Netscientific Share Discussion Threads

[timbo003] 21/10/2016 06:33

>>>>yasX et al

My notes as posted on the Angle thread are copied below, I will add that I was impressed with Ian Postlewaite, he seemed to be quite well up on the scientific and technical aspects (for a CFO). In addition to discussing NetScientific business, we also talked about private equity investment companies and Venture capital funds in general and he seemed very well informed in that area too.

NetScientific look cheap to me on a sum of the parts basis, they appear to trade on an unjustifiably large discount (circa 50%) to their (estimated) net asset value. As with nearly all other investment companies I would expect them to trade on a discount of some sorts (maybe 20 - 30%) but not 50%.
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From the Angle thread


Ian Postlewaite (CFO) gave the NetScientific presentation tonight at the Proactiveinvestor one2one forum


There was only one slide specific to Vortex and he concentrated on one of the other investee companies (Proaxis). The slides will be made available on the Proactive web site tomorrow or early next week. I managed to talk to Ian after the meeting and quizzed him as much as I could regarding the NetScientific portfolio and Vortex in particular, honesty got the better of me, so I opted to declare my slight conflict of interest with my modest holding in Angle.

I asked about the NAV of NetScientific and the NAV of the individual components, including Vortex. Ian replied that they hadn't published any individual NAVs, this was because at the current stage it would not be appropriate to use any of the accepted valuation methods to value the individual investee companies (for example: cost, value based on most recent funding round, or sales multiple etc.). The reasons for this is that the companies have received quite a bit of grant money (£16m across the portfolio), the companies had made significant progress since the original investment, they haven't completed any significant funding rounds for any of the portfolio companies and most of the portfolio were pre-revenue.

I asked if they had any internal feel for the values. Ian said that Vertex was probably worth $20 - 30m and the portfolio as a whole was probably worth between $80m and $90m. Netscientific has no debt and nor do any of their 5 investee companies, the market cap currently stands at around £35m.

I asked how far he thought they were behind Angle, he said around 2 years, but they considered that their VTX-1 machine had certain advantages over the competition.

All things considered, as an Angle shareholder I am not particularly concerned as Vortex are a long way behind (they will launch CTX-1 for research purposes in Q1 2017). As an investor who is constantly on the lookout for interesting opportunities in the Medtech / Biotech area, NetScientific are definitely going on to my watch list.

[yasx] 20/10/2016 19:02

Well, if you glean anything useful, you might as well let us have it - but, I am certainly not interested in banal presentations and ebullient twaddle from Exec Directors. Tat is their job, whereas I am here to make money. The latter can only be achieved by having oozing sagacity, far less soaking up overly optimistic drivel from those keen to promote their offerings.

Those attending such events ought not to look for things to be positive abut but reasons to avoid investing. I suppose one must consider putting on the Defendant hat and assuming this to be a legal case requiring a degree of scrutiny. The idea should be to look for weaknesses and flaws in the thesis that this is a good investment - only then can one be sufficiently persuaded to tuck in.

[timbo003] 20/10/2016 10:30

>>>>>yasX, such events are for free food and drinks!

[yasx] 20/10/2016 10:29

Timbo,

Not this gracious cap - such events are for fools. I prefer to analyse matters impartially.

[timbo003] 20/10/2016 09:21

Netscientific will be at the one2one investor evening this evening which I shall attend. Anyone else going along?

[runwaypaul] 19/10/2016 10:49

you haven't got a 'detailed report' have you......

pmsl

[runwaypaul] 19/10/2016 10:37

5oct YASX
I will publish a very detailed report by the end of this week. It will set out why this is going much, much higher (in my view at least).

come on YASX it doesn't 2 weeks to waffle out a few bullish points.


or are you really just punting based on thinking that the chart is bottoming out ?

that's risky,after the event easy to say if it goes up...until then it could merely drop to another level....

I guess you never had a stop loss here and are now in the hold and hope camp?

[blueball] 15/10/2016 20:18

Could fall to 40p by xmas good luck with it.

[yasx] 14/10/2016 09:29

I have eventual targets of £5 or more for both SUMM and NSCI - it just depends which gets there first.

[yasx] 14/10/2016 09:26

Chewin,

My priority is not to make you a more erudite fellow - as and when time permits, I will submit my summary. I suspect it might be this weekend, but, let me make myself clear: I decide when I contribute.

Separately, readers might also take a look at SUMM (Summit Therapeutics). The Company recent agreed a licensing agreement with Sarepta Therapeutics, listed on Nasdaq (SRPT). In brief, SUMM will recieve $40m upfront with a $22m upon the dosing of the last patient in the Phase II clinical trial for the DMD treatment. Moreover, SUMM is eligible to receive up to a further $20m in specified development milestones, up to $150m in specified regulatory milestones and up to $330m in sales milestones. See how that stacks up against the current m/c and you know why I have been buying aggressively on the dip to 175p this week. This morning you could pick up a few at 173p though not many were available. Target for this year has to be beyond the recent highs of 250p as news sinks in.

[che7win] 14/10/2016 08:46

There you go chaps, a week later and Yaz failed to come up with a single iota of research, yet I was accused of knowing what's on a postage stamp.New lows and Yaz has nothing positive to say alongside his desperate ramping.

[che7win] 11/10/2016 12:52

But you are rather worried as is the market.

[loveandmoney1] 11/10/2016 10:45

oo dear.is it breaking down out of its range?

[yasx] 10/10/2016 22:01

Incidentally, the chap who suggests heavy selling is not watching the tape - a paltry amount traded. This trades thinly, hence the gyrations on light volume.

[yasx] 10/10/2016 22:00

Chewin,

The fact that you are nervous merely serves to increase my confidence. If you agreed with the sagacious chap, I would be rather worried.

[che7win] 10/10/2016 20:43

It didn't, other than to reinforce our suspicions. I'm nervous - and I'm not an owner.

[yasx] 10/10/2016 20:38

Calm down chaps - grab a hot bowl of soup.

I will submit my detailed review, time constraints have hitherto not enabled me so to do.

Referencing 501 - I agree remuneration for executive officers is far too high, as is expenditure generally.

Ref: 502 - I do not think a placing is justified here, and it would be disappointing if they decided to proceed with one. There is sufficient cash to last them through to significant monetisation of assets. There will be external funding of the various asset groups, and this will dilute the NSCI stake in each asset. I expect the first of these external funding arrangements to be announced by the end of the year.

Ref 503 - Am I sure? Stone cold certain. But then, I am bound to be biased given I am long.

Hope that helps.

[loveandmoney1] 10/10/2016 16:10

some v strong selling here,bid collapsing

yasx are you sure about this old boy?

[che7win] 10/10/2016 09:41

I think there will be another deeply discounted fundraising here, another jam tomorrow situation.

[che7win] 10/10/2016 09:40

Annual report 2015:Floating rate nancial assets of £23,239,047 (2014 £16,867,198) comprises sterling £18,162,725 (2014: £13,693,170), US dollar US$7,394,012 (2014: US$3,997,494) and Swiss Franc CHF 127,782 (2014: CHF 946,171) cash deposits with the banks current accounts. Interest receivable for the year ended 31 December 2015 was £36,637 (2014 £67,661).So if similar this year, the fall in Sterling is affecting them to some degree.Yaz, don't you think the directors remuneration here is outrageous? No wonder the cash burn is so high...

[che7win] 10/10/2016 07:42

Another negative, The pound falling, is their cash held in Sterling, I haven't checked...

[loveandmoney1] 10/10/2016 07:35

yasx

we're waiting.....

[yasx] 07/10/2016 11:02

Chewin,

Your points duly noted - I prefer that sort of response to banal claims of this is not a good bet. I assure you that your assessment is flawed, but merely saying that without substantiating the same is useless.

I will therefore respond in detail at some point later today (or certainly by the weekend) - as soon as time constraints allow me so to do.

[che7win] 07/10/2016 10:31

yas,
I had looked beyond the ticker and concluded that you were trapped and losing a packet here, with products burning cash and very low likelihood of making money in the forseeable future.
That's the nature of this businses of course, but I think you know the game here.
What's your opportunity cost here, surely you can make money quicker elsewhere?

I had wanted to draw out your view, but as you're unwilling, I'll tell you mine.

Another year (or less) it will be out of money on current cash burn.If they get seed funding as suggested, that will dilute their ownership. Both negative, with a market cap around £30m and £20m cash burn expected (see edison note below)

Even worse, the chances of success for any of their products is very low. For instance, they have just canned Glucosense in the latest results:

"Reproduction of earlier promising results proved difficult and the Company has decided not to progress with further clinical testing."

Further more, edison (who I think is paid to do research and therefore should be putting a favourable slant on things) is putting very low probabilities of success for any of these programs:

Vortex: 15%
Wanda: 7.5%
Proaxis: 10%
Glycotest: 10%
Glucosense: 5% - now abandoned (it was weighted as worth about 10% of the market cap)
PDS: 7.5%

See Exhibit 5 below for more details:


I don't think this is investible for me - you yas are saying that you think there is a high degree of success.

Please tell me why Wanda is unique in a crowded market?

I'm not surprised by the current and falling price.

[yasx] 05/10/2016 23:46

Chewin,

What you refer to is essentially a basing formation, when sellers dry up and the stock finds support in a tight range. These develop into U shaped patterns after an initial extended fall, significant period f basing and then the rise that forms the right hand side of the U shape. In my experience, the longer the period of basing, the steeper the climb higher.

But, that is not robust technical analysis. Fundamentally, this is coming together very nicely and I am not even remotely dissuaded by two bit fools who have not looked beyond the ticker symbol.