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As is the norm here…..what goes up is guaranteed to come down. Doesn’t appear the financial roadshows have done much for investor sentiment. Tricky morning ahead. SB
Just saying it as I see it unhooked. I don’t like being so critical especially given I have a reasonable holding here but until I see actual evidence of an improvement I just don’t buy this transitional nonsense. All the company is doing is upscaling part of their historic operations with covid upside cash. And yet somehow this is classed as transitional and misses all the other red flags which are all too apparent to those who post here and elsewhere. Look at core progress in the last five years in the ‘ hot’ diagnostics space - way below average imo. SB
No permanent senior management team in place which didn’t even merit an update (despite being led to believe one was forthcoming); ever decreasing cash position (12 months ago we were sat on £21m); with 30% of cash locked in Russia; risk that our 2023 PBT no longer covers dividend as no update on FCF; slowing sales in POC (below 10%); cost cutting across the business; no customers signed up for increased life sciences capacity; and what appears to be missed timeframes with commissioning of fermenters. Apologies for negative comments but this update does nothing to reassure shareholders the business is on the correct trajectory - with no acknowledgement on the loss of investor value. Poor. SB
Trouble is - based on previous experience - market is expecting poor H1 results. Firing your CFO added to the previous note that further restructuring costs were coming down the road does not make for comforting reading. To have lost so much value in such a short space of time with a core business that does ok is pretty much unacceptable. I would say the business should be sold but I’m sure that would be a screw up as well. Major shareholders and NEDs should be embarrassed about what is going on. SB
C'mon donmac - its nasdaq friday :-) SB
That's over a week of daily declines in both indices - and now fast approaching the initial FDA approval price spike on the 30th June. Its worrying that there are likely 2 funds going short here with anywhere between 1.4m/1.8m shares to play around with - and with the price subject to high volatility on low volumes its a trading strategy which could hurt short term and ultimately the price at which new dilutive funds are raised. SB
Agree Hawker - although the wider issue here is we are currently operating without a CEO, a CFO (with no clarity why he is leaving after 18 months) and now no one running our day to day US operations. Not a surprise the market has no confidence in ekf at present - despite the positives you have noted. SB
….ever get the feeling someone knows more than you…..ironically on the day Niox puts in a strong performance ekf continues its 2023 horror show. SB
Apologies - I have just re-read the announcements and can see the shares were issued to repay some of the principal - not the interest/coupon on the loan. Mondays eh......doh. SB
Hawker - setting aside the detail (and I appreciate that's not always entirely sensible...) I think the bond works the same way as an interest only 'mortgage' loan with a 5.5% interest rate - so RENX pays its interest annually (in this case by issuing c.526K shares ) for five years and then repays the $21m in 2027. Pretty much what you noted - and a good deal in hindsight. SB
Bear in mind RENX has the option to pay back the convertible debt in either cash or shares, although shares are the only realistic short term option given cash burn rate. The $21.2m bond package has a coupon of 5.5% accrued quarterly , run to 2027 and the original conversion rate was set at a hard floor of $3.62 per ordinary share - however there has been dilution since and there is a price reset mechanism which looks to have been used to lower the issue price to $2 a share. The original issue would have led to a c.7% total dilution - but price was significantly higher at that point. So - in order to minimise the pain we need a much higher price than current.......SB
Looks like the RENX rollercoaster continues! Price is still very sensitive to low volume trades on AIM - which as has been pointed out is an investor disaster zone littered with company carcasses. I can only imagine the BTIG led meetings are warming the market to a future fund raise - good prep, but will possibly hold off any re-rate in the short term. There is always the temptation to sell on a spike - personally I'm still averaging about £2 and that was after some chunky buys sub £1 here so that's a pretty important milestone for me. Don't know if posters here follow RENX on twitter - they had a great billboard advert last week on times square - so the awareness campaign is certainly gaining some momentum with the FDA news. SB
Couple of short plays still hanging around - so they either need to close out or hope any fund raise is low - but major shareholders I suspect will be starting to eye strong returns here based on what has been secured and the significant investment to get here. We hit £1.50 earlier this year post placement. SB
Little bit of context here - Mike Salter joined ekf in 2017, grew the US business, got promoted to CEO in 2021 after baines left (so they must have had a good working relationship) , appears to have been responsible for the ADL purchase, botched covid plan and delays to the fermentation investments allow of which have been very costly to the business and loss of market confidence which resulted in baines coming back (assuming at the behest of shareholders). Mike was then put back in charge of US operations and looks to have finally overseen a successfully delivery of the fermentation operation (still to be confirmed). Probably a capable guy who without the ADL/Covid stuff would have coped fine - but that's not the way it worked out. Its no surprise he is moving on - but looks like he will be there to support the life sciences upscaling for while yet. Business operations aside - the key issue here is the need to get a permanent CEO, CFO and some stability into the business. Expect updates in the next few weeks. SB
It was interesting to see the recent grant of share options to directors included Catherine Coste (190K shares) having just recently been appointed as a non-exec. Few points to note - they seem to have missed out Thomas McLain on the award notification (he picked up around 500K options); I'm 99% certain that Catherine Coste has been appointed as Jefferson River Capitals board representative; and the timing of the award with vesting starting after 3 months (for 12 quarters in total) feels like a 'bonus' for securing FDA which is justifiable and sets a price level (£1.02) above the most recent fundraise (90p a share) which could be regarded as a floor and is relevant in the context of future fund raising. I expect we will see a reasonable rerate soon - but this will be linked to some form of capital raise with a potential maximum c.50% share dilution. Finally - as noted previously - at what point do they go for a full Nasdaq listing. SB
Any ideas what happened to the buyback? Two weeks since any purchase - and plenty of cash left? Could be closed period prior to July NAV? Or something more significant in the background. SB
Good spot Hawker. I hold all three - think you do too. Oryx report out today but no real mention apart from ekf which gets the covid treatment. We are not due to hear full year results until October incl q1 2024 - so by then the issue of funding will have been resolved one way or another. AIM is no longer the right market for Renx imo - same goes for ekf and Vrci……the UK is pretty much closed for business for healthcare tech. ATB SB
The big risk here remains the funding elephant in the room. Renx has assembled all the bits required for a jigsaw - but can’t complete the picture until it has demonstrated all its successes lead to a viable, commercial and profitable business. We know that’s going to take time - and will require a lot more cash (or access to it) than currently available. There are going to be ups and downs in the coming weeks and months - and there will always be speculation on the upside and downside - the longs and shorts as we have come to know them. There was always likely to be a fall back post FDA / let’s hope it’s not too grim. SB
Apart from the great news about FDA - todays action in the UK (1m shares) and the US (33m shares) shows the future is Nasdaq. I would not be surprised if moves are already afoot. Here’s to more good news in the coming weeks - and congrats to those who held and are starting to see a recovery in their holding. SB
For the night owls among you…..
“ FDA Grants De Novo Marketing Authorization for KidneyIntelX.dkd to Assess Risk of Progressive Kidney Function Decline in Adults with Diabetes and Early-Stage Kidney Disease”. See website for more details.
Phew. Should be a good day tomorrow :-D SB