Member Info for Occam

GreyBadger - I agree, nothing to do until the results are published. As far as I can see the net assets of the company as of end Jan 2022 were stated at GBP 180,000. I would suggest the sensible move for the company would be to cut all expenses to the bone, reward employees with stock not cash, and set a milestone for proof of concept where another player in the market can see the value and bid for the intellectual property.

I like (own) shares of both. The valuation gap between the two is massive: I agree with your numbers, but compare the two stocks based on a multiple of revenue (because neither is currently making money). PHC is at a huge discount on Ev/Sales to Eden. The business both share a huge market opportunity, and there are significant barriers to entry from competitors. The cost of the products is a tiny fraction of the value of the crops which they are protecting for the farmer. If you are driving a Mercedes, it's not a huge deal to take the advice of your mechanic and spend $100 to protect the paint.

I take this as a positive. The pressure on small companies is not only to deliver revenue growth, but profitability. I assume that the capital will accelerate the path to profitability.

Nice to see the stock price higher now, and the volume behind the move suggests that this is sustainable. IMO, the company is in a materially better position now than at any other period in the past. The products are approved and moving to commercial rollout. I hope the higher volume and stock price liquidity now attract more interest.

Sean Smith presents well: it's a relatively simple story of the commercial rollout. Barriers to entry now for others who would wish to compete. Bringing clear value to the farmer, and to the consumer. One of the best overlooked companies on the market.

@NewUncle: RS has said that he intends to fund the company through equity issue, not debt, so he will be giving away the company (unless he himself funds the 100 mill in equity). I agree that he will be loathed to give ownership of the company at these levels, but how else is the company going to fund it's R&D? Also, he will have to seek the approval of the shareholders for that dilution. I don't know how you ask an investor who you sold shares to at GBP 11, to fund at 85p

I like the sector, like the company within the sector, and see management delivering. What is the estimate of fair value for the stock?

Makemoremoney - I don't know the rules of AIM, but would the issue of that % number of shares not have to be approved by existing shareholders? It is giving away about 1/3 or even 1/2 the company depending on what the issue price was to make up 3 mill.

Does anyone have an idea when these are due? I think last year the AGM was scheduled for July and the annual report for the year-end January was around the same time.

Aidan31 - I was referring to the comments on the board at 10:14 by NewUncle about a Nasdaq listing. There isn't a single UK company who have an active listing of ordinary shares in the US (on any exchange) that I know of. The majors list as ADR's, which is massively expensive, but worth it if you are BP. US investors can easily go to the local AIM listing and buy if they want to

I don't know the monthly cash burn, but the company only needs to fund to the point where the concept is viable. I don't think it is realistic to believe that the company will raise over $100 million to bring the concept to market. I do think that if the AI is viable, then there are plenty out there who would spend 15 mill to buy the company, then invest heavily to commercialise the system. It's like biotech, where all you need is an initial indication of value, then the guys who can execute step in. Pursuing a US listing is a waste of resources that would be better devoted to the product. I will state categorically that a US listing on Nasdaq is impossible and a waste of energy and money.

HeresHopin - don't make this personal. Your profile suggests that you have made 400 posts in 30 days. Perhaps that opens you to criticism that "you just like writing a load of guff", but that has nothing to do with the investment case. I have no issue with the RNS, but I don't understand why an investor would decide to pay GBP 11 when the shares are offered in the open market at a fraction of that. I would really like to know why a sophisticated investor valued the company at that level.

What do they see that I don't? Regardless of what anyone pays for shares, the market cap is the number of outstanding at the market price, which is about 15 million. I think it is a challenge for a company of 15 million value to raise $140 million in equity in this environment. I saw a quote in this chat from management saying that an AIM listing wasn't really suitable for a business model that is more akin to a US VC investment. I think that's right, because a public listing does allow individuals to participate with a VC, but opens a company to public scrutiny. Good luck to all who want a higher share price.

Thanks C2H5OH. The house broker suggests that the company will need about $115 million more capital to complete the network, and suggest that it will be equity funded. That makes some sense, given that without any cash inflows it is impossible to make interest payments on debt. The market cap is about GBP 15 million. Current shareholders will be diluted to 1/10th of their current equity. Not diluted by 1/10th, but diluted to 1/10th, assuming that the issue of stock was at the current level. If the shares are issued below the current level, more shares would have to be issued to raise the same amount of capital, and the dilution greater. Normally, when the market is aware that there is an issue of stock coming to the market, buyers wait to see what level it will be offered at. Without buyers, volume falls, and so if somebody wants to sell it's not unusual for a price to weaken. Potential new investors might be tempted to be patient to see where new shares are offered.

I don't know how anyone can do 50 hours of worthwhile research without access to financial statements. What matters for a start-up is how much money they have, and how much do they need, to deliver on the product or service that will generate a return. Why would anyone consider investing in a stock where they don't have that basic information? That's a precursor to a decision about whether the product or service will be successful. If the money isn't there to deliver, the company goes out of business and the stock price is zero.

I have an open mind and no opinion on the name at this point. I'm searching for good companies whose shares have been beaten down, where I can take advantage of the valuation to make money. If it turns out that there are companies listed that don't look like they have any hope, I'll take the opposite position and make money on the downside. I try to keep things as simple as possible, and only consider what's relevant to the investment case for the company, and leave emotion out of it.

Do you have an idea of how much cash the company has now, the rate of spend, and when the next round of funding will be needed?

Thanks. I try to look first at the business, then at the team running it, then at the potential profitability. Startups usually present a clear case as they ask for funding: this is what we will do with your money, and this is the potential return. Why an HNW would decide to buy stock above the price that it could be bought in the open market is interesting. The stock is already listed in the US. I doubt that there are short term traders in the stock - it's not liquid enough.

An Ultra Short Bond fund refers to the maturity of the bonds it holds. Typically investors park cash in high-coupon bonds close to maturity to gain a little more interest on the money while taking only slightly more risk. The name Ultra Short gives the impression it's a high risk bet on the movement of interest rates, but in reality it isn't. Page 78 of the 2022 annual report doesn't show the position from 2021 was rolled into 2022.

The stock is in the wrong sector of the market - small, and not very liquid. The company have delivered on every target, but very little reward for a broker to really get behind it. I'm very bullish on the company, and support the management, but it will be a slow burn for the next 18 months, unless it's simply snapped up by one of the bigger players who invest a few tens of millions to bring forward the time line by years.

What is the bull case for the stock?