Arthro Kinetics Share Discussion Threads

[jonwig] 27/3/2007 16:21

I see RAB Capital have bought yesterday, and directors subscribed to the placing (did they have much choice?) - whilst I haven't much appetite for buying these (again) it might be worth a quick look.

[jane seymour] 27/3/2007 16:10

Sadly its beginning to look like a story without a happy ending !

[learntlesson] 27/3/2007 10:20

Ok its more or less halved now Katy.

Still could be a story here.

[katylied] 27/2/2007 19:00

So... What is it all about?... My take on the state of play...

At present AKI has 50m authorised shares of 20p nominal value. There are ~28m shares (fully paid) in issue. The current MktCap at today's mid of 14p, is therefore ~£4m. The company is still loss-making. There is ~£1.9m cash on the balance-sheet, but also a similar amount of debt.

The EGM called for 22/03/2007 is to authorise a capital-reorganisation and refinance package for the the company. Without this, the company will likely cease trading. So for existing shareholders, the clear threat is... dilute or die.

So... subject to that EGM, AKI will be reorganised to have 200m (4:1) authorised new shares of 5p nomial value. The 27,600,481 old (20p) shares already in issue will be re-nominalised (1:1) at 5p (the additional new 15p shares are simply a device to achieve that end. They will always be worthless and can be ignored).

There will be a subscription of ~44m new (5p) shares at 10p/share and a placing of 16m new (5p) shares at 10p/share. This will raise ~£6m gross and increase the total shares in issue to ~88m. There will also be warrants for future issue of an additional ~30m shares at 20p/share and options for a further ~10% of the enlarged share issue, at prices from 15p to 50p. At today's 14p mid-price, the post EGM MktCap would be ~£12m with net balance-sheet cash of ~£6m...

The new funds will cover a further 12 months, but beyond that company trading will have to improve substantially. The size of future losses will be key. If the cash just burns away, then a ~£12m MktCap looks much too high. In that event, the share-price could halve, rather sooner than it might double...

[learntlesson] 27/2/2007 10:50

Hey Katy, _ haven't looked at AKI for a while - but from my understanding they took a hit in November when the Germans told them they needed an authorisation to by the tissue cultures, and then on 30th of Jan this year they got that authorisation. I think in light of the possible value, some of that dilution may already have been accounted for. This could see a nice reversal?

[katylied] 27/2/2007 09:53

First impression of the RNS, is that 10p/share or less is required.
They seem to specialize in these hugely long-winded RNSs.
Will have to read more carefully when time allows...

[katylied] 30/11/2006 09:39

Rather long RNS out today... lots of waffle, but the important bit comes right at the end ...the Board believes that the Company will require additional capital. The Company expects to initiate a fund raising in January 2007...

Dilution is likely to be extreme. So AKI must surely
now be a no go area this side of Feb 2007...

[learntlesson] 29/11/2006 14:17

I'm glad I avoided it too! - sorry to anyone who did have a go as a result of reading this thread (not that I ever ramped it). However there is still hope for this company, I think. I still think that the joint therapy/replacement market has a good future and maybe Athro Kinetics can be a part.

[katylied] 29/11/2006 08:50

TUESDAY, 22 August 2006 - The Board of Arthro Kinetics plc... notes the recent movement in the shares and confirms that it is not aware of any reason for the fall in the price...

You have gotta larf. Like all this bad news
just arrived suddenly out of the blue?...

[vish65] 28/11/2006 11:52

Take my hat off to the person who dumped in Aug. Learnt a lesson - theres a reason for everything - dont have a punt - check all the facts and make a valued judgement. The CEO resignation was i think also a pointer

[jonwig] 28/11/2006 08:23

Yes, amazing that an advanced Western European country should be the 'country risk' associated with this!
Mind, Germans will simply go abroad to have the op.

How can the HQ remain there?

[callumross] 28/11/2006 08:08

that's the final nail in the coffin now guys - the game is over

[jonwig] 27/11/2006 19:05

Hi, adgd2,

Tianjin Anda will own 85% of the JV, AKI 15%.
My reading is that the Chinese have paid €10 million (cash) to the JV for the stake, AKI have provided the IP.

[adgd2] 27/11/2006 08:04

jonwig - do you know if the chinese deal involved any cash? From the RNS..

"There will be an equity injection of approximately €10 million by Tianjin Anda and the transfer of know-how and rights relating to CaReS by the Company to the joint venture."

[jonwig] 27/11/2006 07:26

Woman has first 'grow your own' knee transplant
26.11.06

Teacher Shivaun McGuckin is the first Briton to receive the implant on the NHS.

A woman with a damaged knee has become the first Briton to have a revolutionary 'grow your own' cartilage transplant that offers hope for thousands for injured sports enthusiasts.

[jonwig] 06/11/2006 08:04

Today's RNS was the end of the road as far as I'm concerned.
Good luck to anyone still in.

[jonwig] 06/10/2006 09:56

IC comment on results:

German-based Arthro Kinetics joined Aim in March 2006 and got a big surprise in August, then an institution that had participated in the placing at 120p dumped 150,000 shares at 30p. So is it now a buying opportunity? The maiden interims don't tell much of a story - they include six-month figures from one business and four months from another, which together formed Arthro on flotation. And revenues were less than expected due to a strike by German surgeons in May and June. What there was came mainly from sales of CaReS, a cartilage repair implant for knees, in Germany and Austria, and also from a few sales of a suite of instruments for minimally-invasive spinal surgery.

During the six months, the company signed CaReS distribution deals covering Italy, Switzerland and Germany and, last month, appointed a UK distributor. Arthro believes that about 10,000 people with knee problems in the UK could benefit from CaReS implants. At the same time, it obtained approval from the Federal Drug Administration (FDA) for its surgical instruments, which make it possible to conduct surgery through a 7.5mm incision against the usual 25-200mm opening.

And Arthro has not been slow to exploit (FDA) approval. It launched the instruments at a US trade show last week, and at one this week in Germany. But it takes time to train distributors and regulatory approval for a second implant product, Cartiplug, is taking longer than expected. So broker Nomura has cut back this year's sales forecast from E5.4m (£3.6m) in August to E3.2m and losses are expected to climb from E5.1m to E8.2m.

The shares are not a buy short-term, due to revenue downgrades. Fairly priced.

[jonwig] 27/9/2006 17:16

Interesting - someone managed to sell 140,000 @ 47p whilst our demolition friend earlier last month had to unload his 150,000 at 30p.
Today's chap filled it through a T-trade (maybe over several days?) so probably has a decent broker.
Don't look good, though!

[katylied] 27/9/2006 13:18

jonwig - call it deramping if you wish. The figures published are almost 3 months old. I don't know the 'cash' position at the present time, but it is clear that they are chewing it up PDQ. Also to the point is the timing. The next results will be the finals. I think I am correct in saying, that there have never previously been any audited accounts? The auditor will not sign off the 2006 accounts as a going-concern, unless it can be demonstrated that there is (or will be) sufficient operating funds for the new financial year. I cannot see that being achieved, without a cash-call. I have also concluded that is why the share-price fell out of the sky recently. The 150K was merely the trigger.

However, I won't post again, so no more deramping from me. It is
coming off my watch-list. The finances need to be resolved and
further announcements of 'distribution agreements'...

well... we have been here before haven't we?

[jonwig] 27/9/2006 12:32

adgd2,

Yes, I remarked a couple of times that "Cost of Sales" exceedes "Turnover".
I haven't got to the bottom of that yet, as I haven't had time to give it much thought, but look at the references to Cell and Tissue Bank Austria (CTBA) in the statement, which I think goes some way to explaining this, and there would have been a gross profit of €152,000 (post consolidation of CTBA: €94,000 gross loss).

As far as 'ramping/deramping' goes, I think it's important to hear all reasoned views, whatever the standpoint.
I threw my rose-tinted specs away many years ago!

[adgd2] 27/9/2006 12:15

Jonwig - hope I don't come across as a deramper, because in some respects I was regretting my sell. Looking at the the relapse into weakness, even after apparent good news China deal, UK deal..[well someone managed to shift 10mEUR of equity off to China], I am glad I bailed out.

I thought about it some more. Look at the numbers - and I readily admit that the numbers are not somethign that I am good with, so if I get it wrong point it out. Every unit they ship costs more in distribution costs than they make in revenues from that item, never mind the actual cost of those sales....at least thats the way I read it. Add in overheads and they appear to be in terrible shape.

[jonwig] 27/9/2006 11:40

Well, not just yet, KL - save your ammo!

On some BBs you'd be labelled a 'deramper' - I think it's just your way of paying us a friendly visit from time to time.

[katylied] 27/9/2006 11:24

I think it is the 'C' words. 'C'ash 'C'all...

[jane seymour] 27/9/2006 11:18

Thank you Mr Jonwig, it seems though that this particular side dish was insufficint to satisfy the palate !!!