Cambridge Cognition Share Discussion Threads

[40 fathoms] 28/7/2022 14:41

It has taken a few hours for the importance of todays announcement to sink in. Firstly the research agreement with the DOD is for an exploratory endpoint. The RNS points to this being an endpoint that will act like a biomarker and stratify the patient population.

"Cambridge Cognition has been selected as a cognitive assessment provider for the project because CANTABTM offers accurate measurement of the potentially distinct pathophysiological processes involved in PTSD."

The Stop Signal Task (SST) measures Response Inhibition. The neural activity associated with response inhibition might act as a predictive biomarker of Trauma focused cognitive behavioral therapy (TF-CBT) response for PTSD symptoms. They might be trying to delineate the role of biomarkers to predict remission of subtypes of PTSD.

If this proves effective this would/could result in a relatively quick roll out by the department of defence and would set the company up for broader commercial applications.

[40 fathoms] 28/7/2022 07:06

Very happy to see us pick up a research contract with US Department of Defense. Yet another area new area where it seems CANTAB has value.

[disc0dave45] 22/7/2022 14:26

Thanks Tom, see where you are coming from now.
By the way cash has only increased £1.8m for H1 and profit is down £80k.
Do you know contract payment phasing for this FY, nope, do you know termination clauses, nope.
Still shy on hitting consensus for this FY IMO.
All the best
Ps I do okay thanks but still learning and love condescension, not :)

[74tom] 22/7/2022 13:29

Yep, you are completely missing it. You will find investing very hard if you don't understand the difference between absolute and relative numbers.

Profit going from £10k to £2k is completely irrelevant. It's £8k.

Cash going from £4.2m to £8.6m in 12 months is extremely relevant, that £4.4m.

£4,400,000 / £8000 = 550x larger.

It's absolute basics...

[disc0dave45] 22/7/2022 12:44

Thanks Tom.
Cash had only gone up 26% though and pat has reduced five fold, so still don’t see how year end profit will be anywhere near last year. H1 eps is only 0.06p, believe consensus forecast is 1.79p for the year, how will earnings increase 27 times when cash (orders in hand) has only increased 26% and H1 revenue +31%?.
Sorry only just taking a look at the company so more research to do, but at the moment I’m clearly missing it!.

[40 fathoms] 22/7/2022 11:51

You are spot on the increase in cash is the leading indicator of future accounting profitability. For conformation of this you can look at the evolution of cash vs profit over the last few years at Cogstate.

[paulypilot] 22/7/2022 11:40

I think COG gets about 20% of contract value on signing.

[74tom] 22/7/2022 11:35

@disc0dave45, it's the timing difference between cash receipts & revenue recognition that's causing the profit to remain flat & cash to increase.

COG gets paid by the client when the contract is agreed - cash goes in the bank and 'deferred income' is recognised on the balance sheet.

COG fulfils the client contract - the deferred income is moved to the P&L and recognised as revenue.

So what is happening at present is the cash is evidencing the growth of the company before the P&L does. Once the £8m+ of deferred revenue is recognised profit should materially increase :)

[74tom] 22/7/2022 11:29

The director buys caught my eye too, as did the material cash generation reported yesterday.

Cash balances;

30/06/2022 : £8.6m
31/12/2021 : £6.8m
30/06/2021 : £4.2m
31/12/2021 : £3m

For a company with a £42m market cap and no debt that level of cash generation is unusual.

The main reason for the large increase is the growth in sales orders creating a very positive working capital cycle as they mentioned in their full year results;

"Cash inflow from operating activities was £3.9m (2020: £1.0m), driven by the high value of sales orders. Sales contracts for clinical trials typically include an amount of cash billable upon signing, and as such an invoice is raised (and cash subsequently collected) as contracts are executed and before revenue is recognised."

So a very small profit on paper, but in reality their sales pipeline building is transformational for the company.

Re. the seller, he declared a 6.99% holding back in November 2020 when the share price was 57p, so he's played an absolute blinder. Selling very gently into strength (averaging around 3k per trading day from October 21 - June 22) and banking significant profits in the process.

Once cleared at some point in the next 12 months COG will re-rate to a more appropriate valuation - I'd say £2 / £60m market cap should be the minimum based on the stellar progress (it peaked at £34m in 2018 with half the current revenue and it was burning cash...

In the meantime I've started building a position and will add periodically when the price dips back.

[disc0dave45] 22/7/2022 10:26

Confused! - sales orders and contract order book up but pat down massively (only £0.02m, 2021 was 5 times higher at £0.1m).
Sales are actually down too.
BoD buying be careful, could be in their T’s & C’s that they have to acquire a certain amount (say 3 times annual salary) within a certain timeframe.
Edit: from their last AR there is no requirement to purchase a certain amount of shares, but they do have some very nice share options and Mr Stork purchase is circa 5% of his remuneration (from last years AR).

[dgwinterbottom] 22/7/2022 09:33

Indeed always good to see Directors putting their hand in their pockets and risking their cash like the rest of us :-)

[40 fathoms] 22/7/2022 09:11

Very healthy signal to see decent sized share purchases from both the CEO and CFO. The CFO's purchase is particularly noteworthy as he has only been in the role for 4 months or so.

[sev22] 21/7/2022 11:36

Cambridge Cognition climbs on 'strong' H1 results:

[sev22] 21/7/2022 07:57

Cambridge Cognition grows orders 44% in first half:

[sev22] 21/7/2022 07:29

All is well under the bonnet despite the recent share price decline.

Even the technicals look good as share price looks like it could bounce from this strong support level as has happened many times in the past.

"Continued strong growth & outlook"
Rev +31% £5.9 (£4.5).
PAT inline.
Contracted Order book 18.6m (YE21 17.1m).
Cash 8.6m (YE21 6.8m) provides platform for considered investments as opportunities arise.
Healthy growing qualified pipeline opportunities for H222.

Cambridge Cognition should be pretty recession proof, benefits from strong sector tailwinds and also a management team which has transformed #COG into a profitable, fast growing company with lots of future contracted revenue, no debt and a growing cash pile. Happily it also benefits from an 80% gross margin so can easily invest in the future.

I have noticed that COG are advertising for quite a few roles which suggests they are not short of work.

[tratante] 21/7/2022 07:17

Indeed, caught me out. I was expecting this update early August and planned to invest some more here on the back of the fall which seemed to me to be for no good reason.

[40 fathoms] 21/7/2022 06:34

Hard not to be happy with that trading update.

Taking more orders in to backlog than we recognised as revenue for a backlog of @ GBP 18.6 million.

Recognised revenue up over 30% year on year.

Cash building fantastically

A very strong outlook statement

[40 fathoms] 19/7/2022 13:00

@Vasilis - Can't disagree with anything that you have said, the BBB remains one of the last frontiers in medicine. My limited experience in this area is that the FDA like to take a long hard look at new delivery methods, prior to any approval.

The other drug arm seems to be a pro-cognitive in schizophrenia and would appear to be using a digital biomarker to determine a population subset that would respond to a α7-nAChR agonist, in this case nicotine.



The other area (although it is probably more than 12 months away) where I think we have the possibility of high impact news relates to the work we are doing on the Apple/Biogen sponsored Intuition study.

[vasilis] 19/7/2022 09:20

40 Fathoms - Thanks for a link to that study.

1 Whilst the new compound is based upon an existing anti-inflammatory, the use of 'proprietary technology licensed from TRx Biosciences' does create a novel compound - ergo the need for clinical trials to ascertain firstly its safety profile and subsequent efficacy as measured against existing drug treatments. In my view it is the 'proprietary technology' - whatever that is - rather than the existing and known anti-inflammatory that is the crucial issue here.

2 Clearly the main hurdle - and there are others - that Monument are trying to get over is ensuring that enough of the novel compound crosses the blood brain barrier (BBB). And whilst pre-clinical trials could only have used animals to reach the conclusions made, the BBB is different in different species, including man - (Just go to the 'Conclusion' if you like.)

A larger picture of the comparison of endothelial cells is here -

This is an ongoing and complex medical area and BBB issues go beyond my own scientific knowledge.

3 I agree that the novel formulation appears to show potential, but there is a long way to go in my opinion based mainly upon past BBB issues. Fingers crossed.

I'll try and keep eye on this but grateful if you would flag up any further news/developments. Much appreciated. This could be a very significant development in years to come with regard to new drug formulations.

[40 fathoms] 19/7/2022 00:16

@Vasilis - I just wanted to add meat to the bones of the type of news we might possibly get during the balance of this year that would/should/could be materially impactful.

Given this is a modified generic, one would think the chances of positive Phase I data are significantly higher than average for a Phase I trial. Currently, I don't think there is very much in the valuation for the Monument spin out.

If results are favourable, I suspect that @30% equity position and a double digit gross royalty, of a drug development business entering Phase II for nueroinflammation and with a pro cognitive arm in Schizophrenia not far behind that, is worth the COG current market cap alone.

No idea what the chances of success are and even if it is successful, whether that gets reflected in the share-price. I just wanted to highlight the optionality of high impact news that could possibly flow in the coming 12 months. There are one or two other lower probability high impact events that they have hinted at in the past that might also drop.

[vasilis] 14/7/2022 15:39

Anyone who has Level 2 just check to see how today the small buys came in as the price came down prompting the much chunkier sales to 'feed the ducks'. The question is, who exactly is feeding the ducks? Perhaps it's Mr Buxton who still has more 'bread' to cast out?

[vasilis] 14/7/2022 12:45

Many thanks for that reply 40F.

In my experience where there is a significant and opportunistic seller there is always pressure on the downside for a period of time, especially if an overhang occurs that needs shifting. PIs can make good use of this where companies such as COG are sound and the share price is weak as MMs will generally drop the share price to a level that draws in buyers to reduce/clear the overhang.

Predicting a future entry point for new buyers is, as Bohr implies, 'very difficult' - but until the share price starts to firm upwards I will assume - based on Heisenberg's Uncertainty Principle - that the seller is still around even if I cannot isolate his current holding position or selling momentum at the same time :-)

[40 fathoms] 14/7/2022 11:32

@Vasilis, One thing I would add to your summary is with respect to the dates of Mr. Buxton's last TR-1. You will note that he actually slipped below the 3% level on 6th June but only reported it on the 30th June. We might speculate, that had he wished to, by now he might have already made substantial progress towards a complete disposal of his position. I would also note that Mr. Buxton's track record to date has indicated that he is both price sensitive and disciplined with his sells. Up until this point he has never puked stock, if you are going to have a substantial seller that is the type you want.

With respect to the shareprice, upside on any AIM listed stock at the moment looks like a long shot. But that is always the case right up to the moment it is not. I can foresee scenarios where the markets continues to take COG shares down but equally I can see plenty of announcements that it would be reasonable to assume the company might make, that would take the share-price substantially higher, even if that spike was meet by a determined seller.

Right now it feels that the quote by Neils Bohr has added significance “Prediction is very difficult, especially if it's about the future!”

[vasilis] 14/7/2022 09:19

40 Fathoms

I've kept an eye on this company these past couple of years and have noted the following :-

1 In the annual report and accounts made up to 31.12.19 on page 12 a Mr Michael Buxton is shown as holding 9.3% of the company's shares as at 23 June 2020 -


2 In the Sunday Times of 27 March 2022 a 'Tipster' article by Lucy Tobin rated COG as a buy at around 116p per share and the price then motored northwards to c.180p - perhaps influenced in part by the article. However, today's price as I type (14.7.22) is below 116p - not helped I would presume by Mr Buxton's continued selling.

3 In an RNS TR1 dated 30 June 2022 Mr Buxton's shareholding is now declared at going below 3%. In other words Mr Buxton appears to have disposed of over 6% of the company's shares in the last two years and could now continue to sell if he so wished without I believe the need for any further RNS.

Clearly Mr Buxton has his own private reasons for selling but under current market conditions and the weakness in the share price over the last few months makes me conclude that until his future intentions are known as to whether or not shares will continue to be fed into the market, there is limited scope for any upside in the share price as even if some good news does materialise that could merely just accelerate any further planned selling. Thoughts?

[40 fathoms] 12/6/2022 04:47

Interesting result from the AGM with the disapplication of preemption rights being voted down.

I think it can be seen as a huge vote of confidence in the business by existing shareholders. The message to management is clear, we are happy for you to undertake a CR if you see fit but only if you give priority to existing holders rather than external capital.