George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Elric, not yet . I listened to the Tom Winnifrith interview. Stuart never fails to answer a question. His answer to Tom was 'never say never' and, understandably, was perhaps a bit more political than his other answers. I feel no CEO, even SA, is going to give an answer that says either yes we are going to raise soon or no we are going to run it to the wire and hope for the best with a multinational deal.
TW suggested raising £1m in Dec. I disagree and feel it's best to fund for a year to allow for any delays or hiccups. As holders here and in most small caps know they do happen.
I feel the prospects for SBTX are so potentially good that whether they issue 5m or 15m shares at above 20p is fairly immaterial to potential shareholder returns and better to err on the side of financial caution and raise £3m. If Croda revenues are coming in as expected then they can always use part of any excess balance for an acquisition next year.
All fair points Clio, my view is that SA cannot leave a raise until after the acne results (January '24) in the hope a multinational signs on the dotted line there and then. That would be unnecessarily risky and it would be an issue just hanging over the Company. Aside from anything, legals can take ages to complete.
I also don't believe SBTX will have a conditional agreement with a MN that is formalised if results are good as it's anticipated they will be. If that were so then I think a LOI would have already been signed and announced. It would be highly material and SA would be obligated to announce.
SA may even want cash in soon so that he has adequate funds for 12 months for the going concern statement in the annual results due around mid-Dec. As someone said it would be good to do it prior to any anticipated news so that it doesn't take the gloss off.
SA will be the best judge as he will know the likely newsflow between now and Christmas and whether it will be sufficiently price-enhancing to put off a raise too soon given the potential prospect of a higher share price to come and therefore less dilution.
So, in short, I don't think SBTX can rely on possible upfront payments coming in a timely manner and Croda revenues would come too late. As an investor, I hate convertible loans so I hope and believe SA will not go down that route. He comes across as an astute CEO and very much aligned to long-term shareholders aspirations.
I agree, SA's 80p options have a very good chance of kicking in during 2024 and indeed his 120p options as well.
Good reflective discussion. I agree that scaling in cautiously is probably the best approach for anyone watching the stock. That in combination with watching the chart trends helps get he best entry point.
I can't see funding anywhere near the lows caused by the OPTI sales and it could even be at a premium to the current price, of course, depending on news flow and investors positioning for 2024. It's a good aspiration to buy into any share at the bottom but, in reality, it's rarely possible and it doesn't matter too much with small caps with the potential to multibag if they go on to fulfil their potential.
In the current bear market (which it goes without saying won't last as it's been about two years already) it's common for investors to be able to buy in below the price of a raise and that's another consideration. It may well be that AIM has bottomed to coincide with interest rates topping out and there could be an end of year rally.
I do think there will be one or more small acquisitions this year and, if they are good accretive ones, then that also enables SA to simultaneously go to the market for working capital needs on the back of a funding that combined with Croda revenues should put SBTX on the path to profitability.
My understanding is that there will be some feedback on the acne study at the back end of this year but the full results will be early next year. A successful outcome as anticipated may well be the trigger for a multinational deal but these things take time. I don't think SA would want to delay funding after January '24 at the very latest as then the narrative becomes 'when are they going to raise' and it detracts from the focus on the compelling prospects.
A sound balance sheet also helps negotiate an optimum deal from a financial stability perspective. Multinationals are notorious for going at a snail's pace because they are more cumbersome than small caps with layers of management who all have to have their input.
So I'll be watching with interest and more than likely scaling in.
Wise money holds or wise money watches? That's the conundrum.
Very interesting last quarter for this Company. Potential for a multi-national deal which will supply cash needs but without that they will need to raise. They are burning about £2.6m a year and raised this amount in early Jan last year. They will need more if they opt for acquisitions although they can pay in shares as well. Not a big fan of using stock for acquisitions as it just puts shares in the hands of potential sellers as per OPTI.
A fundraise doesn't always put shares into the hands of solid hold investors and usually creates an overhang. It looks like SA did better than most CEO's with the last £2.6m as it appeared to be mainly OPTI that knocked the price rather than a funding overhang.
The SBTX story is very interesting though and funding will not be a problem, but the question mark is pricing and potential drift. The markets are harsh for companies looking for cash however good the story is. Look at POLX although granted they need a lot. The plus side for SBTX is that they will not have any OPTI selling giving downward pressure as they look to sort funding needs.
A funded SBTX and 2024 prospects with Croda launch will be a different matter. It's a tricky one for investors. Those watching from the sidelines like me will miss out if any multi-national deal is struck. My view is that they will need the study results for any deal with a major though and I prefer to watch and wait.
SA also believes acquisitions will help get a licensing deal at it gives synergy and testing with SBTX product. If he feels acquisitions and further data are needed to secure an optimal multinational deal that suggests it's not imminent. Who knows, that's the joy (or otherwise) of the markets, you do your research and make your choice. Good luck to all.
A nice 50% trade for AGL whilst POLX has gone the other way. It just shows how important the importance of visibility on sufficient cash for a 12-month period is. AGL results show they have longer than this hence the rise, but they need to address how they will further increase revenues / sort out the cash position otherwise the same issue will arise in the next few months. Both POLX and ANGL were classic buy and hold stocks but for now, are probably just trading stocks and, at best, takeover candidates. Both would have been better listed in the U.S. where access to capital is easier and higher valuations for these type of stocks is achieved.
I was just going to post that Trumpton as starcomstystems.com diverts to t42.co.uk. Not before time but agreed, a positive sign. I wonder if they will add the contracts and information for Zero etc. They have also appointed a new broker. Possibly good news and then a higher level funding? Not enough to tempt me back in just yet but watching closely for sure.
The 750k (NIS 3m) bank loan is actually repayable in 2022 not as I mistakenly put 2023. Charges are put on the assets as is the norm.
Also a $310,000 loan Israeli Govt related where the state interest for the first year (Covid related loan).
Looks like £925,000 convertible @ 15p
£750,000 loan (3m NIS) , TRAC currently in breach so banks can demand repayment now and otherwise repayable by Nov 2023. Due an update as results said they were in negotiations for a solution on 3rd March.
Some warrants at 15p & 18p exercise price but unlikely to be exercised currently.
I believe the loans from directors (interest rate 32%) were converted into shares.
Anything missed?
All fine with growing revenues and supply issues overcome but shareholders need a trading update to see if the distribution deals announced with high minimum sales requirements were hype or based on realistic prospects. TRAC also announced a healthy pipeline of potential orders. All good if that remains the case orders are coming in. A trading update is important as the Company has a history of highlighting transformational potential (United Nations, Russian Rail road etc) that never materialises. I think the Company needs a funding to resolve the NIS issue and repay the convertible loan but the question is whether it can issue a positive trading update and do it at higher levels.
Spot on, antelope. As you say SAAS revenues take time to build and can then go exponential. That's why in order to optimise a return holders need to be patient. I hope AS isn't forced into making an early sale because of pressure from short-term traders who form a large part of the shareholder make-up of Tern. On top end sector multiples then it would mean a poor return. Waiting until late 2022 would probably mean a substantial uplift in valuation.
I am keen to see the DA results and, as you say, given they only switched to an SAAS revenue model about a year or so ago (I think) then some investors are not going to understand how that takes time to take off and will be disappointed. I am aware that pretty much all of the portfolio companies don't really like the spotlight and scrutiny that comes with a major investor having a public listing. So AS comes in for some unfair criticism.
Also, it's pretty much a given that Tom Winnifrith will scrutinise every word and complain about every rns put out by Tern to regulators regarding whether it is material or not. Unfair though it may be, I suspect AIM regulators are fearful of Winnifrith and who knows Tern might be impeded for this reason from putting out more announcements than they are otherwise would.
What investors need to know is how SAAS revenues are likely to grow in order to put a current and future value on DA and it's frustrating that we can't get that insight. We will over time although detail will be limited as DA publish abridged accounts. Short-term investor pressure makes it a more difficult task for Tern to wait to see if a significant uplift in DA value can be achieved from (over time) significant SAAS revenues. The reference to Q4 and 'handsome multiples' by AS won't help matters. It won't be popular but a buy and hold for say Q4 2022 exit is in my view a more realistic approach unless someone is skilled at trading the volatility. There will of course be significant fluctuations both up and down before then given Tern is really a traders share.
Device Authority is still at too early a stage for selling imo. It's not profitable as otherwise it could be valued on an EBITDA multiple of 75 or more. Best guess is some advance on £2m revenues with their revised SAAS model. I say some because neither Tern or Device Authority have released contract news. Let's call DA's revenues £3m which is a 50% increase. The sector average for cybersecurity valuations is 9.3 x revenues. Let's call it £3m. So that produces a valuation for DA (for Tern) of £17.1m being 57% of £30m.
Add an extra amount for the partnerships and the IP but ultimately DA needs to start to announce contracts with decent cash figures for it to be sold for a significant sum.
https://ma-review.com/cyber-security-an-insight-into-the-sector/
https://finerva.com/report/cybersecurity-2021-valuation-multiples/
Albert Sisto comes into a lot of stick for not releasing a lot of information but I believe it is f Darren Antill who wants to progress things away from the scrutiny of public markets.
Tern is very hard to value as things are so opaque. The one holding we can value is Wyld. If DA is valued ( based on a premium to industry valuation metrics) at say £30m then add in £20m for the others holdings then the £60m current valuation for Tern is about right or at a slight premium until Tern give more transparency on revenues for all the portfolio holdings.
Fundamental VR were picking up some contracts with decent sums attached but these seem to have dried up as well.
InVMA - good solid company. Revenues? In profit. Tern just do not give out enough information for a sensible valuation to be made.
Talking Medicines is early stage and pre-revenue. It's had some good investment so they need to start picking up some contracts to highlight the business model works.
Wyld - disappointed with the application for nursing homes but it's the the satellite opportunity that will drive the valuation.
I welcome others making serious attempts to value (either higher or lower) a very opaque company. Let's not ramp or deramp. There is too much of that for this stock. Do we rely on industry metrics (revenues) for valuations or are there special factors for DA that mean it should be valued more highly?
DA being the glue of IOT security and 'awesome' are pleasing words to hear about DA but that status needs to lead to contracts and enhanced revenues.
Tern holders need to know if the revenues are growing from all the partnerships announced. We won't get that information so a guess at Tern's valuation is all that can be done for now.
I believe the valuation for Tern is about right until there is some update that one or more of the portfolio companies is getting some serious revenue growth. More transparency and portfolio updates are needed and about one every quarter. Old nav valuations are silly but so are the extreme end valuations that ignore the sector valuation metrics. They may come b
But on past history TB will convert and sell a proportion. He generally sells the cost of the CLN he has provided.
09/12/2020 Trevor Brown 6,540,000 @ 1.50p £98,100.00 Sell
09/12/2020 Trevor Brown 2,762,500 @ 2.00p £55,250.00 Sell
08/12/2020 Trevor Brown 800,000 @ 8.50p £68,000.00 Sell
07/12/2020 Trevor Brown 1,100,000 @ 9.57p £105,270.00 Sell
04/12/2020 Trevor Brown 5,166,667 @ 10.00p £516,666.70 Sell
10/11/2020 Trevor Brown 9,950,030 @ 14.00p £1,393,004.20 Sell
Bit over sensitive and defensive Trek. Not de-ramping and it's not my style and a random inquisitive post on an obscure bulletin board isn't going to make the tiniest bit of difference. I am just careful and cautious about entry point with small caps seemingly low on cash.
There is an issue in relying on Trevor Brown converting his loan notes as he will exceed 30% if he retains most of the resulting acquired shares as he is already on 29.35%. My understanding is he would have to make an offer if he went over 30%. So he would have to sell pretty much all the shares he acquired from conversion and, like it or not, that's obviously not going to be particularly good for the share price.
The last placing they did was a minuscule discount to the prevailing share price (see I am not deramping) and that would be a much better route imo rather than TB flooding the market with shares simply because he has no other choice to sell them unless he wants to make an offer for the Company. If he does then the share is a buy as it would have to be an offer at the highest price in the last 12 months. I doubt if he is wants to do that at this stage but who knows.
Fascinating company with a lot of potential share price uplift. I'd buy but I suspect they will need to raise soon. Cash balance for year end was £478,910 and loss for the year was 717,534. So basing this year on the same cash burn of circa 60k per month they must be nearly out of cash with about 60k left unless I have missed something?
So on short you think the Company has great technology , presents poorly and fails to get across it’s capacity to dominate the bio threat sector.
I don’t necessarily disagree but take the reverse investment view. For me it makes the stock a little known, under-valued share with brilliant patented technology endorsed by UK and U.S govts and picking up multi million pound contracts and have a strong second half for last financial year.
That makes it an under valued screaming buy for me with a need to improve or and presentations. I’d rather have dismal pr and great technology and commercial prospects than vide versus. Poor PR can be easily corrected ; poor tech … not so easy.
KMK look in a good place on all fronts now. Well funded as well.
I think you will get your wish for more emphasis on the bio threat once the Covid specific results are out as the broader development project for bio threats should get plenty of coverage on the back of it.
The thing is that JB employed several expensive consultants to do the deal making so it's not his weaknesses here that are responsible. It does raise the question though on whether FUM needs someone with a different skillset if expensive advisors are hired for deal making and still don't deliver.
It seems that the product is not ready for licensing and so to build up hopes in the market and not deliver with the consequence of a funding shortfall at a low share price raises questions. IN JB's defence he did say much earlier 'the market' wants to see a deal so maybe it was the key shareholders pressure to go down this route rather than his own wish.
JB is not ruling out a deal but, without one, the problem for FUM is there isn't a lot to excite the market for 15 months. Results late next year if FUM are on time which is a pointed issue for most investors as more often than not they miss time targets. JB is also down playing everything except MED.
On Proactive he said that one of the issues for MED is that the placebo being as fast as acting as MED was also an issue for potential licensees. I read that before in the study report and was cautious because of that. Phase 3 may bring a different more favourable result.
I would love to know what numbers the potential licensees willing to deal were talking. Surely something could have been structured where the main milestones would be paid on success in phase three. That would have got FUM through the trial without dilution and helped the share price so, if funds were needed, they could be raised at a higher price.
I agree with Oil that today has shown that charting is just one club in the bag and investors need to be aware of the potential impact of announcements either positive or negative. Almost inevitably, PJ will not acknowledge that but the share price action speaks for itself. It's not the time for point scoring but it is a key issue to be aware of.
Odd share - I've written this one off a few times and then out of the blue it doubles. At the extreme end of high risk but the CEO usually manages to pull something out that excites the market. The death spiral funding makes one of those out of the blue double the share price announcements less likely and they have already played the 'potential takeover' card. So much potential with such a big emerging market that most western companies haven't or wouldn't touch. Traded this a bit but I'm watching until the convertible bonds have worked their way through.
Gets little interest which can be a good thing. Anyone know why it has drifted well below the placing price aside from investor boredom?
The local partner is quite active on twitter as well :- https://twitter.com/WestminsterNig
To pick up a few here but I suspect they will need one final funding to get to break-even. The gloom about the Company's prospects for survival seems to have dissipated with some very promising looking orders. Would like to see them do well as know a few holders who have held these from much higher levels.