Originally Posted by Hancocks
My opinion is that the results were in-line with the analysts Forsyth Barr ($3.1M) and Edison Research ($3.4M) – total revenue was $4,132,000 including grants and research rebates, that's OK.
We are rolling out a product that has cost a lot of real money to develop. They are expensive tests for insurers because of the development costs, not because they are getting ‘ripped’ and we have still produced this cheaper than any other company could develop; so we have a great advantage there. A lot of the intellectual contribution has been by Pacific Edge Limited, the University of Otago, development grants (e.g. Callaghan Fund) R&D rebates and of course the stalwart angel investors. But a growth opportunity like this takes money and investors with an appropriate risk profile.
Attachment 7373
It has been a long haul getting this product rolled out, but we definitely are getting there, I wouldn’t get too down in the mouth just yet.
Attachment 7374
The FMA issue was just unfortunate and I think a public warning and Pacific Edge offering compensation is the best negotiated outcome you could hope for; it was a hiding to nothing and not worth a fight really – opinion against opinion, just look at this thread for an example.
The rights issue was a surprise for two reasons, one 50mins after the results and the amount; however, when you read the documentation – it all fits in my opinion.
The rights issue will provide Pacific Edge with the funding to:
• Expand its sales force in the US from 12 to 18 to service 19 major metro regions in the US
• Complete the evaluation of South East Asia, and if favourable, launch operations in Singapore as an entry point
• Complete the commercialisation of its third and fourth Cxbladder diagnostic tests, Cxbladder Monitor and Cxbladder Predict
• Bring new product technology and product improvements through to its markets
• Strengthen the balance sheet, allowing Pacific Edge to take advantage of any commercial opportunities which arise.
Grow the US business $3.7M FY16 & $4.2M FY17 Implementation of the increased sales force and targeted marketing programs.
Bring Cxbladder Monitor & Cxbladder Predict to the market $1.1M FY16 & $1.3M FY17.
Enter the South East Asian market $0.7M FY16 & $3.1M FY17.
So the above totals $5.5M FY16 & $8.6M FY17 for specific outflows = $14.1M
In FY16, Pacific Edge anticipates net cash outflow including specifically earmarked initiatives and existing operations of $15.2M
$14.1M & $15.2M = $29.3M they 'Pacific Edge' are raising $35M - makes sense.
Bookmarks