 million (hereinafter - "the Loan").

The loan will bear annual interest in the amount of Prime + 3%, calculated and payable on a monthly basis, to be repaid after a year.

In the framework of the financial agreement that was signed, the Company is obligated to maintain financials covenants in regard to the Groups' EBITDA, Equity and growth targets.


As of December 31, 2020, the Company is in breach of the financial covenants"

Not had time to look through the accounts thoroughly, but from the a very quick look. It looks like they have drawn $700k+ of the 1.1mln loan facility, with about 250k in cash. With government loan and BoD loan too

10/02 rns The Company expects to announce its audited results for the year ended 31 December 2020 in early March 2021.