PEB - Pacific Edge Ltd

[Balance]

This new test you raise, Xpert Monitor, boasts an overall sensitivity of 0.84 and NPV 0.93 from a study of 140.

By comparison, PEB's CxBladder Monitor from 1016 sample study produced 0.91 sensitivity and 0.96 NPV

Which do you recommend?

Not for me to recommend but the users - ie. not patients but actually, the urologists and GPs.

Remember the old Beta (Sony) vs VHS (Panasonic) - all the experts agreed that Beta was the more superior technology but VHS won the day by getting onside with content providers and industry players.

PEB's strategy of going it alone is costing it plenty - not only $ wise.

[Balance]

CxBladder has the edge and we continue to wait patiently for the likes of Kaiser to agree buy a lot of tests. I wasn't pleased by this recent $21m but expected that it may happen. Originally the many significant insto's would have agreed, by legal contract, to continue to hold their stock until company success, and to not crash it. It does appear one major player may have sold out as shown by the selling pressure on the price and the size of a few trades - yes, it is reasonable to assume there are frustrated insto's who want to move on.

I think it is fair to say PEB are being held up, and they want to get going. I think the recent raise was more driven around ensuring the going concern of PEB, particularly from an audit perspective. That is why I intimated the reasons behind this latest raise were not exactly the same as per previous raises. Whether they needed that full $21m is debateable (in my view), but that's just how the mathematics panned out.

One theory could be that it is a specific timeframe delay, in that there are utterances about a time Kaiser may be coming aboard and that the amount to raise is going to take them to that point. i.e. $21m.

Disclosure: I have upped my holding recently at the 34c mark.

Keep hoping.

PEB has fed the market to raise funds with plenty of outlandish projections, mistruths and false hopes(already covered in a previous post).

[stoploss]

CxBladder has the edge and we continue to wait patiently for the likes of Kaiser to agree buy a lot of tests. I wasn't pleased by this recent $21m but expected that it may happen. Originally the many significant insto's would have agreed, by legal contract, to continue to hold their stock until company success, and to not crash it. It does appear one major player may have sold out as shown by the selling pressure on the price and the size of a few trades - yes, it is reasonable to assume there are frustrated insto's who want to move on.

I think it is fair to say PEB are being held up, and they want to get going. I think the recent raise was more driven around ensuring the going concern of PEB, particularly from an audit perspective. That is why I intimated the reasons behind this latest raise were not exactly the same as per previous raises. Whether they needed that full $21m is debateable (in my view), but that's just how the mathematics panned out.

One theory could be that it is a specific timeframe delay, in that there are utterances about a time Kaiser may be coming aboard and that the amount to raise is going to take them to that point. i.e. $21m.

Disclosure: I have upped my holding recently at the 34c mark.

"That is why I intimated the reasons behind this latest raise were not exactly the same as per previous raises." -
The old " it's different this time" .......

[Balance]

"That is why I intimated the reasons behind this latest raise were not exactly the same as per previous raises." -
The old " it's different this time" .......

Yup - the ole 'this capital raise will take the company to profitability and/or cashflow positive'.

[Bing]

There are 3 possible scenarios as I see it:

1. Fail to sign up Kaiser and don't get their LCD from CMS - disaster
2. Agreement is signed with Kaiser by March next year (although maybe not at the price they want given that Kaiser must know they are desperate). Short term surge in the share price. By May next year still no sign of the CMS agreement despite talks "progressing well", share price drops again, eventual disaster
3. Sign with Kaiser followed by CMS a month or 2 later. Everyone happy.

From their presentation it is evident that without CMS (50% of their revenue) they are sunk. They obviously have an estimated date in mind for when they are expecting to sign them up and have modelled the effect on revenue of a 4 month delay in doing so. They also state that the actual date is "outside of Pacific Edge’s control."

I am reasonably confident they will sign up with Kaiser but not so CMS given that every year we have been told an agreement is imminent and every year we have been disappointed.

For myself I am waiting for the Kaiser agreement before selling the remainder of my holding. Should the CMS agreement come through in time I’ll jump back in.

[Balance]

There are 3 possible scenarios as I see it:

1. Fail to sign up Kaiser and don't get their LCD from CMS - disaster
2. Agreement is signed with Kaiser by March next year (although maybe not at the price they want given that Kaiser must know they are desperate). Short term surge in the share price. By May next year still no sign of the CMS agreement despite talks "progressing well", share price drops again, eventual disaster
3. Sign with Kaiser followed by CMS a month or 2 later. Everyone happy.

From their presentation it is evident that without CMS (50% of their revenue) they are sunk. They obviously have an estimated date in mind for when they are expecting to sign them up and have modelled the effect on revenue of a 4 month delay in doing so. They also state that the actual date is "outside of Pacific Edge’s control."

I am reasonably confident they will sign up with Kaiser but not so CMS given that every year we have been told an agreement is imminent and every year we have been disappointed.

For myself I am waiting for the Kaiser agreement before selling the remainder of my holding. Should the CMS agreement come through in time I’ll jump back in.

In May 2015 (when PEB was raising its 'take us to profitability' $35m capital at 61c per share), PEB stated :

“Process underway with key customers Center for Medicare & Medicaid Services (“CMS”) and Veterans Association with conclusion expected in 2015”

Well, it is 2017 and still no CMS.

The optimists in this forum will no doubt read that as meaning it (CMS approval) must be getting close. The realist will read it that PEB has absolutely no idea and has been stringing the market along to raise the funds required to keep the company alive.

PS. In fact, go back far enough and the company expected CMS in early 2014!!!!!!

[kiwidollabill]

Crystal ball time..... Hear me out.....

I agree that CXbladder as a technology has a viable future and will provide positive health outcomes for many.
The cost base upon which they have chosen to launch this test (own testing labs etc) is burning alot of $$$ which is not value adding and/or could be better used to support other areas of the company.
I see the following happening....(within a 3yr term). The sales dont eventuate like PEB want, the sp is suppressed, DD resigns, a US based CEO with diagnostic background is appointed who develops a new strategy to close the testing labs, slash the workforce and license out the testing either as a manufacturer or as a purely IP play to an incumbant.

Flame me if you must, but IMHO

[When the bass drops]

I don't see DD resigning. He'll guts it out to the bitter end, although they would probably be better suited getting a fresh CEO at some point, and move DD into a technical role. Negotiation skill is a must from this point. I would not be unhappy with a $2.50+ takeover offer for the shares if a big player likes the technology and can scale it up far beyond what PEB can do, ofcourse in the medium/long-term.

[blackcap]

I don't see DD resigning. He'll guts it out to the bitter end, although they would probably be better suited getting a fresh CEO at some point, and move DD into a technical role. Negotiation skill is a must from this point. I would not be unhappy with a $2.50+ takeover offer for the shares if a big player likes the technology and can scale it up far beyond what PEB can do, ofcourse in the medium/long-term.

Why would a party doing a takeover pay $2.50 when a say 60% premium to 30 day weighted average (at that stage) may only cost them 50 cents per share?

[Balance]

I don't see DD resigning. He'll guts it out to the bitter end, although they would probably be better suited getting a fresh CEO at some point, and move DD into a technical role. Negotiation skill is a must from this point. I would not be unhappy with a $2.50+ takeover offer for the shares if a big player likes the technology and can scale it up far beyond what PEB can do, ofcourse in the medium/long-term.

Thoroughly unacceptable.

If I have PEB shares, I will accept nothing less than $25.00 as they are worth at least $100 in the medium/long term.


Trouble is that the fat lady is getting ready to sing.