Finance5 Aug 2020 14:20
Well I guess the question is do they have enough cash to see them through before the deal, assuming it completes.
Funny thing is I looked at this company last weekend and chose to add at Avct instead! Lol! Anyway I managed to grab a few this morning.
Last years revenues were £267,868
Interest payments were £28,975
Admin costs were £859,171
Overall losses came in at £617,067
Cash on books was £865,875
So on a repeating basis they are looking at at best staying evens with a small amount from CLN’s.
The yoy revenues were around £100k up on 2018. But I doubt we will see any growth this year as covid has put back quite a few ops. Marking time would be a great result but biased to H2.
So I reckon we are running on fumes. This was why I didn’t buy earlier even though I really liked the science.
Ok so why buy now? We’ll if Mr Brown is being smart I would charge AnnonPharm to undertake DD. Shows commitment and access to IP comes at a cost. It only needs to be a token amount say £60-100k which would make all the difference on these numbers. Money back if you buy!
I have no idea what a product like this is worth. I note the chairman’s statement says
“we recognize that merger and acquisition activity may accelerate revenue generation, fulfill technical gaps, and a potentially faster time to market. Expanding our footprint in medical imaging to better serve patients remains our unwavering goal, and we will remain aggressive in this pursuit.”
So it could even mean a takeout or if someone wants stonechecker now that they know it’s having the tyres kicked buying IQAI may be the only way to secure it. If that’s the case they’d have to get a wiggle on!
So cash is an issues, they may place on the SP rise if they can’t freewheel up to a deal.
If they do a deal they gotta make sure it is based on potential and not existing revenue multiples. Bag that and the cash problem will be sorted for some time and they can invest in the other platforms. It will also put them in a stronger position should a buyer come out later, JV, merger etc.
So with all the risks this deal could be transformational for the co and the DD won’t take that long. Validate product, Sample effectiveness, Historical Checks, Revenue check, Customer base etc. Different people will look at different aspects and it will be pulled together by a project manager. 6-8 weeks if resources are available is my guess.
Makes for very good punt with a lot of upside even from these levels.
Atb
Trek
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