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Magmanus - you really are remote if you think there is buying demand

GB hyped everything on Twitter and BBs and the RNS/Presentation and Q&As were his chance to nail it. The RNS was good but the presentation was a car crash and the Q&A worse. Forgetting the amateur dramatics of the presentation, the real problem was that there was so little substance with big questions left wide open.

The usual suspects on this BB were forecasting a multi-bagger yesterday morning and these are the same people who criticise anyone who takes a view that is in any way contrary to their own. Perhaps rather less aggression and take the opportunity for a bit of quiet reflection and thought about why the SP has tanked.

These are some of the issues;

• The product certainly does not look like something that you would use in the same way that you brush your teeth in the morning. There are also real questions about how it will be used – do we really want Covid infected people walking into shops and supermarkets and pharmacies spreading infection?
• Will this actually work in the real world? As I understand it the product has not even been tested on real Covid. The development is much earlier than I was expecting and there is a lot that can go wrong.
• The messaging on who will be the customer seemed to change over the day yesterday. I think that they have no idea what their main market is and how they will access it.
• Where will they get the money to complete the development? With the proposed acquisition of MWG they have taken on additional losses of £2m. Will there be a big diluting fundraise?
• How will they sell the product, they do not have the infrastructure to do this at any kind of scale. They will need a global or regional sales and marketing organisations. A big pharma company would be the obvious choice. Until they have someone that can do this then DV will be regarded as simply not credible. I fear that the shambles of the last 24 hours will put off the most likely suspects.
• I have heard nothing in the last few days that would suggest that there is any IP or other protections to stop the product being copied. It would not take a well-resourced Chinese (or other) pharma company to quickly reverse engineer this.

Why was there little or nothing in the RNS and presentation on waste water detection? This has been the focus on much of the previous shareholder interactions. An astonishing own goal not to update the market thereby allowing shareholders to assume that there were problems and issues. Amateur hour.

I know that many on this BB regard GB as the next messiah. However, this is not the first time that he has given wildly misleading information on social media with information provided subsequently proves to be completely misleading, such as MWG orders/sales.

GB has massively over promised and under delivered all the while by using social media which comes over as extremely amateur. Perhaps it is time for GB to spend less time on social media and self-promotion and rather more on strategy and execution

Reagents are used day in and day out. So if they had a 48% incease in orders then that should have easily fed through to the sales line and revenues by the half year as these items should be in stock and sold. I recall that one poster here claimed that MWG had serious issues with supply. Although that was broadly poo pood at the time this is the only reason that I can think why there has been such a calamitous drop in sales. Perhaps the poster was right?

Looking to the future MWG is haemorraging cash - always has, always will. From the car crash DV presentation and (even worse) Q&A it is clear that there will not be and significant revenues from the Covid products for months, or more likely years, during which there will be a massive requirement for funding to complete the development. The combined entities will shortly run out of cash. Perhaps you might like to answer where that funding will come from?

Pilgrim - you have made an extraordinary statement. What evidence have you that 'they're in partnerships globally'. If they were they would be required to announce it. They have not announced anything so they do not have any partnerships.

Paul - I have tried to be fair. I have stated that I think that there is something there. However, there are lots of hurdles and I think that we were expecting guidance how we would jump those hurdles. Judging by the market reaction I am not alone. However, I do hope that they are succesful as the potential is clear - I just hope that we do not get diluted to hell trying to get there.

There has been a lot of hype leading into the RNS and presentation. There is probably something there but I fear years and tens of £millions away. There seem to be some fairly fundamental questions;

• Will this actually work in the real world? The development is much earlier than I was expecting and there is a lot that can go wrong before a product can be ready for commercialisation.
• The messaging on who will be the customer seemed very confused. You really got the impression that they had no idea how to bring this to market.
• Where will they get the money to complete the development? With the acquisition of MWG they have taken on additional losses of £2m. They either need a big fund raise (tricky at the current SP without massive dilution) or a big partner (see below).
• How will they sell the product, they do not have the infrastructure to do this at any kind of scale. They will need a global or regional sales and marketing organisations. Until they have someone that can do this then DV will not regarded as simply not credible. This is where Avacta made a real breakthrough with globally recognised sales and distribution organisations standing behind them ready for when the product is available. I think that there were many who expected an announcement on who that was going to be and the lack of that announcement is one of the main reasons behind the SP fall.
• As far as can be made out there is nothing really new or patentable and therefore if there really is an opportunity then it could simply be copied.

The presentations and RNS resulted in more questions than answers.

We have seen lots of hype but no trousers.

There has been a lot of hype leading into the RNS and presentation. There is probably something there but I fear years and tens of £millions away. There seem to be some fairly fundamental questions;

• Will this actually work in the real world. The development is much earlier than I was expecting and there is a lot that can go wrong.
• The messaging on who will be the customer seemed very confused. They really seemed to have no idea how they would commercialise it.
• Where will they get the money to complete the development.
• How will they sell it – they will need a global or regional sales organisations. Until they have someone that can do this then DV will not be regarded as credible. This is where made a real breakthrough with globally recognised sales and distribution organisations standing behind them ready for when the product is available.
• As far as can be made out there is nothing really new or patentable and therefore if there really is an opportunity then it could simply be copied.

We have had lots of hype but no trousers. And not for the first time – as previously noted we were told that the company’s main engine of sales growth had seen an increase of 46% in sales orders - what we actually got was a collapse in sales of 62%. I expect that GB thought that he could bury this by the RNS but he has been caught out.

It is curious that some posters seem to think that a SBB is not an appropriate forum to discuss financial results.

Hmmm.....

Retire you have made a series of factually incorrect statements. Rather than addressing these and acknowledging your errors you are trying to create a smokescreen. It really is about time that you retired.

I think that people have made some very interesting points on here although I find the lack of concern about the cash position and falling sales rather surprising. I suspect that we are merging with another organisation is making us rather more relaxed. There are a couple of points that Retire has made that I would like to correct.

Regarding shares the takeover triggered GB receiving 20m shares in MW. Eventually these will be converted into DV shares on a 1 to 1 basis (or 10 to 1 following DV consolidation) in the same way as other shareholders. This is not made up but is a matter of public record see merger notice ‘Under the terms of Gerard Brandon's service contract with Modern Water, he is entitled to receive his salary of £50,000 per annum for the two years from 4 March 2020 in Modern Water Shares at an issue price of 0.5 pence per Modern Water Share. Upon a change of control, these amounts fall due to be settled, to the extend not already settled, by the issue of 20,000,000 Modern Water Shares at an issue price of 0.5 pence per Modern Water Share.’ These share will convert into DeepVerge shares. Retire – you seem to have very little idea what is going on in the company and I suggest that you do some basic research before slinging accusations around.

Similarly we were promised that orders of reagents had increased by 40%. As this is, apparently the largest past of the business, it is not unreasonable to expect that sales overall would show a similar increase. The fact is that sales have collapsed by 62% and the cash outflow has widened. Retire seems to think that is acceptable and in line with expectations. It is not.

Let us hope that progress on Covid detection is rather better than sales or cash.

Retire - you rather missed the share point. He will receive shares in SKIN. DYOR

Pilgrim - you really are a genius. Anyone who defends a 62% crash in sales and ever increasing cash outflows must be seriously smart. Good luck with the merger!

I have no view on SKIN as I do not know the company well enough to comment.

I do know MW and far from the company being turned around the opposite seems to have happened with falling sales, ever higher cash outflows. Things are not getting better they are getting worse. MW would appear to be running out of money (again).

Difficult to see how a 62% collapse in sales and operating cost cash outflow of £1m (more than double the comparative) can in any way be seen as 'going in the right direction'.

I agree that a MW shareholder voting against a merger needs help.

A more interesting question is why SKIN wants to be saddled to this perpetually lose making company. Surely nothing to do with the 20m MW shares (and to be converted into SKIN shares) that are triggered for GB by the takeover.

Retire - you are not seriously trying to defend a 62% crash in sales?

One thing you cannot argue with is the ongoing cash outflow. This company is heading for the knackers yard without the merger.

Retire - you are not seriously trying to defend a 62% crash in sales?

One thing you cannot argue with is the ongoing cash outflow. This company is heading for the knackers yard without the merger.

Is this the worst management team on AIM?

The results are largely after the so called new direction. In reality it seems like a continuation, indeed acceleration, of the fall in sales that we have seen for a number of years.

MMgames – SKIN is due to take over Modern Water.

Looking at these results;

The MW shareholders were promised that orders and sale were up by 40%+. They are actually DOWN 62%.

A number of posters on this board had suggested that MWs cash position, following a fundraise, would support SKINs operations. In reality MW lost £1m in cash from operations in 6 months and only had £800k at the end of the half year. At this rate MW will run out of cash sometime around November.

These figures are simply unacceptable and it is clear that we have been misled about the prospects of this company (40% increase in sales anyone).

From a MW shareholder perspective thank goodness for the merger – although SKIN seems to have finite resources and most certainly cannot support losses of this magnitude for long.

So looking at these results a little more carefully.

We were promised that orders and sale were up by 40%+. They are actually DOWN 62%.

We were told that with the cost cutting we would mean that we are cash breakeven. In reality we lost £1m in cash from operations in 6 months. We only had £800k at the end of the half year. At this rate we will run out of cash sometime around November.

These figures are simply unacceptable and it is clear that we have been misled about the prospects of this company (40% increase in sales anyone).

Thank goodness for the merger – although SKIN seems to have finite resources and most certainly cannot support losses of this magnitude for long.

Has anyone seen the results of the company that SKIN are due to take over? If not you should.