Belluscura Share Discussion Threads

[jaknife] 18/9/2023 13:29

buywell3,

"To be clear, your brokerage firm cannot lend out your stocks without your permission.

However, you may have signed a customer agreement that explicitly allows your broker to lend out your securities.

This clause is often tucked deep within the customer agreement, and few investors pay much attention to it."

This is not true.

I've already highlighted the words of CASS 6.4; once again they say:

"the client has given express prior consent to the use of the safe custody assets on specified terms"

That means that there has to be a specific document expressly for the purpose of highlighting the stock-loan terms and conditions. The words can't be buried deep on page 7 of a 10 page general document, it has to be made crystal clear what the client is agreeing to and the client must specifically sign off on the one point.

In the whole of the UK there is not a single retail broker that does this for ordinary share dealing/ISA accounts of retail customers.

If you think that your internet sourced myth about stock-lending is true then, by all means, find the terms and conditions for a standard share dealing/ISA account used by retail customers where Stock-lending is permitted and highlight it here. You will not be able to.

JakNife

[buywell3] 18/9/2023 13:00

To be clear, your brokerage firm cannot lend out your stocks without your permission.

However, you may have signed a customer agreement that explicitly allows your broker to lend out your securities.

This clause is often tucked deep within the customer agreement, and few investors pay much attention to it.

Including buywell until today

Therein lies the problem


-----------------------------------------


Should be some problems coming IMO

[buywell3] 18/9/2023 12:54

So are you shorting BELL jakNife ?

Getting a tad worried eh ?

[jaknife] 18/9/2023 12:49

From:

CASS 6.4 Use of safe custody assets

(1) A firm must not enter into arrangements for securities financing transactions in respect of safe custody assets held by it on behalf of a client or otherwise use such safe custody assets for its own account or the account of any other person or client of the firm, unless:

(a) the client has given express prior consent to the use of the safe custody assets on specified terms; and

(b) the use of that client's safe custody assets is restricted to the specified terms to which the client consents.

[my emphasis]

There is not a single broker in the UK that lends out stock of ordinary retail clients. The suggestion otherwise is an internet myth perpetuated by the ignorant.

JakNife

[buywell3] 18/9/2023 12:28

When a trader wishes to take a short position, they borrow the shares from a broker without knowing where the shares come from or to whom they belong.

The borrowed shares may be coming out of another trader's margin account, out of the shares held in the broker's inventory, or even from another brokerage firm.

It is important to note that when the transaction has been placed, the broker is the party doing the lending, not the individual investor. So, any benefit received (along with any risk) belongs to the broker

[buywell3] 18/9/2023 11:39

Could be time to start loading up on TEK and BELL ---- IMO


There have been IMO two teams operating on deramping TEK and BELL


Many investors are not aware of :


The Big Problem With Share Lending - How Brokers Can Lose Your Money




dyor

[owenski] 18/9/2023 11:26

Expectations here haven't been delivered and some things just don't add up on the sales figures.

[jaknife] 18/9/2023 11:02

This will partly explain today's price action:

SLAM DUNK SHORT: Belluscura – bailout placing looms to stop a gig with the Fat Lady within weeks

[dr biotech] 16/9/2023 09:37

There is a whiff of the board not being completely honest here.

Sales in the last 6 months were $366k. At about $1800 each thats approx 200 units. Or 35 a month

From the final results 29th June (this covers the period up to 31st Dec22). Bear in mind this is one day before the statutory 6 months limit post period and just 1 day before H1 ended - when they must have known how H1 performed they said..

Good momentum, with initial new standing purchase orders exceeding 1,000 units for the latest generation X-PLOR, as we lay foundations for international expansion

Thats just not true. The sales decreased by 30% vs H1, they are selling 35pm. 1000units over what time?

"Trading in the first half of 2023 has continued in line with our expectations for the full year, with a significant second half weighting expected, as previously stated. Demand for X-PLOR, which is predominantly a Direct to Consumer unit, is growing.."

Really?

Lets go back to the trading statement jan13th

In addition, the collaboration agreement with the VGM Group has already resulted in 17 new distribution agreements in the last 3 months

How many of these have sold any?


In December 2022 we also signed our first international distribution agreement, with MedHealth Supplies of South Africa, which sells to one of the world's leading respiratory device suppliers. We have already received orders for over 1,000 units, with their first shipment sold out within 48 hours.

1000 units over what period? Again sales have been 200 over 6 months.



In December we produced a record 536 units in our in-house facility and with Innomax coming on-line in Q1 this will more than double production of X-PLOR. Of important note, even with the rapid increase in volume, the production quality of our in-house facility has been outstanding, with no units returned due to defects.


Now this concerns me. They stopped production in june to make some adjustments to meet the market. If the have made 3000 units and only sold 200, what is going to happen to the 2800 that need adjustments? Presumably they wouldn't have made so many, but that's $5m of wasted inventory

By 31 December 2022 the Company had shipped or received orders for 2,850 X-PLOR units with 1,226 units being shipped in 2022 (2021: 377).
So that's about 1200 units ordered but not shipped. So why did they only ship 200 in the first 6 months? Somethings not right.

[faz] 14/9/2023 10:22

THey are spending $6m to earn £300k that's 1:20 ratio. But it is also the case that the $300 k peroducts is l;oss making, so make that $6.4m. They have enormous staff costs - I suspect many high paid individuals that do not make sales - who are spending the money raised earlier this year. Not a business brain in sight. This is why companies list on AIM. DYOR- you are putting your money into people's wallets not a business.

[marky60] 14/9/2023 10:15

So PH and IC have got it wrong then?

[buywell3] 14/9/2023 07:20

buywell has long thought that people suffering from Long Covid , 2M in the UK and over 100M worldwide ( probably multiples of that number) --- would benefit from CPAP low level oxygen therapy


Read

Sept 7th 2023

What happens inside a long covid clinic?






A couple of snippets taken from the above , which means imo that basically nobody knows how to provide a treatment regime for Long Covid sufferers

quote:

How the condition should be managed in the long term is not clear and next spring the funding and oversight for post-covid services moves to local integrated care boards.



1)

When 60 year old Shelley Curran caught covid-19 in autumn 2020, she waited to feel better. And waited. While her husband, who has chronic obstructive pulmonary disease, recovered well, her symptoms dragged on.

buywell adds:

Presumably her husband who suffered from COPD recovered well --- he was presumably on supplemental oxygen therapy ---- Shelley was not


2)

Box 2

Long covid clinic “validated” GP-turned-patient

For Curran, being listened to by the clinic and accepting her symptoms has been an important part of living with what she now sees as a long term condition.

She uses a continuous positive airway pressure machine at night which she thinks has helped alleviate the chronic exhaustion a little, and takes anti-sickness drugs.


buywell adds:

Using a CPAP at night seems to have helped

Would it help more if low level oxygen was also used ?



dyor

[buywell3] 14/9/2023 07:01

buywell notes the deramp teams are hard at work here

Wonder who they are paid by ?

[danmart2] 13/9/2023 19:11

They will be raising more cash around november

A good time for any holders to short

[dr biotech] 13/9/2023 17:08

I'm a bit dubious about this outfit

Today they said

Revenue for the period was $0.4m (2022 H1: $0.6m; FY 2022: $1.4m) reflecting the decision to fine-tune our X-PLOR product to suit the target market, pausing production for a period of time. Production re-commenced in June

So X-Plor didn't quite meet expectations and needed some work. Nothing wrong with that. But they didn't mention any of this in their statement June 29th - surely they should have done? Sales of $0.4m - how many units have they actually sold?

They were saying how great a unit this was, and how sales were building when the reality was the unit needed tweaking and sales are well below expectations. The loan conversion will keep a lid on any rise much above 50p too - should it do that.

[jaknife] 13/9/2023 13:47

Babbler,

Is it possible that you could expand those words into complete sentences? Paragraphs?

"During the period, net cash inflow from funds raised in the period was $8.8m (2022 H1: $7.1m; FY 2022: $7.5m). Net cash outflow from operating activities was $4.9m"

This appears to be an extract from today's accounts. Why have you posted it? What's the relevance? Are you suggesting that there's a problem with my comment of:

"But they burnt $7m of cash in H1!"

?

As I noted in my post 507:

"significant costs being capitalised straight to the balance sheet rather than to the P&L"

If you look at the cash flow statement yes you will find that "Net cash used in operating activities" is £4.9m. But you then need to look down the statement to the line below which also has:

Net cash used in investing activities (2,181,290)

which reflects:

Intangible assets under development (2,174,449)

In simple terms, they spent $2.2m of cash developing technology related to their product but instead of expensing that to P&L they have capitalised the cost to the balance sheet on the premise that the "technology" that they've created has increased in value by $2.2m.

$4.9m + $2.2m less a little in the rounding is $7m, hence:

"But they burnt $7m of cash in H1!"

Re:

"They still have the CLN convertible quarterly which started in June"

The terms of the CLN were set out here:



and are helpfully summarised in today's results:

"The Convertible Loan Note Instruments ("CLNs") are three-year £1.00 Convertible Unsecured Loan Notes issued at par. The CLNs are convertible into ordinary shares at a conversion price of 50 pence per share. Conversion is at the holder's election on the final business day of each quarter, commencing on 30 June 2023 and otherwise automatically at 3 years from the date of the Instrument subject to satisfaction of the conversion condition which the company is committed to satisfy upon election during the aforementioned period. The CLNs receive a Coupon of 10% per annum."

Note that quarterly conversion is "at the holder's election". If you check June's RNSs you will find that none of the loan was converted in June. The holders are very unlikely to convert the loan to shares if the share price is less than 50p (economically it makes no sense). If you look at the terms of the convertible the holders could simply wait until three years before being mandatorily converted but at least then they'll have three years' interest at 10% pa.

JakNife

[hatfullofsky] 13/9/2023 13:27

Started with $2m raised $8.8m have $3.8m left, burnt $7m. That level of burn can't continue although they do say Op Cash spend was $4.9m.However they've also spent $2.1m on intangible assets under development. I presume this could be new contracts but it's a bit saucy capitalising this (its a hard cash expense but not on the P&L) but they have done it in the past.

[babbler] 13/9/2023 13:20

During the period, net cash inflow from funds raised in the period was $8.8m (2022 H1: $7.1m; FY 2022: $7.5m). Net cash outflow from operating activities was $4.9mThey still have the CLN convertible quarterly which started in June

[jaknife] 13/9/2023 12:44

Basically yes, it will take some time but they're going to have to raise funds again. They raised £3m (at 25p) in the placing on 25 May:



and $5m (£4m) via a fixed price (50p) convertible in January:



which was subsequently increased to $5.8m via a broker option.

Both of these are in the balance sheet as at 30 June, which shows:

"Net cash as at 30 June 2023 of $3.8m"

But they burnt $7m of cash in H1!

If you read the recent optimistic RNSs then they point to future revenue and revenue being received over a period of time, ie NOT (material) revenue being received in H2.

They're going to have to raise cash and they'll need to raise that cash before Christmas. They burnt more than $1m a month in H1, if they were repeating that in H2 (I doubt that it's that bad) then they'd have to raise cash before the end of October. And there's no sign that markets are going to get any better for small cap placings! At a guess they might place at 25p again (NB: At 43.5p it's a £50m market cap).

JakNife

[millennialinvestor] 13/9/2023 11:51

JakNife,

do you believe that the share price will head lower?

[orbis] 13/9/2023 11:05

I'm very optimistic about this company, below was just released via Alliance News:

"Belluscura PLC on Wednesday noted sound demand for its medical devices, as it reported a widened interim loss due to an increase in administrative costs.

Belluscura shares fell 9.7% to 44.70 pence each on Wednesday morning in London.

The London-headquartered medical device developer said pretax loss widened in the first half of 2023 to USD6.4 million from USD4.6 million a year prior, as administrative expenses increased by 39% to USD6.1 million.

Revenue fell 35% to USD366,221 from USD561,745.

Looking ahead, the company said trading is currently in line with expectations for 2023, which it emphasised is "significantly second half weighted".

Chair Adam Reynolds said: "Demand for X-PLOR, which is predominantly a direct-to-consumer unit, is growing, and we expect that our affiliation with GoodRX, and our own direct sales will lead to significantly higher gross margins as we utilise the company's previously high inventory levels."

He added that the company is well positioned to deliver substantial growth in the coming years."