The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Yep, the drag from fund redemptions should certainly ease this year & allow the cream to rise to the top. £4-4.50 should just be the starting point for a re-rate in my view, considering shares spent nearly all 2021 trading at £3.50-4... The strategic progress made in the US since has been stunning & unparalleled in the AIM small cap space.
Over the weekend the Kooth CTO shared an interesting role that they are recruiting for;
https://www.linkedin.com/jobs/view/3798347166/?refId=1U2ci3B7Rm63ADBikIvmXw%3D%3D&trackingId=1U2ci3B7Rm63ADBikIvmXw%3D%3D
"VP of Engineering - Consumer Marketplace - Scale-Up - Remote/East Coast
This pioneering marketplace product is immediately hiring a VP of Engineering to lead its technology division in the U.S., offering a pivotal role in shaping and evolving the innovation of a new platform for widespread adoption in the American market."
"Key Responsibilities:
Closely collaborate with the CTO and CPO to shape the platform's vision and its in-house migration.
Assemble and nurture a team of exceptional, remote, US-based engineers, ensuring the app's delivery and success.
Assume full responsibility for the new and parts of the existing app, previously developed by a third party, and make critical technology decisions.
Embed security, accessibility, and best development practices into their processes.
Build and manage a high-performing, delivery-focused US team within the established European HealthTech brand.
Strengthen ties with the global team, promoting a robust remote-working culture.
Collaborate with the European CTO to develop and implement a robust technical strategy.
Oversee the successful delivery and operations of the application, ensuring compliance and data security."
Appears to be a clear sign that things are full steam ahead...
Someone clearly wants in here, L2 order book is well bid, for a SETSqx share this generally suggests international interest... It still amazes me that we aren't trading at all time highs, however it won't take long to get there if this buying continues & the news flow we expect begins to land.
@Wildtiger, a trading platform makes money based on volatility, not market prices... Q3 was extremely volatile, with a large fall in October strongly reversing in November & December. The large dip to start Jan is perfect for a company like CMC as it will encourage traders to reopen positions etc. CMC has never been cheaper than this on a P/NAV basis, high probability of a re-rate back towards £2 IMO.
@Acuere, I suspect the dates you quoted provide the answer to your question - the Penn contract will be running from 21/02/23-21/02/24, so there is plenty of time between budget approval last month & contract renewal date.
Excellent volume this morning @£3 - potentially from word of the successful launch starting to spread? Presumably any II that bought shares in the July placing will be keen to add at the same price if execution risk is now substantially lower? Canaccord likely still providing supply for now, given that they didn't partake in the placing and have been reducing their holding all year - no doubt selling illiquid positions first to satisfy fund redemption requests. When this supply dries up I suspect shares will fly.
And that's a good point on no news being good news @Nortel, likewise I am very keen to hear what else they have been doing - digging has uncovered their plans with Aetna in Kansas / Illinois, ongoing work in Arizona with the same team that put Penn in place & then there are undoubtedly a significant number of ongoing workstreams with the 30+ other states that are in the process of embracing digital mental health resources. And then we have the international licencing opportunity!
Would be nice of management to update the market on the California launch, all looks to have gone well with a statewide service now in apparently operation; https://solunaapp.com/
Just needs an RNS to reassure the market & highlight that the majority of execution risk has now been removed...
Just needs a little bit of volume and we'll be off...
Excellent start to the year - all systems go...
"Following the delivery of the NoD and in the absence of any meaningful correspondence in relation to this matter from the Government of India or if no amicable settlement is reached, IGPL will subsequently deliver a notice of arbitration to the Government of India. Any such notice of arbitration is anticipated to be delivered to the Government of India in this first quarter of 2024. Under the Treaty, an arbitral tribunal is to be constituted within two months of delivery of the notice of arbitration."
LIT & Fasken are managing / funding the litigation process, PAT are not legal experts and likely have no internal expertise, they certainly won't have much to do with the arbitration filing which will be very technical in nature. Likewise the claim quantum. So once they provide the info, PAT will release it...
Good to see only 3 early sellers & NT for more than 75k shares into close, should make traders think twice about jumping in and out.
Ps. Mickey, there is no £499 man, it's just a common amount for people to buy / top up!
Newsflash;
- PAT will need to spend money over the next few years whilst the claim is progressing... £1.4m per annum in costs is immaterial vs the claim size
- The filing of the claim & quantum disclosure are quite obviously driven by LIT & Fasken, PAT are not in control of this
- Early settlement is very unlikely - probably less than 5% chance. The value creation here will be from the size of claim disclosure & what the market deems PAT's chances of success are.
- Excellent to see a near $600k decrease in exploration expenses, offset to a some degree by a $170k increase in share of JV expenses. Presumably the $71k of unrecognised arbitration cost will be recognised in the following period - shows they are controlling cash burn.
- No more disruption from financial filings until the end of September, in that time period it's highly likely we'll learn the value of the claim & be valued at a more sensible chance of success than ~1.5% chance we are currently priced at (based on a $1b claim)
- if the market prices in a 5% chance of success on a $1b claim shares would trade at £39m cap / 22.5p, GRX currently trades at ~18% chance of success (this would equate to 80p per share based on PAT's current 173m shares in issue.
Bottom line - there should be very significant upside from current levels once the claim is filed
Solid report, should be enough to attract some interest as 5.5p to 38p is decent risk vs reward!
Worth pointing out that Allenby estimate a claim mid point of $750m, given PAT have already quoted the times of India article which stated >$1b you could say this is prudent.
At $750m their methodology gives a target price of £0.29p, however at $1b it would increase to ~40p. As we know, there is potential for higher than this which would stretch valuations even further...Add in the fact GreenX trades at ~19% of it's claim value and the upside increases further still.
Nice to see some stability & signs of upward movement, I suspect the additional £150k at 5p made the game obvious too anyone who has been following. It also explains why shares were obsessively kept down by the MM's in August / September when they should really have re-rated to 15-20p. It's filthy but maybe they owed the backers a favour for showing faith in March when funding was still conditional...
Either way, once that claim value drops we will get significant attention, the wider market is also dramatically improving so there is a genuine chance of a 200-300% move if the numbers align to what we have speculated / suggested by the company.
@deckchair, sure - here it is;
"Ok, here goes my claim quantum effort - no investment advice / DYOR...
IMO there are three key factors that will be used to determine the market value of the investment at the time of the alleged expropriation in 2021; the in ground value of the gold, when the expropriation became public knowledge & the estimated size of the resource at that point in time.
I found this 2015 research report really useful to try and put some meat on the bones of some analysis;
http://www.cipherresearch.com/reports/150601_The-Real-Value-of-Gold-in-the-Ground.pdf
It studied 253 transactions involving gold companies between 1990-2013 and determined that the average price paid per in ground oz was $63. The average price of gold over the 24 year study period was $605/oz. So the average transaction paid 10.4% of the 'in ground' value. That may be skewed by the fact that for 16 of those 24 years gold averaged ~$350, but to me that seems like a sensible figure to use and leaves some upside.
The 1999 BIT states; "The compensation referred to in paragraph 1 of this Article shall be computed on the basis of the market value of the investment immediately before the expropriation or impending expropriation became public knowledge"
Based on this link it looks like 15th March 2021 was when the bill was first introduced; https://prsindia.org/billtrack/the-mines-and-minerals-development-and-regulation-amendment-bill-2021
'Immediately before this on the 14th March 2021 gold traded at $1720, so using the 10.4% figure above, that gives us an in ground market value of ~$178.88/oz
Then we just have to apply that to the resource size. IMO there is no chance PAT are just going to claim for the 2008 JORC of 1.74Moz given how much that figure would have risen in the 13 years between then and the official expropriation. However, even if the arbitration panel decided to use that figure it would still come to a claim size of $311m, or some 20x the current market cap. That's the ultimate downside here IMO.
However, it's far more likely that PAT will utilise the 2 resource studies from the GSI, the 6.7Moz from 2014 or the 7.9Moz from 2021 that I posted earlier on.
6.7Moz * $178.88 = ~$1.2b
7.9Moz * $178.88 = ~$1.4b
That's the size of the prize... and before anyone says they could claim for 10Moz+, they would need some reasonable basis to do so, that is what makes the GSI work potentially so valuable."
For anyone wanting to get more info on California progress, there was a product demo a couple of weeks ago which has now been uploaded to Youtube;
https://www.youtube.com/watch?v=4o_gljVrbW0
53mins to 1hr 22 is the Kooth 'Soluna' section.
Accompanying slides are here from 37 onwards; https://cybhi.chhs.ca.gov/wp-content/uploads/2023/12/11292023_Virtual-Services-Platforms-Webinar.pdf
Much to be encouraged / excited about, particularly how heavily involved the youth have been in the design & feel. The feedback from the 2 individuals on the call was excellent & it does genuinely look like a really impressive resource.
Yep, it looked unlikely this time yesterday but all of the previous delaying tactics were abandoned and they got everything approved & signed. Given the timing of the Lane Johnson LinkedIn post I suspect Kooth were aware of the likely outcome & are ready to roll.
This Linkedin post a couple of days ago is also worth reading; https://www.linkedin.com/pulse/congratulations-kooth-ambassador-lane-johnson-his-nomination-5gqqc/
"Over the coming weeks, I’ll be sharing more about the work Kooth is doing in Pennsylvania and beyond. The response to Kooth’s services has been incredible - from parents, teens, educators, and government representatives. But, for now, I’ll say this: Lane Johnson’s influence is just beginning. "
Combine that with a 1 in 10 usage rate reported in the half year results and things look very bright indeed here
The final parts of the Penn budget were signed off overnight, which as per the October investor meet company Q&A should result in the finalisation of our Penn contract in Q4...
https://www.penncapital-star.com/government-politics/shapiro-signs-final-budget-bill-after-late-night-votes-in-the-pa-legislature/
https://local21news.com/news/local/pennsylvania-budget-fiscal-code-education-code-governor-josh-shapiro-speaker-joanna-mcclinton-senator-pittman-education-improvement-tax-credit-criminal-justice-reform-child-tax-credit-december-14-2023
Watch from 5hr 27 mins onwards of this Kansas legislative research department meeting on 6th October;
https://www.youtube.com/watch?v=mP5hZSgppCo
Verbal confirmation that Kooth have partnered with Aetna in Kansas and are working through app implementation for a state wide rollout...
Also, may have been a slip of the tongue but Erin Davis (Kooth VP Government Relations) refers to 'Kooth Therapeutics', which I've never heard mentioned before.
'Kooth is the gold standard model of care for personalised, proactive and accessible digital support'
@Nortel, agree on public bodies being frustrating, however once you are integrated the competitive moat is huge so it will be worth it!
Kansas appears to be the perfect setup; Kooth are working with a huge Medicaid company which will provider many advantages, one of the most important being credibility in front of government. The questions asked by legislature were very positive, there appears to be a genuine desire to find solutions.
As I posted a few days ago, Aetna are present in 17 US states so a rollout beyond Kansas would seem inevitable post a successful implementation (and may already be happening).
Another bit of research that's worth mentioning is regarding Medicaid, as per this line of the placing proceeds RNS from July;
"piloting Kooth with Medicaid to support youth in low-income families;"
Linking back to this post from October; https://www.linkedin.com/posts/janesbrown_such-a-pleasure-to-offer-novel-digital-solutions-activity-7118186301169831936-IKVg?
Jane Brown works for Aetna Better Health, which is part of $100b market cap CVS Health, listed on NYSE
They work across 17 US states proving Medicaid services; https://www.aetnabetterhealth.com
Each health insurance plan provides access to certain services, which are listed here; https://www.aetnabetterhealth.com/illinois-medicaid/whats-covered.html
Piloting Kooth with Medicaid via what I believe is Aetna / CVS provides the first step towards potential integration of digital mental health support across some or all of those 17 states.
They already have offices in Chicago, Kansas & Pennsylvania, so it certainly looks like they are setting up for big things...
Hi Uh-oh, if you go onto investor meet company and listen / watch the last 2 presentations then you'll get a far better idea of where they sit. However, they confirmed in the October meeting that the California contract is self funding - they are receiving ~£12m up front this year to cover hiring, product R&D spend etc. Once the contract formally commences they'll almost certainly be paid in advance so cash should never be an issue.
FYI there was a CYBHI public webinar on Thursday evening which confirmed everything is on track, a recording is here; https://cybhi.chhs.ca.gov/event/public-webinar-december/
This is the portal at present; https://calhopeyouth.org/ , obviously we can't download the app as it's only available in those 2 counties pending full roll out in Jan. However, the fact it's been live since late August significantly de-risks things IMO. Kooth US headcount on Linkedin is now up to 114 from around 15 earlier this year, so hiring appears to be going very well indeed.
The £10m raised in July + the additional £6m they held prior is for supporting US growth ex. Cali & Penn. I.e. Medicaid system work, new research studies, lobbying etc. Mid teen EBITDA margins (no debt) and FCF by the end of next year and a hint at dividends beyond that (not sure that's necessary at this stage), tell you where this could head should things go as hoped.
Hi Nortel,
Glad to see some activity on here & others on the same page re. valuation / drift. On Pennsylvania, it's all waiting on the school codes budget being signed off, the schools mental health budget is all tied up in a larger bill which came oh so close to being signed off 3 weeks ago but was amended at the last minute by Democrats. This is the bill in question;
https://www.legis.state.pa.us/cfdocs/billinfo/bill_history.cfm?syear=2023&sind=0&body=H&type=B&bn=301
Media coverage; https://www.penncapital-star.com/education/fight-over-tax-money-for-private-school-tuition-snags-education-funding-bill-again/
The funding confirmation is on page 73 of the bill itself and confirms that each Penn school district can apply to receive $100k funding support (there are 500 states, so $50m total, unknown what the Kooth expansion will cover, pilot was 30 states @$100k / $3m total);
https://www.legis.state.pa.us/cfdocs/legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2023&sessInd=0&billBody=H&billTyp=B&billNbr=0301&pn=2326
Senate is back in session this week so fingers crossed they can get it done this time...
I too think a NASDAQ or NYSE listing will follow at some stage, primarily because they'll need to reward their US employees with stock options in USD. If they can nail Cali, Penn + a couple of additional states & get on board with Medicaid policies then I think they'll be ready to push the button.