Member Info for Spacman

Tommy, yours are not facts, you are intentionally twisting my statements, and ignoring my repeated clarification.

Once again, the facts are, per this official document, that a respiratory P2 costs, on average, $12.2m USD:

https://aspe.hhs.gov/sites/default/files/private/pdf/77166/rpt_erg.pdf

The company has sufficient reserves to fund current operations for three years, but that does not include a P2 trial (or two).

Your repeated twisting of my statements tells me that I'm spot on, the company has a Going Concern qualification issue with the auditors who will be in there for the year-end accounts at the moment, and the company is urgently pursuing a funding commitment from J&J (or anybody, come to that).

Whether by design or accident, this is actually good news for the shareholders and should be welcomed by you, but of course your remit is to protect management first and foremost.

Jint - £200m delivers £1 per share immediately. I'm not sure a BP funding commitment would increase the SP by as much in the short-term. I really don't trust the company's capabilities, so I'm not looking to the long-term, I want to be out.

Tommy, the point is that any of those things could happen, but there is no information coming out so we're guessing. And I'm indifferent, anything that gets the SP out of the toilet, please.

Professional, please can you elaborate on your comment:

"And that is exactly why i have offered the company a solution as well (5-10mln)"

I do agree with Doc83, I cannot see 20p PS working. I'd hope that shareholder resistance would secure £1 plus.

Tommy, you're selectively quoting conclusions but not the accompanying various hypotheses/analyses that support different potential outcomes.

The point of all this is there is good news for the shareholders here if it means J&J are riding in as white knights.

Tommy - that three year timeframe still holds, but only in terms of current burn-rate, NOT investing in a P2 programme on top!

Jint - absolutely they will have discussed worse-case. They will also have the auditors in currently prompting exactly that discussion and I would imagine it is the main focus of the audit. That's why I also think that a funding transaction is running in parallel here. But that commitment would need to be secured before the auditors sign off.

Tommy - the metric is 12.2m USD and an average, so not necessarily the cost that Synairgen are envisaging, but it's probably still tight. It's not so much their spending power, it's the fact that it could exhaust the reserves and so prompts a Going Concern question.

And you're right, without expressing the P2 commitment then they would have been fine for the next three years probably, which makes Marsden's P2 self-financing commitment ill-advised and means they now have to move quickly on a funding solution.

AIMHO.

Going Concern is fundamental not tangential.

Funnily enough, the only statement that Marsden has uttered in the last year may have caused a huge problem for Synairgen, but at the same time may also bring shareholders relief far more quickly.

Auditors get nervous around pre-revenue companies, particularly listed ones, and stress-testing the Going Concern assertion is paramount; if they are not properly satisfied then they qualify the accounts. And then the LSE suspends the shares. And the BoD is forced to call in an insolvency advisor…

The Going Concern stress-test looks at the company’s ability to execute on its Business Plan for the next 12 months… from the actual date that the accounts are signed off, not the previous year-end. They could possibly even look to that 12 months from the date of the next AGM if they believe that the financial statements are going to be informing decision-making in that forum, I’m not sure, but certainly the 12 months start point is no earlier than the date the accounts are signed off. In Synairgen’s case, the last Annual report was signed off on 26th April. If consistent, this year’s audit will need to see financial projections showing the company is solvent until at least the end of April 2025.

Now, Marsden has said that the company can self-fund the P2 programme. The average cost of a P2 respiratory trial (and Synairgen want to run two) is around $12.2m according to this official report:

https://aspe.hhs.gov/sites/default/files/private/pdf/77166/rpt_erg.pdf

We “think” Synairgen is sitting on around £15m. And there will be R&D tax credits to come back in. So, Marsden’s Business Plan (if you can call it that) may well just be financeable in cash flow terms. But that’s not the way the auditor prudently assesses these things for Going Concern qualification. They will discount the R&D tax credit entirely because of uncertainty of receipt, no matter the probability. That leaves £15m to run the P2 trials and keep the company going until at least June 2025 (oh yes, the auditor will also want to see at least some leeway in the projections). All of this suggests a problem:

Marsden cannot row back from his Business Plan, and it does not seem to pass the Going Concern test.

What’s the solution? A third-party funding commitment, before the 2023 accounts are signed off. J&J may well be completing their DD currently. Let’s hope so.

Had Marsden not said that the company could finance the P2s (simplistically that may have been so, but not workable for a listed company complying with accounting rules) then this wouldn’t be this problem for him now. Perhaps the hubris has played to the shareholder’s advantage this time around, and we will shortly see a transaction completing and the SP lifting dramatically.

AIMHO. DYOR.

Aether - I think I preferred your feverish "whodunnit?" (a game for one - you) persona to the 1970's bigot you are now trialling.

Jinit - I just want the BoD to sell the company/assets and to signal that intent to the market so that the SP finds a proper level and I can sell. The inadequacies of the current management regime are compounded by a finite amount of cash and a dependency on a third party triage mechanism to make the product commercially viable, all that needs to change. The company's hubris and BoD self-interest have deterred BP thus far, there's no other reason why a transaction couldn't have already been consummated. Who knows, we might all be pleasantly surprised tomorrow when an RNS drops telling us J&J have come in. In the meantime, I find Prof's discourse more uplifting then endless tangential posts on interferon/RSV/Covid.

The share price is 5p. The placement price was £1.75. The market capitalisation is less than the cash balance, so the market is saying that the patents and the data are worthless in Marsden's hands. These are the main facts to focus on if you are an investor.

The person who reached out to me tells me they are still weighing up whether to go for it, but they think they have the 10% within their ranks anyway, so action is feasible (and Mani’s post shows that).

I thought your post about another party coming in to scoop up 10% to exert influence (it would certainly be a thorn in TFG’s side) was interesting but what additional benefit could they derive from taking an active rather than passive role do you reckon? Also, to accumulate the other 7% once the 3% interest is disclosed would surely see an increase on the acquisition cost from the £1.2m that you were quoting, or is there a smarter way that avoids increasing the SP?

Thanks Mr Costs.

So the £350k pa CEO leaves the £25kpa receptionist to fend off the enquires on her own. Hmm.

The few shareholders I actually know aren’t buying the line that comms are consistent with previous times. We are in a new era that isn’t comparable – crisis time with the market saying the company is worthless. Other CEOs come out fighting for their investors by promoting the company. Ours doesn’t care about the shareholder. Or the receptionist it seems.

Mr Costs - did you hear back? TIA.

Prof - sorry I don't. I'm not sure how they sort access out but I'll certainly ask, it'll probably be tomorrow now.

MrC - maybe skip over to the Telegram board, I'm not actually on there myself but I was canvassed by a friend who is.

Fair play to you Mr Costs, thanks for letting us know.

Please let us know what transpires.

I understand there is talk on the other boards of a potential push for an EGM. I think people are sick to death of the BoD's dismissive arrogance - and have lost 97% of their investment anyway, so why not, nothing more to lose really.

T-F-G please filter me and don't respond to this, I find your equally dismissive arrogance offensive too.

Doc83 - but they need somewhere around 6 out of every 7 shareholders to vote in favour, so an offer needs to achieve that.

Personally I would just like to see them accelerate the process if that's the desire.

Equally, Tommy may be perfectly right and nothing is going on. But TFG would be missing a great opportunity at this point, which is causing the "doubt" in my mind.

If the price is right, it's a fair deal for all sides, great.

Doc83 - it makes perfect sense for TFG to do a deal with management to take it private at this stage when the company is valued at cash, particularly if J&J are waiting in the wings to collaborate formally.

If that is the case then I wish they'd just get on with it and table an offer.

The SP has now been low enough for long enough for the BoD to legitimately recommend a low offer price.

But they still have to get over the 90% mark to squeeze all minorities out, so it has to be an offer that works.

Providing LTHs here have averaged down since the SP collapse then it might not be a bad outcome for shareholders. Pity the ones who have already exited and crystallized massive losses.

At £1 per share they'd be scooping up the rest of the company for circa £140m... so not bad for them either if they can see a route to riches through J&J.

Buy shares in TFG lol.