Member Info for JAllis

Hi Andrbea - my read on this is kdix has mixed up proposal with the word bid and this may well be due to lack of preciseness used by DH himself at the AGM. The AGM was held in July, shortly after, in September the inerims were released. The wording in the interims was explicitly 'PROPOSAL', had a formal BID as part of the IOM 5th and 6th licensing rounds been submitted this RNS would have not used the word PROPOSAL but the word BID.

Add to this that window for BIDs only opened in late October and further the points about the bonds required to be submitted as part of any bid - bonds which PET does not have the financial resources to be able to put up.

Funny headline there David, same as the one you posted on the BMV board yesterday.

The very definition of hot money

Exactly, no BID has been made, only a proposal was put to the authorities back in July time and given nothing has been heard since on the topic would suggest it has come to nothing

merely a speculative rise, would expect it to fall back over the next couple of days as the hot money traders leave before the weekend. bear in mind theres also circa 14.3 million warrants here that are in the money from c

To add; given bid window opened in late October and Pet was stating in July/September it had submitted a proposal itself shows the two are different things. It seems that the Bid window was opened on fiscal terms the Iraqis wanted to issue the licenses. Petrel states; "Petrel has fine-tuned its Iraqi proposals, following feedback. We have contractors and suppliers identified but seek improved fiscal terms to attract partners."

Petrel has mentioned this point regarding the fiscal terms of the licenses in other RNS's also - the offer the Iraqis are making for the blocks are on fiscal terms that PET has not been able to in the past make work with their partners hence the revises PROPOSALS it submitted in Jul-Sep. Seems these were not amenable to the Iraqis either which is why we have had nothing further back from PET in terms of making official BIDs for those projects. Pet made the proposals for amendments to fiscal terms in Q3'23, they were not acceptable to the Iraqis and the Iraqis went ahead and opened bid window on their own terms in Q4 which PET has not then participated in because they are unworkable for PET given it needs to attract partners and give them a nice slice of the pie for their participation.

Seems posters are getting 'PROPOSALS' and 'BIDS' mixed up.

Pet confirmed, as follows, in its HY results in September that it had submitted a PROPOSAL:

"Petrel has fine-tuned its Iraqi proposals, following feedback. We have contractors and suppliers identified but seek improved fiscal terms to attract partners. An updated Merjan oil field development proposal has been submitted to the Ministry with a view to finalising a licence agreement."

A formal BID for a block is an entirely different thing. Petrel has not confirmed or announced anywhere that it has submitted a formal BID as part of the 5th and 6th licensing rounds which are due to be awarded in the upcoming weeks. The BID window itself opened in late October (see IOM website, link in last post) with the submission of BID bonds required by April 18th 2024 and the DEADLINE for the payment of these fees April 25th 2024. Per my previous posts, PET does not have the cash - see last report) to even pay the participation fee let alone the BID BOND.

There is nothing to suggest PET have submitted a BID for either Merjan or Block 6 as part of the upcoming round.

Thanks, Smugger. Yes my figures didn't include Viatris as it was a one-off payment.

And, as you rightly point out, impossible to say how it will be accounted for in each of the FY23 quarters other than it has certainly been accounted in the 23year. If $0.7M was in '22 then that leaves $3.7M to be spread over '23. It may have been all recognised in the 1Q'23 in which case there's no contribution going forward, it may be spread equally which would mean a contribution of c$0.9M each quarter benefitting the FY24 trailing quarters only upto Q3'24, or it could be anywhere between in the figures, whichever way the benefit is only to Q3'24.

As you rightly say the big concerns are Q3, and even more so Q4 where the target revenue amount to be generated is $22.5M and $31.5M - huge increases that STX must meet and far from where it is currently.

Mrcalm - self declared short term trader - what is your source?

Further to my pevious post - from the website:

Each company in a consortium must pay the Participation Fee. The Participation Fee for the Fifth (+) Round Offering is US$100,000 and for the Sixth Round Offering is US$100,000. A company may obtain the data packages and participate in both rounds by paying a Participation Fee of $150,000.

"...It should be noted that this Participation Fee is not a “purchase” of the data package, but a fee which allows participation throughout the process (including access to the underlying technical data, draft contracts, etc., and participation in any workshop/webinar that may be organized)..."

"...If a bidder is bidding for more than 1 Contract Area, a separate bid bond must be provided for each bid. Such bid bond(s) must be presented before the date for the submission of bids. A bid bond will be in the amount of five million United States Dollars (US$5,000,000)..."

Petrel does not even have enough cash to make the bids for its two blocks thus highly likely no bid has been made.

According to Iraq's Ministy of Oil's PCLD $100K is required prior to a bid being made for each block and $5,000,000 for each block a bid is submitted for. Thats $200K for both Block 6 and Merjan prior to making the bid and $10M to submit the bid for both blocks.

As at 30th June Petrel had 51K EURs and has since raised circa £108K from warrant exercises. That's about £150K in cash if all overhead expenses are excluded.

It's not possible for these bids to have been submitted. This is all a load of hype over nothing. Rise on hot air. Baseless speculation.

Monetary criteria for bids can be seen here:

https://iraq-pcld.com/initial-tender-protocol/

Riz -dont understand why its so difficult to understand what is meant by 'revised covenant' - the originals were those in the Sep RNS, the revised are those in the April RNS. They are behind on both targets

Thanks.

I think the key point they need to answer is are they in breach of the minimum revenue covenants for the trailing 4 quarters to Q1'24 (which, based on the numbers they have provided, I believe they are), if so by how much and will they be raising 2x that amount as is stipulated in their agreement with SWK when a breach occurs - if not why not.

Will be interesting to hear what they say

Riz - did you have a read of what I posted in response to your request for the source of min rev covenants? what are your thoughts on that?

Riz - did you have a read of what I posted in response to your request for the source of min rev covenants? what are your thoughts on that?

Helium One also had Helium shows, Helium was leaking out of the ground at their first drill site - we saw how that went and how many drills, time and $ it took them to finally hit something.

The gas that flowed to surface in the HEX historical drill is not confirmed to be Helium. it is not known what that gas is. It could be anything. This is not an appraisal drill as it has been promoted.

Riz - read the RNS of the 28/9/23 (titled 'Shield Therapeutics - $20m secured debt facility &proposed equity raise'), ive copied the relevant section below note that the minimum revenue covenants detailed below were renegotiated lower (albeit are still substantial)- the revised figures are in the RNS of the 30/4/24

Additional details on the SWK Financing

Shield has entered into a Loan Agreement in connection with the SWK Financing pursuant to which Shield has, conditional inter alia on Shield repaying the Existing AOP Loan and lien release on IP rights and satisfaction of other customary conditions precedent for a transaction of this nature, obtained a commitment from SWK to fund a US$20m term loan with a maturity date of 28 September 2028. The first nine quarters following closing will be interest only periods and the interest rate will accrue interest at an initial margin of 9.25% plus the greater of: i) 3-Month CME Term SOFR ("SOFR"); and ii) 5.0%. Interest will be calculated on the basis of a 360-day year and paid in cash with the first payment due in Q4 2023. Shield is required to pay SWK a 1.0% origination fee on the value of the term loan and a final payment fee of 6.0%. Post the interest only period of nine quarters, quarterly payments of US$1m will be due for capital repayment. The SWK Financing will be secured by way of perfected first-lien interest in substantially all existing and future assets, including intellectual property, subject to the release of the AOP's lien on IP rights in connection with the Existing AOP Loan. Financial covenants apply with minimum revenue targets and minimum liquidity of no less than the greater of i) trailing one quarter of cash burn or ii) US$2.5m. Warrants over 8,910,540 new Ordinary Shares will be issued to SWK with an expiration date of six years after closing and a strike price of 11.1p per Ordinary Share. The table below details the minimum revenue covenants:

Trailing Four Fiscal Quarters (i.e., 12 months) Ended - Minimum Group Revenue

Q3'23 - US$8.5m

Q4'23 - US$14.5m

Q1'24 - US$22.5m

Q2'24 - US$31.5m

Q3'24 - US$38.9m

Q4'24 and each fiscal quarter thereafter -US$45.7m

In the event of the breach of a minimum revenue covenant, Shield can avoid default by raising equity or subordinate capital equal to, or greater than, 200% of the breach. Shield has a period of 40 days from the date of breach to evidence to SWK the raising of sufficient capital to cure such breach. Shield can utilise this cure route three times over the life of the facility and not more than twice in any 12-month period.

The SWK Financing is not conditional on completion of the Equity Fundraising.

The drill is billed as an 'appraisal well' but appraisal wells are for discoveries to test commerciality.

There is NO Helium discovery here. The previous wells that were drilled just encountered GAS. The gas was not further tested to identify it. That gas could be anything, therefore to call this an appraisal well for Helium is misleading.

Yes, these are just Accufer revenues. The $17.5 m in the update included the one off payment from Viatris and the Texas revenues. Going forward there will be no Viatris payment. Excluding Viatris they made $13m so would still have been $1.5m short if the Viatris payment hadnt got them over the line. So granted, on this occasion they're ok for the Q4'23 period but are in breach for the trailing 4 quarters to Q1'24 by about $1.7m and need to raise about $3.4m for that. The Q2 revenue target is 16.5m so they would need a c.25% increase over the Q1 and they are going to have to achieve that without Texas as it still was not back online by Tuesday. So with almost half the quarter gone without TX its looking unlikely (given they only hit a 1% QoQ increase in Q1'24 over Q4 without TX) they will hit the target for Q2'24 either.

Whats more concerning

Update:

I found the actual updated sales figures, they're in the RNS of the 21/2/24:

Q Sales Avg selling price Total $ Sales Trailing Target Gap

Q1 10.1 119 1,201,900

Q2 14.9 119 1,773,100

Q3 23.3 145 3,378,500

Q4 28.6 145 4,147,000 14,500,000 -3,999,500

Q1 28.8 140 4,032,000 15,000,000 -1,669,400

As STX have to raise 200% of the gap it needs $8M for the Q4'23 period and $3.4M for the Q1'24 period - that is a total of $11.4M to address the SWK breach. 40 days are up for the Q4'23 period and we've not heard anything so they are late on that and have about 10 days to address the Q1'24 period. The next week or do should be interesting to see what happens. Extremely poor form the management did not even discuss this major issue in the investor call on Tuesday

This is not about being cashflow positive, it's about minimum revenue covenants. I suggest you read the small print in the $20M funding RNS from Sep 23.

Ps. My last post probably explains why the CFO and CEO haven't bought any shares at this price

Company must meet minimum revenue targets set by SWK as below.

Trailing Four Fiscal Quarters (i.e., 12 months) Ended Revised minimum revenue targets

Q3 2023 - $8,500,000

Q4 2023 - $14,500,000

Q1 2024 - $15,000,000

Q2 2024 - $16,500,000

Q3 2024 - $22,500,000

Q4 2024 - $31,500,000

Q1 2025 - $38,900,000

Q2 2025+ $45,700,000

If it doesnt meet these targets it must do a placing for the difference according to the following conditions:

"In the event of the breach of a minimum revenue covenant, Shield can avoid default by raising equity or subordinate capital equal to, or greater than, 200% of the breach. Shield has a period of 40 days from the date of breach to evidence to SWK the raising of sufficient capital to cure such breach. Shield can utilise this cure route three times over the life of the facility and not more than twice in any 12-month period."

If it cant then SWK can step in and takeover the assets. This is high risk bet on STX being able to hit these targets. The ability to hit these targets just became more difficult not only by the downward revision in the prescription data but the Texas PMB issue discussed on the Investor call yesterday. It was noteworthy that the CEO said he could not and would not commit to a timeline as to when Texas would be back online. Even if it does come back online how long would it take to come back to the levels previous to the issues? This will impact the trailing 4 quarters numbers and if it means the trailing 4 quarter revenue is not at the minimum revenue level then its a placing for 2x the difference.

Q1'24 trailing 4 quarters (T4Q) are Q2'23, Q3'23, Q4'23 and Q1'24.

Based on RNS data we know revenue in Q1'24 was $4M from 28,800 prescriptions. Company has not disclosed Q4'23 revenue figures but has said Q1'24 prescriptions were 1% greater meaning Q4'23 was c 28,512 prescriptions. Avg selling price in H2'23 was $145. 28,512 * $145 = $4.1M. Q3'23 had 27,750 prescriptions, at $145 per prescription thats $4M. Q2'23 had 15,800. Avg selling price in H1'23 was $119 (see call yesterday) thats $1.9M.

Thus total revenue for trailing 4 quarters to Q1'24 is :

Q1'24 - $4m

Q4'23 - $4m

Q3'23 - $4m

Q2'23 - $1.9m

Total = $13.9m. SWK's minimum revenue target covenant for Q1'24 is $15M meaning target has not been hit and company will have to do a placing within 40 days for approximately $2.2M. And then potentially the same again if Texas is not online for Q2'24/company can't hit that T4Q target. If thats the case and company doesnt hit Q3'24 target either ($22.5m!!) then its failed to meet revenue targets given it can only avail itself of the placing route twice in 12 months according to SWK conditions and SWK has claim over co assets.

To sum it up, seems placing for circa $2m is definately on the cards within the next 40 days and there is high risk of another after Q2 or SWK taking charge of assets if Texas isnt online in time.