Member Info for NickE

Yes, Elric, Oleric will have to cough up a very worthwhile subscription if he wants to get the really juicy bits :-)

Excellent interview Elric and plaudits to Stuart for being as frank as he could be. His excitement of what is to come was genuine and palpable.

There's a certain amount of guesswork on what 'transformational' means but it's likely to involve one or probably more acquisitions that put SBTX on the path to profitability. I think the strategy then is to enhance the products from the acquired companies with SBTX thereby making the acquisitions even more profitable.

This has the knock on effect, as SA alluded to, of taking away any weakness in SBTX's negotiating position with the multinationals. There will of course remain a desire for an optimum licensing deal but without any financial weakness resulting in an inferior deal.

Again, as SA alluded, SBTX with its products out there in the market post acquisition(s) becomes a growing competitor to the multinationals (albeit at a relatively low level) which enhances the prospect of a takeover at a multiple price of where we are now. Enhanced licensing deals are the likely result but there will be majors who are taking a close look.

Just my take on things and it looks like 2024 is going to be a very exciting and rewarding year for shareholders.

"Our" IPO's. Why use a possessive pronoun for something you don't own?

I doubt TEK will retain as high a stake as 50% given the amount MicroSalt intends to raise.

I sold for a small profit after seeing MicroSalt announce the IPO and TEK fail to announce it that day. I called the Company to ask why and got what amounted to a remote office answering secretary who said someone would call me back. Eventually, the Company Secretary called and he was clueless and said he would find out why TEK hadn't announced and call me back but he didn't bother. It seems the board have abdicated responsibility for providing information to shareholders to their pr rep UK Investor Magazine who does a very good promo job.

There will likely be a time to invest in TEK but not for me right now. Guident looks like the pick of the bunch given the high percentage stake they hold. I hope they retain the large stakes in the parent company and the newly formed subsidiary. That now looks to be the main prospect for a significant TEK re-rating either via a licensing deal or a sale of the shock absorber subsidiary. Too small a stake in BELL and LUCY upside looks to be limited by the warrants in their funding.

If Guident is as good as it looks then one strategy to maximise returns for TEK holders would be to sell the stakes in BELL, LUCY and MicroSalt and reverse Guident into TEK. If they could do that on the back of a licensing deal for the regenerative shock absorber then I think TEK could trade a multiple of the current 13m m/cap and be cash-rich and with the finances to fund both parts of Guident to potentially significant profitability.

Good to see Chris Tovey make a purchase. Some serious upside with this share especially once the anticipated licensing deal is signed and the bear market for small caps turns. The XF pipeline update on the 17th is probably going to be directed towards institutions and analysts. I'd expect some funds to follow Chris Tovey after his success with GW Pharma.

Https://www.nottingham.ac.uk/news/pressreleases/2011/october/tatelylesodalo.aspx

https://www.tateandlyle.com/sites/default/files/2017-08/SODA-LO%C2%AE%20Salt%20Microspheres-Sell%20Sheet%20EMEA-112216_A4_EN-GB%20(1).pdf

I don't know the full history of MicroSalt but it looks like Nottingham University has similar technology and licensed it to Tyte and Lyle some years ago. It's unclear if Tyte and Lyle have used it but I don't think they have to any significant extent if at all. It's the same principle though- smaller particles meaning the same taste but with reduced sodium.

The Nottingham Uni / Eminate Ltd deal with Tate and Lyle looks to have fallen by the wayside. Perhaps Tate and Lyle have even relinquished the license as I didn't see any reference to this as a competitor in the MicroSalt prospectus. Again, I don't think they have. Certainly, Eminate have significant financial difficulties and their accounts at Companies House show the Company is heavily in debt. Mainly it's to Nottingham University so I suspect they can continue trading.

The regulatory climate will change in MicroSalt's favour and Eminate Ltd may have been just too early.

I haven't been over-impressed with the way TEK has handled PR over this and it's poor that no upper or lower limit guidelines have been given on the ultimate % holding in MicroSalt post IPO. Markets are difficult so perhaps they don't want to big things up before knowing if the IPO will be a success.

I've been cautious and reduced significantly and taken a small profit because of the lack of information on valuation and any guidelines on retained % holdings. But the good news for shareholders is that Belluscura is sorted, MicroSalt will no longer need funding and Guident is seemingly doing well.

LUCY may do well but the big mistake there was issuing 1 for 1 warrants in the last funding. It just meant investors in the funding felt comfortable selling their shares in the knowledge they could always take up the warrants albeit warrants at a higher price. At least MicroSalt avoided issuing warrants.

For me, Guident is the pick of the four holdings in terms of having the potential to provide significant future returns to TEK and its shareholders. I'll watch developments there before potentially adding again but, for now, I've adopted a cautious approach in the context of difficult markets and poor communication from TEK on the potential value to shareholders of the MicroSalt IPO.

The other issue is that TEK will be left with a much reduced % of MicroSalt albeit one that can move forward with cash. My preference would have been an IPO or trade sale after doing a significant deal with one of the savoury brands. A bit of a 'chicken and egg' situation though as any significant deal would be dependant on being able to supply quantity and for that they required funds for a production facility with the consequential reduction in TEK's holding. Very odd that TEK didn't announce the funding and anticipated IPO date for what was highly material news.

Yes, I believe they changed their accounting dates and the interims are due by the end of Sept.

Shares currently trading at over 50% discount to Nav with interesting times ahead for MicroSalt and Guident especially.

Another 200,000 buy went through at 14.55 and was presumably a worked buy and delayed. Hard to know of course if it is the same recent TR1 3% plus shareholder adding or someone else.

The article is a decent summary but ignores one important fact, namely that TEK's nav is about 30p so at 13p a staggering it's 57% discount to nav.

Then if you factor in LUCY and BELL seemingly bottoming out with the potential for substantial recovery gains and the prospects of MicroSalt and Guident becoming much more valuable companies with consequent additions to TEK's nav then maybe it would be more appropriate for the article to analyse why TEK is not trading around or above it's 30p nav. The answer for me is firstly, the bear market and, secondly, the current lack of awareness of how big Guident and MicroSalt could be.

I think a closing of the nav discount will come with more Guident and MicroSalt news. Without wishing to hype I think the question is how big these two companies can be. The latter has the answer to resolving a global health problem (excess salt and relatd heart disease). Is there another solution that can resolve the issue without adversely impacting the taste or using questionable alternative ingredients? If the answer is 'no' and MicroSalt production can be scaled up then surely it's a matter of time before a major deal with a major bread or savoury brand comes along and, if so, it's not unrealistic to see TEK trading at 50p plus.

My understanding is that two of the criteria TEK uses in choosing the techs they invest and develop are:- is the technology disruptive and is the market over $1b - for MicroSalt, Guident the answer is a firm yes. The attraction for me with TEK is the size of the stakes they hold. With MicroSalt and Guident it's 97% and 100% respectively. Obviously some of the former will be relinquished for the IPO but, almost certainly, a very large stake will be retained. Interesting times ahead.

Thanks for posting the research note link TrustedInvestor. Very interesting detail on MicroSalt and the significant barriers to competition.

As I thought, TEK's nav is 30p with the scope to go much higher. So at 12p currently an absurd 60% discount to nav.

I believe nav is about 30p but should shoot up with Guident and MicroSalt developments. As Simon Thompson appeared to clarify recently, Guident's increased activity and likely valuation could add an extra 16p on nav.

I'd assume TEK wouldn't rule out a trade sale for MicroSalt to the likes of Unilever or P&G if the right offer came in. An IPO does mean relinquishing a fair bit of the substantive existing % holding. No doubt it depends on the listing valuation compared to what would be achieved via a trade sale as an IPO has the advantage that the price could ride up significantly as deals come in and revenues increase.

Exclusivity for a multinational via a trade sale could achieve an 'interesting' figure. There doesn't appear to be a genuine competitor to MicroSalt as the other low sodium alternatives appear to have taste issues judging by the reviews or undesirable substitute additives.

Potassium Chloride seems to be the main option as an alternative to sodium but that can cause complications in some instances (diabetes, kidney issues). So it looks like MicroSalt is a marketing gift in promoting the option of 50% less sodium but exactly the same taste and natural product.

TEK having disruptive patented product/technology for one multi-billion market (food/salt) is appealing but disruptive technology within Guident for another massive market EV and other vehicles is almost greedy. More so given they own substantive amounts in the various companies/subsidiaries.

At some stage, the market will catch on and the shares will take off - probably after a significant commercial deal or two in the two holdings.

For now, a lack of understanding by the general market means the stock is incorrectly primarily associated with BELL and can tend to reflect Belluscura movements. With AIM and tech stocks depressed it's been good to pick up at these levels. Simon Thompson has tipped it in his Bargain Shares portfolio at 20p and higher and it's easy to understand why.

Yes, thanks for the link Tivman. My notes and posted elsewhere.

hTTps://ukinvestormagazine.co.uk/electric-vehicles-next-frontier-with-guidents-harald-braun/

A must listen for anyone invested. The energy regenerative shock absorber tested with positive results with a tier 1 OEM. Extended the mileage range by 9 to 12 miles in actual vehicle testing not a simulator.

Could be applied to all electrical and even non-electrical vehicles to enhance performance and that includes e-bikes etc.

Only one serious competitor out there.

Additional patent in application to add to existing grant.

The intention is to license out on a non-exclusive basis within 12 months after further optimisation in the next 3 to 6 months and further extend extra mileage gained in collaboration with the 'multi-billion' tier 1 company.

Market is tens of billions or even 100's of billions. They haven't got an exact handle yet on how big the market is.

Highly impressive CEO who spent 20 years in high roles with Siemens.

Simon Thompson has gone the extra mile in his research and this bit of the article suggests that Guident is going to contribute to a significant uplift in the nav.

He states Guident’s sales pipeline has “experienced remarkable growth over the past year”.

Book value ofor Guident is £18.1mn (8p) but "Valued on a discount cash flow basis, a 50 per cent increase in the compound annual growth rate of sales projections would increase the Guident valuation by $34.5mn."

I assume he really does mean increase because that would make Guidant worth £52.6m and add an extra 15p on to the nav. That's staggering and I don't think the market has picked up on it.

On top of that he also rightly says an IPO of MicroSalt would increase the current book value significantly. It's important to stay grounded as things can take time when dealing with multinationals, but MicroSalt listing on the back of a deal with the top ten multinational they are currently talking to would be transformational.

Belluscura looks set for high growth and probably catches the most attention within TEK's portfolio, but with a 11% holding (circa £5m book value) it isn't as material or potentially transformational as Guident or MicroSalt.

I wonder if that is what they are waiting for before going ahead with listing. Inevitably some of the holding would have to be relinquished for the IPO in exchange for cash but it really could be huge so it's best to retain the full holding until some significant eye-catching deals with a major or two are in the bag.

Agreed CM, doesn't seem likely to be a random action.

I wonder who the Company referenced in the Investor Magazine Is? The CEO from MicroSalt said:-

“Our ability to not only reduce sodium but to enable a more efficient production process could be a watershed moment in the fight against excess sodium consumption, and we have already seen a high level of interest from one of the world’s largest food companies.”

If I were to make a guess I would say a likely candidate would be Unilever. Some in the list from the link below are soft drink companies so can be dismissed.

Seems to be a patented no-brainer unless I am missing something - lower sodium, same taste, less production time and cost savings as well.

https://www.foodindustry.com/articles/the-10-largest-food-manufacturers-in-the-world-by-revenue/

Perhaps an overhang has gone as PHLC has moved from offer to bid after staying there for quite a duration.

Personally, I have positioned myself primarily for the likely MicroSalt IPO and a few other compelling reasons:-

1) MicroSalt IPO and potentially one or two deals before listing. I think the market and investors are trying to assess how big this can be as it has the possibility at least of being huge. You can learn new things in this game and I had no idea that the bread market amounted to 0.5 trillion (dollars I assume) until I read the announcement that Microsalt can be used for bread production. I think that's the first time I have seen the trillion word in a nanocap rns! More realistically, the snack market is probably going to bring the initial deals.

2) Guident and potential spin-off of the energy-capturing shock absorber side of the business with the new subsidiary. Has this been created for another IPO?

3) Further news on the high demand for the Bellascura portable oxygen project and details on how BELL are doing in terms of manufacture and supply for the mass of orders.

4) Some recovery of Innovative Eyeware (LUCY) on Nasdaq. The patent of the hinge was interesting but it's hard to get a handle (no pun intended!) on how significant that can get.

5) Not only an increasing NAV but the prospect of the share price narrowing the gap for the discount given.

Interesting times and plenty of newsflow to come for what looks like should be a decent re-rating for the rest of Q3 an Q4.

I agree on the undervalue and prospect of a re-rating. Podcaster Alan Green values the assets at around 40p to 45p. I'll have to listen again but I think he references other research analysts in arriving at that figure.

https://ukinvestormagazine.co.uk/uk-house-prices-cadence-minerals-and-tekcapital-with-alan-green/

The catalysyt for a re-rating / fair value could well be MicroSalt set to IPO this year. A deal or two with a snack provider or bread producer would set things up more than nicely. I don't see why, ultimatelely, there won't be mass market uptake as it looks a proverbial no-brainer to do so. If so, the book value for MicroSalt looks like something that will be substantially corrected on IPO.

Guident with the new subsidiary for electromagnetic regenerative shock absorbers also looks like it is being set up to release value perhaps via an IPO.

Then of course TEK gives exposure to Belluscura which looks set to deliver high volume sales and just has to deliver on the high demand in China and elsewhere.

Thanks Clio (and Elric), this is an unusually good board for exchange of thoughts and information for holders and potential holders. It should be an interesting few months ahead.

They may have some minimal data on efficacy as 47 participants in the psoriasis consumer trial had conditions such as acne. The rest (180 or so) specifically had psoriasis. The data from these 47 participants weren't included in the psoriasis results for obvious reasons. Clearly, the acne formulation has been adjusted and as they announced "the Group has been developing a new bacterial blend. Management is pleased to report that the pilot formulation is stable."

SA mentioned the possibility of a multinational deal before year-end with the added comment "what a Christmas present that would be." I don't think he would say that if it weren't a reasonable possibility although it isn't wise to raise expectations too much and of course he wasn't saying by any means it is nailed on.

SA referenced that he had narrowed negotiations down to two companies from four and no doubt discussions have already taken place about numbers. Perhaps one or both parties have expressed interest in doing a deal subject to a positive acne consumer trial. They may wish to wait for the oral/toothpaste results which should follow shortly after acne results but that shouldn't preclude a pre-Christmas deal.

SBTX will be in a strong position if they have results in the acne and toothpaste consumer trials that are similarly strong to the psoriasis consumer study. That said, I think he will do a deal separately with a different party for toothpaste as it is a more defined market with just four or five major players.

Multinationals are notoriously slow when dealing with smaller companies but given he is pretty much playing off one interested party against the other (he said as such in the TW interview) then that is a strategy that may well bring an early deal.

I don't know why investors go for risky pharmas as a preference to the likes of SBTX given the former take years and require massive funding to complete trials. 70% of phase 2 trials fail and 50% plus of phase 3 trials fail. The appeal for me is that SBTX is addressing similarly sized blockbuster markets at a fraction of the cost, time and risks that pharma companies of all sizes take.

Thanks for those corrections, Toyin. I think the 375m to 400m figure was based on increased revenues resulting from the markup for the enhanced product. If I recollect SA's reply correctly when answering Tom's point about the prospect of £25m royalties from Croda, SA mentioned a potential doubling of product price but with the caveat that not all consumers will transfer immediately or even over time.