Member Info for shandypants2

Well the source was the TU RNS back in Jan, which stated the 7th. Clearly this was always a provisional date but it has never been corrected by the company.

Not long to wait regardless and hopefully good news to report

Asa - agree no chance of a bid until the liability is known. Not sure a rights issue will be required though

Unfortunately today's RNS essentially says they will run out of cash in the next few months, despite the CEOs positivity.

See excerpt below..

Consequentially, the Company expects to report revenues for the year ending 30 April 2024 in the range of approximately £2.8m-£3.0m, with a corresponding adj. EBITDA loss of between approximately £2.6m-£2.8m. Cash and cash equivalents as at 29 February 2024 were approximately £800k. The Board continues to closely monitor cash to ensure that the Company has sufficient resources to execute its growth strategy. Cash burn and customer acquisition cost are expected to reduce as the Company converts its pipeline in the coming weeks and the Company is seeking to improve contract payment terms to include upfront payments.

Agree with everything you say - other than results should be on the 7th!

H2 margin was great than the 8.5% achieved in H1 (as per Jan RNS) so i'm expecting really good numbers. Hopefully the SP will be nearer 100p when the news is digested

I think today's results are quite poor. At 12 months (to 30/6/23) we had revs of £33m and EBITDA of £4.7m. So in the extra 6 months of the year( as accounting period was adjusted to 18 months) we have an extra £13m of rev and only c£500k in EBITDA.

However, we know that interest is over £500k per 6 months so essentially they have made a small loss for the last 6 months.

I suspect they were distracted by the EM div sell.

To blame it on the financial constraints is a bit of a cop out as this was the same in the previous 12 months, where performance was good.

Anyway, the SP is still cheap, the balance sheet is massively improved and now we have the funding to go after large public sector contracts. Hopefully will be transformational for EAAS.

Yes re-reading the £8m to £10m extra, payable over the next 18 months or so (to Sept 2025) there is an max upside of £20m , so i think the £8 to £10m is both realistic and achievable. Part of it is linked to each meter installation so they will know what these numbers have been over the last year or so.

However, this extra income has not been factored into the SP at all

Frankie - the initial milestone payment was for $5m , so c£4.4m. Although it was received in late 2022 only £700k was recognised in the 2022 accounts (as per the YE accounts RNS in April 2023). The remaining amount was fully recognised in H1 2023 as shown in the 1/2 year accounts (RNS sept 2023). So there will be nothing in Q3 2023 onwards. Who knows the breakdown between Q1 and Q2 - let's assume a straight line.

Other Viatris milestone payments are only due when sales reach $100m p.a - we are miles off this for at least a couple of years.

Therefore, IMHO both the revenue and the cash levels required as per the convenant will come to ahead early Q2 2024.

The RNS says results were in the lower end of expectations, not that they were missed. As this YE is a 18 month period rather than 12 due to the accounting date change and the first 12 months have already been published and were good i don't think an 'average' 6 months will be too problematic.

Similarly if you say you expect to publish results in a 2 week window, not to hit that date range is a little disappointing.

The didn't sell the Mgmt Div because it was performing poorly, quite the reverse. They have expanded aggressively over the last few years and faced cashflow issues. The £5m funding was fully used and required repayment (or refinancing) in Feb 2024. The expensive £2.5m loan required repaying in May-July 2024.

There were approaches for this business and no doubt the BOD felt this was the best solution to resolve the cash issues, improve the balance sheet and ultimately add value.

As we now have £25m in the bank that c6.5p a share so this should reduce any SP downside.

Yes, £8m of this has been used to repay debt but this was costing over £1m a year in interest, so that £1m saving can now go straight onto the profit line.

Frankie, good analysis, but don't forget the one off milestone payment from Viatris which was recorded in H1 2023. As this was carried over from 2022 it is likely that most/all of it was accounted for in Q1 2023. However, even if we assumed an even spread over the 6 months that's another $2m per quarter that STX need to replace. So that's another 13.3k prescriptions or c4.5k per month. As we are probably c10k prescriptions per month now that's a big ask.

Just checked the RNS when the $20m loan from SWK Financing was announced.

There is a minimum 12 month revenue figure that if breached will force STX to do a placing to cover the shortfall.

The 12 month revenue figures are Q4 2023 $14.5m, and then increasing each 3 months to $22.5m, $31.5m, 38.9m and then in Q4 2024 $45.7m.

STX has just announced $17.5m for 2023, so above the required $14.5m, however, this includes a $4.4m one off milestone payment from Viatris.

If we assume an extra $8m rev is required in Q1 (the difference between the 14.5m and 22.5m) at c$150 per prescription that's c53k for the quarter. In Q4 2023 we are now being told that prescriptions were only 28.6k, so this needs to almost double in Q1.

It is doable - say 12k in Jan, 17k in Feb (40% increase), 24k in March (another 40% increase) - but seems a big ask.

Remember the CEO will have got a bonus for arranging this! His salary in 2022 was a basic of £406k and he received a bonus relating to 2021 (when he only worked 6 months) but paid in 2022 of £223k (including an extra 25% because it was paid late!). In 2022 his bonus was £329k, to be paid in 2023. He has never bought a share in the open market!!

Yep, a good little company that is growing quite rapidly. Had some cashflow issues but has just sold one division for £30m (and total market cap is c£25m!!) so these are now resolved.

LUCE recently bought c9% of the company and as part of the net zero offering (solar, LED etc) i believe LUCE supply the LEDs that EAAS fit.

They have a lot of contracts with schools - over the holidays they refit the whole lighting system over to LED at no upfront cost. If the electricity saving is c50% the school 'pays' maybe 20% a year to cover the cost, so still makes say 30% annual saving in total.

We were told YE numbers would be published 2nd half of Feb. Well Feb ends tomorrow so i will be disappointed if they don't land at 7am tomorrow

Don't want to have a pop, but maybe you should start using spellcheck before you hit 'post'. Everyone makes the off typo or incorrect spelling, however, with you it's almost every word.

To add to the MyZero discussion EAAS do also get a fee per installation for the first 2 years - see below.

Also YE numbers (18 months as financial period has changed) are due 2nd half of Feb, so any day now. Need BOD to spell out direction going forward

"As part of the Transaction, further contingent cash consideration may also be payable on the following basis and subject to the EM Subsidiaries delivering an agreed minimum level of earnings during the period:

· an amount equal to the free cashflow generation from the EM Subsidiaries (excluding the impact of My ZeERO from completion to 30 September 2025; and

· a payment per successfully completed My ZeERO Installation during the same period as above.

The contingent consideration is estimated by the Company to be in the range of £8 million to £10 million, subject to the Energy Management Division achieving strong growth in line with its business plan, and is capped at £20 million.

Any contingent consideration will be payable in two instalments, covering the period from completion to 30 September 2024, and the 12-month period to 30 September 2025.

Belatedly watched it. As expected CEO tells us how great everything is and how dedicated and motivated the team is, whereas the SP tells a different story. He predictably limited the presentation to 30 minutes and took only a few 'filtered' questions as usual.

When things go wrong, and they clearly have, he seems to take zero responsibility.

It is easy to blame a 3rd party for over estimating sales, however, as these go back to Q1 2023 surely these figures would have been checked v actuals through the year. An issue should have been identified months ago.

The net revenue debacle is 100% down to Greg as he should have known that salespeople will take the easiest route to get prescriptions if you let them - the insurance reimbursement process should have been sorted this time last year. At least this seems to have been fixed now and the average rev per prescription is increasing.

The most worrying thing for me is the Q4 2023 increase in prescriptions. To only achieve 22% is poor as we were told all salespeople were fully trained and adding value by the end of Q3. Their own estimate for the period, was over 50% . To now say they have made changes is unacceptable. They've been selling for 18 months now.

Any company/person who bought in the last placing at 8p was clearly misled and has a potential claim against the company. Trust is important. I believe the CEO got bonuses link to this.

Clearly Q1 2024 numbers are critical now as a 20% quarterly increase is not sufficient going forward. I think an issue is that whilst the product is good most insurance companies stipulate that the cheap oral tablet must be taken first. This slows down the process and clearly for pregnant women the issue is time boxed.

I would expect as part of the cost saving the BOD either defer a % of wages or take shares in lieu of cash and i would also like the BOD to buy in the open market - after all you can now buy 1m shares for less than £30k.

However, it's pretty obvious this CEO will not do neither.

Yes, very encouraging.

Cash was £556k on 30/6/23 so H2 has been excellent with cash inflows of well over £1m. Clearly cash is very important for such a small company so this is really positive

I think the investor meets presentation may have been delayed so it can incorporate full year numbers (which is 18 months this year as the time period is being adjusted) , as else all the questions will be about that.

Did they say 2md half if Feb? If so any time now.

Although i have big holdings in my SIPP and ISA i have also traded this recently as some of the drops have been strange, almost due to boredom. After the sale was announced this spiked to 9.75p and in the next week dropped to low 6s. I loaded up in the 6.1 to 6.5 range and sold these at c7.9p. When the EGM was confirmed i also thought best to sell a few more as i suspected some would see this as a opportunity to get out. So sold a few at c8p. Just bought some back this morning at 7.19. With the £25m received that's c6.5p underpinning the SP. IMHO anything under 7.5p is a massive bargain. Hopefully if the BOD show they are using this money wisely (and not just paying themselves excessive bonuses) this should be 10p plus.

There seems to be very little stock around. I've struggled to top up both yesterday and today and when i have HL has only allowed low amounts. Hopefully the start of the SP rise - it is priced to fail, which seems overdone IMHO

SP has perked up a little today. Hopefully, this will continue over the next few weeks in anticipation of the March update

A director buy is always good, however, if they are buying a few thousand pounds worth, a similar amount to a PI, then it is almost pointless.