REMINDER: Our user survey closes on Friday, please submit your responses here.
I have seen some comments / concern about the bifurcation of relations between the West and China and whether that might impact on the Ceres / Bosche / Weichai JV. Treasury Secretary Yellen gave a speech yesterday (see link).
Bifurcation is happening at the level of advanced semiconductors, AI and quantum computing.
However, the US (and I expect UK / Europe to align), seek to protect trade related to tackling climate change. That is not to say that there are not other geopolitical risks. But the above might help anyone who felt bifurcation meant a total separation of business; it does not. Yellen's speech:
https://www.youtube.com/watch?v=wte_XZ6bZWs&t=2176s
Thank you Dennis; this unexpected interaction has been a highlight for me. I look forward to future trading updates.
Hi @D.S.
Thank you for the opportunity to ask questions. I'm considering a further investment in ITM. Following on from the interim results investor presentation dated 31 Jan 2023, I had the following questions:
1. Could you comment on the future of pink hydrogen and whether ITM would be in that space?
2. On 31 Jan 23 CFO Andy confirmed that ITM had sufficient cash to achieve profitability based upon the 12-month plan - 2.5 months on... is the plan on-track?
3. I understood that pursuing new contracts is dependent upon completion of Yara and Leuna contracts as these are intended to demonstrate ITM capability and reliability to new customers. What are the broad dates of completion and is it possible to see new contracts before these projects are fully implemented?
4. (a)What has been the most significant change made by the new Head of engineering? (b)Do you envisage any other new appointments to significant roles?
5. How will performance against the £29.9m project overrun and £15.7m inventory loss be reported moving forward?
6. With the 12-month plan underway, what keeps you awake at night, and should it keep me awake as well?
Many thanks,
Steve
The application of share options to those who invested considerable time and effort to get the business to this stage, is a good thing. The options would normally only be exercised by the directors if the share price went up, at which point, share holders would be notified, and interested to see if the interested party kept their shares, or sold them at a profit. To exercise a share option, the shares must be purchased at the price stated in the option. In this instance if the directors exercised the option in future, the shareholders should have gained compared to today's price.
Longer term holders who purchased stock priced higher than the current share option price may have some mixed feelings about directors awarding themselves options at a perceived 'lower price', but on aggregate, the award of share options at this stage is still a net positive for all share holders as it requires growth to make the options valuable enough to exercise - and even then the directors would likely feel some obligation to keep the stock if ever the option was exercised.
Thank you for sharing. Relevant section at 13:37. I don't think there is any question that the technology is proven to work. The outstanding question relates to commercial viability, which depends upon the brines. While smaller bench trials have been undertaken over the last 18 months, the Bolivian brines will be shipped to Austin Texas and tested in a larger pilot "this quarter". There may be an opportunity to extract magnesium as well. An update on the trial should be available by 30 Jun 2023. There may be an update shortly on the status of the JV conditions precedent.
Hi Torino, I think you may be mistaken; the JV partner Next-ChemX is not listed on the Nasdaq. It is an 'over the counter' stock. Quoting from Charles Schwab:
Over-the-counter (OTC) securities are securities that are not listed on a major exchange in the United States and are instead traded via a broker-dealer network, usually because many are smaller companies and do not meet the requirements to be listed on a formal exchange.
$300m would be about the 3rd smallest company on the Nasdaq. I hope that helps.
Hi Beetroot, your perspective has helped my understanding - thank you. So presumably they are shipping 20x 1000l of brine to Texas, to run the trial. There is high confidence of trial success. Following negotiation and capital raise, they intend to construct a larger pilot in Bolivia, based on a modular design. I assume the 40ft modular containers will be built in Texas and shipped.
I agree with you - the iTDE technology will be an exciting opportunity if it can be shown to work at scale.
If you are scratching your head over the price action in the last 2 days - read on.
Prices fall because more sell than buy - of that I am certain. The question is why.
I re-read the Joint Venture 'JV' RNS from yesterday, and the previous Heads of Agreement 'HoA' RNS dated 15 Feb 2023. This is what I came up with:
Conditions precendent:
1) Clon to pay $500,000 to Next-ChemX (NCX) for exclusivity of use in Bolivia
2) NCX to provide proof of funds $500,000 to Clon
3) Clon to issue 385m shares to (GBP£580k at time of rns, but now GBP£500k at 0.13pps)
One or more RNS are expected shortly to confirm the above conditions have been satisfied. At that point the JV is entered into.
The issue of 385m shares represents a dilution of 8.8% (385m/4.37b), bringing share pool to 4.755b. 50% of the 385m is locked in for 12-months. Assume this dilution was already priced in because it was mentioned in the HoA RNS.
The HoA presented NCX the right to purchase £250k of Clon stock at 0.065pps. I have not seen an update in respect of this offer being accepted and therefore I assume it did not happen, though I would be interested to understand why NCX seemed to pass on a good opportunity.
As part of the transaction, but not a condition precedent Clon will receive NCX equity valued at $500k at the time of the next NCX equity raise. More certainty is required on when this transaction will be concluded.
Upon the conditions precedent being met, a JV is entered into comprising of broadly 5 dependent stages:
Stage 1: Complete pilot plant construction in Texas
Stage 2: Negotiate contractual arrangements for pilot plant in Bolivia, SECURE ADDITIONAL FUNDING, transport pilot plant from Texas to Bolivia
Stage 3 Q2 2023: Bolivia pilot; prove the 1) technical, 2) commercial and 3) environmental feasibility of a pilot plant, if successful, issue 250m shares to NEXT-ChemX
Stage 4: Negotiate Construction & Processing contract with Bolivia, if successful, issue 250m shares to NEXT-ChemX
Stage 5: Deploy plant to Bolivia. Commercial Ops
Successfully passing stage 3 & 4 will result in the issue of 250m Clon shares each (500m total). The issuance of this equity will dilute today's holders by a further 5.7% each time (11.4% total), in addition to the 8.8% dilution already identified. All priced in as previously disclosed in the HoA RNS - no surprises there.
However, see Stage 2 above, the JV RNS stated "subject to securing the necessary further funding". The earlier HoA RNS appeared to suggest that all funding was accounted for in the HoA terms; but apparently not. The requirement for additional undisclosed funding to complete the pilot is a fundamental extra point. Ambiguity around the requirement for a further capital raise at the pilot stage may explain why, after a small pop, the share price settled into a decline based on the new information. It would be useful if Clon clarified what the extra capital requirements are.
I hold the