Tim Watts, CFO at Shield Therapeutics #STX presenting at our Life Sciences Investor Briefing Watch Now
mcadder, the people who spend 7p to buy one
placing share also get given 1.25 warrants for
free. investors should be taking that into account
when calculating the price level that was needed
to persuade people to take part in this placing.
what do you think would be a fair price for a
warrant in ADME, exercise price 8p, that can
be exercised between 6 months - two years?
--> effective placing price was 7p - [1.25 x that value]
if you believe that this is a share which has
significant upwards price potential, then the
value of such a warrant is not just trivial, eh?
"********** I am not sure whats your advice for people looking into TRADING adme : Should they buy for 30-50 % profit or not to buy ???? lol"
i have no advice whatsoever for would-be traders here.
i presume you are all adults, so you take your own risks.
E_AL, you forgot to quote the *IF* that preceded my
comment about cash from possible warrant exercise"
" [...] IF they are successful in pumping a story about
the terrific "potential" of assets that they buy options on,
so that there is some buoyancy and volume to the share price"
selective reading again on your part, E_AL.
i don't know whether or nor they will manage to get the share
price to spike up there or not. it is perfectly possible, as this is just
an AIM micro-cap oily with little transparency to the news drivers.
but there are loads of folks sitting out there waiting for a spike to sell, imo.
mcadder: "As you say it's in your view that the company was low on cash but you simply don't know that. After all they raised 500k only a month ago so I would 100% disagree with you there."
E_AL "Now we are in a very comfortable cash position.."
well, i've shown some actual numbers, based on the company's
own published results, and on their subsequent RNS which give
figures for raises, warrant exercises etc. board readers can review
those figures for themselves. if you see an error in those numbers,
then please feel free to set out how you calculate your own figures.
the company is indeed in a much better position for the next
few months to keep paying the BoD wages/admin costs. but
it doesn't leave 'em with much spare to spend on meaningful
investments in other assets. i've said what i think they may do.
gl honest folks.
on a more minor note, it was funny to see that
earlier this week some posters seemed to think
that zark is a 'swiss bank'. very clearly, it is not.
this is the UK registered private
limited company based in london:
(take a look at their accounts filed 21/3/19
to see what kind and size of fish they are...)
obviously, if they are successful in pumping a story about
the terrific "potential" of assets that they buy options on,
so that there is some buoyancy and volume to the share price,
that would also assist ADME's cash position as holders of 4p & 8p
warrants exercise & cash in, though that would also be a damper
on share price rises given there'd be approx. 21,000,0000 warrants.
let's revisit ADME cash position,
starting point from last results:
£216,000 cash balance at 31/12/2018
£680,000 gross from placing april '19.
(let's assume the costs for that were
about £80,000, hence £600,000 net.)
£72,000 in from warrant exercise in june
£500,000 gross from placing in august '19,
(let's assume £50K cost, hence £450K net.)
£5,000 in from warrant exercise in august.
that gives total cash before admin costs = £1,343,000
2018 admin expenses were £1,620,000. (ADME said it
had reduced operating costs, but not admin expenses.)
--> seems still burning **£135,000 per month** on 'admin'.
so since december 2018, £1,343,000 cash
balances. but spending £135,000 / month.
-> that meant they were going to run out of cash end october '19.
unless they'd severely cut admin costs, or unless they did a placing.
and then, lo and behold a placing for £832,000.
(let's assume shareholders won't block it, if
they do then company is just brown bread.)
let's assume 10% costs for the placing, gives
them a net cash influx of circa £750K. unless
admin costs are cut significantly, that funds
them to keep paying BoD wages etc for another
five and half months, i.e. until *mid April 2020*.
however, that assumes firstly that they don't actually
spend any of the money on assets, nor on purchasing
options to buy prospective assets, and it also assumes
that they don't get asked to pay back the grenada cash
in the near future. similarly, they still do not have cash
to pay for their share of possible aje developments, (if/
/when partners ever agree on a plan) as this fundraise is
needed for BoD wages & admin costs over next 5-6 months.
so i think they might spend some of the placing cash on
buying an option on some african asset which is not yet
doing any significant *production*, & then try to use that
news plus associated spin that this is an asset that they
intend to 'evaluate' which they think has terrific 'potential',
in order to invigorate the share price so that they can then
get a larger placing done (bear in mind that all that could
happen before the results of 'evaluation' known...) & then
in turn they could use the next placing cash to buy options
to evaluate yet more assets with 'potential'. if they can get
enough plates spinning, that could keep the BoD in big
wages through repeated placements even *if* very sadly
none of those assets ever do turn out to be worth much.
based on published results & RNS data, imv company
was running very low on cash, so it had to raise more
more money urgently or head into technical insolvency.
but they did manage to raise at a better price than i
thought they would -- luckily, those rumours about a
"merger" helped pump up the price a bit pre- placing...
at first sight, the placing price appears to be 7p, but
potential investors should also take into account the
free warrants being given to subscribers, in 5:4 ratio (i.e.
buy four placing shares at 7p each, get 5 warrants free).
--> this means the effective price placees have paid is:
7p - [1.25 x whatever you think the warrants are worth]
the warrants are currently out of the money; 8p exercise
price, & can be exercised in-between 6 months - 2 months
from issue. what would a fair price be for such a warrant?
e.g. if you think a fair price would be 1p, that implies the
effective overall placing price is 5.75p. but if you think
fair price is e.g. 2p, implies effective placing price 4.5.
if you think warrants worth 1.6p, effective placing at 5p.
lol, so the sheikh has discussed his investing
psychology & motivations with you, has he?
none of the stuff you cut and pasted is
relevant to the fact that ADME are running
out of cash, and so will be teetering on the
edge of becoming insolvent.. as you should
know, insolvency is what happens when an
individual or organization can no longer meet
its financial obligations to its lenders as debts
become due. an oil company could still become
insolvent despite having loads of reserves, loads
of wells, or a fistful of licences from 10 states if it
can't actually come up with the *cash* to pay its bills.
insolvency looming within a couple of months, imv,
unless they manage to get another placing away, or
find another rich sugar-daddy investor to bail 'em out.
(in a quantum universe all things are possible, but some
of them are a heck of a lot more likely than others are.)
how much cash do you think adme is burning through
each month, & how much cash do you think it has left?
gosh, it's never dull here.
i don't suppose there was an itsy-bitsy-teensy
shred of evidence offered for that rumour, eh?
anyone here fancy buying shares in a nearly insolvent
ailing AIM micro-cap investing in deep-water nigerian
never-never oil on the strength of an unsubstantiated
twitter rumour, by any chance? roll-up, don't be shy.
curious logic to the rumour -- someone tries to start a
story that share-holders will have "great news" soon
because a merger is coming ... and they say sheikh has
sold out because he knew that great news was coming.
what a funny fellow he must be. most big shareholders
in a small company that was expecting to be subject to
a merger on advantageous terms would want to hang
onto their shares in order to join in all those profits, hein.
how could anyone compare it, since no-one
ever actually got to see and test the onitor
product they claimed to have 2.5+yrs back?
i doubt that ctag ever had any
properly working product at all.
happy to be corrected, if anyone can point me
to any independent assessments, reviews and
demonstrations of onitors from way back when.
(but stills & short clips of company stooges just
standing next to piles of shiny cardboard boxes
sure as heck don't count, nor mock-up outputs.)
the aje partners need to get a substantive partner on board
to support broader field development. the future of the gas
here would need to be the main draw, given the economics &
politics of tempting majors into new deep-water oil projects.
doug, it does matter. you may think that AIM is the wild wild,
west, but at least there is still some oversight & regulation that
AIM companies are meant to comply with, e.g. via the nomad.
since exiting AIM, 'ctag' doesn't even have to match up to those
regulatory/governance standards. so wild, wild, wild, wild west.
they can pretty much do whatever they want without comeback.
julian, patron saint of adme.