Member Info for Maxi19

Good post Kooba. But I would still disagree with you on disclosure to some extent - if they're close to agreeing a deal I think better to stay quiet.

If anything has happened that is materially different to shareholder expectations based on prior disclosure or is materially different to financial expectations then they can't delay disclosure. Check out the MAR rules on delaying disclosure. So if the process has gone completely tits up they'd have to disclose it.

I'm not sure that's likely as most people would say the value lies in the IP and trade secrets not JDAs which don't bring in much revenue. I would be surprised if they're still negotiating the price at this stage. The process was supposed to be highly structured and the potential bidders gave indicative bids in Q2. If none of them were decent I don't think the process would have continued.

There are many reasons why the process could be dragging on. On the positive side one or more bidders could be willing to pay loads but want to do a lot of DD before they do so (generally the higher the price the more DD). On the negative side one or more bidders could have pulled out or something bad has come out of DD. Really could be anything.

Unlikely. They have plenty of cash and shareholders would need to approve any new issue, which they presumably wouldn't.

Kooba I agree that commitment was dumb. I think it was before CDX got involved properly and made it clear the process wouldn't be that quick and they'd be better off holding on to the cash until a deal was signed.

In terms of share price movements I'm not sure you can draw that many conclusions from it. The share price more than halved from last November to April. Did that reflect the potential of the company or was it because there was no news?

If the market is currently right then can we expect a £10m sale. It seems very unlikely they would sell off for that little when the cash runway is fine.

If we get no deal the price will fall quite a bit. In which case the market was wrong. If we get a deal anywhere close to the valuation they did the the price will jump quite a bit. In which case the market was also wrong.

If a company decided to put all its money on black, say £10m, the market cap would be about £9m. The resulting market cap would be zero or £20m. That £9m market cap didn't reflect the eventual outcome.

You could probably come up with 20 reasons for him leaving, half good, half bad.

One thing though is that he was a massive number of shares so you'd think it's unlikely that he'd do something to sabotage the majority of his wealth.

Kooba I agree that the wording of the latest TU didn't really inspire confidence, particularly the meaning of assessing options. I wouldn't however take that to mean no bids have been received, because under the disclosure rules if there has been a material change in expectations and previous guidance you have to be explicit about that and can't release something ambiguous. So what I suspect may have happened / be happening is that bids were received but there is also this LG litigation which if it settled, either via a license or sale of the IP to LG, could "maximise value" as Dimitry said.

Also, Edison in their report said that various outcomes to the CDX process were possible. That could mean a separate sale of the IP and operations.

Pure speculation on my part but it's hard to know what's going on.

Agreed, the share price doesn't really make sense. It suggests the CDX process won't end in a sale, but if that were the case it would likely have terminated a long time before given we're so far down the road.

Alternatively they're going to sell for an amount way below the external valuation done last year, which valued the IP at over £47m so as to reverse the accounting impairment of the IP. But could they accept such a low-ball offer seeing as the cash runway is fine? Again, they probably would have ended the process before now if the offers were so low.

So the most likely solution is that the process is still going fine and the share price movements is unrelated. The SP does have a history of drifting on no news - this is the fourth major spike and drift in the last 12 months. In April there was no spike ahead of the JDA and litigation announcement so it seems they're not leaky.

My guess is that the LG litigation is somehow intertwined with the CDX process, in that they are either trying to get an early settlement or LG could be a potential buyer. The fact LG appeared to go in so hard on the transfer of venue petition offers some evidence for this, but that is very much a layman's assessment.

There's a risk the sale doesn't complete, in which case you'd be looking at a 10-20% drop.

Thanks Glorfindel. What may have happened with Dieter is that the company calculated the tax at e.g. £10,000 and it was actually £10,065 when they plugged it into the software and rather than ask Dieter to make another transfer they just sold the small number of shares. Although Dieter is German I expect he attends board meetings in person so his employment would be UK based and subject to PAYE.

The recent share issue and sales for the non-execs is interesting.

It shows Chris Battersham and Alison Fielding selling about 30% of their issued shares to satisfy PAYE/NICs, no sales for Jalal and about £60 worth for Dieter May.

All non-exec pay should normally be put through PAYE so it begs the question why Jalal and Dieter didn't have (more) sales. The only reason I can think of is that they decided to pay the income tax and NICs amount to the company themselves so that they maximises their retained shares. In other words they didn't want to sell / wanted to buy shares at 11p.

What I expect happened with Dieter is that the calculation or payment from him was marginally off so they had to sell a few to make up the difference.

If I'm right about this it's a positive sign that Jalal and Dieter are optimistic enough about the share price at 11p to dip into their own pockets.

Or am I missing something?

Becoming difficult to ignore the significant share price drop in the last week in the last couple of weeks? Is it shareholders who knows something about the CDX process? Or is it simply a complete lack of buyers and someone who wants a fair amount? There's not massive volume.

I've been doing some research on the company's disclosure obligations. Obviously they're sitting on significant inside information right now. The starting position is that inside information should be disclosed as soon as possible. It can be delayed though when it's in the company's legitimate interests, such as when negotiations are ongoing for selling off an asset.

However, disclosure cannot be delayed when to do so would mislead shareholders. I think that's what happened with the Samsung settlement. The board realized shareholders were overestimating the size of the settlement which prompted the second RNS.

In this case shareholders' expectations are that bids have been received, SPA negotiations are ongoing and are expected to conclude in Q3 and that the deal should complete before the end of 2026. If that is no longer likely then I would argue disclosure would be necessary as delaying it would mislead shareholders. So the fact we haven't heard anything suggests the CDX process is still on track.

It's surprising there's not more speculative trading here but I guess it's just flying completely under the radar.

I wonder if the application could somehow be related to the CDX process to buy them some extra leverage by sowing a seed of doubt that it could be moved, or if they're in negotiations for a licence.

Dipper, you've clearly been using AI.

The motion to move the case to N.California, if successful, would mean that the case would take a lot longer to come to trial than it would it if stayed in E.Texas and would therefore be a big win for LG.

However, it's a high bar to get a venue moved and basically requires that a defendant have a much much stronger connection to the chosen venue. LG's headquarters are in Korea and it has been sued multiple times in E.Texas so one would hope it's a bit of a Hail Mary attempt to get it moved, but in the context of the ongoing CDX process it may make sense to sow a seed of doubt - how exactly that makes sense I don't know but we have very little visibility.

Kooba they were clearly trying to say as little as possible on the subject as they could, presumably in order not to jeopardize it.

Appreciate that you don't see why revealing more information should jeopardize the process. My view is better safe than sorry.

Kooba, I see what you mean but without wanting to parrot Dimitry if you try and force the pace of an M&A process some bidders will simply not want to take the risk. Unfortunately these things take time.

I think Chris Richards was foolish to talk about the process being done at pace, intimating it could be wrapped up very quickly. Of course someone could have in early doors and been willing to pay X amount but it doesn't mean someone won't still pay X amount after taking longer.

I completely agree with you that this stock has been bad news after bad news the last few years but it doesn't make sense to exclude a decent deal being struck just because they haven't done so yet.

If there was no prospect of a deal the process would have ended already, they wouldn't want to waste management time and fees on CDX.

...commit a certain number of years to the business which he didn't want to do.

Kooba, that's a pessimistic view of what's happening. I share your frustration at the lack of detail in the RNS, but the fact is that it's deliberately worded ambiguously so as not to give much away. Perhaps we're near to a deal, perhaps we're miles apart, it's impossible to know.

Pickett's resignation is hard to decipher. My initial reaction was that the potential buyer didn't want him or his salary but it could be that they wanted him to commit a

I've said this before Smithy but another outcome could be the separate sale of the IP and operations to different parties. I think that's entirely plausible.

In the LG v Nanoco it shows LG have recently got 4 lawyers from Latham & Watkins to represent them. They're one of the most expensive law firms in the world so clearly they're taking it seriously. Might also show they intend to defend the claim initially.