Deepmatter Share Discussion Threads

[timbo003] 22/7/2023 08:30

I received two updates by snail mail from the company in July:


1) Correspondence dated 3rd July

Chairman's letter:


Resolutions:


Subscription letter:




2) Correspondence dated 10th July (Received 21st July)

Chairman's letter:


Resolutions:



It looks to me as if all small ordinary shareholders (who did not participate in the April open offer for A shares) will be totally wiped out as there will be a one for a billion consolidation for both the ordinary shares and the A shares, with no fractional shares being allocated to shareholders.

It is now apparent that the only value in holding the old ords after the delisting (I held 5,000,000) was that they gave shareholders the right to subscribe to the April open offer for A shares

There is now a new share offer to raise £1.5 million through the issue and allotment of 3,260,870 new A shares at the lssue price of 46p pence per Share - it is not clear to me from the ccorrespondence whether that share offer is still open or not, but given that the subscription price is just over 3X that of the April open offer (taking into account the share consolidation) I will pass on that one anyway


Postscript:

The correspondence regarding the April open offer has now been published on the website, although I do not recall seeing it on the web site at the time of the open offer, also there is nothing there regarding the recent (July) shareholder correspondence:

[timbo003] 02/5/2023 16:27

The open offer ended up over subscribed

I applied for 10 trillion new A ordinary shares in the offer (2X my basic allocation) and ended up with just over 7 trillion shares, so there was about 60% scale back on my excess application.

[timbo003] 23/4/2023 09:11

On a re-read of the paperwork, it is not quite a simple as I first thought in terms of how the new shares relate to the old shares.

The nominal value of the (old) ords is 0.01p
The nominal value of the (new) A ords is 0.000000015p
The offer price of the new A shares is 0.000000015306363p (i.e. just over the nominal price)

The two share classes are equal in all respects except the nominal value, i.e. equal voting rights and entitlement to dividends, but given that the nominal value of one old ord is 653,323 X greater than the nominal value of the new A ords, that would mean on wind up (or sale of the company?) each old ord would receive 653,323 X more than each new A ord.

There are some new company articles which shareholders are being asked to approve
along with resolutions to approve the new share issue:

[timbo003] 22/4/2023 08:27

I received paperwork through the post yesterday concerning a £1M open offer along with a trading update which sounds reasonably encouraging:

End of year sales of £1.5m. Strong growth in Q1 (end of March)compared to last year (circa +60%), new contract wins with Vertex and Bayer and contract extensions with AZ, Lonza, Springer Nature and LVMH so far this year. Cost savings introduced should reduce operating expenses from £5m to £3m, they estimate the total cash requirement until end of 2024 will be £2.5M. The £1M fund raise will keep them going until July, so over the next 3 months they will look at other funding options and possibly selling the business.

The Open offer is for 1M new shares for every 1 existing share priced at 0.000000015 pence per share, so that implies a pre-money valuation for the company is approximately £1

I will apply for my entitlement, plus an excess

Shareholders will need to be quick if they want to apply though, the open offer closes at close of business on Wednesday APril 26th.

If any shareholders still hold their shares in nominees accounts and haven't received paperwork or notification, message me and I can send you some paperwork

[timbo003] 20/4/2023 09:28

Asset match share trading facility:

Twitter feed:


Sign up for news letter:

[1347] 04/1/2023 12:24

This TR-1 makes no sense to me. Acquired 547,500,000 shares via subscription at 0.04 p and held 991,380,771 afterwards, according to the RNS on 1st December 2022. Now has only 605,995,338 shares, i.e. 385,385,433 less, so sold at a loss just after subscribing? Percentages also don't stack up. Anyone?

This whole affair stinks in my view, related parties subscribing in previous placings and then sell down, then subscribing for more shares at a lower price and then vote to take it private. The FCA needs to investigate this whole sorry affair.

[the stigologist] 04/1/2023 08:32

What is Norwood up to ?

[tomboyb] 19/12/2022 15:54

rns out -

Delisting approved -

[3put] 01/12/2022 18:40

I made a lot of money doing the opposite of 1347. He is a known shorter, check his posting history.

Position taken here

[1347] 01/12/2022 15:09

PW - Well whatever they do it stinks to high heaven in my view. I wonder what Lee Cronin and some of the others think, or maybe they are in on it?

[pwhite73] 01/12/2022 14:44

1347 - "The thing is a substantial capital raise will also dilute them"

Not if they're injecting even more money themselves. The substantial capital raise need not necessarily be more shares. It can be a sale of IP, sale of assets or a secured loan. Whatever it is they don't want small PIs to know or profit from it.

Digital chemistry is a fast moving and growing industry. Deepmatter are right at the heart of it.

[1347] 01/12/2022 14:30

Yes basically I see it that way to, basically it's a reverse Robin Hood scenario, rob from the poor PIs to give to the rich insiders. The thing is a substantial capital raise will also dilute them out of a fair bit next year won't it, because whomever stumps that capital up will want to take a sustantial piece of their pie.

[pwhite73] 01/12/2022 13:17

1347 - "Since the market cap is quite low then a big pharma could take them out as they are, why would they go along with silly games crashing the share price and delisting?"

They have said the market cap does not reflect the true value of the company and I believe them. The crashing of the share price is irrelevant to them. If Merck offers £50 million for the company its in their financial interest to own 90% of the shares as opposed to only 55%.

In my opinion that is what I believe is going on and why they can claim they anticipate a "substantial capital raise" when they go private next year. As you previously asked why can't they do this capital raise as a public listed company and I replied they can't because they would hold too many shares as a public listed company and have to make an offer for the whole company

[pwhite73] 01/12/2022 12:42

euclid5 - "because if they did announce the contractual value their price will be much higher - then less dilution"

Yes but the point I'm making is that they want more dilution for small PIs as all the new shares are going to them. They're the ones purchasing the new shares. Now why would they do this if they can't trade the shares on a public market in a month from now. They do this because they see medium to long term value in the company. When they say they anticipate a substantial capital raise I interpret that as they already have the financial support lined up but need 75% of the shares to carry the votes through.

[euclid5] 01/12/2022 12:33

Doubt your below comment, because if they did announce the contractual value their price will be much higher - then less dilution

Problem with micro cap co's - they are loss masking and need plenty of funding over years before they achieve anything profits - some do make it

was an article of Trustnet a few weeks back, think they mentioned around 85% or 90% of AIM shares fail., If i find the article will place the link here

[pwhite73] 01/12/2022 12:28

euclid5 - Yes the substantial capital raise is that they are going to sell part or the whole business. They may simply sell valuable IP. According to their website they have 54 employees so they are not a tiny outfit. They claim the markets are not reflecting the true value of the company but that's because I suspect they're concealing the big money deals (they never did say how much the Merck deal was worth) and they keep trashing the share price to hold an even larger stake in the company. How else did they expect the market to react.



54 Employees + 4 Non-exec Directors. £2m Invested in R&D annually. 35+ Clients

[euclid5] 01/12/2022 12:18

In addition to the Subscription, the Company anticipates a more substantial capital raise being pursued as a private limited company in 2023.

[pugg1ey] 01/12/2022 12:16

Lots of the corporate VPs in larger companies are thick as mince and just out for a deal in the latest tech. So on that point they may get lucky....
I've been around long enough when the automation revolution of the 90's was in full swing and GSK spending £300million on Affymax. Then selling it back 6 years later for £3million...hxxps://www.chemeurope.com/en/news/4107/glaxosmithkline-divests-affymax-business-to-venture-syndicate-led-by-patricof-co-ventures-inc.html

The transaction to sell the Affymax business will be recorded as a sale of net assets worth approximately £3 million and will result in cost savings to GSK. As a result of the sale, an exceptional charge of approximately £305 million will be made in the current financial year. This charge includes a goodwill write-off of £299 million which arose on the original purchase of the Affymax business and was previously written-off to reserves. To comply with current accounting standards on disposals, this goodwill will be re-instated and then written-off as an exceptional charge to the P&L account.

[pwhite73] 01/12/2022 12:09

Pugg1ey - "I have no idea why Merck are investing in this."

That's the whole point I'm making and why they're subscribing for 2.5 billion more shares just weeks before they can't trade them on a public exchange. The company clearly has something that Merck are interested in and what Merck are interested in other life science companies are interested too.

[pwhite73] 01/12/2022 11:20

On the way to a new era

"In the chemical industry, digitalization of production and supply chain processes is well advanced. Technologies such as Big Data, augmented and virtual reality and predictive maintenance, all of which are based on large volumes of data, are used there. Compared with telecommunications or retail companies, the chemical industry is still in the midst of its digital transformation but we’re making progress. According to a study by the consulting firm EY, executives in the chemical industry expect all roles within their companies to continue to change considerably during the course of digitalization – whether in research and development, sales, order management, or customer service. Overall, around 90% of those surveyed expect evolutionary, revolutionary or even disruptive changes in the next three years. It is not without reason that the German Chemical Industry Association (VCI), in its “Chemistry 4.0” study, is seeing the dawn of a new era for the industry, in which companies are fundamentally changing their products, processes and business models. This includes using internal and external data to optimize operating processes and developing new digital business models"