Galileo Inn. Share Discussion Threads

[mrkournikova] 25/4/2003 14:47

Hi,

One thing I forgot to mention that is worth a mention is that the 1.25p approach no longer stands, it's off! Good! When the shares re-list in the near future the cash balance alone will ensure that the shares trade above 1.25p.

Mr K

[mrkournikova] 25/4/2003 14:43

Hi,

Had a chat with Mark this morning so I do know what's going on. Mark was very open and honest.

Basically Sreddy has everything spot on so there is no need for me to go into detail about my conversation.

Thanks Sreddy and well done!

Regards

Mr K

[spike_1] 25/4/2003 09:31

A couple of extracts from Cyprotex's results:


Press Release 1 April 2003

Cyprotex PLC

Preliminary Results for 14 month period ended 31 December 2002

Cyprotex PLC, a drug discovery technology and information company, today reports
its preliminary results for the 14 months to 31 December 2002.

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

Jeremy Scudamore and Dr Mark Egerton, former Chairman and Chief Executive
respectively, decided early in 2003 to leave the Company to pursue other
interests. We thank them both for their valuable contributions to Cyprotex in
its first year as a public company and wish them both future success.

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

Shareholders may be aware of the adverse publicity which followed the Company's
AIM flotation relating to a spread bet. The Board believes that the existence
of the bet has restricted its ability to attract further institutional
investment and continues to attract adverse publicity. The Board is actively
seeking a resolution to this situation and believes that achieving this will
enhance the Group's prospects going forward.

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[cappagh] 23/4/2003 00:22

Do the directors own any part of the Co's
GAI have invested in?
If so, it looks like they have given their
Co's free money.

[sreddy] 22/4/2003 23:32

Judgement,

I'm not sure what you are getting at. Issues on the 'going concern' topic can arise due to theoretical over-commitments which can be predicted to arise if no remedial action is taken. It becomes an issue if the ability to carry out the remedial action is subject to some doubt. For example, the need to raise new facilities, the need to raise equity to fill a projected funding gap, a liability to pay deferred consideration which could be called as cash rather than shares, a contingent liability (such as pending or threatened litigation) where there is debate as to whether it is likely, possible or remote and which if crystallised would cause difficulty. There could be projections which on a sensitised downside basis, which the auditors might focus on, show an inability to meet commitments - even though the directors think the scenario is highly unlikely and anyway does not allow for management action.

As to your second point, yes, these discussions may well require the directors to do something they think was not really necessary in the real world to cover a theoretical situation which is causing the auditors difficulty, to satisfy the auditors that this eventuality won't arise and enable them to sign off on a going concern basis. It is more likely that this will happen nowadays as auditors become much more nervous post-Enron.

[judgement] 22/4/2003 23:09

Simply because you used the example to help illustrate why the accounts of a company might not be produced on a 'going concern' basis, which is I believe the situation GAI finds itself.

Can you think of another example, which would help illustrate the 'going concern' issue, without indicating that the company has over-committed.

It would obviously be a bit concerning if auditors had the right and the power to decide that a company might well get itself into trouble in the future. Just thinking a bit further... perhaps they've actually done investors a favour, and saved some of the equity shareholders' funds from actions the management of Galileo might take in the future!!! That would be a first!

[sreddy] 22/4/2003 22:54

Probably not. But I'm not sure what that has got to do with the quote, which relates to a hypothetical situation not specifically relevant to GAI other than to explain the going concern dilemma that auditors can have.

[judgement] 22/4/2003 21:29

sreddy,
"For example, you could have a profitable company with a comfortable banking facility, which just so happens to expire well within twelve months. In reality, this might not be a problem because the company is confident that new facilities/renewed facilites will definitely be obtained at the relevant time or they are planning an equity issue or the sale of assets"

So have they committed more money than they posess, or haven't they?

[jq699108] 22/4/2003 19:51

Just wait, can't be long now.

[sreddy] 22/4/2003 19:43

JQ,

If it is as bust as you say, why isn't GAI in receivership as we speak?

[jq699108] 22/4/2003 19:31

Sreddy,

Obviously you have no guts to take on a bet with me, PRM may be doing well so hopefully it will offset your losses on GAI. Good luck. I look forward to writing again when GAI goes into receivership. Please at least promise to say sorry to everyone when shareholders get Zero. I promise to apologise for my negative remarks if GAI is relisted and the bid is above 0.1p

[canihackit] 22/4/2003 19:16

Whats the chance of using cyprotex again for an accounting/advisory role, or have i just thought up an other scam for them.

[grebo] 22/4/2003 17:02

My GUESS, yes it's a GUESS, is that the company is not a going concern because it has so much cash tied up in the guarantees for it's investments that it has none left for working capital. Being unable to float or sell those companies puts them into a catch 22 situation.

It's also a really bad time to go to the market for more cash.

So they have to offload their investments to free up the cash that's tied up. I think there will be some cash left once all the dust has settled, but I suspect it will have been drained somewhat more than sreddy seems to believe, due to operational costs and advisors fees etc.

of course the big question then is what next ? If we are left as a cash shell then they may just look for new investment ideas and re-invent the company. Look at TGR for an example of what could happen if they go this route, that company has been re-invented so many times that nearly all the capital has been lost.

So ... I don't think GAI is necessarily dead yet, but I think it could be a long way off before we get a chance to recoup anything.

[sreddy] 22/4/2003 11:40

knitcraft,

We now have you on record as saying 'They are bust and nobody will get a penny'. That is pretty unambiguous and you won't be able to wriggle out of it. Let's wait and see.

[sreddy] 22/4/2003 11:36

knitcraft,

Idiots like you make up things that I have not said - HP's post above is a classic example of that - just to try and win points. You have to make up your own invented points to knock them down having attributed them to the person you wish to knock down. That rather well known argumentative approach might work on your circle of friends and acquaintances and they may let you get away with it, but I won't. You deserve to be rounded on severely and I am quite happy to oblige. I think you will find it is you who come out with unreasoned, unsupported repostes. My reposte to HP was totally correct. You choose not to bother to read my post and the reply and try to set it up as an example of me just lambasting anyone who disagrees with me. Your shallow approach will not work. I will not let you get away with it. I am quite happy to discuss the cons as well as the pros and if you actually bother to read my posts properly I have regularly given reasons to cover the cons as well as the pros. It is your stupid, prejudiced, 'don't care if it was what was actually posted I'll knock it anyway' type of posts which will get slaughtered. I have every confidence in my ability to show you up for what you really are - an unbalanced poster, who blatantly makes things up, can't argue rationally, relies on unsubstantiated cliche and is not worried about the facts.

[hugepants] 22/4/2003 10:32

sreddy, I totally disagree with your reasons (now theres a surpise eh?). Companies do not go into administrations because they are going to release a lousy set of results. They go into adminsitration because they cant cover running costs. In GAI's case perhaps write-downs in the valuation of the portfolio companies would be necessary but thats life and you've got to accept it.

[knopfler] 22/4/2003 10:25

cubes101,

what's the point of that if all the info/figures are out of date? it will mean nothing.

[sreddy] 22/4/2003 10:25

cubes,

See post 1760.

[cubes101] 22/4/2003 10:18

sreddy do the calc of cash less investment / poss liabilitites to spell out the position for the doubters and supporters

cheers

[sreddy] 22/4/2003 10:11

Because if they had carried on with the stated policy of supporting their investments, the auditors might not have been convinced that they had enough unencumbered money to run them and GAI for 12 months, and therefore there would have been discussions on whether the 'going concern basis' for production of the accounts was appropriate. It did not necessarily mean that GAI was insolvent. Indeed, if this was the case, it would be in administration already. Either the auditors would have needed to be convinced of the ability of GAI or the investees being able to raise necessary working capital in these difficult markets, or that GAI could float/sell the investees, or that they would not support the investments with more money. It looks like the latter option was the only one possible in these markets. There is no doubt that this not the scenario for significant value creation that I was hoping for, but now we have the downside, let's see if the factors I said would limit the downside come into play.

The shares are suspended under AIM rules because they have not produced the accounts on time due to the above discussions.