Infonic Share Discussion Threads

[ric_ola] 23/1/2009 16:50

How's about a government bail out package?

No??

Come on... if you don't ask...

[wolf_top] 23/1/2009 16:45

Barnesian,
Come on, there is absolutely no chance any company will pay money up front for the services of Infonic now they have released this RNS. The company will need to resolve its current cash position, resume share trading and then provide the confidence they are a going concern.
The only chance they have is that a ton of money is already or close to being paid to them and they get support from the bank, creditors or investors to continue.

[broomsticks] 23/1/2009 16:44

I haven't said this before because it sounds like ramping and that is the last thing I want, but acquiring Lexalytics was the best move that Infonic has made, in terms of the technology. The semantic web is the next big thing it has even been mooted that it will surpass Google. It's good enough for Sir Tim Berners Lee to expound its value.

Unfortunately I don't think that Infonic will be around to reap the benefit.

I wonder if Infonic had hoped that the other two divisions could 'carry' Lexalytics for a while.
Ah well it's probably all academic now.
aimo,dyor

[barnesian] 23/1/2009 16:28

The crunch, if it comes, will not be an auditors qualification on going concern. It will be much crunchier than that. One month-end, the bank will refuse to pay the staff salaries unless directors give personal guarantees - "if you are so confident that these contracts will come in, put your money where your mouth is". Or other creditors (advisors, landlord etc) simply put it into administration because they haven't been paid.

I'm guessing that the management are looking for a large licence contract with the money up front and the service part following on behind in cash terms in the normal way. It will be the upfront payment that matters. Let's hope they succeed.

[barnesian] 23/1/2009 16:28

The crunch, if it comes, will not be an auditors qualification on going concern. It will be much crunchier than that. One month-end, the bank will refuse to pay the staff salaries unless directors give personal guarantees - "if you are so confident that these contracts will come in, put your money where your mouth is". Or other creditors (advisors, landlord etc) simply put it into administration because they haven't been paid.

I'm guessing that the management are looking for a large licence contract with the money up front and the service part following on behind in cash terms in the normal way. It will be the upfront payment that matters. Let's hope they succeed.

[joestraughan] 23/1/2009 16:01

wolf_top - I guess you're right there - although the plug was probably pulled early on their facility! I just hope MT is able to persuade possible lenders as to his $100m valuation of the business! Although, I think the instis may just throw him 10p and give him a good kicking!

[wolf_top] 23/1/2009 15:49

When a company issues this kind of RNS, have no doubt they have no cash and have already tried to extend the loans.
If they had a credit line of £8 million it is used, who would want to support this kind of incompetence!

[joestraughan] 23/1/2009 15:42

ric_ola - autonomy raised £222m yesterday with great ease - all ifnc needs is a few million! The trouble is that would be a 100% dilution - let's hope they get a loan rather than more shares,if they even get as far as that?!!

[ric_ola] 23/1/2009 15:37

For me...

1 - I'm hacked off that the company management pushed through expansion plans without considering knock on effects if markets turned (sounds like RBS).

2 - I'm even more hacked off because I think the company is reaching the point of sustainability - it appears the technology is excellent and the markets they are working in (e.g Sharepoint etc) are showing signs of extraordinary growth.

With a little astute management this company could be very successful - sadly however, although she hasn't reached the chorus, the fat lady definitely appears to be warming up.

[joestraughan] 23/1/2009 15:28

I guess it has some cash to service contracts short-term but needs to raise money (again) before the auditors come in and qualify the audit report and say that the company is not a going concern? Very similar to a year ago - but eveyone's much more short of cash now!

[broomsticks] 23/1/2009 15:10

In the meantime who is going to service the contracts?

[joestraughan] 23/1/2009 15:07

Barnesian - well put. But it seems that the contracts just haven't been completed rather than lost? I guess it's more a matter of ifnc agreeing with clients as to what stage they've completed and what can be billed? It will be interesting to see if any instis will stump up more cash - but at what price? The trouble is that a used-car salesman might have more luck at raising money than MT!!

[barnesian] 23/1/2009 14:54

From their statement, it looks as if the material contracts still haven't been closed and the timing is still uncertain. I suspect they were relying on the contracts being closed (and recognised to revenue) before year end with the cash following within 60-90 days to part pay down the debt that is maturing this quarter.

The problem isn't the poorer than expected results - that is a matter of timing - the problem as ever is cash flow.

Two scenarios:

a) the contracts will close soon and a "bridging loan" will be provided to bridge the cash gap.

b) the contracts are lost and will not close in foreseeable future so there is no "gap" and no new cash will be provided.

I imagine potential lenders are currently trying to decide between these scenarios and management is frantically tryimg to close the deal(s).

If a) then the game goes on.
If b) then it's all over for current shareholders. Someone will pick up the business (minus its debt) for a pittance and the proceeds will go to the cr4editors.

[joestraughan] 23/1/2009 14:38

broomsticks - lol! No, the bank must have pulled the plug on seeing no cash come in. In theory, lexalytics just merged their business with infonic and the 70:30 split was based on the valuations of the two businesses - which, as neither appears to have any cash, is sod all!

Still, if they're desperate for money and it's now very public, it might attract a few predators?

[broomsticks] 23/1/2009 14:28

ric_ola,

The MOD contract payments were delayed to the fist part of 2009 but as I understand it, only my own assumption, Lexalytics may have been acquired on the basis of that receipt.

Edit. It seems to me that Infonic is robbing Peter to pay Paul. Apologies to Peter and Paul ;-)

[retford1] 23/1/2009 14:25

Keep it up ric_ola, I'm feeling better already, might even have an early beer.

[ric_ola] 23/1/2009 14:14

Guess it isn't exactly... last man out - turn out the lights.

Time to max out the tesco credit card!

Am I wrong in thinking the MOD contract payments were delayed and were expected 2nd half 2008? Delays in finalising that - and having included it on the balance sheet for yr ending 2008 - might explain today's announcements. Guarantees that the revenue was signed but just not delivered - along with proof of cash flow improvements could be used to aid ongoing cash arrangements... no?

Could be completely wrong.

Probably I'm just a desparate rose-tinted glasses wearing chap.

[wolf_top] 23/1/2009 14:13

Oh boy, were in trouble when the company does not even know when a contract is finished!

[joestraughan] 23/1/2009 14:08

We're not quite dead yet - but it's still the problem of cashflow - will be interesting to see if they can tap the institutions for more? Or will a competitor come in to pick up the pieces? Obviously, Lexalytics didn't bring any cash to the table! Obviously they brought in the younger, greener CFO to pull the wool over his eyes!

[retford1] 23/1/2009 14:07

Time for a White Knight to ride in, buy a stake in IFNC and put an experienced management team in place. Please!

[spaceparallax] 23/1/2009 14:00

Shame about the suspension, but it was always a possibility with the negative cashflow to date. Obviously, the products are good and well-liked - hopefully, we might attract a little credit to tide us over.

[borsya] 23/1/2009 13:40

Fxxk me !!!! Just like everyone expected. Jeeeeeezzzzzzzz

[egoi] 23/1/2009 13:39

That statement in my opinion might as well just have said: 'We spent it before we got, or even might, get, it....... (again)'.

Well said Broom imho.