Member Info for Slam01

Barbershop,

Whilst DSM may have needed to dispose of current stock (with upcoming "Use by" dates), I guess that if you look at it the other way around and also say that PXS were also confident that they could sell the stock on within the given timeframes.

If you consider that we have just bought £350K's worth of stock for fairly imminent sale and despatch, I guess that we are looking at a very healthy order book. Based on my earlier estimates this could net PXS approx £900K in sales.

Am I looking at this with my rose tinted specs on????

On the whole, I can't help thinking that this is good news as it saves a messy fund raise that would have almost certainly been done at a lower share price.

It resolves the issue of the fund raiser that has been hanging over our heads for the last 12-15 months and, at the same time, it identifies the further commitment to, and confidence in, the product by DSM

Gixer - Great find!!

The thing that slightly confuses me in all of this is that By-Health seem to have bought in to the efficacies of Fruitflow and seem to be spending a lot of time (and money) into research of its additional properties. They seem extremely confident of the product itself.

Given that, I would have thought that they would at some stage look to be taking a stake in PXS with a view to a by out of the Company. However, there doesn't seem to be a glimmer of that sort of activity at the moment. From what I read of the new Patent, it will be owned by By-Health.

I am not sure that is a problem - the main issue is that this will increase the value of the existing PXS patents and surely will impact on the SP of PXS.

I have said it before but i think a rationale valuation of our current patents is about £40 - £50 M (ie 3 x current SP). This new news gives me confidence that the real value of our patents is somewhere north of that figure. IF we get some form of medicinal approval, the upper limit is. surely a lot more.

Two really chunky sells this morning at about 8:30. One went through the main exchange and one went through Aquis. Both of the order of £8K. I wonder if someone knows something that we don;t?

All in all I still feel quite confident at the moment and took the downturn to buy some more shares (they show as a sell on Aquis.

I think it would be really important for the Company to issue a Y/E Trading statement in April. I would think of this as a minimum due to the fact that anticipated income levels are more than 2 x previous years but with the Company's track record of news dissemination, I don't think that we can take anything for granted. Maybe we all should email IF to petition this.

Roll on positive news from China.

I can only hope for dreams like yours DP

I am fairly sure we have discussed this before, but does anyone have an explanation for the plethora of very small trades that seem to go through the books - a lot of them seem to have identical timestamps too.

Whilst reviewing the latest accounts prior to my recent analysis, I think that I came to the opinion that the recent change from the DSM Alliance Agreement to the new "In House" Production and Sales Model was the catalyst for unlocking the benefits for Fruitflow. I think that the statement regarding post Year end Sales and Orders amounting to £590K was pivotal.

When I went back over the years and did my original analysis, I found that the Cost of Sales for FF + o3 Tablets was on average 33% of the revenue generated by the sales of the Tablets. In other words we were making a 67% profit on those sales. I am assuming that the cost of Producing the raw material (FF SD II) would be less than that and therefore, the profit margins should be higher.

As I said in my analysis, I believe that we could possibly be trading profitably under the new arrangement if you discount the costs of DSM Royalties and R&D.

Having said that, I believe that SAMR approval will take us into a much higher division.

a) It will open up a completely new market for FF and to use a well worn message this new market could be at significant multiples of existing levels, AND

b) I believe that SAMR approval will also make a significant difference to the value of the original IP..

As Gixer says, the development of the Gut Health research by DSM could also bring the same results.

For the first time in ages, I am feeling very much more confident of our short term prospects - to put my money where my mouth is, one of those buys on Friday was mine.

Slam

I have not yet received an answer from IF regarding the royalty payments made to DSM, but I have done a lot more analysis of the current set of results and those from the previous 6 half yearly reporting periods. I think that my analysis is leading me to believe that we might already be trading profitably if you strip out the R&D Costs and the DSM Royalties from the Accounts:

My initial thoughts regarding these two elements are:

R&D Costs: I have always thought that Provexis was a Company with two distinct arms to it. The first arm is as a trading company which looks to manufacture and sell the Fruitflow product - more of that later. However the second arm is as the "guardian" of the IP and the Patents that support the IP. The R&D costs contained within the Accounts merely represent the cost of this guardianship and should not be considered as part of the normal trading.

In my opinion the IP and Patents have an inherent value of their own. It is difficult to put an absolute value to this but I would argue that the IP has to be worth £50M at least, especially when you consider the money that the Chinese are investing to further advance the understanding of the original IP. I suspect that the achievement of SAMR approval will significantly enhance this valuation.

DSM Royalty Payments: My analysis suggests that the Royalty Payments are indeed contained within the Current Accounts within the "Cost of Sales". I think that these payments lie in the range of 40%-50% depending on whether you apply this to gross sales to ex-DSM clients or whether you apply it the same sales but Net of production costs. In either event, my models estimate the Royalty Payment to be approx £145,000 in the latest period. We know that these Royalty payments are time limited and will reduce to zero over the next 3?? years. If we are doing an analysis of the Current Trading II would argue that we need to consider the Company position excluding this particular element of cost.

If you strip out both elements we discount £140,000 R&D Costs and we discount £145,000 as an estimate of the DSM Royalties, then I would argue that we are currently trading profitably as both of these are included in the last reported loss of £267,106.

My models make a few obvious assumptions but I don;t think that I am far out on these and I am happy to share the analysis if anyone in interested.

I am also really buoyed by the reported sales and order numbers post the year end as they are showing highly significant increases in volume. This will only increase further when the SAMR decision kicks in.

But in the words of the immortal Gixer - WTFDIK

Just to let you know that I have e-mailed IF to ask him exactly this question.

Gixer, I am not expecting him to let us know the amount - but I do expect him to have to answer the basic question.

Dr Horrible, I do not think that they can simply exclude the figures from the Half Year Report as it would result in a mismatch with the Balance Sheet.

I will let you know when, or if, I receive a response.

Slam

PS I am a bit disappointed by the lack of market movement today.

i have now had a chance to read through the entire report in full detail (along with some of the comments that you guys have made in relation to the results).

however, i am more than slightly confused about the nature of the agreement that we have with dsm regarding the "royalties" that we pay to dsm for the sales to previous customers of theirs. i understand that the details of the agreement are confidential but, in order to maintain that confidentiality, they cannot, and have not, directly refer to any "royalty payment" made to dsm within the half year report. having reviewed the income and expenditure account, i think that there are only two ways in which they can manipulate the figures to hide these payments:

1) revenue: they might show revenue net of the royalty payment, or

2) cost of goods: they might include the royalty payment within the cost of goods.

either way, this will result in a distortion of the true long term profit. on a back of *** packet basis, i have estimated that the royalty payment could easily be in the region of £150 - £200k. if this was the case, then it means that our long term figures (without royalty payments are already much closer to "break even" than we might be led to believe.

the note of sales in q4 2023 (£270k) and the note of orders being processed in q1 2024 (£320k) are hugely encouraging if this is the case.

am i overthinking this?????

I have two or three spare packets. They are welcome to have them free of charge. I had to stop taking them for a few months prior to surgery and I never got round to suspending my subscription. They are all from the latest batch and so are well in date.

One of my long held thoughts is that the short to medium term value of the provexis stock lies in the underlying asset of the patents held by the Company. As time goes on the number of worldwide patents has increased and has started to cover an increasing number of uses. Furthermore, the recent "Clinical Trials" performed by BH, would appear to be positive and will only add to the value of the previous trials required to gain the original EFSA approval.

In my very simplistic mind, I have ascribed an approximate value to these patents/IP of £40-50M. The current market value of the Company is £14.5M and so, I believe that there is significant hope of short to medium growth in the share price.

The share price has been held back because of the lack of a positive marketing plan for the original product and the threat of a funding shortfall.

However there are now a number of issues on the horizon that could breakthrough the negativity:

1) The possibility that provexis could move into profitability in the next 12 months

2) The grant of Blue Cap Status for the use of Fruitflow in the Chinese Market. Not only would this increase the value of the IP but it would also open up a massive new market for the product.

3) We now have two more potential uses for the product: Gut health (being investigated via DSM and; Possible drug claims under the new BH patent.

I continue to keep my fingers crossed that I am right with these thoughts, but it has been a very long time coming.

It would be great news if this was a precursor to an entry into the "Drugs Market".

However, I am slightly concerned that it is BH who have applied for a patent, rather than Provexis. Who would benefit from such a patent, if granted? Any thoughts?

I suspect that Gixer might be right with his assessment about timescales.

I also suspect that, given the length of time that this process has taken, and the fact that the original decision to allow the new health claims was made in June, BH will already have a list of products to release based on Fruitflow as the active ingredient. I further suspect that they will also have the marketing campaigns ready and waiting to roll out.

The question in my mind is whether they have sufficient quantities of FF to substantiate such a roll out. Surely, Provexis have been asked to provide significant supplies of FF already BUT, if this is true, surely this would have triggered a requirement for funding to either purchase the remaining DSM stockpile or to ramp up the new production runs. However, there has been no news on funding since the RNS in April. I am confused about this.

However it represents a significant milestone for the Company and as such I am slightly surprised by the lack of movement in the share price and certainly surprised to see some fairly chunky sells.

Gixer,

Wow, this identifies a massive increase in the value of the IP for "Gut Health" stuff. If this valuation were applied to Provexis it would equate to something in the region of 8p per share. Difficult to compare Apples with Pears I know, but it is a development that is worth keeping an eye on.

Gixer,

As regards your second paragraph below, am I right in thinking that, under the new arrangements Provexis will be responsible for the supply of the straight ingredient of FF to DSM for use in DSM's Premix solutions (once their existing supplies of stock are exhausted).

In other words will DSM become a direct customer of Provexis?

As far as I know there is no guidance available and there has only been one sub-trial from by-health that comments on the clotting time of blood for FF Users. However, I did undergo some elective surgery last year when the surgeon found out that I was using FF and postponed the surgery for a minimum period of 2 weeks because they were concerned that FF could affect clotting times.

Very strange isn't it. It is definitely listed as an ingredient. However, the product is sold as a scalp tonic (to be massaged in).

Have this norwegian company done some research that identifies that fruitflow can be administrered externally and that it is efficaceous in preventing hairloss???

Let's hope that Provexis can rush to resupply these products by using up some of the new stock that it has just purchased from DSM. The quicker that they can sell this stock, the less impact there will be on cashflow, and that will mean a reduced requirement for new funding or debt AND, hopefully, a quicker march into profitability.

Am I being too hopeful here?

I had Covid during the spring of 2022 and am a regular taker of Fruitflow. However, what is quite interesting is that I was forced to stop taking FF prior to surgery and I actually contracted it during this period.