GEN - A ski slope

[Bling_Bling]

quote:Originally posted by Bling_Bling


quote:Originally posted by donner

If you can buy a dollar for fifty cents you arenot doing too bad.

ACC must think so too. And its not as if they are a bunch of half wits.


Where did you get $1 valuation from? A few institutions bought into GEN during the initial listing on the NZSE at a much higher price. I think the more interesting thing is to find out who should the large parcel to ACC.


It seems to me that GEN is running around the dark bushes blind folded with the Leader screaming out loud "We are as Safe as Houses".

Where to from here for GEN? Investors dont believe anything the management says. The company is eating up capital faster than David Tua Big Mac meals at McDs.

Bling Bling has been looking at GEN for the last few years with a view to invest, but are now too afraid to invest in GEN.

Disc: Not a shareholder.

**MS, where are you? Need your expert views.

[donner]

This ann was to be expected. This company is now at its most weakest and vulnerable in its short history. Which makes it a buying opp.

We just have to wait for RBC to announce a legal challenge to their patent and IP rights, obligations, licences and ownership. That will be the sign that the takeover is on, and that they are keen to get the IP. It gives them leverage and time. Time to build a stake and leverage in any negotiations they may have.

It fortuitous *snort* that TEN\RBC have managed to wrap the sale before xmas to leave them debt free and cash positive. Plus the cap repayment to be made to RBC soon. I just can't help but wonder what they will do with all that loot. Could Arborgen and GEN be featuring on the radar perhaps?

[zyreon]

u think t/o on the horizon donner?

i wouldn't touch this, unless i had spare gambling money (which i seem to have from time to time so i may keep watching!)

[duncan macgregor]

I suppose now that the new drug for eczema is a flop they can always devote more of you guys money into stopping cows farting.
They will come back soon for another handout. MACDUNK

[donner]

Indeed they may Macdunk. Providing RBC doesn't snatch them first. Wanna take the risk and not be in?

I did a bit more digging on patents pending. Arborgen have applied for three. But it looks like GEN/RBC have stolen the march and they hold the ones that matter. That is cloning, frost resistance and lignin modulation.

Expect the legal stoush.

[madmike]

quote:Originally posted by donner

I did a bit more digging on patents pending. Arborgen have applied for three. But it looks like GEN/RBC have stolen the march and they hold the ones that matter. That is cloning, frost resistance and lignin modulation.

Expect the legal stoush.



donner...please elaborate

[donner]

http://www.nzherald.co.nz/index.cfm?c_id=3&ObjectID=9004375

This article concentrates entirely on the medical side of GEn as if AgriGen doesn't exist. You gotta wonder abou the state of the media sometimes. At least Liam asked about cap raising plans. Which were denied. When I spoke with Hall he couldn't make public comment. So maybe something has changed in the meantime.

Regardless, come the first quarter and half of next year something has to happen. The 5% call on Arborgen is up. They have to get the money from somewhere if Arborgen goes through to the next round.

To elaborate MM will take a long time. But in short order, without being glib, it goes like this.

RBC/GEN and GEN on its own, have the patents that matter. If RBC can get GEN they will own all the IP and patents outright. They will gain control of Arborgen just as field trials are beginning in Brazil.

Some of these patents have been granted recently, like 04, and some are pending. Arborgen has filed others. Whether the technology crosses over I don't know. If it does that could be a very sore point and cause of conflict in Arborgen. Irrespective of that though, Gary Weiss adn Tony Gibbs and GPG have built their reputation on legal challenges. So if they can find a hole in the legal armour of patent then expect them to try to exploit it and steal the technology. If not it doesn't change the fact that RBC taking out GEN when its down is a very logical thing to do.

[donner]

Looking at that article again. Hall says there are no plans for a public raising of capital.

If that is understood to be there will be no public raising of capital then what will they do to get the capital required?

It occurred to me that perhaps a placement of equity to a PEP. It makes a lot of sense.

If they have polled their main holders who may have said we don't want to put anymore money in then it opens them up to a takeover through the rights. If they go to a PEP they get a safe cornerstone holder, the money and a vote of confidence in their business to flag to the market.

Cadmus did this and now their price is three times what it was. They also were a turnaround coming from an out of favour sector.

[madmike]

Donner

i'd be surprised to hear that gen would have registered any patent it shouldn't have. not to sure how rbc got to register any patents but may have come about that some of their technical staff did work for arborgen as well. there would be no legal case unless gen/rbc profit to the detriment of other shareholders in arborgen. if you are right and arborgen is worth a bit i cant see gen and rbc doing anything to upset the apple cart so to speak. so me thinks you maybe doing a wee bit of ramping here donner???
thats not to say that i dont think gen is undervalued and agree with you that gen is a good buy...contrary to phaedrus technical analysis.

my rambling for what they are worth
1)rbc got all the forest biotech in the fletchers split up
2)rbc also got lumbered with ten stock
3)gen is in trouble
4)gen cant get a "partner"
5)gen has to get some $$$$ to buy 5% of arborgen
6)will wri be happy with a rights issue (if they were wouldn't they be was is called "averaging down"!!!!)
7)where is wri going......some say gen is a millstone for norgate
8)where is rbc going......some say when it was formed that they would sell off their petrol stations, sell ten, distribute the cash and say night night.....they haven't and gpg are in there.
9)now form the ten thread.....someone said that ten would not distribute cash to shareholders but repay debt and have 90m in bank. this is making ten a sitting duck for a takeover....by rbc!!!
10)would rbc also take out gen???...or let norgate sweat a bit...and perhaps the 5% of arborgen may come to rbc.
11)although come to think of it i think there are rules about the partners of arborgen increasing their stake...ie no one can increase their % ownership of arborgen without approval from all others, or if someone sells it must be to the shareholders...so maybe rbc cant take out gen so easily???

anyway isn't fundamental analysis so much more interesting than graphs and lines??

anyhow..i'm thinking of buying more gen to average down.....but just where is that bottom price....i haven't got much faith in that new ceo...what has come out of his mouth so far hasn't been inspiring. i might wait and see what the quarterly/end of year housekeeping will do to the price....it can only but fall...therfore may wait till the new year.

end of rambling...hope it's given you all gen holders something to think about...merry xmas

[donner]

Heres an excerpt from an interview with Watson earlier in the year when the price was 70c. Looks even better at 45c.

Some people will say Genesis was a brave experiment that has failed.
Well, they’d be dead wrong! [laughing]. We’ve raised $180 million for New Zealand science. About $68 million of that is from investors and $112 million is from deals, partnerships and royalties. I see a lot more growth from that investment. The share price at the moment doesn’t reflect that.

What does it reflect?
It reflects the [biotech] industry and the attitudes of New Zealanders to high-risk, long-term product development. It frustrates me that licensing deals and scientific partnerships are not regarded as real revenues just because there isn’t a product to sell. This is normal for biotechs. Immunex [a Seattle biotech] took 17 years to develop its first blockbuster product, Enbrel. You’ll get a much bigger return if you stay for the long term than if you invested in a regular commodity business that makes incremental gains. Look, I’m an investor too. Most of my investments are in Genesis. I see a bright future.

[duncan macgregor]

DONNER, I fail to understand your reasoning for holding this share. From a practical point of view even if you are proved right. in the end you are completely wrong. Golden rule number one never buy more of a downtrending share, get out. Rule number two If you are convinced you are right, keep very close watch and buy in big when it proves its self. People hesitate when it bottoms they will require more convincing than you thats when you move. I think you are wrong with this company and hopefully you will prove me wrong, but unlike you i will buy in if ever it trends up, while you sit on a substancial loss, and play catch up. Always remember we all make mistakes. My mistakes cost me very little your mistakes are going to cost you the lot. Hope you are right MACDUNK

[donner]

quote:Originally posted by duncan macgregor

DONNER, I fail to understand your reasoning for holding this share. From a practical point of view even if you are proved right. in the end you are completely wrong. Golden rule number one never buy more of a downtrending share, get out. Rule number two If you are convinced you are right, keep very close watch and buy in big when it proves its self. People hesitate when it bottoms they will require more convincing than you thats when you move. I think you are wrong with this company and hopefully you will prove me wrong, but unlike you i will buy in if ever it trends up, while you sit on a substancial loss, and play catch up. Always remember we all make mistakes. My mistakes cost me very little your mistakes are going to cost you the lot. Hope you are right MACDUNK


This is no longer a downtrending share. Have a close look.

Take a look at the depth and tell me how you can buy in big when the moment is right.

Why don't you put up a case as to why I am wrong?

[duncan macgregor]

DONNER, As i said my mistakes cost me very little your mistakes will cost you big. Regardless if you are right or or wrong stand back and think about it. If i thought as you do that this was the best thing since sliced bread, and invested in it this is what i would have done. I would have bought my first 50pc quota then watched it drop 5pc and got out regardless of what my feelings were at the time. Remember i still think its a great company only everyone else is wrong. when it hits the bottom, and goes up 5pc i buy in again, only if i still think i was right in the first place. That is exactly what i would have done, so work it it out, where to and when. I would not have invested in this company regardless. Hindesight is great, we might all be millionaires if we had it. That is only my point of view. Dont get it wrong tell me when i do. macdunk

[donner]

Well I guess I am in good company. The ACC have done exactly the same thing only on a much grander scale. And guess what? It is arguably your\our money.

[duncan macgregor]

DONNER, Money managers what more is there to say.MACDUNK

[I.T.Ancient]

The ACC have proven canny investors over recent years. I haven't found donner's posts too convincing (sorry donner), but the ACC move persuaded me to pick up a few. None-the-less, they are filed with my BOZ & WPL investments as "wild speculations which can afford to be lost".

[donner]

I have been considering what options are available to GEN in order to raise the capital required to take up their 5% option on Arborgen.

Previously, I have suggested a rights issue or a PEP buying a stake.

Now, I can confidently discount both of these options.

The first has been dismissed publicly (more or less) by the new CEO, Hall.

The second, has actually already been canvassed for and failed. However, that is so long as GEN stays in its current form.

So I have been scratching my head thinking what else could they do. I have concluded that Ngapuke is most likely correct. An IPO of AgriGen.

Upon which, either a PEP or instos can take up a holding.

The benefits of this are threefold. It raises the capital needed, fends off any takeover threat and the spin off, so long as existing holders get their lot gratis, the same way as NOG holders got their PPP, will serve as a dividend restoring some wealth back to those that have lost a fortune. While at the same time unlocking the hidden value in GEN.

The way the climate is in NZ they may even go for an IPO in Oz only.

[warthog]

quote:Originally posted by duncan macgregor

DONNER, Money managers what more is there to say.MACDUNK


Well Macdunk you couldn't be more wrong if you look carefully are ACC performance over the years.

[duncan macgregor]

WARTHOG, Happy new year my friend. Lets see how wrong macdunk is.
The fund managers manage 5.5 billion and made 495 million according to the figures that sharechat produced. Without going any deeper in that time the market rose by 25pc in the same period. A monkey throwing a dart would have come out on top. I did a rough calculation the monkey would have come up with i.375 billion profit.
CHEERS MACDUNK

[warthog]

quote:Originally posted by duncan macgregor

WARTHOG, Happy new year my friend. Lets see how wrong macdunk is.
The fund managers manage 5.5 billion and made 495 million according to the figures that sharechat produced. Without going any deeper in that time the market rose by 25pc in the same period. A monkey throwing a dart would have come out on top. I did a rough calculation the monkey would have come up with i.375 billion profit.
CHEERS MACDUNK


JOLLY GOOD MACDUNK but it's none too intelligent to apply the general to the specific. HAVE FUN WARTHOG

[saintjohn]

OK warthog, as an ex GEN holder I’m curious.

You imply that ACC are skilled investors- but macdunk thinks otherwise.

Without attempting to cause conflict, would you mind elaborating on your last post as Mac’s logic makes sense to me.

So what have we missed?


SJ

[duncan macgregor]

SAINTJOHN, Go to sharechat and look up unlimited magazine and get the figures. Dead right as you will find, but hold everything you did miss something. The macdunk sense of humour to play a joke on you. Do your own research and think it out. I thought i would have been called out by now. happy investing macdunk

[warthog]

quote:Originally posted by saintjohn

OK warthog, as an ex GEN holder I’m curious.

You imply that ACC are skilled investors- but macdunk thinks otherwise.

Without attempting to cause conflict, would you mind elaborating on your last post as Mac’s logic makes sense to me.

So what have we missed?


SJ



You appear to not have read my posting. Or if you did, you might like to read it again :O)

Of all the fund managers in NZ, I think you will find that ACC has a pretty good track record. Can't really comment on any other NZ managers but Macdunk may well be on the button.

[saintjohn]

mackdunk' I don't have the inclination or the time to research anything you say: I'm just curious to know why ACC would pick GEN.

Does your "just Joking" also apply to all your advice and tips? So now it's just. macjoking is it?

[duncan macgregor]

Right guys i will come clean the figures for ACC was for the June year and the other figures were for the year 2004. Did the fund managers show a profit or loss, depends entirely on how much interest we pay on our overseas debt. To risk 5.5 billion to show a profit of 485 million less interest on 5.5 billion is a very stupid thing to do. The profit next year will be less, because of the rising dollar.
cheers macdunk

[saintjohn]

Looks more like a warthog than a clown to me.

[Steve]

quote:Originally posted by saintjohn

I'm just curious to know why ACC would pick GEN.

So am I, given the recent negative announcements. Are there and GEN boffins out there willing to enlighten us?

[Bling_Bling]

I dont really understand why you guys are so interested why ACC picked up the large GEN parcel. Fund managers buy and sell constantly on the market and most get it wrong. A number of funds managers bought into GEN during their IPO and got it wrong. Maybe ACC shorted the stock and now covering, who knows. But whats more important is why the seller sold to ACC.

I have yet to see a convincing analysis with fundamentals that will convince me to purchase this sick puppy with fleas. At the end of the day it is the bottom line that counts and GEN have made many promises but yet to deliver.

[croesus]

Gen makes my contrarian nose twitch.
dics hold Gen (recently like last week).

[Bling_Bling]

quote:Originally posted by croesus


Gen makes my contrarian nose twitch.
dics hold Gen (recently like last week).



Why did you buy?

[Steve]

quote:Originally posted by Bling_Bling

I dont really understand why you guys are so interested why ACC picked up the large GEN parcel. Fund managers buy and sell constantly on the market and most get it wrong. A number of funds managers bought into GEN during their IPO and got it wrong. Maybe ACC shorted the stock and now covering, who knows. But whats more important is why the seller sold to ACC.

I have yet to see a convincing analysis with fundamentals that will convince me to purchase this sick puppy with fleas. At the end of the day it is the bottom line that counts and GEN have made many promises but yet to deliver.


Bling,

I don't think why the seller sold is that important - you answered your own question in the second part of your posting. It has not delivered on its promises.

It is the investment criteria rules of the ACC fund that make it interesting as to why they increased their stake. One thing for sure is that they CAN'T be covering a short position...

[donner]

Well, well. Isn't this what I said on the RBC/GPG/GEN The common thread thread?

Goldman Sachs JBWere manager of private stockbroking, John Cobb, said a number of GPG investments such as Tower and Rubicon had the potential to be drawn into merger or acquisition activity.

I must be in good company if what I am saying is being repeated by these guys (though one always has to have a healthy dose of suspicion when listening to Just Beware) and the ACC is buyng the same stock on an averaging down strategy.

I hope they have either some shark repellant or poison pills in the medicine cabinet.

[croesus]

Bling Bling For the same reasons generally that I purchased TPC at 10c and HGDCA at .4c, WRI at 67c (and others) a cpl of years back, ( purchases flagged on this and the doomed sharechat channel).

I agree most stocks that look like dogs are dogs, Research is needed, visits to meetings can be very informative, etc.

But the gains can be huge, it is not always by definition easy to be a contrarian.. but it can be damned satisfying.

disc also buying BLT, NTG (au), ICE (au)
ps.. the above holds for RAC (au) wish I had had, the balls to buy more at 12c.

Best Wishes all for the N/Y.

[Arthur]

Seems like there is some talent there

http://www.kiwiexpat.org.nz/portal.asp?nextscreenid=201.102.101.101&categoryid=1339&sessionx=6E05154B-1356-4260-A699-BB9A8CFCF6F6

[donner]

Whats Peter Lee doing now? Is he still on the board of Arborgen?

[whiteheron]

I have just been looking at the GEN chart for the last two years

Share price has gone from $1.45 to 45c , a reduction of 69 %

Need I say more ???

[saintjohn]

Talk to Mick100 he's a bit rusty on %

[whiteheron]

saintjohn / mick100

Percentage reduction goes like this

Base price 2 years ago $1.45
Price now 45c
Therefore reduction equals $1.00

Reduction over base equals 100 over 145 equals 69 %

Thats my best shot at an explanation

[donner]

At last report GEN had $16.6m in the bank. Total amount of shares available is 26.1m. Giving 63.6c of value per share. Everything else is for free. Including the $10m of revenue.

At current values it implies there is only $11.7m in the bank. Which could be true.

[Arthur]

I went through the cash in bank calculation two years ago and a year ago....It's all about cash burn.

I'd really like this company to be a winner,but luckily for me so far my brain has overridden my heart.

Lets hope its worth billions in a few years and Donner can buy us all a drink.

[donner]

And this is what people haven't figured out yet Ar'fur.

Cash burn has been arrested. By canning all the extra projects and getting rid of a heap of people and electing to go down a partnership path instead a go it alone path they have arrested the cash burn. It remains to be seen whether it has been halted.

But all the latest communique from them says they have enough cash to keep going for several years yet as things stand.

Its a funny thing. Out of that $10m revenue $7.6m was generated by Agrigen. Only $0.84m was generated by the health. Now that they have taken action to arrest the cashburn, come the next statement we may just find that Agrigen is making a profit.

Fancy making a profit, with no debt, all assets carried at nil value, patents and depreciation being a major component of its loss.

One has to wonder what is in store for the health side now that they are back to square one and Watson is on the sidelines.

[warthog]

quote:Originally posted by duncan macgregor

Right guys i will come clean the figures for ACC was for the June year and the other figures were for the year 2004. Did the fund managers show a profit or loss, depends entirely on how much interest we pay on our overseas debt. To risk 5.5 billion to show a profit of 485 million less interest on 5.5 billion is a very stupid thing to do. The profit next year will be less, because of the rising dollar.
cheers macdunk


Macdunk you are showing a remarkable lack of understanding about what, in terms of investment/fund management, ACC's task is. It is highly unlikely, for example, that if you lose all your investment portfolio that anybody will be breaking your balls (except Mrs Macdunk maybe). Get it?

[duncan macgregor]

WORTHOG, I have cups and medals for boxing but my indoors scares the living daylights outame. I trained a couple of guys in nz for the games at one time in the past using her left hook. I get it all the time warthog. MACDUNK

[IcedPaladin]

quote:Originally posted by Steve


quote:Originally posted by Bling_Bling

I dont really understand why you guys are so interested why ACC picked up the large GEN parcel. Fund managers buy and sell constantly on the market and most get it wrong. A number of funds managers bought into GEN during their IPO and got it wrong. Maybe ACC shorted the stock and now covering, who knows. But whats more important is why the seller sold to ACC.

I have yet to see a convincing analysis with fundamentals that will convince me to purchase this sick puppy with fleas. At the end of the day it is the bottom line that counts and GEN have made many promises but yet to deliver.


Bling,

I don't think why the seller sold is that important - you answered your own question in the second part of your posting. It has not delivered on its promises.

It is the investment criteria rules of the ACC fund that make it interesting as to why they increased their stake. One thing for sure is that they CAN'T be covering a short position...


I recall ACC buying into those little blue letter boxes scattered around the neighbourhood with little blue bikies delivering the goods. ACC said they were a substatial security holder,the following day the company was placed in liquidation. National Post I think.

[warthog]

quote:Originally posted by duncan macgregor

WORTHOG, I have cups and medals for boxing but my indoors scares the living daylights outame. I trained a couple of guys in nz for the games at one time in the past using her left hook. I get it all the time warthog. MACDUNK


GOOD ON YOU MACDUNK I assume "it" is her left hook. TAKE CARE WARTHOG

[donner]

Looks like I am not alone with biotech choice.

http://www.smh.com.au/news/Business/Biotechs-set-for-improvement-in-2005s/2005/01/11/1105423479846.html

[Steve]

Biotech is a good sector to be in, if you can avoid the ones that over-promise and under-deliver...

Disc: Hold BLT, BOZ, PEB but no GEN

[donner]

This is what RBC had to say about Arborgen. Its hard to be believe GEN values it at nil.

First, from increasing market recognition of the value of our biotechnologyoperations. Two years ago the Grant Samuel independent report valuedRubicon's forestry biotech businesses at a mid-point of $95 million. Today,we estimate they are valued in the share price at below our book value - ataround only $35 - $40 million. If we could realise just that value differenceand no more, then in Rubicon share price terms it would translate into anadditional 20 cents plus per share.

[Ngapuke]

Donner, would you mind translating this into what it would mean for GEN (if they were to use RBC's logic)?

I'm not being lazy - but it's the end of a long first week back at work, and my brain isn't functioning too well!

[Cooper]

quote:Originally posted by donner

This is what RBC had to say about Arborgen. Its hard to be believe GEN values it at nil.

First, from increasing market recognition of the value of our biotechnologyoperations. Two years ago the Grant Samuel independent report valuedRubicon's forestry biotech businesses at a mid-point of $95 million. Today,we estimate they are valued in the share price at below our book value - ataround only $35 - $40 million. If we could realise just that value differenceand no more, then in Rubicon share price terms it would translate into anadditional 20 cents plus per share.


Where was that from Donner?

[donner]

From the CEO speech, 16th August.

It means Ngapuke that Arborgen is worth a lot of peso's but carried at nil value.

Hang on to your hats. When it comes its going to be sudden. Did anyone notice that the CEO of RBC has been buying?

A bit ambiguous that last one. I meant he has been buying RBC not GEN.

[Cooper]

Cheers Donner

[donner]

Sorry Ngapuke. Its still a ski slope due to the flat to rising bit at the bottom. Poised for take off kinds reminds of the vertical poistions of the Apollo and shuttle missions.

Now if anyone missed the maths on RBC's statement for Arborgen and what that entails for GEN check out the following.

According to Direct's Details button there are 283,631,406 shares available in RBC. The fact that most of them are locked up is a different story. But 283,631,406*0.2=56,726,281 dollars of value to be added to RBC's capitalization if the 0.2 is the 20c they mention. Add to that the already recognized value of $35-40m. Hell, lets be risque and go with the $40m that yields $96,726,281. Remembering that RBC has only about 31.67% of Arborgen, that means the 95% that GEN doesn't own is worth 3*96,726,281=290,178,843. Making the 5% GEN does own worth approximately $15m. 0.95(x)=290, x=290/0.95, x=305. 305*.05=15. Though it would be safer to round off at $300m.


Now my maths isn't too good but if we took the $15m and divided by the amount of GEN shares available (26,126,802) that would give us $0.57 of unrecognized value in GEN. With a call of another 5% coming up in Feb. Making a total of $1.14 of value in GEN on Arborgen alone, then add the fifty cents of cash reserves value and, hey presto (!) we have a stock worth more than a buck fifty. More than three times its current value.

Not to mention the rest of the assets like patents, IP, databases, licences and revenues.

And this is on the mid-point of old valuations on the plant side alone.

This thing is going to go sooner rather than later.

[madmike]

quote:Originally posted by donner


Now my maths isn't too good but if we took the $15m and divided by the amount of GEN shares available (26,126,802) that would give us $0.57 of unrecognized value in GEN. With a call of another 5% coming up in Feb. Making a total of $1.14 of value in GEN on Arborgen alone, then add the fifty cents of cash reserves value and, hey presto (!) we have a stock worth more than a buck fifty. More than three times its current value.


Donner
I think gen must pay market value for the second 5% so back the the truck up to 107c (57c value of arbogen + 50c cash).

[morv]

dont think the cash is there to pay for it and the other shareholders dont want them to pay for it,and to get that sized payment past the board would require some home truths on the cash flow versus cash burn scenario.

[donner]

Thats right guys.

MM, 57 cents on the mid-point of old values. Now that the phase three trials are happening its more like $1.14 for the 5% they own.More importantly is what happens after phase three. That is getting product to market. Have you checked out the size of the market? Or who owns the patents and what kind of royalties they might get? I have.

Morv, good point on the cash. Any ideas where they might get it from...I do.

[morv]

not really donner,the staff are reeling after all avac,pvac, and bureaucrat staff get the heave.the investing govt dept and the backer broker of this site have a link thru a native flower science invest fund,plus access to a director of this dog,and linkage to the biotech state across the sea but think they would like a clean out of all management and minority shareholders to make the play worthwhile.

[donner]

Morv...what the?

[madmike]

quote:Originally posted by morv

not really donner,the staff are reeling after all avac,pvac, and bureaucrat staff get the heave.the investing govt dept and the backer broker of this site have a link thru a native flower science invest fund,plus access to a director of this dog,and linkage to the biotech state across the sea but think they would like a clean out of all management and minority shareholders to make the play worthwhile.


agree morv...appointing ceo internally bad option...definitely need change of blood...too much avac/pvac in the system...transfusion needed quick....just hope they aren't fools and give up the 5% buy option in arbogen

[donner]

quote:Originally posted by donner

I have been considering what options are available to GEN in order to raise the capital required to take up their 5% option on Arborgen.

Previously, I have suggested a rights issue or a PEP buying a stake.

Now, I can confidently discount both of these options.

The first has been dismissed publicly (more or less) by the new CEO, Hall.

The second, has actually already been canvassed for and failed. However, that is so long as GEN stays in its current form.

So I have been scratching my head thinking what else could they do. I have concluded that Ngapuke is most likely correct. An IPO of AgriGen.

Upon which, either a PEP or instos can take up a holding.

The benefits of this are threefold. It raises the capital needed, fends off any takeover threat and the spin off, so long as existing holders get their lot gratis, the same way as NOG holders got their PPP, will serve as a dividend restoring some wealth back to those that have lost a fortune. While at the same time unlocking the hidden value in GEN.

The way the climate is in NZ they may even go for an IPO in Oz only.


Amazing to see that Jon Cimino, GEN director, just happens to be a director of a PEP. Structure been put in place that separates Agrigen from Health makes the IPO possible with placement to the PEP.

Though a new CEO may be inclined to just sack the innards of the company to reduce costs, sell off some assets or the entire health side and concentrate just on Agrigen.

But then I am sure Norgate needs his money elsewhere at the moment and since the grass project has been canned one has to ask just what is Wrightson doing there? Surely that stake must be up for grabs. Enter Rubicon with a takeover bid?


BTW, has anyone actually considered how MeadWestvaco, IP and RBC intend to recoup the money they have ploughed in to Arborgen? I have.

Heres a tip. It begins with N and ends in Q.

[duncan macgregor]

I advise anyone that is a pure fundamentalist to read all the pages in this thread, all the expectations forlorn hopes, money lost etc.
Let us all beleive this dog comes right, you are only a ph call from buying in so what is a few cents lost at the bottom. It doesnt matter about a company. What does matter is your own profits not theirs. When the market goes down, like this companies price, it will be the fundamentalists that lose the lot. The TA people with their stop loss systems will be laughing at you. This is a great example for anyone with half a brain to take on board. macdunk

[donner]

Hey MS,

got that book today by Tom Abate. Have only looked at a few pages but it seems really interesting.

Thanks for the headsup.

As an aside, if people are interested in saving some bucks on books I suggest getting on the i-net and shopping at Amazon.

For example, when buying this book I also bought The Intelligent Investor by Ben Graham. First off though I went to Boarders in the city to check it out. I decided I would buy it. It was sixty bucks. I baulked at that only after spilling my coffee on a page but thats a different story. So I came home, checked out Amazon and got it delivered from the US for about twenty bucks.

Better than the WHS.

I am sure Ben Graham would have thought that as being a shrewd investment.

[donner]

Good volume on GEN today. Price still softening. Is this speculation on the interim? Better watch out for the cash burn. See if its slowed or stopped.

I still think the market has this wrong. How wrong?

Well the New York money thinks Arborgen is so good they have ploughed in to RBC for it. But then they could be after leverage into TEN. Yeah right!

Could be a pleasant surprise in the interim. The fifth anniversary for Arborgen comes round next week. Will we see a new valuation for it? 54c on an old one in the midpoint for the 5% they already own when they were at phase two. Most likely to be way higher than that now. For a clue look at the Monte Carlo modelling put out recently on the likely impact of AVAC going to phase three. Remember that Arbogen is already in pahse three and preparing for commercialization of their product. The trick for GEN is getting the cash to pick up the other 5% they have an option on.

The way I see it Hall has to wipe the table clean and get all the bad news out in one go. If so duck for cover. The price might go through the floor. But if he does that, then adds on the end some kind of strategy plan going forward, something like details of a PEP taking a stake and/or an IPO plus a few Monte Carlo valuations like in the recent shareholder presentations maybe, just maybe you might see some action.

Not likely with this market though. People jsut don't get it.

Though if the negotiations with a PEP are getting bogged down there will be nothing to announce on that front leaving just the bad news thereby facilitating a cheaper VWAP for the PEP to make an entry.

Poor old Hall. He really is between a rock and a hard place. But he is pretty shrewd as well and he would never have taken on the role if he didn't have something in mind. Something that involves a bit of value creation.

[digger]

So Donner what do you make of 4.5 million being sold today at 45??
Who is right the buyer or seller??

[warthog]

quote:Originally posted by digger

So Donner what do you make of 4.5 million being sold today at 45??
Who is right the buyer or seller??


Don't know, but the seller is Mr Norgate aka "the new brierly" if you listen to Cushing the (cough).

[donner]

Act 1, Scene 1. More to be revealed scene 2.

ACC buys @42. WRI sells @45. No-one knows the buyer. But increasing volumes recently and range bound between 40-52c.

One would expect a buyer to know what they are doing. Norgate under pressure elsewhere. Needs cash quickly and GEN has already been written off in his books. No material effect to him.

Personally I believe this is a PEP taking a stake. Maybe to stave off the competition but that would have to be disclosed under continuous disclosure. So maybe it is the competition. Trade off with Cushing to enable GPG to get leverage into GEN and Arborgen? Remembering that GPG is RBC who happens to own 33% of Arbo. Be interesting if it is because there goes the likelihood of a legal challenge to patent. They wouldn't sue themselves, would they?

[marinesalvor]

PEP?? why on earth?

[duncan macgregor]

WRI gets rid of this dog at a great loss and their shares go up. I wonder who bought them?, only hope it was not my ACC money. They are stupid enough if you look at their record.
macdunk

[TerryA]

>>WRI gets rid of this dog at a great loss and their shares go up<<

If I recall correctly the value of the CEN shares was written off or, at least, substantially so a while back. Presumably this would have been reflected in the WRI sp at that time.

If so the proceeds represent a nett gain as of today but no where near enough to account for the rise.

[madmike]

just a thought....if wri has to made a market disclosure of selling their stake in gen, wouldn't someone have to make a market disclosure of buying????......or maybe the buyer isn't listed on the NZX and doesn't have to disclose.

i would think that if it was an existing shareholder or a related party (such as RBC...perhaps not gpg) then disclosure would have to be mucho pronto

and if acc bought the parcel that would take them over the 20% wouldn't it????

so i would guess the buyer is a rich persons investment vehicle (eg cullen investments) or an overseas biotech with interest in GEN's area...most likely the plant side (the health side looks very sick)

[Bling_Bling]

Ummmm... no announcement of the buyer.

Maybe it is a broker distributing the shares to a number of funds and private clients.

[Studson]

ACC is back in again. They acquired another 10% and now own over 16%.

[Bubble Boy]

Well, well, well... Lets see if ACC has the ability to reform this dog and extract some value.

[madmike]

mmm .......acc sold 30,000 18/01/05........why!!!!

it maybe an insight into acc investment strategy?

[duncan macgregor]

MADMIKE, they might be fundamentalists averaging down. MACDUNK

[digger]

Madmike, ACC has as much right to play the market as anyone else. I would say ACC was trying to drag the price down to make the eventual wri settlement better . I believe this happens a lot but once's a co gets over 5% the world hears about it.That is probably what happened but don't expect them to admit it.Over 5% you have to own up to trades but you don't have to say why.

[donner]

Seems the buyer was Amro Craigs. Norgate is a big client of theirs so will be looking after his interests. Selling the rest to the mums and pups. Direct Capital hve thrown a piffling amount to make a sale process easier but the big deal will come when new equity is issued to a PEP thereby diluting the existing holdings. I think this is why Norgate is getting out now.

We could well see this down to 25-35c if the dilutionary effect takes hold when and if the issue is made.

But remember, they need money from somewhere to take up the 5% on Arbogen.

[marinesalvor]

ouch a legal dispute now...

[Bubble Boy]

Wonder if ACC knew about that??

[warthog]

quote:Originally posted by Bubble Boy

Wonder if ACC knew about that??


Wonder if WRI knew about that?

[donner]

Think I mentioned this somewhere along the line.

This is business US style. The chances in patent disputes are fifty-fifty for the plaintiff. Look for an out of court settlement. The fact is they already own 5% so that can't be taken away...I think.

Of course Norgate knew about this. Amros is looking after one of their bigger clients interests at the expense of the mums and pups. Business as usual.

All I can say is bring it on! That Nasdaq listing must be getting close for them to be scrapping it out now.

[duncan macgregor]

This share was $7-60 at one stage now it is heading for the gutter. Is there anyone dopey enough to have had this at that price, and still holding on?. This is a good lesson to the people that dont have a stop loss policy. Norgate knows it is a dog, and flogged it off to the ACC. Who can blame him, that is business willing buyer willing seller. I see the ITALIAN pension fund lost countless millions in ARGENTINIAN bonds so our dopey lot are in good company. A few more deals like this then we can all look forward to an impoverished future. WARTHOG the fat lady is tuning up make a run for it. macdunk

[tsb]

yeah hanging in at $0.505 average - but then ACC is @$0.45 average

[donner]

FPH has a similar problem in the US and it went belly up.

The strategy here is to bankrupt GEN on lawyer fees or to hardball them on negotiations.

Basically what it says is GEN's use has expired and GEN has something the others want and don't want to pay for it.

For me it all bodes well. Bit scary for the faint hearted and the lesser informed though.

Makes for a more likely case for a PEP to take a stake on even softer terms now making the dilutionary effect greater.

I noticed Citibank quickly ditched 100k the other day. Will have to check with Computershare again to see if it were their holdings or an individuals. I suspect theirs. Trying to put the price into a spin no doubt.

[duncan macgregor]

DONNER, What can any one say. Even after all this you are still making excuses. Cant you see this was doomed a long way back the only reason that it is still going was people like you prepared to lose the lot to prove that they were right. I ask you to start at page one and read all the posts made since then and think if i had a stop loss in play i would only have lost 10 or 12 pc and all those mugs are still riding it down. If the bloody thing did come right, you would only have lost a few cents at the bottom on the way up at the start of a trend. My old mate warthog bought last week at 44c lost 25pc on the price if he still holds. The rules that i hold are.
1 the company must be running at a profit.
2 The profit must be increasing
3 The company must be one of the best in that field
4 Initial buy very strict stop loss
5 Expect to make a wrong call so stick to the rules
6 never buy a downtrending share.
Time you made some rules my friend before you lose the lot . macdunk

[madmike]

quote:Originally posted by duncan macgregor

DONNER, What can any one say. Even after all this you are still making excuses. Cant you see this was doomed a long way back the only reason that it is still going was people like you prepared to lose the lot to prove that they were right. I ask you to start at page one and read all the posts made since then and think if i had a stop loss in play i would only have lost 10 or 12 pc and all those mugs are still riding it down. If the bloody thing did come right, you would only have lost a few cents at the bottom on the way up at the start of a trend. My old mate warthog bought last week at 44c lost 25pc on the price if he still holds. The rules that i hold are.
1 the company must be running at a profit.
2 The profit must be increasing
3 The company must be one of the best in that field
4 Initial buy very strict stop loss
5 Expect to make a wrong call so stick to the rules
6 never buy a downtrending share.
Time you made some rules my friend before you lose the lot . macdunk


is duncan macgregor scottish for broken record!!!

[warthog]

quote:Originally posted by duncan macgregor

DONNER, What can any one say. Even after all this you are still making excuses. Cant you see this was doomed a long way back the only reason that it is still going was people like you prepared to lose the lot to prove that they were right. I ask you to start at page one and read all the posts made since then and think if i had a stop loss in play i would only have lost 10 or 12 pc and all those mugs are still riding it down. If the bloody thing did come right, you would only have lost a few cents at the bottom on the way up at the start of a trend. My old mate warthog bought last week at 44c lost 25pc on the price if he still holds. The rules that i hold are.
1 the company must be running at a profit.
2 The profit must be increasing
3 The company must be one of the best in that field
4 Initial buy very strict stop loss
5 Expect to make a wrong call so stick to the rules
6 never buy a downtrending share.
Time you made some rules my friend before you lose the lot . macdunk


MacDunk you are so inaccurate with figures that your accountant must be gibbering in a hospital ward somewhere.

[donner]

Regardless of anything, if you play follow the leader (ACC) you essentially piggy back on their strategy and come out with the same result at the end...whatever that may be.

[duncan macgregor]

DONNER, If you follow the leader you are heading for an accident.
Appologies to my old mates mad mike, and warthog. Warthog i am not to hot at subtraction sorry about that. Donner i will never bore people again with how bad i think GEN is promise cross the heart on all that to shut up. macdunk.

[Snow Leopard]

Yeah, right :D

[Bling_Bling]

Why have ACC bought over 15% of this dog?

[duncan macgregor]

BLING BLING, promised to shut up about this. Election year

[madmike]

quote:Originally posted by duncan macgregor

BLINGGGGGGG BLINGGGGGGG, promisedddddddd toooooooo shuttttttt upppppppp abouttttttt thisssssss. Electionnnnnnnn yearrrrrrr


who changed the record speed to 33rpm...they should have changed the volume.....to zero!!!!

[warthog]

quote:Originally posted by duncan macgregor

BLING BLING, promised to shut up about this. Election year


Paper tiger, oh paper tiger.

[Bling_Bling]

33 cents today, ouch !

How low will GEN go? Someone in ACC is getting the boot?

[Ngapuke]

Whats at stake:

Transgenic trees are reaching the threshold of commercialization - a point bioengineered crops reached in the 1980s, observers say. This time, though, it's not the United States leading the charge, it's China.....ArborGen's director of regulatory affairs [says] ArborGen's first tree is at least seven years away from commercialization.... Others see GE trees coming sooner.

"Government and industry are basically looking at what they can do to finalize regulations to streamline commercial release," says Neil Carmen of the Sierra Club. "We're talking about potentially millions of acres of genetically engineered trees.....There is immense commercial pressure to move ahead with this

http://www.csmonitor.com/2005/0310/p14s02-sten.html

[Bling_Bling]

What is the advantage of the GE enhanced trees? Do they grow faster and stronger?

Sell forestry stocks?

[Sharebroker]

quote:Originally posted by Bling_Bling

33 cents today, ouch !

How low will GEN go? Someone in ACC is getting the boot?


Why should someone in ACC get the boot, BB? They are not allowed to make mistakes? How about the tens of millions they have made by buying stocks like DB Group and Hellaby when nobody wanted those stocks?

[warthog]

quote:Originally posted by Bling_Bling

33 cents today, ouch !

How low will GEN go? Someone in ACC is getting the boot?


Just so you don't lie awake at night wondering:

GEN could go as low as zero.

If you can beat the market every time then you're doing better than both ACC and the majority of people here.

Not all that blings is bling bling, bling bling.

[Bling_Bling]

29 cents today !

How low will it go?

Even WRI doesnt have conifdence in GEN. They sold down their entire shareholding to invest in another Biotech companies.

http://www.stuff.co.nz/stuff/0,2106,3216956a13,00.html

[duncan macgregor]

I know nuthin and promised to say nuthin another acc accident with my money i suppose. macdunk

[donner]

I am not convinced that the following isn't because of a new value for Arborgen.

Certainly looks like they have no friends at the moment.


15 March 2005 - Rubicon announced today that it is to move its balance datefrom 31 March to 30 June with immediate effect. This means the currentfinancial period will be a 15-month period from 1 April 2004 to 30 June 2005. The NZXR has granted Rubicon a waiver from the requirement to give notice tothe NZX not less than one month before the existing balance date on thecondition that the Directors of Rubicon certified that their decision tochange the balance date was not influenced by any information in thefinancial results for Rubicon for the current financial year. The Directorshave provided this certificate.

[donner]

Does anyone have any ideas what this flash new fund might be used for? Couldn't be to bail out GEN when they are set to tip over the edge could it?

[donner]

Is anyone able to tell me where Arborgen LLC is incorporated?

HQ in Sth Carolina but not incorporated it appears.

[duncan macgregor]

DONNER, You appear to be the last one standing, can you please turn the lights off when you leave. All the best Macdunk

[Bling_Bling]

At least Donner have ACC or are they both the same?

On a serious note. Are they any value in GEN? If there was any value, one would assume an overseas Bio firm would have made a t/o offer to secure GEN IP and fire all the staff.

[donner]

Ha! Take a closer look MacDunk. But I agree it is not for the faint hearted or weak of spirit and mind.

I don't think you are too far away there Bling. All, or just about all the staff have been fired at the same time a mega-fund is formed to invest in NZ biotech.

[duncan macgregor]

DONNER, I agree a faint heart or weak spirit is out. But a weak mind?, surely a weak mind would be a necessity to hold on to this dog. Still you might be right someone may take this doggy and give it a good home. cheers and best of luck macdunk.

[Snow Leopard]

quote:Originally posted by duncan macgregor

DONNER, If you follow the leader you are heading for an accident.
Appologies to my old mates mad mike, and warthog. Warthog i am not to hot at subtraction sorry about that. Donner i will never bore people again with how bad i think GEN is promise cross the heart on all that to shut up. macdunk.

:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

[madmike]

quote:Originally posted by Paper Tiger


quote:Originally posted by duncan macgregor

DONNER, If you follow the leader you are heading for an accident.
Appologies to my old mates mad mike, and warthog. Warthog i am not to hot at subtraction sorry about that. Donner i will never bore people again with how bad i think GEN is promise cross the heart on all that to shut up. macdunk.

:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D


he aint got a (brave) heart....the english cut it out.....ha ha

[duncan macgregor]

PAPER TIGER, only offered condolances at the hospital before it finally dies. I did offer a glimmer of hope so take that into account. I wasnt even laughing i wiped a tear from the eye and felt for the family. macdunk

[Snow Leopard]

:(

[Capitalist]

quote:Originally posted by donner

Ha! Take a closer look MacDunk. But I agree it is not for the faint hearted or weak of spirit and mind.

I don't think you are too far away there Bling. All, or just about all the staff have been fired at the same time a mega-fund is formed to invest in NZ biotech.


Well it's definitely for the weak of mind. As Major von Tempsky said, Donner should stick to pulling Santa's sleigh. This is going to go bust. Get out now people.

[PGL]

quote:Originally posted by Capitalist


quote:Originally posted by donner

Ha! Take a closer look MacDunk. But I agree it is not for the faint hearted or weak of spirit and mind.

I don't think you are too far away there Bling. All, or just about all the staff have been fired at the same time a mega-fund is formed to invest in NZ biotech.


Well it's definitely for the weak of mind. As Major von Tempsky said, Donner should stick to pulling Santa's sleigh. This is going to go bust. Get out now people.


Cap, I know how historically correct you like to be

Santa's reindeer was called Donder or Dunder (Dutch for thunder)- often rendered as Donner in Nzild

BTW when naming Santa's reindeer, people often also forget Olive - the other reindeer.

[Capitalist]

I am truly grateful for your erudite comment PGL. Believe me, when this goes down the toilet Donker, Donner, or Dunder<s>head</s> will know about it good and hard. He accused me of fraud on the CEN thread and Capitalists have long memories. Ramping the great unwashed about Arborgen? WHAT A JOKE. HEH. I CAN'T WAIT.

[donner]

Who let you out of your Off Topic hole Ruth? Must be something going on. Are we working for Nicholas Bagnall and the ACC in getting the price down?

Facts remain long after Ruth and Citibank have done their business. Remember TRH and AIR. I am well versed with this company and quietly confident in the mid term. Short term this is a company in play and under pressure.

How 'bout putting up a reason why it will go bust instead of just spouting your BS Ruth.

[marinesalvor]

Go back through 19 pages of the thread donner - plenty of reasons

[donner]

...and not one of them put up by you. When so many clever people are calling this a dog then there must be something of value in it.:D

In fact I do recall in some thread somewhere that Ruth actually said, Biotech was going to be good this year but be selective.

Then you have to wonder why a fund worth $150m is set up by some other very clever people with no other purpose than to invest in NZ Biotech.

...the list goes on and on but GEN is not without risk. I will grant you that but a failed pup it is not.

[donner]

quote:Originally posted by Capitalist

I am truly grateful for your erudite comment PGL. Believe me, when this goes down the toilet Donker, Donner, or Dunder<s>head</s> will know about it good and hard. He accused me of fraud on the CEN thread and Capitalists have long memories. Ramping the great unwashed about Arborgen? WHAT A JOKE. HEH. I CAN'T WAIT.


I noticed that several government agencies around the world have accused Citibank and its employee of fraud and dishonesty recently, so I guess I am in good company.:D:D:D

[marinesalvor]

are you talking to me Donner - have you read the 19 pages?? obviously not as theres a lot of good reasons there

certainly better than your tired old ramp "Theres so much value - Arbourgen is amazing"

[Bling_Bling]

quote:Originally posted by PGL


quote:Originally posted by Capitalist


quote:Originally posted by donner

Ha! Take a closer look MacDunk. But I agree it is not for the faint hearted or weak of spirit and mind.

I don't think you are too far away there Bling. All, or just about all the staff have been fired at the same time a mega-fund is formed to invest in NZ biotech.


Well it's definitely for the weak of mind. As Major von Tempsky said, Donner should stick to pulling Santa's sleigh. This is going to go bust. Get out now people.


Cap, I know how historically correct you like to be

Santa's reindeer was called Donder or Dunder (Dutch for thunder)- often rendered as Donner in Nzild

BTW when naming Santa's reindeer, people often also forget Olive - the other reindeer.


The market is definitely very quiet and the ST traders are all out to play. :D

[donner]

Heres some comments (four years old) from Luke Moriarty re GEN. Who would know, as an outsider, GEN's value better than him?

We have had a long association with Genesis - Genesis was our partner in the sequencing of the jointly owned DNA database in Radiata and Eucalyptus. We have not yet addressed our current position in Genesis, other than to say that we see more value than the $3.85 per share at which it is trading today.

...and on Arborgen,

In terms of opportunities and high-growth, we work backwards from an hypothesis about the future - so for example, with Capstone we formed an hypothesis about the future of distributed electricity generation and sought out the technology that would meet the way we saw the world moving. In ArborGen we have taken a view about sustainable forestry and have sought out technology (in this case forestry biotechnology) to meet what we see as a future need. The same is true for our HortResearch alliance work. In the end, it is this accuracy of the hypothesis, the size of the market space, the correct selection of the technology and its commercialisation that are the key determinants of high growth. We believe that ArborGen meets all of these parameters.


In terms of our existing portfolio, the greatest market opportunity rests with our ArborGen investment, whereas the closer-to-market opportunities probably lie in generating clonal forestry activities in South America and bringing the HortResearch alliance to a marketable product(s) - but neither of these are immediate events.

To the question, does Arborgen make any money?

No - ArborGen is not yet making money - it is still in the development phase of its life-cycle, and is currently focusing on the development of three bio-engineered tree- traits, in three species and in three geographies - Lignin reduction, growth and herbicide tolerance, in Radiata, Eucalyptus and Loblolly, in the US south, Australasia and South America. These traits represent some of the largest value-generators to the growers, processors and end-users of wood fibre, and the three species / geographies allow ArborGen to target over 50% of the world's plantation forestry market.


Now, MarineSalvor, are you more qualified than Luke Moriarty to talk about GEN or Arborgen?

[TerryA]

You could put it another way and ask whther Mr. Moriaty still has the same opinions today - 4 years is a long time even in the research field.

[marinesalvor]

well put Terry!! 4 years and many many millions of dollars that have proved unproductive

Would have thought that Donner might have tried to concentrate on a recent positive - eg the Tech NZ grant for RNA work - but oh no he rolls out the same boring stuff

[Bling_Bling]

Donnor, I give you 5 stars for persistence. You seem to be the only one here that still believe in this dog.

[marinesalvor]

I admire Donner's dedication too - as I have said many times I wish him all the best and hope GEN succeed - he tends to lash out though

[donner]

quote:Originally posted by TerryA

You could put it another way and ask whther Mr. Moriaty still has the same opinions today - 4 years is a long time even in the research field.




Thats a good proposition. I hope Sharechat take up the challenge.

I note that the JV partners are committed to another $60m over the next five years again. I guess for some that could be called good money after bad.

[donner]

quote:Originally posted by TerryA

You could put it another way and ask whther Mr. Moriaty still has the same opinions today - 4 years is a long time even in the research field.




Thats a good proposition. I hope Sharechat take up the challenge.

I note that the JV partners are committed to another $60m over the next five years again. I guess for some that could be called good money after bad.

[morv]

has gen taken up the extra 5% in arbogen, i havent noticed any annoucement of success or failure

[donner]

I wouldn't expect so with the Court case hanging over them Morv. On top of that if they did I would expect them to inform the market of such a thing.

[Bubble Boy]

Who would want this job? Donner, i nominate you....

GEN
28/04/2005
DIRECTOR

REL: 1238 HRS Genesis Research and Development Corporation Limited

DIRECTOR: GEN: Genesis R&D Announces Closing Date for Director Nominations

Auckland, New Zealand, 28 April 2005 - Genesis Research and Development
Corporation Ltd (NZSX/ASX: GEN) advises that in accordance with NZSX Listing
Rule 3.3.2, the closing date for director nominations is 5.00 pm on Thursday,
19 May 2005, in respect of the company's annual shareholders' meeting
scheduled to be held in June 2005.

Genesis Research and Development Corporation Limited will advise the date and
location of the annual shareholders' meeting once those details are
determined.

About Genesis

Founded in 1994, Genesis is a New Zealand-based biotechnology company. It
has built a broad therapeutic development platform targeting immune disorders
and cancer and is developing RNAi therapeutics for immune disorders. The
company has an extensive patent portfolio.
Collaborations are maintained with Amgen Inc. (Nasdaq:AMGN), Corixa
Corporation (Nasdaq:CRXA), SR Pharma plc (AIM:SPA), Jurox Pty Ltd, and
AgResearch.

AgriGenesis Biosciences Ltd is a wholly owned subsidiary of Genesis that is
focused on using key plant cell signalling genes - novel hormones and
transcription factors - to control commercial traits including flowering
control, cold tolerance, growth rates and cell-wall lignin and cellulose
content in commercial species. It has developed comprehensive plant EST
databases including the world's largest EST database for commercial forestry
species. It has commercial collaborations with Wrightson (NZSX: WRI),
HortResearch, Landcare Research and ArborGen LLC.

For more information, please visit www.genesis.co.nz and
www.agrigenesis.co.nz

Media contacts:

Jim McLean, Chairman
Genesis Research and Development Corporation Limited, +64 9 373 5600
End CA:00114542 For:GEN Type:DIRECTOR Time:2005-04-28:12:38:12

[donner]

A bloodless coup in the making. I wonder how many seats are up for grabs.

I recently spoke with a clerk in the US Judiciary regarding the case against GEN brought by Arbogen.

It was mentioned that the case is sealed and no public documentation is available.

It means then, shareholders are totally beholden to the good people up at GEN for enlightenment on its progress. For example, should it go to a judge it will be held behind closed doors and what of the decision or pending decision? When can it be expected? Has it been decided? Or what if there were an out of court settlement made and it never gets to court? Wouldn't the continuous disclosure rules and regs come into effect here?

The two months passed since the announcement is long enough for even the US wheels of justice to have turned to the next point.

Perhaps a call to the NZX's Market Surveillance Panel might be in order. Oh! I just remembered. It so happens that Jon Cimino resides on that also. Don't think I would get very far there.

So whats a shareholder supposed to do?

I remember someone, I think Maxine, has a penchant for things legal. Perhaps you or someone else could offer a perspective on this.

[maxine]

Donner, I agree with you that the continuous disclosure rules apply (regardless that the dispute is before a US court, the disclosure obligations of GEN with regard to the NZX listing rules are not subrogated).

Therefore the humble GEN holder is obliged to assume the matter remains before the courts or perhaps is in settlement discussions between the parties, or perhaps both, but that nothing sufficiently material has transpired as to require a disclosure by your chums the gene wranglers at GEN.

It seems that the resolution of the matter is sufficiently price impacting for GEN that they would be obliged to disclose, whereas the other parites to the dispute probably don't have to no matter what (the US has disclosure obligations too for listed Companies like IP, but this matter wouldn't come close to moving the IP price.

As for recourse, if you have grounds to believe that a listed company is not adequately complying with its disclosure obligations (by failing to update the market, or by not being quite fully forthcoming in its disclosures), then you should complain to the Surveillance panel. I don't think it is really fair to suggest that wouldn't work on the basis of some perceived conflict of interest - it is an amusing conspiracy theory for the chat board but not really very fair.

You will probably find that listed companies in situations like this have been very careful in their disclosures/ PR to technically comply while ensuring the best possible spin is put on their situation. So aside from reading their historic statements (and not so much what the press might have chosen to say), and reading these with a healthy degree of skepticism, I don't think much can be done.

Finally you say you would have thought it would have reached the US courts by now. I genuinely don't know how long it would take, but would not be surprised if it took much longer than you seem to think (justice almost always seems to come to late - the court apparatus exists to stop bad behaviour through a kind of Mutually Assured Distruction - rather than to plausibly remedy it).

Those are my thoughts right now, not very insightful sorry, and I reserve the right to be wrong and/or to change them.

Maxine
disc. don't hold any GEN, never have, never will.

[donner]

Thanks for the response Maxine.

I would never say never though. You just don't know whats around the next quarter's corner.:);)

I suppose a be patient position is the best one.

I have no doubts Cimino plays it by the book as well. Though perception is quite often reality. If it turns out there is a material development in the matter and it hasn't been announced yet then the perception is the reality. Time will tell.

You see, the other thing that matters is the dispute arose at the same time as the 5% option on Arbo came to life. Options have a finite life. Usually a quarter. We are just about at the end of the quarter. They don't have the capital to take it up so if it has been sold, declined, recinded or exchanged as part of the dispute or they intend to exercise it then that should be declared since that also impacts price. But how can you know when there is no public record about it and they won't say.

Whatsmore, if I did call the Surveillance Panel, the first thing they would say is, why do you think this, donner? Well, I could say because I read it on Sharetrader, or its just my opinion but that might not be good enough.

I noticed a little increase in volume with a decline in price on Friday also. Someone in the know?

Now heres a theory. I remember being at their AGM last year I think it was when WRI/Freeth tried to hijack a directorship via proxies. It obviously had Watson worried at the time and clearly came as a complete surprise. With the wrangling on the ledger thats happened just recently with ACC, WRI and Direct Capital I cannot help but wonder, after reading Friday's announcement about director nominations that this time its ACC's turn to have a go. Only this time they might have the numbers given the changes.

Looking at the list of directors I can see three that could easily be gone. Put together with at least one other like minded individual on the board and, vwallah, a bloodless coup.

I hope for goodness sake they are able to retain at least the five percent of Arbo they have. Otherwise they are just a bunch of clever failed capitalists.

[Lizard]

quote:Originally posted by maxine

Mutually Assured Distruction


Distruction - what a great Word! Distraction and destruction all in one, with distrust thrown in for good measure. This word is a gem which should be in the investors vocab to describethe process by which investors realise that a company has been over-hyped and badly managed!

[donner]

Being that Arbo is a large and valuable component of GEN and now the only component of Agrigen given the demise of the bio-fuel project, if it has been decided or recommended to sell the stake they own in Arbo then I hope it has to go to a special shareholders vote. The AGM would be very opportune for this and it may be the charter (if there is one) would require it.

So how does one get to find out about the agenda for the AGM and where can one find the company charter if indeed there is one.

Looks like poor old Jimbo is getting further and further on the outer. I see he is no longer on either the Audit Committee or the Remuneration Committee. I guess this is more in keeping with a shift away from executive duties to that of founding scientist.

[cdt18]

What a bloody disaster this company has been. It was run by a bunch of people with PhDs who thought making money must be p-i-ss easy compared to genetics or whatever the hell they do. How horribly wrong they were !

[donner]

Until Capitalist posted the BLT/GEN thread, the idea of ACC trying to stage a coup de'tat of the board was just what I had said. A theory.

But now, Citibanks mouthpiece has begun to show an unhealthy interest in it. Coming out of her Off Topic hole, offering no reason why it is going to go to the wall but insisting it will. Implying she has knowledge others don't.

Given the relationship, Citibank and ACC have, a very close healthy working one, and ACC having taken a major stake in GEN recently, and most of the trades in GEN coming from Citibank, it seems kind of odd that they would advise ACC to buy yet spout from the roof tops to everyone else to get out before the end for it is nigh.

Therefore, for me it is confirmation of two things. The price of GEN is being manipulated down. Last time I looked it was TWR funds who were making the supply of stock. We all know who owns TWR now, don't we? Thats the problem with lack of liquidity. Its much more transparent with a bit of digging. Therefore, in such cases averaging down is a good strategy. Hope your'e reading Phaedrus.

Secondly, I am right in my theory of proxy driven takeover of the board. Who needs 50% of the shares? In a company like this most of the small shareholders won't vote. They hold a great percentage of the shares. So there are only about three to six players that matter. Get about 30-40% cobbled together between you and your buddies and the chances are good you will get a majority.

Actually it confims a third thing. Ruth really really is a fool. I can't think of any other word for it.

Also, when the price goes to the wall and then some fancy ACC white knight comes in and says, look our directors have had a look at this company now and we say its kaput. So let us take it off your hands by giving you 15c for your shares. Work up to the 50% get control and then watch it go up in value.

Nominations close on Thursday at 5.00PM. I guess shortly afterwards confirmation or otherwise of this theory will be provided when we see who the nominees are, if any.

Better make your move quick, Bagnall.

If I were Nick Bagnall at the ACC, paying all that money to Citibank I would expect something better than the services the resident fool of ST provides. In fact, I reckon the boss would do well to enhance his reputation by firing the moll. But we know who wears the pants in that house, don't we?

[duncan macgregor]

Donner, gotta say this loyal to the end.You would make a great ships captain going down with the ship and all that. Suggest you read all this thread from start to finish and change tack.
Best of luck macdunk

[saintjohn]

quote:Originally posted by duncan macgregor

Donner, Suggest you read all this thread from start to finish and change tack.
Best of luck macdunk

[u]macdunk donner wrote most of it!</u>

GEN in it's present form is dead, not much doubt about that, but do you really believe ACC the last to climb aboard stumbled blindly onto this.

As I have said before, I suspect someone will be very happy at the end of the day, but then Quote "I may be wrong"

[Phaedrus]

Gosh Donner, what a statement you made regarding GEN "...... in such cases averaging down is a good strategy."

This stock is surely a textbook example of the [u]folly</u> of averaging down. Say you bought initially at about $6.50. The price fell so you bought more at $4, more again at $2, yet more at $1..... All the time throwing good money after bad. All the time increasing your investment and compounding your losses. Even shares bought at 50 cents have halved in value. Every $1000 of initial investment is now worth about $35. The punishment for "buying and holding" this stock was bad enough without compounding the initial error by buying more and yet more as it continued to fall.

Conservative investors that want to monitor only major long-term trends often use a 200 day moving average. In 5 years this stock has never, ever been on the right side of such an indicator.

http://home.ripway.com/2003-11/39768/GEN515001.gif

[thereslifeafter87]

Classic example of one of those "Buy and Hope" stocks.

Phaedrus, I agree with you re: averaging down in GEN. It would have been a stupid move.

Must disagree about averaging down as a strategy though. So long as the fundamentals remain strong, the fact that the market thinks the stock is worth less this month than last is largely irrelevant.

The trick is in the analysis, and in buying companies that continue to produce results (unlike GEN that continually produces only hot air and bad results).

So long as the earnings improve, the price will eventually catch up.

[donner]

If I were Nick Bagnall or Arkie van Roy I reckon I would be pretty pissed with Citibank and its performing fool. In fact, I'd ask for my money back.

Its incredible who reads these pages, you know.

Come out, come out, where ever you are, Ruth.

Bwahahahaha:D:D Fool.:D:DBwahahahaha.:D:D Coward:D:D


Phaedrus. This should really be on the Case Study thread but until another time, I will only say that you are 99.99% correct. But even you will admit that every situation can have a unique set of circumstances that can give rise to using averaging down strategy a successful one. According to ones entry point I believe this is the 0.01%.

[donner]

Previously I have said, along with MadMike, wherever he is these days, that at these levels you are getting all the IP for free therefore it must be a good buy.

Hence, my continual tub-thumping on this company.

Well, let me tell you something else.

At the next level, have a look at the depth, it'll be about mid-teens by the looks not only will you be getting the IP for free but the cash as well.

Now you tell me where in this world can I buy a dollar for fifty cents and get the IP for free?

One should never say never, eh Maxine.[B)];)

[duncan macgregor]

Four and a half years to wise up. Still talking about this crap company even after that prolonged downtrend. we all make mistakes but this is utter stupidity. Dont some of you guys like money?.
We all know that at the bitter end it wont fizzle out this stupid govt will throw money at it and save face. If you want to make money that is when it will happen up until then its down the gurgler.
If you have half a brain you would all have been out of this 3 years ago at least. The people holding this should have a look in the mirror to see who the patsey is. macdunk

[dingdong]

quote:Originally posted by donner

Now you tell me where in this world can I buy a dollar for fifty cents and get the IP for free?


Sounds good in theory but unfortunately with the likes of GEN you can't control the cash burn so the dollar becomes 20c in no time. Then you get asked to contribute another 50c etc etc.

[Bling_Bling]

quote:Originally posted by donner

Previously I have said, along with MadMike, wherever he is these days, that at these levels you are getting all the IP for free therefore it must be a good buy.

Now you tell me where in this world can I buy a dollar for fifty cents and get the IP for free?


GEN is losing over $12 million a year. They currently only has $10 million in the bank. The cash will only last less than one year.

Capital raising soon?

Management in GEN should have been kick out long time ago. Dont know why they are still in there. Do you trust the current management?

[Capitalist]

quote:Originally posted by duncan macgregor

Four and a half years to wise up. Still talking about this crap company even after that prolonged downtrend. we all make mistakes but this is utter stupidity. Dont some of you guys like money?.
We all know that at the bitter end it wont fizzle out this stupid govt will throw money at it and save face. If you want to make money that is when it will happen up until then its down the gurgler.
If you have half a brain you would all have been out of this 3 years ago at least. The people holding this should have a look in the mirror to see who the patsey is. macdunk


Exactly-13% fall today - we will have the last laugh, unless the socialist govt steps in to support those who are too incompetent to make a profit in a 'free' market environment. I doubt they will in this case though.

[duncan macgregor]

Without being unkind the volume was only a thousand bucks worth. The only money to be made now is pick when the govt will prop it up before it goes bung. I think this might happen sooner than expected. GEN only has 8 months money in the bank. Election coming up might be worth a gamble. Last time i said that transrail doubled in price lets see if i pick this right. SP will drop to the mid teens and double its price in 6 months. I say that with the reasoning that the govt are complete numbskulls. macdunk

[donner]

We are beginning to come into alignment DM.

It will be bailed out. I have known this for a long time. But it won't be the G who does it. Not unless it comes out of the blue.

Nope. It will be these fellows, with whom, from my snooping it appears the ACC are aligned with. The price is being moved down to facilitate entry for them. That is, they want something for nothing. Or, a dollar for fifty cents and the IP for free.

http://www.nzvif.com/news/pdf/BioPacificVentures%20Final.pdf

More interesting is this one.

http://www.directcapital.co.nz/PressDetails.aspx?Id=55

Check out the names at the bottom and do a google on Howard Moore. A very clever and interesting man.

You know, it should be the G who bails this out. They have put a lot of money in it up til now. Now it is going to bought out cheap. Possibly even privatized after being declared a failure yet it remains a very valuable company. Worse still is the huge wealth these people have destroyed from investors. Theft in ordinary terms. Theft from investors. Theft from the state and its citizenry after all the hand outs its had and theft of the fruit bourne from them.

[Bubble Boy]

Govt wont prop it up. Dont be rediculous. GEN is not a 'NZ Asset' or what ever they called AIR. It is not even the 'flagship biotech' any more. It is a commercial venture gone bad.

Keep an eye on those BioPacific boys, Donner. They have the skills to know if any of the IP has any value. And they have the cash to be able to extract it.

[Bubble Boy]

quote:Originally posted by duncan macgregor

Without being unkind the volume was only a thousand bucks worth. The only money to be made now is pick when the govt will prop it up before it goes bung. I think this might happen sooner than expected. GEN only has 8 months money in the bank. Election coming up might be worth a gamble. Last time i said that transrail doubled in price lets see if i pick this right. SP will drop to the mid teens and double its price in 6 months. I say that with the reasoning that the govt are complete numbskulls. macdunk


Now you are talking, DM. We all know the people who invested 4 years ago have lost their cashola. The game now is to try and pick if it is a potential turn around or if their is any value in a liquidation. And you are right, it is a gamble.

[marinesalvor]

which part of the government should bail GEN out???

[donner]

The method they will use is called a PIPE. Public investment private equity. It is dilutionary on existing holdings.

For the effects of such a thing, check out Cadmus. It tripled in value in a quarter.

MS:MED.

[marinesalvor]

not a great example - Maires stand forced it up for a while - its nearly back to last years levels... cant see much public money there

[donner]

quote:Originally posted by Bubble Boy

Keep an eye on those BioPacific boys, Donner. They have the skills to know if any of the IP has any value. And they have the cash to be able to extract it.


There is a ton of value in GEN. And they will extract it. I am concerned about how.

They could choose to sell Arborgen and wind up Agrigen. The biggest mistake they could make IMHO. Nevertheless it would bring money in to the comapny and put it at a higher value it is now.

The better option would be to spin Agri out. Re-cap it, take up the 5% in Arbo, partner other players out there from other sectors letting them take a cornerstone stake(s) and bring in their IP. Via this method BioPacific would be able put in as much money as they want in to Agri and Health. Shareholders would avoid any recap plans and on a 1:1 or whatever works issue would have the value of their holding doubled overnight. If the spin out and recap was cheap enough then it would be more than doubled and everyone wins.

Jim Watson could then persue his interests in health elsewhere and Agri would have a new lease on life to achieve what it should be able to achieve. The big kicker though is by removing Jim and some of the older faces out of the picture a settlement could be made with Arbo because that is where the value lies. All one has to do is change the accounting policies to recognize it. Revenue should be flowing in from it in about 5-7 years. In the meantime other sources of revenue could be pursued such as what has been going on for the last five years in licencing and milestone payments etc.

[donner]

How much would be needed MS? We are talking about a $6m company, maybe less.

[marinesalvor]

all depends what their aspirations are as a company - but money has never been GENs problem - they did a superb job raising capital early on. They need focus and a few more "wins" eg perhaps in licensing something

I just can't see why any part of the govt would invest where the private sector obviously doesnt want too

[duncan macgregor]

marinesalvor, The acc wallies poured our money into this dog what makes you think they are not dumb enough to do it again. We have had great examples of people averaging down with this company to get a bargain. Will the govt let it go bung? i think not it will only prove how wrong they are. macdunk

[marinesalvor]

whats in it for the government to not let it "go bung"?? and what can they really do? give GEN money?/ money isnt the issue!!!

[donner]

quote:Originally posted by marinesalvor

I just can't see why any part of the govt would invest where the private sector obviously doesnt want too


I just can't quite finger whether you are being deliberately misleading or if you just don't know.

THe BioPacific fund has AgResearch as one of its founding members.

Heres a little blurb on them from their site.

AgResearch is an independent, Crown-owned research and development company. Our two shareholders are the Minister of Finance and the Minister of Crown Research Institutes.

Conclusion: the G is already there. Ready to bail them out.

[Bubble Boy]

Donner, from the info i could find on BioPacific, i think Agresearch are a manager, not an investor. Managers dont tend to put money into funds, they skim the fees off the funds. The main investors are Nestle and Wrightsons. If there is any govt money, it will be ACC or the Superfund although i couldnt find any information as to wether these two are investors.

THe Crown Reseach organisations are all struggling with funding since the govt made them accountable for their spending. I am certain none of them have a spare $ to put into a speculative fund.

MS is right, money is not their problem, management is. As a rough estimate, they still have $7-8m in the bank. A lean biotech could operate for 2 years on this. GEN are not lean.

Conclusion: The govt will not bail out GEN. It will be PIPE deal by am insto or fund, or a liquidation and fire sale of assets.

[marinesalvor]

Donner - agresearch has nothing to do with Agrigen or GEN - its a crown owned CRI, ex DSIR and frankly close to irrelevant in this particular thread

As Bubble Boy points out - Celentis/Agresearch started an investment arm that contributes some people to BPV

I dont see why my tax dollars should invest in GEN...

[duncan macgregor]

a few of the gamblers placed some small punts on this doggy today. Wonder if an announcement is looming or are they only averaging down. After a budget like that our govt is stupid enough for anything. something must happen soon keeping close watch. macdunk

[Bling_Bling]

Maybe ACC is trying to hold the price up?

[donner]

Absolutely not Bling. They want it as low as possible for the 20 working days prior to the PIPE happening. 20 days VWAP is what will set the entry price for the fund. It is closing price that matters wo lets see if a small transaction happens right on the close to bring it back down to about 20c. If not bet your boots it will be back there soon. Problem is, if it does they might lose more votes.

MS, we shall see. But the obvious question of why would they not take part in the fund needs to be asked. Hell, they could even back some revenue producing projects in to GEN and make sure that they don't commit the same cash burn sins again.

The nomination for directors closed last night at 5PM. No ann. today on it. Either they don't want to give the game away or there is some kind of problem. Not sure whether that is in keeping with the continuous disclosure rules but looking at whats happened today it looks like something is up.

[marinesalvor]

but how does the govt prevent cash burn inside GEN?? I am honestly keen to know how they can intervene effectively

[tsb]

you may be right Bling - maybe ACC is averaging down!

[morv]

not so much as averaging down but doing a reverse takeover. aim will be to get a sx shell co.,some scientific ip., and lease of a purpose built scientific building to use as a biotech nursery cluster.

[duncan macgregor]

By my reckoning which is pretty basic, the govt cant let this doggy get to much negative publicity at election time. I DONT CARE WHAT IT COSTS PAINT THE BLOODY THING WHITE [fly on the wall stuff in Helens office]. Only a point of view. macdunk

[donner]

Most takeovers command a premium. Will be interesting to see what happens from here on in.

Interesting to read about clusters. This is part of the Porter principles of industry development. The G is right in to this at the moment. SO much that it is almost a policy. They tried it in the boatbuilding industry but so far it hasn't been a success. It indicates G's involvement.

THe BioPacific fund is it turns out a company. No prospectus issued. Which would have been if it was a fund. Established quite a while ago by Direct Capital. Its worth a $150m but only the first $100m got any coverage. Nestle, Direct Capital and Wrightsons and Inventages were the main contributors. Its guess work who gothe other $50m but I will put money on it that its ACC, AgResearch, Pohutukawa maybe GPG and perhaps a couple of other players.

If a cluster is what it is, the baby co's will have to pay an entry fee for the builidngs use, the LAN and IP. All revenue coming GEN's way.

Snap it up people. You won't get another chance like this anytime soon. And if these guys want to be in, let them pay or let it go to the wall proper and liquidate its assets. Others have paid and lost their money in the meantime.

In other words, average down.

[duncan macgregor]

DONNER, Why not do a bit of lateral thinking about how to go about buying this doggy when someone rescues it from the pound. Everything has an opposite, we sell shares with a stop loss. Stop and think what the opposite of that is with a buy order. Is that not a better idea than picking the bottom, which normally ends up with being in the pooh. It is not only GEN in this category, we have a ST BERNARD called CER and WDT to play games with if it happens.
If the sp rises to a predetermined price your buy order kicks in.
Give it a thought next time you are inclined to average down.
macdunk

[donner]

You clearly don't understand the issue of liquidity very well with that statement. If you are chasing an illiquid stock up you will end up paying through the nose for anything other than a handful if you wish to accumulate a decent stake.

I know you sweaty sock Northern jocks don't like to part with the brass easily but fortune favours the brave.

The AGM is coming up about three weeks. 17th of June to be exact. Notice has to be issued ten days before to the shareholders. If it isn't on the agenda then I think someone needs to ask Jim or Stephen about it. They will have to put their reputations on the answer I dare say.

[donner]

What exactly does a reverse takeover involve?

[Bubble Boy]

See Blue Chip (BCN)/Newcall for a case study.

[marinesalvor]

You still havent said how this company can be rescued?? we've established that giving it more cash isnt the answer... and we havent established why the govt needs to bail it out - its not one of the flagship biotechs is it??

Check out: www.nzbio.org.nz
is this the cluster you mean Donner

[morv]

donner basically a group of disparate people accumulate enough shares cheaply until one day they are sitting in the pub discussinghow many shares they own in various dogs and they realise that combined they have enough votes to control the board and then they find something very profitable to sell to the dog which all the shareholders will agree to and then that cements their control without having the cost of buying out heaps of little shareholders, but you get the $ out thru con sultancies, salaries,and directors fees

[Bubble Boy]

Morv, the guys in the pub dont have to be shareholders. Could be the directors sitting around having a few brews, realising that the business that they IPOed is a dog, but that they still have some cash in the bank. In walks their mate with an intersting private business who wants to sell down, and then, hey presto, directors recomend to small share holders at an EGM that their mate is a better prospect than the flea ridden internet/mining/listed VC dog that they currently own.

[marinesalvor]

just like KID bubble??? I remember it when it was Feverpitch

[Snow Leopard]

:) or [V] ?

quote:
GEN
24/05/2005
GENERAL

REL: 0831 HRS Genesis Research and Development Corporation Limited

GENERAL: GEN: Genesis Research to Receive US$5.5 million From Settlement

Genesis Research and Development Corporation Ltd (NZSX/ASX: GEN) today
announced that it has agreed a settlement of the legal dispute with ArborGen,
LLC. Genesis will receive US$5.5 million from ArborGen in return for exiting
its forestry related activities (including its ownership interest in
ArborGen) on completion of the settlement conditions.

The settlement is subject to formal legal documentation being agreed, and to
approval by Genesis shareholders at the annual meeting to be held on 17 June.
The settlement provides that:

1. Genesis will transfer to ArborGen all rights and ownership it has in
certain specified agbio technology and patents, including all its forestry
related technology.

2. Genesis will not operate in the forestry field, and will have no
ownership interest or rights in ArborGen.

3. Genesis will maintain its rights to receive a royalty on certain
patented technology to the extent that such technology is included in
commercial products developed and sold by ArborGen.

4. ArborGen will pay Genesis US$5.5 million on completion of the
transfer of certain patents, technology, information, documentation and
materials to ArborGen.

5. ArborGen will pay Genesis a further US$1.5 million if certain
ownership restructuring events occur in ArborGen prior to March 2007.

6. Both parties will withdraw all legal action against each other.

The Board of Genesis has reviewed the options of continuing the current legal
action against ArborGen or accepting the terms of the negotiated settlement
and believes that an early settlement of the dispute is preferable to
extended court proceedings and that it is strongly in the best interests of
the Company to settle the dispute on the terms noted above.

The Board notes that ongoing Court action would have a significant impact on
management time and would hinder the development of other more productive
initiatives for the future benefit of the Company.

The Board also notes that the payment due on completion of the settlement of
US$5.5 million (approximately NZ$7.7 million) will substantially increase the
cash reserves of the Company to more than 3 years cash burn at the current
rate. It will provide significantly enhanced ability to continue its research
operations until receipt of further licensing revenue.
End CA:00115742 For:GEN Type:GENERAL Time:2005-05-24:08:31:39

[donner]

Looks like there wasn't much negotiation in that. More along the lines of what do you want us to do and how much will you pay us for it. What a cop out.

However, I believe this might be the harbinger of some radical overhaul cum rescue for GEN. Maybe even perhaps a requirement for a reverse takeover.

Below is the reason why I have been so bullish on GEN and Arborgen. RBC may own more of Arbo than GEN but leverage through GEN is much higher.

This is what I tried emailing you Digger. If you have any friends holding GEN print this off and show it to them.

Remember the success or failure of this depends on a vote and with ACC entering the ledger recently no one knows where the votes lie.


The following is based on using Capstone as a model when it was spun out of Fletcher Energy on to the NASDAQ. Although the actual numbers of shares on issue may alter, the leverage ratios and company capitalization amounts do not and it is these that matter.

FEG owned 10% of CPST coming out with 8.1m shares in CPST at float time. Shares on issue in FEG were 353.2m and CPST had about 81m. At float time there was actually only 76m approximately but options to be converted were about 9m and currently there are 84m. So for simplicity's sake I will stick with 81m. So the leverage ratios are 100:10 or 1:0.1 or in shares 353.2:8.1 (0.023).

CPST at one point in time went to just over $100US making it a US$8.4b company.

If you owned 1% of FEG you owned 0.001 of CPST. Giving you a worth through your FEG holding (before the payout of CPST stock to shareholders at a ratio of 1:70) of 0.001*US$8.4b. Get a piece of paper and work it out. Its huge. US$8.4m to be exact.

But to get 1% of FEG you had to buy 3,532,000 FEG at a price of about NZ$6 a piece if I remember correctly. So thats over NZ$18m. Pretty impossible really.

Now compare FEG to GEN and Arbogen. Assuming that they have foregone the 5% option to settle the current dispute.

GEN has 29m shares on issue. Lets assume Arborgen has the same amount of shares issued as CPST if and when it floats on the NASDAQ and it goes to the same price. That makes the ratios 100:5 or 1:0.05 or 29m:4.05m (0.14). Meaning if you buy 1% of GEN you will own five ten thousandth's of Arbo or as a multiplier you would use 0.0005. So when Arborgen gets to be US$8.4b you will have a net worth of US$8.4b*0.0005 or US$4.2m via your GEN holding.

The cost of buying 1% of GEN is 290,000*0.25-0.28 at the moment. About $72-75,000.

Some of the figures are arbirtrary I admit. For example, what if they don't use the CPST model to float with? If they don't it makes no difference. It would just change the shares on issue. Not the market capitalization rate.

What if the market cap doesn't go to US$8.4b? Well, imagine it goes to only half of that. Then use a multiplier of 0.5 against your net worth and that is the outcome. Still not bad. Imagine for a minute if it goes to twice that!

Remember though, this is on a five to seven year time frame for maturity. A lot can happen in that time frame. So whether or not this pans out remains to be seen. I must point out that Capstone took twelve years to come to maturity. Also, it is common for a biotech to hit the skids at about this time in it life as GEN has found out. Take Arbo out of GEN and they are really just another Phase 1 run of the mill failed biotech with big promises. Arbo is close to having a product in the market place. Already they are meeting with the US regulatory body to revamp the rules and regs and I have read that even though they may have to wait five years for the test trees to mature they can take a young sample and extrapolate a mature sample from it with remarkable accuracy. So early on they will know if they are a success or not.

Any skepticism I have has been mitigated by the fact that it is second time round for Luke Moriarty and his gang. Plus the fact that GPG and the New York money on RBC is smart but risk free money and I am sure they are not after TEN.

[Enumerate]

While the loss of significant IP is a bad thing ... the cash is very welcome, and the lawsuit an unfortunate distraction ... the remaining issue is: "can GEN make use of the extra burn time to get themselves organised with their remaining IP?"

Presumably, this cash will go straight to the bottom line (since I believe GEN carry the IP at zero valuation (?!?!).

Ultimate question is: "is the company undergoing volunatry liquidation?".

[Bling_Bling]

More cash for GEN to burn. $US5.5m will keep GEN breathing for another year, the most.

[donner]

quote:Originally posted by Enumerate

While the loss of significant IP is a bad thing ... the cash is very welcome, and the lawsuit an unfortunate distraction ... the remaining issue is: "can GEN make use of the extra burn time to get themselves organised with their remaining IP?"

After five years they haven't yet

Presumably, this cash will go straight to the bottom line (since I believe GEN carry the IP at zero valuation (?!?!).

They do. But that doesn't reflect the cost of developing the IP. I reckon this must be at cost or below.

Ultimate question is: "is the company undergoing volunatry liquidation?".

Only on the Agri side. Read the statement where they say we will be right out of forestry 100%. They have sold the Cartesian product which was Agri's. Other agri projects have been canned and all the agri scientists have been sacked. Whats left is a health and lifesciences company that has various stage one projects trying to be licenced. Problem is nobody wants to licence them. If they did they would have done so by now. Specifically I mean RNAi and Zyrogen.

What can you say? Thanks Jim. Thanks for all the losses and wealth destruction. Thanks for the sell out and most of all thanks for nothing.

Lets hope I am right about my bloodless coup in the boardroom theory. Which I see they still haven't made any announcement on yet.

[Bling_Bling]

Why dont GEN shut down shop, sell out IP and retunr cash to shareholders?

[donner]

Good question Bling. One I asked a long time ago. I came up with several answers. Those answers are what gave me the confidence to average down.

If you want to know you will have to go back and read the thread. Plus a couple of others you can find on the search facility.

[Enumerate]

I must confess, I always preferred the forestry/plant side of the business as opposed to the health side. (Health has significant financial/time barriers to commercialisation). Now, what we are left with is all the health IP assets.

I think Donner is right - will the ACC swallow the bitter pill being offered or will they catalyse a restructure? (.. or will they do both?)

[Bubble Boy]

ACC will force through some well overdue changes at the AGM. The tealady tells me the current board cant even decide on the sandwiches for their meetings, let alone make company decisions.

At least getting rid of the plant side will allow them to focus more. THey have spent their money on a wide range of research, but forgotten about actually commercialising any of it. Time to focus on two or three of their best patent platforms and ditch the rest.

[donner]

quote:Originally posted by Bubble Boy

At least getting rid of the plant side will allow them to focus more. THey have spent their money on a wide range of research, but forgotten about actually commercialising any of it. Time to focus on two or three of their best patent platforms and ditch the rest.


Thats my beef BB. They can get rid of Agri with a spin off. Not a fire sale sell off.

[donner]

quote:Originally posted by Enumerate

(Health has significant financial/time barriers to commercialisation). Now, what we are left with is all the health IP assets.

Not to mention the FDA. For Arborgen they have to deal with APHIS. They are already in negotiations with them to enable planting of their trees. The criteria for APHIS is much less stringent than the FDA.

For those wondering about the G's involvement read the following from a law firms site,

New Zealand Venture Investment Fund (a New Zealand government owned entity) in relation to its cornerstone investment in the BioPacificVentures investment fund, which will be co-managed by entities associated with Direct Capital, AgResearch Limited (New Zealand's largest Crown owned research institute) and Swiss venture capital firm, Inventages. (Other cornerstone investors in the fund (which achieved a first close of NZ$100 million) include Nestle, Wrightson and AgResearch.)
RECT Funds Management in relation to its investment in the BioPacific Ventures investment fund.

BTW, what happens with the share issue in reverse takeovers.

[madmike]

quote:Originally posted by Enumerate

I must confess, I always preferred the forestry/plant side of the business as opposed to the health side. (Health has significant financial/time barriers to commercialisation). Now, what we are left with is all the health IP assets.

I think Donner is right - will the ACC swallow the bitter pill being offered or will they catalyse a restructure? (.. or will they do both?)


yes i only beleived in the forestry/plant side of the business as well....wonder what type of champers the rbc boys are drinking now?

[roaddog]

share price up 10c in 2 weeks :D



cool dudes[8D]:D

[Enumerate]

Back to where the share price was in March ... just before Arborgen decided to expel Genesis, sue them for this and that; before the Cartesian software was sold; a board memeber resigned.

I notice ACC have not been "averaging down".

[Ngapuke]

quote:Originally posted by Enumerate

While the loss of significant IP is a bad thing ... the cash is very welcome, and the lawsuit an unfortunate distraction ... the remaining issue is: "can GEN make use of the extra burn time to get themselves organised with their remaining IP?"


You comment hits the nail on the head, Enumerate. My first response on hearing of the settlement was one of relief: GEN were clearly up against negotiators who could stall and play hardball for as long as it took to get the deal they wanted. The Arborgen stake has long been what's kept me from selling up my entire GEN holdings, and the more I reflect on the news the worse it seems. Yes, it staves off bankruptcy... but it seems a bitter pill for s/holders to have to swallow.

I just wish there was some real alternative for s/holders to vote on at the AGM, other than to just stand up and chastise the current board...

[madmike]

quote:Originally posted by Ngapuke


quote:Originally posted by Enumerate

While the loss of significant IP is a bad thing ... the cash is very welcome, and the lawsuit an unfortunate distraction ... the remaining issue is: "can GEN make use of the extra burn time to get themselves organised with their remaining IP?"


You comment hits the nail on the head, Enumerate. My first response on hearing of the settlement was one of relief: GEN were clearly up against negotiators who could stall and play hardball for as long as it took to get the deal they wanted. The Arborgen stake has long been what's kept me from selling up my entire GEN holdings, and the more I reflect on the news the worse it seems. Yes, it staves off bankruptcy... but it seems a bitter pill for s/holders to have to swallow.

I just wish there was some real alternative for s/holders to vote on at the AGM, other than to just stand up and chastise the current board...


this is definitely a right off stock now for me.....shares in the bottom draw.....cant see a way back from here...yes the forestry sector was the only "light on" in this company...and its just gone out

[Snow Leopard]

madmike (and others). Is selling your shares not an option?

[donner]

Madmike. I expected better from you. This isn't a done deal. It hinges on a vote. You must exercise your vote and vote no.

Now let me tell you, this vote is going down to the wire. ACC and co do not want to sell Arbo. Can't tell you how I know but I do. It doesn't matter if you only have a few hundred. It could be the difference.

Remember the FFS vote on the forests how intense that was? Well this is the same only its not in the media.

If you have any questions MM or others email me on donner_nzse@hotmail.com. That should read r_n.

[madmike]

quote:Originally posted by donner

Madmike. I expected better from you. This isn't a done deal. It hinges on a vote. You must exercise your vote and vote no.

Now let me tell you, this vote is going down to the wire. ACC and co do not want to sell Arbo. Can't tell you how I know but I do. It doesn't matter if you only have a few hundred. It could be the difference.

Remember the FFS vote on the forests how intense that was? Well this is the same only its not in the media.

If you have any questions MM or others email me on donner_nzse@hotmail.com. That should read r_n.





donner
gen will still get royalties from the ip "sold" or "stolen" (however you see it) and they get us$5m to boot...... they never put money into arbogen and got paid as well for the research done. if you want to fight in the us courts you'll soon be ask to give money to support the fight.

the real questions to ask are
1) whats with the us$1.5m clause re change of "structure/ownership" all about?.....just thinking that maybe its the option gen had on the 5% that they could have bought...ie arbogen cant issue stock to a 3rd party within the timeframe (18 mth or something)
2) is arbogen worth us$100m (us$5m / 5% gen equity)
3) is the restraint of trade fair????

and papertiger......sell......no.....i'm having too much fun

[donner]

gen will still get royalties from the ip "sold" or "stolen"

You don't seriously believe that do you? and if it does eventuate it will be chicken feed when read in context with the rest of the statement.

1) Not sure on that one.
2) At least. Will see when RBC release their annual. Thats capital value. Not enterprise value.
3) No.

[tsb]

there has to be an X factor somewhere
e.g. take abano - when the Rotorua mob bought a heap of shares - the due diligance will have been well down the track. There may well be somthing going down with Gen - but what?

[tsb]

oops - RECT notice is dated 03/12/04 for purchase of Abano shares - the dates on Abano notices suggest that things didnt happen until after this date

[donner]

MM asked,

whats with the us$1.5m clause re change of "structure/ownership" all about?.....just thinking that maybe its the option gen had on the 5% that they could have bought...ie arbogen cant issue stock to a 3rd party within the timeframe (18 mth or something)


It occurred to me that it could be a third party a fourth and right up to many tens of thousands. IE a NASDAQ float.

[roaddog]

dudes,
last trade 40cents :)share price up 100% in two weeks [8D]

[marinesalvor]

if you get the magazine Bioshares from Australia - you will find a good commentary on GEN - rated as a spec buy class B

[donner]

I think they might be a bit behind the times MS.

I have a feeling there is a merger on the cards. Hence the now obviated strategy change by management. It seems they want out of Agri. After all this time one has to ask why?

At first glance it is capital requirements. Which whilst true ignores the fact that there are many ways to get capital. Not the least nor last is a merger or reverse takevoer. The only people who could do the RT is BPV. The effects would be as I said earlier, theft of everything so far by entry at a knockdown price and dilution of holders rights and ownership.

I thought this the most likely.

However, with greater analysis I have discounted this in favour of a merger. Most likely an Aussie outfit. Don't know which one but would be in health and lifesciences.

It is logical that the sell off of Agri would be the spadework required for this. In so far as it removes strategically unnecessary assets, cashes up the company to probably an even amount or required amount for the ratios needed to merge.

If this is the case I still believe selling the assets is the wrong move. It should be a spin out or a sale with the Arbo issue attached.

It will probably be sold as a great thing. Full of promises and wonderous new science and assets and people and hope and blah blah blah.

But what matters in bio is stage three projects.

If they don't have a stage three project in the pipeline then all you are being served up is a promise and a sell out. So existing management can keep control.

I kinda know how the Maoris feel now. A shotgun and blanket for a thousand acres. And as a token of my good will I'll throw in a box of free shot.

[marinesalvor]

was written last Thursday Donner - I would think that theres no merger open to GEN at the moment - what do they have to offer except cash??

[donner]

A lot more than cash but I'll leave it to you to find out if you don't already know.

Any comment on the following? What kind of reputations or philosophies do these men have? Or what are their backgrounds/

GEN01/06/2005MEETING REL: 1131 HRS Genesis Research and Development Corporation Limited MEETING: GEN: Notice of annual meeting The attached notice of annual meeting and proxy form is being mailed toshareholders. Business includes approval of proposed settlement with ArborGen LLC,re-election of J D Watson as a director, and election of J H von Roy and S JWasher as directors of the company.

[marinesalvor]

good one Donner if you are going to get snippy (again) please actually tell me what is so amazing - so far theres been little demonstration of the value of "mountains of valuable IP"

[Bubble Boy]

Try google, Donner. "Stewart Washer" and "Aki von roy". Both have solid science commmercialisation backgrounds.

[Bling_Bling]

Maybe GEN can get into organic weed spray. :D

[Enumerate]

Well, don't know about weeds - but, if it is green and it folds ... GEN can make it disappear very quickly.

[I.T.Ancient]

Hmm Which other institution burns other peoples cash for miniscule return? The government. Maybe Donner is onto something. It certainly looks like they would be compatible team mates.

[donner]

quote:Originally posted by Enumerate

Well, don't know about weeds - but, if it is green and it folds ... GEN can make it disappear very quickly.


Thats right. They could engineer some kind of odourless, smokeless fast burning pot. Is that what you mean?

There has to be money in pot for them, surely.

[donner]

After reading the AGM ann. It seems both these people have been nominated by the ACC and Jim Watson is to stand down in the future when a third candidate has been found. Meaning that if the third person is ACC affiliated then therein lies your bloodless coup and a new path for the company is set.

Reading about Washer I see he is ex-Celentis. Looking at Celentis I noticed they have several 100% owned business units. If they back these in to GEN or even 50% of them then you have a real life example of the PPP strategy supported by the G and from this you could hang several phase 1 incubator projects off. In accordance with Porter principles of industry development.

Aki is already a director of several companies around the traps. These too could do the same thing.

If there any revenues involved in these companies already then if and when they become part of GEN (big assumption I know) then you might find that normal valuation metrics could apply giving an altogether different value than what it is now. Currently all one has to do is take cash on hand and divide by shares on issue to get its valuation. This values all IP and plant at nil. Totally erroneous in my view but not the markets.

But I got to wonder about Jim stating his intent to resign now. Something funny in that. What good is he now if he is going to resign and wanting a big fat Greek paycheck upon doing so that needs to ratified at the AGM? Why not just do away with him now? Save the money and make the coup complete. That way the BPV outfit could steal it for nix. Crikey Jim. Just what are you doing? Most likely that would precipitate the resignation of Jim McLean making the coup a route.

[duncan macgregor]

DONNER, I hate to harp on about it, but some things in life dont make economic sense. Some directors in some companies squeese the last drop of blood out of a company then walk away. Instead of looking at reasons from a company perspective look at reasons from a greedy bastard to fleece the shareholders then walk away. I have a list of people that if they are on a board of directors then thats it for me regardless of hype. At this moment in time GEN,CER, WDT.WRI are out for that very reason. macdunk

[Bling_Bling]

DM, you are wrong on WRI.

[duncan macgregor]

BLING BLING, sorry you dont agree. I am working in very close proximity with two WRI stores and one RDI store see who goes in and out only an honest opinion no axe to grind hold no shares in either.
macdunk

[donner]

Not long to go before the AGM and the voting.

I would like to point out that the voting will be close. Therefore every vote will count. So please take the time to fill in the forms. People like Enumerate, Mad Mike, St John, Bubble Boy, Ngapuke and others who may read but not post or those I couldn't recall in my two seconds of memory.

To make you think, on average there is about 45 reads per post on this thread. Assuming everyone holds on average 10,000 shares per read then that gives a voting bloc of 450,000. To have those votes directed to a vote of no against the sale of Arbo could well make the difference.

How do I know that, you ask? Because last year there was only a difference of 1m votes on the election of the directors. That was GENvWRI. The difference of a takeover and a failed bid. Just one million. Things have changed since then and if ACC is trying to do the same thing then 450k if votes not voted last year could well be the difference.

SO please vote people. On this one, you do matter.

Whatsmore, I believe that Jim Watson is the difference between a route by ACC and Direct Capital when the day comes and a good deal for existing shareholders so I encourage you to vote for him as well as the election of the other new directors.

[Bubble Boy]

Donner, Bubbles is not a shareholder. It didnt quite get low enough. I was getting interested at 20c, and probably would have taken a punt in the teens, but alas, it didnt make it. Still watching with interest.

[Enumerate]

I have 12k - most, thankfully, acquired at $0.21. I need to sell at about $0.50 to break even, not that that means anything.

Averaged down on the strength of Donner's compelling arguments.

Was going to the meeting - but looks likely that I won't make it. So, in terms of the proxy ... is the best advice to make Jim Watson the nominated proxy?

[duncan macgregor]

ENUMERATE, Wont you ever learn from your mistakes. Cant you see what listening to advice cost you and you turn round and ask for more advice. THINK FOR YOURSELF. Macdunk

[Enumerate]

Lol - MacDunk, I do think for myself! Remember, I am the hold-TTP-against-the-rest-of-the-world guy.

I have specialist knowledge in computer software. I understand how intellectual property can be as real and tangible as other forms of property. This value attracted me to GEN where I was very keen on some of the plant signaling patents they held.

Donner's financial arguments around the commercialisation of plant side of the GEN business are very compelling, to me.

With computer software, you have a very risky development cycle leading to mostly marginal reward or occasionally exceptional reward. You build your business around the only points of leverage that matter - smart people (who can work as a team) working on creative ideas.

The GEN critical success factors are identical. Smart people, working as a team, getting lucky every now and again explioting their patent base.

As a shareholder - it is a rocky ride. There is a high chance of failure. (I would argue that a pubically listed company is the worst vehicle for the development stage of this business - you need to be lucky with shareholders with the right temprament - a statistical impossibility with a public vehicle).

I will acknowledge that it is probably the "beginning of the endgame" for GEN. However, it is not over yet - there will be some interesting twists and turns ahead!

[Still grappling with the Philosophical conundrum that if I start thinking for myself because I was told to "think for myself" - am I indeed, thinking for myself or am I just obeying instructions?]

[donner]

Thanks for the comments E.

As far as the proxy goes you can give it to the chairman or vote yourself with no need for a proxy if in your name. If they are in a nominee account you must issue instructions to the administrator of the account.

Be interested in hearing more about the plant signaling patents you mention. Its certainly the plant side that is the most interesting on the surface.

[Ngapuke]

I just want to make sure I understand you clearly, Donner.

You're recommending to shareholders that they vote in favour of Resolutions 1,2,3(a),3(b), 3(b) and 4 .... but that we vote against Resolution 5 (which is the one seeking shareholder ratification of the out-going Board's decision to accept the Arborgen settlement terms, as announced)?

That is - we support the re-election of Jim Watson and the election of ACC's nominees (vanRoy and Washer), but try to block the current settlement proposal?

[duncan macgregor]

NGAPUkE, Re arrange the deck chairs as the ship sinks. The point being,the captain and crew are off in a lifeboatlaughing at the mugs going down with the ship. macdunk

[Enumerate]

Good question Ngapuke. Exactly what I need clarification on, myself.


MacDunk - you cannot always choose the ideal situation from which to make decisions. It would be much nicer if GEN did not have basic survival decisions to make - it does, however, and hence this is the testing time for "moral fibre".

Reminds me of a war story - NZ 2nd Division is surrounded a Mersa Metruth (sp?) - surrounded by 20th Panzer - its annihalation has been announced in Berlin - British tank formations have abandonded the NZ'ers, again.

At night, the motorised 2nd Div breaks out through the middle of an active Panzer division - in trucks! Casulaties are light - the German's can't believe it (nor can the British). The NZ 2nd Division cements a reputation as the elite mobile formation in the British 8th Army. Later, in Tunisia, the remnants of the Deutsch Afrika Korp ask to surrender to the NZ'ers as a mark of respect.

Here we are, in a Biotech desert, surrounded by hostile venture capital armoured formations, abandonded by our own venture capitalists. The margins of success are thin ... but if everyone knows what to do and when to do it ... there is one chance left ...

[I must have too much time on my hands ... I will stop now].

[donner]

quote:Originally posted by Ngapuke

I just want to make sure I understand you clearly, Donner.

You're recommending to shareholders that they vote in favour of Resolutions 1,2,3(a),3(b), 3(b) and 4 .... but that we vote against Resolution 5 (which is the one seeking shareholder ratification of the out-going Board's decision to accept the Arborgen settlement terms, as announced)?

That is - we support the re-election of Jim Watson and the election of ACC's nominees (vanRoy and Washer), but try to block the current settlement proposal?


That is precisely what I mean. Thank you for translating my garbled mess.

[Sky Tower]

NZ Herald: 13.06.05

By Liam Dann

Biotech company Genesis Research - which holds its annual meeting this Friday - has doubled its cash reserves by selling out of Arborgen but it isn't about go on a spending spree.

The sale of the stake in Arborgen - which was pioneering the breeding of genetically modified trees - earned the company nearly $8 million, said chief executive Stephen Hall.

That effectively doubled the company's cash value from about 30c a share to around 60c.

Its was a legal dispute with other Arborgen shareholders that prompted the sale last month but the timing is good for the company, which has seen its cash reserves dwindle from $60 million in 2000 to just $11 million in 2004.

Last year Genesis decided to scale back its plant science research to focus on the health sector to preserve that cash.

The Arborgen money will give its drug research programmes a boost. At present spending levels it is equivalent to three years of cash burn.

"It was always our strategy to sell out at the right price and at the right time," Hall said. "Certainly the legal situation did bring it to a head."

But a 5 per cent stake in a tightly held company is not easily saleable, so the opportunity to get out was not such a bad thing.

Biotech companies can never borrow money and developing products to the point where they raise revenue can take years.

Genesis' ability to raise cash from New Zealand investors has been limited by the boom and bust it went through shortly after listing.

Its shares rose to more than $7 shortly after listing. They were trading as low as 29c last week.

The Arborgen cash would give Genesis more credibility with investors and with potential licensees and partners, Hall said

"The nature of biotech is that you raise a lot of cash and you spend it slowly and wisely in the hope that you will get a pay-off," he said. "We've had three [potential products] that didn't pay off and we've had to be more cautious and more wise."

The decision to move away from plant science was made because of longer timeframes and lower returns in that sector.

The company is still running a programme on cell wall research.

"The most likely application there is in the biofuels industry," Hall said. "People are looking at ways to convert biomaterials to ethanol."

But the primary focus was now on the health programmes and particularly on RNAi therapeutics.

RNAi was a whole new paradigm of technology, Hall said.

RNA are molecules involved in protein synthesis within cells.

The "i" in RNAi stands for interference and refers to the ability of the treatment to block viruses or to switch off cancer-causing genes.

"Just as antibodies revolutionised health therapeutics, we believe RNAi is going to do the same," Hall said. "It allows you to reach targets that are currently considered undrugable."

RNAi was not necessarily a "slam dunk" as there were still technical issues to be resolved.

Genesis will make a full progress report on its RNAi treatments at it AGM on June 17.

[donner]

Did anyone go to the AGM today?

[Winnie Burgers]

GEN
17/06/2005
ADDRESS

REL: 0846 HRS Genesis Research and Development Corporation Limited

ADDRESS: GEN: Presentations to Shareholders at Annual Meeting

The attachment includes presentations to the Annual Meeting of Shareholders
by the Chairman Mr Jim McLean, and the CEO Mr Stephen Hall.

Chairman's Address

In my presentation I want to make two points. The first is that decisions
made last year, and the consequent restructuring of Genesis, leaves us in a
strong position for the future. We are well placed, in spite of public
sentiment, to succeed with our next health candidates. And the second point I
want to make is your board believes that the market will have more confidence
in the future as new directors are brought in to stimulate the future
development of the company.

So firstly why should shareholders be optimistic for a successful future? Let
me recap the major events for last year and the decisions that have been
taken. The key matters that commanded our resources were:

1. The inability to independently finance AgriGenesis in the unfavourable
financial markets of the time; conditions which persist today.
2. The appointment of a new CEO.
3. A difficult and time consuming dispute with our forestry business
partners.
4. The dependence on and subsequent failure of the AVAC clinical trial for
atopic dermatitis.

It became apparent that financing of agricultural biotechnology, and so
AgriGenesis, was not going to provide the capital needed for this business.
That triggered a number of events. We needed to choose where to invest our
capital since we could not afford to invest in both businesses. And we also
needed to manage our resources as if, as it turned out, our AVAC trial did
not succeed. If the trial were to succeed that would be fine, as many options
would become available to us. But if it did not, we needed to be prepared for
that eventuality.

So we made the following decisions. We would re-evaluate every programme in
the company and consider each as if the business had no future from AVAC.
Could they drive sufficient shareholder value on their own? Could they be the
backbone of Genesis's future? Could we achieve the key milestones that would
gain the confidence of the market, and do so with our available capital?

The results of this exercise were the decisions discussed at shareholder
meetings around the country last year. We would focus on the health business
of RNAi targets and on Zyrogen, and restrict our plant targets to ArborGen
forestry and our Cell Wall programme. This decision resulted in having to
reduce our very capable staff even before the AVAC trial was complete.

During the same period we undertook a worldwide CEO search and appointed
Stephen Hall who was clearly the best candidate, something I believe has been
borne out since. We were also lucky in Stephen being so familiar with the
business and its issues that he could be up to speed and execute key
decisions quickly.

One of the early and difficult situations Stephen had to deal with was a
disagreement with our forestry partner ArborGen. As Stephen will detail in
later discussion of this issue, this dispute had been simmering for some time
and degenerated to the point of legal action earlier this year. We now have
the opportunity to resolve this disagreement by selling our interest in
ArborGen and exiting forestry research. I cannot overstate the burden such
disputes put on the whole company. Accordingly the result is equally
important and satisfactory for Genesis shareholders. It is the cash from this
sale that adds strongly to our financial position and so our ability to
succeed in our chosen area of health products.

In the event also, the AVAC trial did not succeed and the many decisions that
had been made if that happened were put in place.

Following all these changes that have happened at Genesis during the last
year we now have a smaller company, with a clear focus on its next targets
and with sufficient money and so time to p

[Lawso]

New chairman, new CEO, new faces on the board, new direction for what is now a smaller company. No more forestry, new therapeutic focus on immune disorders and cancers. Significant cash reserves, according to CEO Stephen Hall. More positive vibes out of this meeting than I've felt before.

All resolutions passed without dissent from the floor and with overhwelming proxy support. There was no discussion on the ArborGen settlement and proxies were 5.6m for, only 569k against.

Donner: what's the point of haranguing us at tedious length on ST if you can't stand up at the meeting and get if off your chest? Not that it would have made any difference to the result.

[donner]

Precisely. It would not have made any difference in hindsight. But you do what you can.

I find it weird that a 60c stock is trading at half its worth of cash backing now. A dollar for fifty cents and the rest for free. Mind you not sure anyone really wants the rest. Bunch of Phase I projects languishing behind the competition.

Just thinking about those figures, thats only a little over 7m. Where is the other 22m? 16 are in the top twenty. Leaving another 9 available from that pool. Are you sure those figures are final?

[Lawso]

If you're talking about the proxy figures on the ArborGen resolution, donner, No that's only the absentee proxies. There were 6,365,713 lodged, counting Fors, Againsts and Undecideds, before the meeting. As all resolutions were passed on a show of hands there's no way of knowing how many shares were held by those at the meeting, though the audience did include a high proportion of "suits". I figure the Against proxies represented about 2% of eligible votes.

[Ngapuke]

Donner
A chap was at the meeting from ACC, so presumably he could have voted ACC's shares if it had gone to a poll. I attended and didn't give a proxy, as I wanted to make up my own mind on the day. I expect other large shareholders might have taken a similar approach.

I voted for all resolutions, and left the meeting confident that the current board & management have as good a chance as any of pulling GEN around. They seem both harmonious and competent. Arki von Roy and Stuart Washer will be valuable additions. Feel a tad nervous about dilution effects if BioPacificVentures get involved, but at least the Co isn't so desparate for cash now.... so any such deal (if it in fact happens) should be done for the benefit of all s/holders.

It will be a couple of years yet before we know whether the RNAi research will result in valuable commercial outcomes. But the Arborgen settlement will remove that distraction, the cash from the settlement will take the funding pressure off for a bit, and the new board will be very focused I'm sure.

Definitely a hold, in my book. Might yet be a success;)

[duncan macgregor]

I fail to understand the thinking of some so called investors. I used to think that investing was about systems and proceedures that increased the initial investment at a greater rate than might be expected from a bank, The i know best line of thought like a train going full bore to the end of the line before the disaster. This complete and utter dog has been destined to crash for years with you lot still unconvinced. Without making further comment on this dog all i can say is it is only an idiot that invests without a stop loss. If you take all the money from all the people and give out equal shares then in a couple of years time the same people will still be rich. Some of you lot must have inherited the money to throw it away like that. macdunk

[Ngapuke]

quote:Originally posted by duncan macgregor

I fail to understand the thinking of some so called investors. I used to think that investing was about systems and proceedures that increased the initial investment at a greater rate than might be expected from a bank, The i know best line of thought like a train going full bore to the end of the line before the disaster. This complete and utter dog has been destined to crash for years with you lot still unconvinced. Without making further comment on this dog all i can say is it is only an idiot that invests without a stop loss. If you take all the money from all the people and give out equal shares then in a couple of years time the same people will still be rich. Some of you lot must have inherited the money to throw it away like that. macdunk

Spare me the lecture, unless you have something constructive and interesting to say.

[donner]

Let me see if I have this right.

It makes no difference how many votes those who held their hands down in the show of hands because the chairman declared the motion carried. Therefore, anyone who held their hand down can only have their votes counted if they stand up and demand a poll.

And since ACC were there at the meeting, with no mention of a poll by them then we can assume tacit approval of the motion by that camp.

Conclusion, the motion is carried on about 22% of the available votes.

I think this is the end of Jim Watson. If he doesn't stand down before next year I am sure he will be rolled. Certainly I won't be voting for him again. The guy has done nothing but destroy wealth not only in the price either all the while picking up a salary that I feel is probably not deserved. While a clever man and a good scientist, one also has to remember noone is indispensable. So if the deal with BPV isn't made within the year then I am sure enough changes would have happened in that time to push the balance of power over to ACC.

He has a lot of his wealth tied to GEN shares so any deal brokered will be in his interests before that of the shareholders but the irony is it will have to be in the shareholders interests for it to be in his.

Whatsmore, once he steps down off the board he will be free from having to publicly declare any sale of shares. Any sale from him will clearly be an indication of the future of this company and it won't be good.

Be assured Jim. Some of us are watching you closely and are bitterly disappointed with you. The sale of Arbo was a complete sell out. We know where GEN's RNAi programme lies in the bigger scheme of things vis the competition.

As Abe said, you can fool all of the people some of the time but you can't fool all the people all the time.

[Lawso]

from donner:

quote: Conclusion, the motion is carried on about 22% of the available votes.
You can't conclude that, donner, because you don't know how many votes all those who put up their hands were entitled to cast, had there been a ballot.
Also you don't know how many, if any, didn't raise a hand.
What we do know is that 1) nobody raised a hand to vote Against, and 2) the number of Against proxies represented no more than about 2% of eligible votes.
There's no point in arguing with you over GEN, and I'd have to agree that [u]to date</u> it's been nothing but a dog, but I just wish you'd come out in the open to state your views publicly. Otherwise you're wasting your time and everyone else's.

[donner]

Thank you for the replies Lawso.

Ngapuke, how do you know ACC had a rep there? Did they say something?

Well I don't know what you mean "publicly". This is pretty public. It gets a wider audience than any GEN AGM I've ever been to, some of that audience are pretty influential in the worlds they inhabit and the text remains after I have finished for scrutiny and debate by all comers. Not the least will be other shareholders, GEN representatives, biotech industry participants and quite likely at least one Arborgen representative. All of whom are stakeholders in GEN, its future and the NZ biotech industry as a whole. Quite a different state of affairs from what would be after the last breath of a big moan on the floor at a board that are all quitting and as the votes show would've made absolutely no difference.

But Arborgen is gone so lets look at whats left.

A) A company with about $16m cash valued up at about 60c per share.
B) A purpose built lab and some fancy machinery and computer network.
C) Two pre-Phase 1 projects in the medical field.
D) A state sponsered project in agricultural cell walls.
E) A public listing.
F) Some IP and patents.

Lets take away the state sponsorship, listing and cash and imagine that this is a start up looking for cash because they believe they have the next big thing in RNAi and Zyrogen. If you believe the tune being sung.

To get the cash they would have to go to a venture capitalist or seek private equity from people of wealth. They could not spin this on to the stock market. No investor would go near it. In fact there is a trend these days for investors to steer clear of anything that doesnt have at least one Phase III project and/or a couple of Phase II. I recall one comment from Inventages on NZ biotech saying that GEN came to market to soon. That it was too immature a company to be publicly listed. That was made two or three years ago. GEN had several Phase I projects wehn it listed. They have even less now and the price was $6. Laughable really.

The outcome is that for investment in GEN that may have a worthwhile payoff against the risk taken, one can only conclude GEN does not warrant an investment. Its that simple. Zyrogen and RNAi are a crock.

That leaves cash, plant, state sponsorship, IP and patents and a listing. Remove the state's money out of the equation because that isn't a commercial reality . IP and patents are no longer of any use since they are to be sold to Arbo and the others are primarily AVAC/PVAC and SRP related and for investment purposes should be valued at nil value as per Benjamin Grahams writings.

Which leaves just cash, plant and a listing as assets. Therefore one can only conclude that GEN is a shell company. The life promised by GEN at its inception is no longer a dream to strive for. It is a failed commercial wreck. A penny dreadful.

What does that mean?

Well, several things actually. Liquidation for one. A shift on to the merger and acquisition trail maybe. But those people gettig longer in the tooth will remember how Ron Brierly came to be. More recently it was Charlies. That is a reverse takeover. Remember ACC would have had a plan when they came on board. Liquidation would not be it I imagine. M&A could be. RTO is most likely.

The only people who can do that are BioPacific Ventures. Of which Aki von Roy is a director of and who is now a director of GEN. A position that instantly causes a conflict of interest. But lets not mention that.

Don't think GEN will be telling you this. Nope. They just want you to know how great RNAi is.

The integrity, credibility and reputation of the good people up at GEN just took another hit. And we know who that is.

A waste of time you reckon? I disagree.



Arborgen had some serious implications for the country as a whole as well as for shareholders. I have to watch myself. I might start getting a bit lofty here since its to do with economic development and prosperity and the general wealth of nations.

Not only could the IP have drastically altered

[Capitalist]

quote Donner "I liken it to Microsoft"

Just saving that. Bwahahaha [^]

[donner]

OK RMB. Just for you if it makes you feel better. Doesn't change the fact though.

[rmbbrave]

That's not very nice Donner, even for Cap.

Anyway she drives a kompressor.

[Capitalist]

Exactly. Hey buy GEN peoples. I will update my Kompressor. Lord knows Santa's reindeer has had so many 100% calls over the last few years. CEN being one. NZD6 as good as it gets :D:D:D

I would bet on RBD actually...small change for CVC.

[donner]

Oh I forgot to mention why I favour an RTO over the M&A option.

Because the two new ACC directors have a history of being in the business of commercializing IP. So they must have something in mind that needs to brought to market.

When you look at GEN they have nothing to commercialize. You just can't commercialize pre-phase I projects. So you have to ask what are they going to commercialize? Well, I don't know. But I'll bet there's something in store.

[Lawso]

Very thoughtful - and thought-provoking - stuff, donner. All I can say in my simplistic way is "We shall see, we shall see".

I've been in GEN since 1999, before the IPO, and I reduced my holding in '01, selling some but unfortunately not all for $4. I'm a bit more savvy now but of course I see no point in selling at the current price.

Yes there was an ACC guy at the meeting. He answered a shareholder's question by saying that ACC saw no role for itself in the future direction of GEN but that it had increased its holding to approx 18% because it believed the shares were worth more than the price it paid for them.

To repeat: "We shall see."

[Ngapuke]

quote:Originally posted by donner

..Ngapuke, how do you know ACC had a rep there? Did they say something?

Yes, the ACC rep stood up and gave his name (sorry, I didn't catch it), and - in answer to the question of why ACC had invested, said that it was simply because that the price they bought they saw more value than was reflected in the share price.


.... Zyrogen and RNAi are a crock.
Not the view expressed by Stephen Hall to the AGM. Said that the Board had considered the alternative of winding up the Co, and paying out shareholders, and still considered current investment strategy a better use of s/holders funds.

That leaves cash, plant, state sponsorship, IP and patents and a listing. ..... IP and patents are no longer of any use since they are to be sold to Arbo
Not entirely true: note point 3 in the ARborgen settlement press release. "3. Genesis will maintain its rights to receive a royalty on certain patented technology to the extent that such technology is included in commercial products developed and sold by ArborGen." I questioned Stephen Hall on this at the meeting, and he confirmed that such royalty payments could be signficant in future. So the company may yet get some up-side should Arborgen fire.

Note also that GEN retains rights and interests in biofuel development. These are not classed as competing with Arborgen, and so are not swallowed by the settlement.

[donner]

This gives a clue to how important Arborgen will become.

http://stuff.co.nz/stuff/0,2106,3323595a13,00.html

[donner]

Interesting to note Bruce Sheppards comments on Charlies RTO today in the paper. Reckons existing holders got fleeced $3m and Charlies got too much of CER. Look a bit closer and you will see Brent King of dodgy Bridgecorp deal fame standing on both sides of the transaction.

This was my big concern with GEN and ACC and BVP if they made the trifecta of seats on the board at the AGM. As it happens it didn't eventuate. Jim Watson was returned. Is this a good thing or a bad thing?

Good I think, but the proof is in the pudding. Lets see what the details of the deal are when it happens.

Personally I have great faith in Jims ethics and although you can say directors looking after shareholders is the same as a politician talking about taxpayers money I am sure that noone will want ot go out on the note of being a great wealth destroyer and failed CEO with no scientific product ot show for it. SO I actually do believe that Jim and co will be working to restore shareholder value.

[duncan macgregor]

DONNER, I actually think you got yourself hypnotised take a big swig of the goodstuff and repeat after me . (I MUST LEARN FROM MY MISTAKES). We all make them DONNER you are beyond that it is a complete fixation to the point of utter stupidity. No offence intended mate but somebody has to tell you. macdunk

[donner]

Thats ok Mac. I'm not easily offended by comments like that. I would be far more aggrieved if you put up an argument of reasoned substance to prove why I am wrong and not the market in this case. Current minimum value is 60c and they are trading at 30c. Can't be all wrong. Keep going in that direction Mac and you'll find Affco at the end of the trail. At least you won't be lonely there.

Meanwhile, I see the Chairman has stepped down. What then of the conflict of interest between AvR being in the employee of BPV and chairing GEN, not to mention sitting on other boards should any deal come to be? Ah, well you see it is Jim Watson that holds the casting vote on any proposal so perhaps it is not so important as what it could have been.


GEN15/07/2005DIRECTOR REL: 1236 HRS Genesis Research and Development Corporation Limited DIRECTOR: GEN: Genesis Research Appoints New Chairman Auckland, New Zealand, 15 July 2005 - Genesis Research and DevelopmentCorporation Ltd (NZSX/ASX: GEN) advises that Joachim (Aki) von Roy has beenelected Chairman of the Board of Directors. At the recent annual meeting of shareholders, Mr von Roy and Dr StewartWasher (Australia) were elected to the board. Other members of the board areDr Steve Gillis (USA), Mr Jim McLean and Dr Jim Watson. Mr von Roy commented "Genesis has been through a difficult time but I haveevery confidence that our current research and development projects can leadto a positive commercial reality. The focus on RNAi therapeutics for thetreatment of atopic dermatitis and asthma is a cutting edge concept fordealing with these diseases, and we have the team to become a commerciallysuccessful company. The appointment of Dr Stewart Washer to the Board willhelp us sharpen our understanding of the agri-biotech potential of thecompany as well as increase our ability to develop collaborations in NewZealand and Australia."