Member Info for JAllis

Yes, that's also my understanding - that Conrad will be looking for farm in partner to cover the costs. However the risk here is will EME be part of that deal or will they have to find their own partner/find a buyer for the stake/stump up the cash? The former two could take while unless something is already lined up and the latter could be quite dilutive. They also have the CNOOC issue and, it appears, a sum they owe to Conrad also that they need to cover.

So not so straightforward here yet.

Just listened to this interview.

Sounds like they need to raise cash for field development hence the farmout.

He mentioned $350b - think it was a mistake and he probably meant $350M- as the development cost. If thats the case and EME own 8.5% then EME will have to stump up its share which works out to be $29.5M.

That maybe why SP's not moved on today - clarity needed on how EME will cover its share of field development.

$100m at 0.01p means this company at 10p is now valued at £1billion. It's worth 10x nav of BTC they expect to buy. Ridiculous valuation.

Can anybody explain the bull case here given they are issuing $100 million at 0.01p per share and it's already trading at a 760% (currently 7.6p) to that price?

Warrants issued at 2.3p, fool

Thats the worst advice when it comes to smallcaps, esp AIM

A LOT of warrants here though

To add meaningful results from the Indian contract announced today will not be in place until next year at the earliest and the Cummins contract is yet to undergo a lengthy ASIL-D testing phase.

Appreciate regular posters on here have said the CLN conversion is not a near term risk however such statements carry little weight in the real world. Fact remains £2.4M of CLNs are in profit above 0.035p and can be converted at any point. Furthermore, company runs out of cash in a few weeks. Unless this is addressed officially comments on here are mere speculation from vested interests

Rudyard Helium shows came in at 0.1% - why are PIs getting excited about such a low grade of Helium given 0.5% is what's considered commercially viable in the region especially as mud shows can be higher than what actual flows may be?

"The Darwin #1 well at the Rudyard Project has significantly surpassed initial expectations. Helium gas shows measured by mass spectrometer reached a peak of 1,312 ppm"

History shows it was actually was around 21/22p and pulled back to around 13p before it came to current levels.

Seems there is still a seller around, dumping into rises

What sort of discount would a placing be at?

Because this a big question mark on funding. How will the development of the DROs be funded?!?

Cash runs out Q1 which is just over 3 months away.

Morning BBN,

That's not the sentence I was referring to when I said there were typos.

The argument has not switched to revenues, but remains that growth when looked at from the perspective of what matters - $ - was only 5% in the Q4 over Q3 '23 period. Add to this that based on trend so far for every quarter where Rx levels rise they are followed by a 2 quarter drop.

Ive set out from a conservative perspective how if this trends follows through we could be looking at capital raises of between $4.4m and $6.4m. Wrt left field events yes they can happen with all businesses but that PBM issue was pretty worrying, what's stopping another PBM just disappearing - every time a PBM disappears does it mean revenues of a whole state drop off until the new one is in situ?!

Yes there is the chance that everything goes exactly as it should and no loan covenant breaches occur. We will just have to wait and see.

GL!

Along with any other left field risks like the debacle with under reported numbers earlier this year or the Texas PBM issue

There were some typos in my last message which may have led to some confusion.

Regarding Q3'23 > Q4'23 growth being 5%, that was in reference to net sales. So, although actual scrips increased by 22% the $ value of this increase in net sales was an increase of 5%; net sales went from $4.1m in Q3'23 to $4.3m in Q4'23. See slide 16 on the interim deck you posted.

Further, scrip prices haven't gone up every quarter. Infact, every quarter they increased has been followed by 2 down quarters with an upto 6% correction.

Assuming the 20% increase QoQ you put forward alongwith a conservative 10% correction in scrip prices gives us total revenues across the 2 upcoming quarters of $14.7m. Add the $1.1m for ex US and the $1.4m for the Paed and Canada payment brings the total to $17.2m. A approx $2.2m shortfall. 2x that to apply the cure and we're looking at a potential capital raise of $4.4m along with the Q1'25 target being bumped up by the $2.2m shortfall.

If we instead get only a 5% net sales increase in Q4'24 as we did in Q4'23 then the total revenue across the 2 quarters is $13.7m leaving a shortfall to the target of $3.2m and a capital raise requirement of $6.4m along with the Q1'25 target being bumped up by the $3.2m shortfall.

Ultimately we will have to see what happens but it is certainly not out of the woods yet and the real risk of breaching the loan covenants does remain.

With resect to the cure. If we take a somewhat conservative estimate and say the company hit an additional $14m by year end, taking the total achieved to $27.1m they will be $4.4m short of the target and will thus have to raise $8.8m as a cure - almost 33% dilution - what sort of discounts would they be expected to give to raise that cash in the current environment?!

Further, this would then put more pressure on the Q1'25 target - they would have to generate $11.8m in Q1'25 to hit the SWK target ($7.4m for the Q1'25 target plus the $4.4m miss from H2'24). Else it will be a raise/loan at 2x the gap again. Additionally they are only permitted to use the cure twice in 12 months, so any further misses and SWK has a charge over the co assets.

Thanks BBN.

My take on it was the renegotiated favourable terms were the reduced revenue targets, they are outlined in the 30/4/24 RNS, with everything else staying the same - i.e. the cure to such breach else any amendments in these parts would be released to the market as the amendments to the targets were.

The c.20% increase Q1 to Q2 was made up of a 69% jump in number of scrips AND a 23% increase in scrip prices from $139 to $171. That increase in the number of scrips is due to a correction from the Texas issue. Whereas a similar increase in prescription numbers may be possible it is questionable whether a similar jump in scrip level would be given they are now approaching the upper end of what they expect to achieve. A 23% increase in scrip prices in just the next quarter would take the scrip price to $213 which is near the ceiling of scrip price based on previous guidance from STX.

The $18.4M gap to the target ($12.1m plus the $1m announced today) is an expectation of $9.2m per quarter which is a significant ask. It would require a 25% increase in Q2 to Q3 and then 25% again from Q3 to Q4. Q4 is a slow quarter generally due to the holiday period and reduced scrips being written. Q4 growth over Q3 last year was barely 5%.

If the company manage to hit the Q4'24 SWK revenue target then the Q1'25, Q2'25 targets are a lot more achievable but it is this significant hurdle it will have to clear and it requires everything - # of scrips, scrip price and revenue - to increase more than it has ever done before. It is a big ask.

No. They need to do $31.5m by the full year. They have done $13.1m so far.