AVR - Anteris Technologies

[Purple XS2]

not that I believe stock-market analysts:
http://www.proactiveinvestors.com.a...-strong-revenue-growth-from-adapt-196209.html

Does anyone have an opinion on proactive's record/credibility?

Closed today at 0.365. Been a bit jumpy last few trading days. Reached 0.40 briefly.
My concern remains their cash flow: will they plough on without a cap-raise, or not?

I hold. Quite a few.

Regards,
P

 

[Country Lad]

I have this as a breakout candidate and may just enter if the momentum improves and it closes at 38 or higher.

 

[galumay]

My concern remains their cash flow: will they plough on without a cap-raise, or not?

Shouldnt be a problem, given the numbers in the last 4C. Dont forget there is still $5m funding undrawn as well. I think the CR's are behind AHZ now. I hold plenty too, its my one really high conviction speccy, so I am probably biased but I think the next 12 months will be hugely positive for this business.

 

[Purple XS2]

https://www.asx.com.au/asxpdf/20180508/pdf/43tvsw4j8lj0zf.pdf
an announcement in relation to a capital raising. Oh well; there goes that theory.
Details expected today (Thurs 10th).

As noted by @galumay above, there wasn't necessarily an imperative need for a CR just now, although Admedus probably concluded a line-of-credit from a lender wasn't sturdy enough or big enough for comfort. Or that they see stand-alone profitability as being further off into the future than optimistic shareholders would like to think.

Last close pre-Announcement was 0.36c. Average for the last 4 weeks' trading probably about 0.33 - 0.34c ? So my guess would be a CR, with opt-in for holders, priced at about 0.30c?

Sooner or later CR fatigue will weigh heavily on shareholders. I'm getting that here-we-go-again feeling.

Regards,
P

 

[galumay]

I was totally wrong. (not for the first time.) This is pretty dire IMO, every year for the 5 years I have been a shareholder AHZ has put their hand in shareholders pockets, this year they also raised debt for the first time so its a double wammy. Also Wayne Paterson had told shareholders there would be no more CR's - and months later here we are.

Interestingly within 6 months of every previous CR, you could have bought the shares cheaper on market, so I will wont be adding to the executive coffers this time round. For the first time I am doubting the narrative around AHZ.

 

[Purple XS2]

...
Interestingly within 6 months of every previous CR, you could have bought the shares cheaper on market

So true: CR was issued at 0.30: shares since resumption of trading have been gettable as low as 0.25. Last close 0.255.

so I will wont be adding to the executive coffers this time round. For the first time I am doubting the narrative around AHZ.

Neither did I - not so much from insight, but primarily no available funds.
I still hold.
So now I await the next quarterly report on revenue. With hope, & fingers crossed.

Regards,
P

 

[galumay]

@Purple XS2 This is even worse than it looks, turns out they were in negotiations about a supply contract at the time of the CR, so AHZ knew there was at least a reasonable chance of negotiations failing and a resutling impact on earnings. In hindsight the optics are terrible, shareholders that participated in the CR would be rightly furious with the course of events and subsequent crash in the SP.

I have had some discussion with Wayne Paterson on Twitter about the timing of the CR and the subsequent negative announcement, he was obviously pretty defensive about the events of the last few months. I suspect its a classic case of management not having skin in the game and being poorly incentivised.

 

[greggles]

AHZ dumped this morning after the release of their quarterly results.

Quarterly operating loss of around $6 million. ADAPT sales were a big miss. Forecast of $4.2-$4.3 million vs. actual of $2.7 million. Estimated cash outflows for next quarter of $12.57 million.

Those who subscribed for shares at 30c in May must be pissed off. Surely management must have had some idea of where this was all going by that stage? I bet some lawyers are getting phone calls this morning.

Admedus currently down 27.66% to 17c.

 

[galumay]

Yes, the capital mangaement by Wayne Paterson has been detrimental to the business and shareholders. His habit of over promising and under delivering has led to a savage reaction from the market. I doubt AHZ can survive without putting their hands in the shareholder's pockets again - which wont go down well! I think they knew quite a bit about various bad news before rushing that last CR through, it was very suspicious to say the least. I contacted WP about it at the time and he was shifty as a fox in a chook run.

 

[Purple XS2]

I suppose the good news is that this crunch came on the last day of the month: so I get to nominate AHZ as my tip for August, on the theory that while growth didn't live up to the hype, there was revenue growth - but still a long way from profitability.
The ASX link to the quarterly, for the curious:
https://www.asx.com.au/asxpdf/20180731/pdf/43wxc3c65c0879.pdf

 

[galumay]

on the theory that while growth didn't live up to the hype, there was revenue growth - but still a long way from profitability.

I think the problem is that they will run out of cash, they now have debt as well, and no real hope of raising capital as no one is going to put more money in now. It looks in very poor shape to me.

 

[Purple XS2]

And today's excitement is a trading halt for a capital-raise. Further details to emerge by Monday's trading.
How the h*** that's going to pan out is anyone's guess. As posed above by #galumay, who's going to put their $ in now?

 

[galumay]

Yep, when I looked into it in more detail I think they could just get through the next quarter, but given the December Q is usually softer, they would be out of cash by end of year. Thats assuming they can maintain a 30% growth in revenue, otherwise its even worse.

They do have an undrawn facility of $5m but I suspect they are already in breach of covenant with the first tranche of debt, also $5m.

The only way a CR would work is if the directors and management stumped up some of their bloated salary for shares, no one else will touch it with a bargepole.

A sobering lesson in the dangers of management with no skin in the game and bad incentives.

 

[Purple XS2]

After the extension to the extension to the extension of the trading halt ...
Let me see now:
Trading halt 1st declared 2nd August.
Extended on the 6th August, till 8th.
Extended on the 8th, till 13th.
Extended on the 13th, till 20th.
Extended on the 20th, till 3rd Sept (next Monday).
Make that the extension to the extension to the extension to the extension of the trading halt.

I think this qualifies as grim.


Oh well, it's only money.

 

[galumay]

I think this qualifies as grim.

I concur with your analysis!

 

[Purple XS2]

Extended on the 3rd Sept, to date unspecified.
Some dilution with shares issued to institutional investor ("Bright Star", who I believe also recently acquired a substantial interest in Admedus's vaccine R&D wing).

More capital raising measures to be announced, date unspecified. Suspension continues in the interim.

So ... make that the extension (duration unspecified) to the extension to the extension to the extension to the extension of the trading halt.

At least now we have a fig-leaf of hope that Admedus will avoid liquidation.
I imagine there'll be a bolt for the exits once (if...?) trade resumes.
Though where the dust settles thereafter...?

Rgrdz,
P

 

[galumay]

Yes @Purple XS2, its basically a chinese business gaining control of AHZ, another Aussie company lost to our shores. This time its due to incompetence and mismanagement at best and possibly worse.

Shareholders will end up with something, but a consolidation and re-rating will mean its very little.

When I directly questioned CEO Wayne Peterson on Twitter, making the obseervation that the circumstances and timing around the last CR left little doubt it was either a case of management incompetence and unprofessionalism, or something more sinister. His response was not to offer some other explanation, but rather to block me on Twitter. That was the moment I should have sold out, very clear management values were not aligned with the business.

 

[Purple XS2]

I'm still here, actually hold only some AHZO oppies (Dec 2021, 0.08c strike).
Chart getting active last couple of days, for no discernable reason:

(1st chart is last 12 month, the flat slippery-slide was the extended halt before another disasterous dilution)
(2nd chart is the last 3 months)
today's close 0.055, on volume of 4 mill units.
Looks a lot better than sub 0.03, but this may vanish like the morning dew.

 

[galumay]

Not a student of squiggly lines, but the last few days volatility makes me think there is an announcement coming and there is a bit of insider action. The other possibility is the traders at HC that ramp and dump these sort of companies may be trying to create some action.

 

[Purple XS2]

Whew. Anothr 6 months or whatever it was, suspended. Resumed trading today, announcing a deal with a US distributor LeMaitre Vascular (of whom heard I have of not):
https://www.asx.com.au/asxpdf/20191014/pdf/449gd18nq2915h.pdf

So, AHZ's little sparrow heart still beats. Better news than I was expecting ("we downed the last bikkie and squeezed the last tea-bag from the staff kitchen folks, time for us to Voluntary Administer...")
It wasn't that.

Mr Market's frown lifted a little, but it was a boost not a Godsend.
Closed at 0.069, having been frozen for months: last trade back then was 0.060.

regards,
P