Trackwise Designs Share Discussion Threads

[ny boy] 07/1/2023 04:31

2 years ago his was 300p +…enough said!

[timbo003] 07/1/2023 01:48

………

The meeting to approve the recent fund raise and to change the articles of association took place on Friday (Jan 7th 2023) at the Company’s HQ at Tewksbury. I was the only retail shareholder attending (which came as no surprise), there were three directors present (Philip Johnston, Paul Cook and Charles Cattaneo) and two other directors joined via video link (Ian Griffiths and Susan McErlain), there was also a representative from Equiniti and an assistant taking minutes. Charles Cattaneo chaired the meeting.

The formal part of the meeting to vote on the resolutions took about 10 minutes. All resolutions were passed with approximately 21m votes in favour and 2.4m against for all the resolutions except resolution 3, where the votes were approximately 18.2M in favour and 4m against.


The Q&As session that followed lasted for about 40 minutes during which time just about all of my questions (listed below in no particular order) were answered:


What circumstances lead to the placing being offered at just 1 pence and please explain how you can reconcile not obtaining a higher price than 1p/share with the recent RNS announcing that there was “exceptional demand” (at 1 pence/share)?

The BOD explained that the funding road show commenced in September and it was an extensive process, the initial rounds involved obtaining expressions of interest from potential investors without any detailed discussions of pricing, this initial process indicated a likely short fall in the amount required and it was only later in the process when the size of the likely discount became apparent, it was in effect the last substantial investor to commit which dictated the price and ensured that sufficient funds could be raised, this investor had held the shares previously, but had now sold out (note: readers should be able to work out who they are from that). The warrants were introduced as a result of another (different) investor’s insistence.


Was the open offer oversubscribed/undersubscribed?

It was undersubscribed with around 34% uptake, so excess application will be met in full. The CFO commented that the OO funds were not considered essential to execute the plan, but they would provide a contingency cushion should it be needed.


Can you add a bit of colour to the circumstances that lead to the share suspension?

The BOD or Finncap did not request the suspension and it was entirely down to the LSE. The BOD believes the suspension during this fund raise could have deterred many shareholders participating in the open offer as they may have been spooked (suspensions in the UK are unusual and are generally not good news for shareholders). I opined that in some jurisdictions (for example Australia) listed shares are automatically suspended during a fund raiser and investors had become accustomed to this and perhaps it wouldn’t be a bad thing if the same procedure was followed here in the UK, no one appeared to disagree.


What impact would there be on Trackwise’s future if the UK EV OEM who has just made the £3.99m cash advance as part payment for the battery connector contract was unable to pay the balance outstanding once the contract has been fulfilled?

It would not be good news, although the company have had assurances from the UK EV OEM that it will have sufficient cash (without needing to raise further funds) to pay the balance in the agreed timeline. PJ added that has been checking the share price and SEC announcements of the OEM on a daily basis. (EV OEM share price and SEC filings available here: )


What other methods of funding did you explore instead of the discounted placing, for example selling Stevenage Circuits, attracting a strategic investor/partner etc.?

We had some forthright discussions with the UK EV OEM as their problems had been the main reason for our financial stress and we ended up with the revised terms for the contract, we argued for more but the OEM was itself constrained financially, We also look at other funding solutions, including getting a strategic investor on board, but it was difficult to get traction, exacerbated by the volatile political and currency situation at the time. Selling the Stevenage Circuits business would not have produced sufficient funds, so was not considered an option.


Has there been any pressure from new investors for PJ to step down as CEO?

Pressure is probably not the right word, there have been discussions around succession planning (PJ is approaching 60 years old so will not be around forever) and the two new directors joining the BOD will most likely play a part in that.


What sort of investors participated in the placing, were they generally new investors or existing investors, would you describe them as long term or short term? Did any VCTs participate?

There should be a number of TR1 announcements with familiar names, no VCTs or EIS funds participated in this round as the company has reached the ceiling for funds available under the EIS/VCT scheme.


How close are you to fully commissioning the facility at Stonegate and do you have the capacity to produce all the material you would like to sell through winning the pipeline contracts outlined in the offer document (offer document: )

The Stonegate facility is not yet fully commissioned, but it will have the capacity to fulfil the order from the UK EV OEM to the agreed timings (July 2023). It will achieve this running just a single shift. Capacity could easily be increased 3X with very little extra Capex by increasing to three shifts/day. Furthermore, there is spare space in the facility to install additional plant to double capacity for each shift but needless to say, this would require additional investment.


In the offer document you talk about re-incentivising directors and employees with revised share option and share save schemes when are you planning to do this?

Yes, this is in hand and it was considered an important requirement by one of the major investors in the placing.


Given that IHT technology is proprietary and protected by certain IP, where are the numerous EV OEMs listed in the offer document expecting to source there battery connectors if it is not from Trackwise?

The battery connectors that are of interest to the various EV OEMs listed in the offer document are not reliant on the IP described in the IHT patents from 2012, but do employ other IP such as knowhow and trade secrets, so it is unlikely that Trackwise will be sending any cease and desist letters to competitors who supply EV OEM with battery connectors. They have however sent such letters to competitors who they suspect are infringing Trackwise patents when supplying IHT type products to the aerospace industry. There is a big number for intangibles in the accounts which the auditors question from time to time, but in our view it is justified on the basis of the extensive IP and knowhow.


Are you still planning to hold a Capital Market day for shareholders and investors sometime this year?

Yes, the intention is to run an event later in the year at the new facility at Stonegate.

………

[master rsi] 06/1/2023 15:41

re - "sell" shares they didn't have

It happens very often on placings
and is MMs and large investors taking stock in the placing, but at the same time selling them in the market at a higher price, but unable to deliver them due to the shares are not issued yet by the company ( like here a couple of weeks later ).

Those shares from the placing should be sold on a T+10 or T+15, and most likely were sold as T+2 normal sells, so unable to deliver them on time.

STOCK Exchange (SE) has been incompetent for years on this issue and many more cases useless

[ifaze] 06/1/2023 15:30

I don't think there is anything illegal with short selling and my understanding is you can only do it if it is facilitated by your broker who in theory arranges for you to borrow the shares that you are selling. Clearly a broker can't lend you shares that don't yet exist. Maybe the broker has come to an agreement with an institution that knows they are going to get the new shares but that seems dodgy.

I doubt if a PI could have been able to short shares he was expecting from the open offer.

I'm in no hurry to sell my shares and happy for it to be suspended as long as it takes. Hope the SE tales harsh action against anyone who's been a bad un (for a change)

[cliffpeat] 06/1/2023 14:00

Looking forward to hearing from Timbo003 on whether the SE suspension was discussed this morning.

What do people make of this from the RNS re the suspension which was:

"..due to a deterioration in settlement performance. The Exchange will continue to monitor the settlement situation and when trading is to be restored, the market will be notified by Stock Exchange Notice. The Company will make further announcements as appropriate. The Board believes that Admission will result in the settlement issues in the Company's Ordinary Shares being quickly resolved."

Did anyone "sell" shares they didn't have but expected from today's issue? - and if that was the case, will the SE take action against those involved?

[ifaze] 06/1/2023 13:22

For the record, I took up my allocation plus applied for about 120% extra. Good to know I will be getting them all.
Agreed, good spot Philspectre. No particular comments on that other than I assume they must have good reason to be wanting to be involved in the company and think that it still has a future. I certainly hope they are right.
Look forward to reading your report timbo

[fillspectre] 06/1/2023 12:48

Timbo003 - I edited my post 1481 referencing the 28% realising it couldn't be right. Fils

[bagpuss67] 06/1/2023 12:46

So mostly PIs decided not to throw good money after bad and accepted a write off. Understandable as a choice

[fillspectre] 06/1/2023 12:41

Thanks Timbo003 much appreciated.
Yes RNS out at 12:30pm confirms only 34% of open offer shares taken up. Fils

[timbo003] 06/1/2023 12:10

Good meeting, will write up some notes over the weekend, open offer undersubscibed, so applications (including excess) will be met in full 😀

[bagpuss67] 06/1/2023 07:47

Hope it goes well Timbo. Looking forward to may report you will give later. I took a modest 1million in the open offer. Sounds like a lot but not at 1p!! Let's hope this can be salvaged.

[timbo003] 06/1/2023 07:44

fils,good spot on Andrew Lapping and Chris Pennison's link to Hindley Circuits, I will ask about that at (or soon after) the meeting today, I'm not sure they will have 28.1% of the enlarged capital though (excluding OO shares), I think the number is more like 2%, but still a sizable chunk.

[fillspectre] 06/1/2023 07:00

Suspect you are right IFAze. Anyone any thoughts on Andrew Lapping and Chris Pennison taking on roles as non-exec Chair and non-exec Director? They are also investing £100,000 between them. Unless I am very much mistaken both are involved with Hindley Circuits up in Cramlington, Northumberland - a business not dissimilar to Stevenage Circuits. Fils

[ifaze] 05/1/2023 22:39

Don't think there's the slightest chance the placing won't get voted through. Will be surprised if there's much else said at the meeting either, but would be interested to hear your report Timbo

[fillspectre] 05/1/2023 22:07

Timbo003 - you have a private ADVFN message. Fils

[fillspectre] 05/1/2023 12:33

Cheers timbo003. I will message you any specific questions I have. Glad you are going. Fils

[blades38] 05/1/2023 09:21

Presuming the vote goes ahead ,placing gets voted and trading resumed next week all been well. That would be a start

[timbo003] 05/1/2023 09:09

>>>>fillspectre, I intend to turn up despite the shareholder unfriendly time and venue. I have quite a long list of questions and a few suggestions for them and Finncap, but more than happy to add a few more from others who cannot attend.

[fillspectre] 04/1/2023 21:44

Did someone write here they intended to attend the 6th Jan General Meeting? Would be good to have a first hand account from a PI to tell us what goes down and the mood of the meeting. Fils.

[mally6] 24/12/2022 10:17

https://www.hl.co.uk/shares/shares-search-results/t/trackwise-designs-plc-ord-gbp0.04/director-deals

[mally6] 24/12/2022 10:17

https://www.hl.co.uk/shares/shares-search-results/t/trackwise-designs-plc-ord-gbp0.04/director-deals