Member Info for Retireby40

Modern Water plc
Modern Water, the global water crisis monitoring and solutions provider, has announced its signing of a three-year revenue sharing manufacturing agency agreement (the ‘Agreement’) with Integumen plc (AIM:SKIN, ‘Integumen’). This will provide manufacturing and logistical support for the Company’s supply of water monitoring reagent consumables.
The Agreement is structured in expectation of receiving revenues of US$1.25m (£1.04m*) per year for each of the next 3 years, totalling US$3.75m (£3.12m*). This is then shared between the two, based on a 60%/40% split in favour of Modern Water (after costs) and is subject to rolling 12-month extensions thereafter. The Company has been producing its own bacteria-based products for existing customers to use as consumables in their monitoring equipment. Product demand has shown consistent, organic growth of c. 5% per year from its client base, although past balance sheet constraints have meant that it had been forced to rely on somewhat outdated equipment which, in turn had resulted in capacity constraints while also occasionally testing required quality standards.
The news is a further important step emanating from MWG’s February 2020 proposal to modernise its operations along with a Board-level reorganisation, which was then followed by the appointment of Integumen and Cellulac plc’s CEO, Mr Gerard Brandon, as non-executive director and Chairman. The common factor between Modern Water and Integumen is their expertise in handling and managing bacteria; Integumen, for example, has been developing such products for the past 12 years with specific expertise in viruses and toxins through its Labskin subsidiary. Here it produces full thickness human skin equivalent; it incorporates fully differentiated dermal and epidermal components that functionally model skin for the purpose of clinical research and testing.
Effectively a watershed moment for Modern Water, the Agreement reflects its intention to move from a self-contained production, sales, marketing and distribution operation, to a collaborative, cooperation and partnership business model. It immediately provides the Company with access to state-of-the-art UK laboratories, together with their experienced scientists, without the need for capital expenditure or the extended time required to bring such a team together. Integumen’s superior development and manufacturing capabilities should enable MWG to build rapidly upon its existing network of sales, marketing and distribution channels, delivering clients the product quality and quantity demanded through a lower operational cost base. Integumen has already announced a further 100% expansion of its purpose-built product and development laboratories in York, UK, to 6,000 square feet, adding six more laboratory rooms to meet growing demand. Two of those laboratories will be allocated to the production of Modern Water's bacteria reagent.

In this respect, the vision for Modern Water is to move from a self-contained production, sales, marketing and distribution company to a collaborative, cooperation and partnership business model. Significantly, it immediately provides Modern Water with access to state-of-the art UK laboratories together with their experienced scientists, without the need for capital expenditure or the extended period required to establish such expertise. In this respect, Integumen’s development and manufacturing capabilities are expected to enable MWG to grow its existing network of sales, marketing and distribution channels, while also delivering a quality product through a reduced operational cost base.
Today’s news represents a further important move in the continuing expansion of Integumen’s laboratory services. It demonstrates their ability to provide European bacteria reagent manufacturing capacity, together with the logistical support for Modern Water’s sales, marketing and distribution in the US, EU, China and Japan. In addition to production of the bacteria reagents, the Group’s AI division is also exploring options to develop data analytic tools for Modern Water monitoring equipment, with the potential to add higher-value bolt-on real-time alert services leading to increased revenue per client. This, together with ongoing expansion of Rinocloud’s high margin data and AI services, Labskin’s analytical/monitoring technologies and the extended customer reach now offered through ecowaterOS’s multi-continental consortium, highlights the scale of opportunity being presented to Integumen in these underserved global markets. With the weight of anticipated demand from global-scale manufacturers potentially testing the Group’s recently expanded laboratory capacity before the current period end, TPI’s Initiation research on Integumen plc (released on 8th January 2020) set a target price of 3.23p/share.

Integumen plc
Integumen has announced its signing of a three-year US$3.75m (£3.12m*) bacteria production agreement with Modern Water plc (AIM:MWG, ‘MWG’). This revenue- sharing agency agreement (‘Agreement’) entails both the manufacturing and provision of logistical support for MWG’s monitoring reagent consumables. Not only does this news represent a further important move in the continuing, planned expansion of Integumen’s laboratories, but it also provides significant additional reassurance that the Group will deliver on the significant, four-fold revenue expansion already projected by its Board for the current year.
This Agreement is structured in expectation of receiving revenues of US$1.25m (£1.04m*) per year for each of the next 3 years, totalling US$3.75m (£3.12m*). This is then shared between the two, based on a 60%/40% split in favour of Modern Water (after costs) and is subject to rolling 12-month extensions thereafter. Integumen subsidiary, Labskin has confirmed intention to double its laboratory space in Q2 2020 in order to meet anticipated demand.
The news is highly significant for both companies. For Integumen, it effectively underwrites the three-fold revenue increase (i.e. £4m for the year-ended December 2020) guidance that has already been cited by the Group’s CEO, Mr Gerry Brandon. It also strongly reinforces Integumen’s relationship with MWG, which in February 2020 was confirmed as a member of the ecowaterOS consortium that the Group founded along with numerous other significant corporate and academic bodies. The consortium’s already stated intention is to bring together multiple partners (with a combined 32 years of related engineering skills), added to smart AI cloud-based data analytic technologies and best-in-class engineering at commercial scale across the brewing, biofuel, chemical and wastewater industries. With raising awareness of the direct impact of climate change on worldwide systems vital to the population’s wellbeing, ecowaterOS seeks to address and capitalise on the urgent issues now facing international water monitoring, recovery, treatment & recycling. Mr Brandon became Non-Executive Chairman and a shareholder of Modern Water in February 2020.
Based on existing demand for MWG’s supply of such consumables, this Agreement provides forward visibility and the expectation of delivering both technological advancement and improved operational efficiencies. In this respect, the vision for Modern Water is to move from a self-contained production, sales, marketing and distribution company to a collaborative, cooperation and partnership business model. Significantly, it immediately provides Modern Water with access to state-of-the art UK laboratories together with their experienced scientists, without the need for capital expenditure or the extended period required to establish such expertise.

This looks primed for a further move north. $22m on the balance sheet and the Azure roll out imminent wand are finally ready to deliver albeit a long time coming. They also said a few large deals should now be closed in Q1 and they must be material so we should be getting a few decent RNSs in the coming weeks and months.
Toward the end of 2019, a small number of significant deals slipped into 2020. The majority of these deals are within the Company's growing Microsoft channel, where customers have elected to wait for public availability of the Company's embedded Azure product, Fusion Resource Provider ("FRP"). Other pipeline customers across multiple channels have elected to revisit the initial scope of their engagements and increase them. The Board fully expects these deals to close in 2020 and notes that they are not competitive tenders.
The delayed deals now expected to close early in 2020, along with the Company's current pipeline, support the Board's continuing confidence in meeting current market expectations for FY 2020.
The joint FRP project with Microsoft brings WANdisco into the data fabric of the Azure cloud, integrated as if it were a native Microsoft product and unleashes the collective strength of the Microsoft seller network. As such, it is the most important initiative in the Company's history.
Importantly, the FRP product has now entered a critical phase of customer deployment, 'private preview'. Private preview signifies the availability of the product to select, existing Microsoft customers to address their data migration and data availability requirements and to provide product feedback ahead of the revenue generating 'public preview' expected in Q1 2020. General availability will follow this public preview, launching the full joint go-to-market strategy. A number of customers, including one of the world's largest retailers and a global systems integrator with over 100,000 employees have agreed to participate in the private preview.
Alongside the private preview, a global US restaurant and beverage chain has begun using WANdisco Fusion to migrate data to Azure Data Lake Storage in an Azure-specific use case with wide appeal within the Azure customer base, and where WANdisco is the only viable solution.

Aside from Spurs and FRR I’m well thanks and hope you and the rest are. You never know both could turn it around. Here’s hoping!

It’s seemingly good news Georgian politicians are meeting their US counterparts who are being lobbied by FRR but surely given the arbitration result is due these meetings are inconsequential as whatever is decided in arbitration will be implemented and will either mean FRR continues on B12 with damages or winds up with a lot of debt.

Do we know when the arbitration findings are due?

A massive opportunity and given the huge number of existing products that have to be tested let alone new products coming to market SKIN will be very busy indeed. Already working with 5 of the top 10 cosmetic cos who turnover billions and have hundreds/thousands of existing products that need testing. Onwards and upwards.

The time savings alone make a compelling business case, with customers typically achieving in excess of a 90% (again according to Sopra Steria) reduction in time spent manually processing, while delivering greater accuracy, statistical reliability and depth.
Labskin’s AI tools facilitate evidence-gathering in order to recognise patterns and irregularities across siloed product data (clinical, PMS, regulatory, risk management, sales, marketing, R&D). Machine learning can extract from such ‘Big Data’ to identify patterns and common features, while visualising product performance information in a single place can become much smarter with the use of structured and unstructured data to identify value propositions, clinical insights and product safety. As such, regulatory compliance becomes a win-win situation, providing healthcare providers and consumers with confidence in the efficacy of the medical devices they procure, while deeper product insight also allows them to differentiate and protect their brand reputation.

A need to outsource regulatory compliance8
Consumer product manufacturers lack the experience and technology required to rapidly gather, assimilate and process the data to both adhere to regulatory demands and optimise their offering. Sopra Steria, the giant European information technology consultancy, for example, concludes that most companies base their business decisions on just 10-20% of available data, with up to 80% of employees’ time spent simply locating the information in the first place.
Combining artificial intelligence, clinical research and life sciences, Integumen’s Labskin AI compiles data from both human volunteers and its own laboratory-based full thickness skin equivalent. Its smart systems technology enables the customer to aggregate, ingest and analyse data based on specific health and beauty requirements.

While compliance by ‘/vendors etc. will involve substantial effort and new submissions, it also presents them with an important business opportunity, both for the product originators and the service providers (like Integumen) assisting them with regulatory compliance. The key changes implicit to the regulation are as follows:
Key Changes: MDR 2017/745
1. Companies will be required to provide additional clinical evidence to both keep such existing products on the market and for new introductions
2. All products will require re-labelling through the regulatory authorities with unique device Identification system (UDI System)
3. Greater data transparency will be required – data derived from clinical and/or laboratory- based trials, etc. will need to be made publicly available
4. Greater requirements for post-market surveillance and performance assessment established for most devices
5. Tighter vigilance timelines required, with reporting being reduced from 30 days to 15 days
6. Classification of products may change, which may now require additional reporting/ surveillance to previous classification

Indeed, a significant portion of that cost is due to new content, data and continuing analysis, all areas in which Integumen provides services. TransPerfect’s MDS President Marc Miller, for example, noted “Two critical areas affected by MDR and IVDR are labelling, including translations, and post-market surveillance. The new regulations will create a substantial, permanent increase in the volume and velocity of content in both of these areas. The only practical way to address this increase is through automation and AI.”
For manufacturers of substance-based devices, meeting these new requirements comes on top of the efforts needed to provide stronger clinical evidence to support the safety and performance of their devices. Additional resources are required and significant investments in pre-clinical testing and clinical investigations, to keep these products on the market under the new legislation

The fact that many global-scale producers have approached the Group seeking quotes for such work over the past year, reflects both the uniqueness of its offering and quality/grade of its services. Significantly, Rule 21 will affect manufacturers of various OTC products, cosmetics and household goods that contain active substances which come into contact with, are used on or are absorbed through the skin or other body orifices. Many of these products come with a medical claim (i.e. Antiseptic, Hypoallergenic, Anti-ageing, etc). These products now face being reclassified at a higher medical device level based on those ingredients, and consequently now require stricter clinical testing and proof of efficacy.
Industry-wide, the cost of implementing the EU’s new MDR and IVDR (in vitro diagnostic medical devices) requirements is estimated at nearly US$20 billion, according to EPICOS2, the leading Global B2B information platform.

Vendors, suppliers, manufactures and licence holders of medical devices across the EU are being forced to comply
with significant new regulation in order to continue offering their consumer, personal and household products.
26 May 2020 is the deadline for existing Class 15 compliance with the new EU Medical Device Regulation (‘MDR’) 2017/745, after which they can no longer be placed on the market. Up to now such devices have been simply ‘CE marked4’, with a self-certification by the Manufacturer who had only had to declare their compliance with the requirements of the previous Directive 93/42/CEE. This covered almost half of available consumer products with the FDA, for example, indicating 47%1 of total medical devices had historically fallen under this category, of which then 95%1 were treated as exempt from the regulatory process.

I agree that the broker note adds nothing, regurgitating the RNS. No insight, industry commentary etc. Poor.

Although disappointing it’s at 1.5p it was less than 10% dilution that can get the physical lab revenue to £10m and then we have AI on top. This means no acquisition is needed next year as we can grow organically. I’d hope the strengthening of the balance sheet will mean big deals are converted soon and the £4m will be revised north. I can see this being a £50m market cap co by end of Q1 as I’m sure we’ll have some chunky wins announced and once we get to £50m we’ll have fund managers looking at us.

If some shareholders equate our fast growth to a likelihood of a risk of overtrading, where we could not fund growth, had to slow down, turn orders away, then they might assume we would need to raise funds, or growth would stall. But we did not acquire with massive dilution. It was enough for internal growth and to meet the demands of our large clients.

Finally, if you are invested for the long term, you have considered compound interest growth of a company. From the above numbers, we are delivering triple-digit growth. This is no longer just from a very low value.

Management is aligned with shareholders for that growth, and have continued to buy in since August 2018. We would not have taken shares in salary, nor invested more money today if we thought otherwise.

Do your research and read more than just a headline.

I have read the comments and wondered whether anyone commenting negatively actually read the RNS or just the headline. Yes, it is unusual for a CEO to be on ADVFN, but that is just me. I will continue to do so, without compromising EU 2016 MAR conditions.

Integumen are growing so fast, that it is necessary to either slow down, turn business away, or keep accelerating. To do that requires hiring more staff to deal with the increased demand, larger laboratories and business development team to cover US, EU and Asia.

Directors followed their investment with £48k.

The largest institutional shareholder increased their holding by twice that.

The first 6 months of 2018 this company was generating $54,000 (in total sales) with £274k for full-year 2018

We guided £1m for 2019 or 300% growth over and above 2018

We guided £4m for 2020 or 300% growth over and above 2019

We are adding on laboratory capacity to be able to cope with revenues up to £10m. That is 10 times 2019 revenues, which is 187.5% growth over and above 2020

In addition. the Labskin teams are working with multiple large partners in the EU and US on projects that exceed £10m.

At 78% gross margin and data generating as much as twice the Labskin side of the business, net margins are quite high, as can be seen from Q3 numbers with operating costs up, but losses down. We are heading into profitability in 2020.

This funding was filled very fast, started and finished in 7 working days.

The amount raised was the maximum (to the last share) that was agreed at the AGM on the 31st of July, this year.

There are no investors warrants, as we did not have to because we are close to profitability. That risk is being eliminated.

4% discount to Friday closing.

8.5% dilution for triple-digit growth percentages.

Large companies required the Company to have a cash buffer, which was highlighted during their due diligence. Why? Because, before agreeing to sign off on long term commitments to work with us, they want Integumen to prove the ability to fulfil our long term commitments to them. If they are relying on us for their future growth we have to verify we are adequately funded.

Someone pointed out here in this thread this morning, if we told everyone we were going to raise funds, the price would have dropped to the floor. If we told anyone individually, that would be insider trading.

As for the use of the term "forward selling". It is a myth. How can you undertake a T+10 sell last week, if the shares are not going to be on AIM until the 16th of December?

Someone pointed out rightly, I believe, that no single negative poster on a bulletin board can drive a share price lower. Bad management, market sentiment, lack of communication to shareholders and ultimately sellers drive a share price lower.

If you don't believe your own research or existing shareholders and management are not prepared to put their own money on the line, then you should not be invested.

ADVFN is more active

I’ll sell you shares.

Volume isn’t up/more buys. This looks primed for an upwards breakout.

Today the team has people in Paris and Barcelona, next week in Geneva and Lausanne ... whew!

Then - Labskin AI on tour photo outside a L’Oréal sign which was in French i assume that’s Paris as the team are also presenting at a conference in Barca.

L’Oréal are a client so we’re trying to win them on the AI platform and given 2 of its biggest rivals are paying for access I assume they’ll want access too. Wouldn’t want your rivals reducing their costs and getting products to market more quickly. You’d want access to the same platform. Sure they’ll fall like dominoes.