PEB - Pacific Edge Ltd

[Habits]

Have had dogged persistence with this mangey mutt, out she goes. I managed to make a small fortune ie a large fortune reduced by loss... how sad. Probably spend the dough on something frivolous and wasteful which will be more likely to have better returns.

[thegreatestben]

I put mine on the mortgage, feeling the squeeze there.

[Maxtrade]

Positive to see the funds from Cap Raise look to have been put to productive use. 50% increase in revenue should be viewed as upbeat. As we all knew, profits on this update were never going to have materialised yet. So it should not be concerned seeing losses increase. They are using the funds to get the product out to market. Traction can be seen from these results in this regard. Those that were expecting or hoping for anything different were too hopeful, especially at this stage with the disruptions and disruptions from Covid. There will be those that sell who were hoping for more. But that is unrealistic, the report can be seen as positive as to be expected with all at hand. Investors should feel comfortable and happy that the funds from the Cap Raise look to be putting to good use. Continuing on this trend things are looking on the right track. In regards to SP, will likely see traders and funds do the old sell down focusing on no gain in profits. Then buy back in strongly once they drag the SP down a notch. Likely to see SP touch down on 0.77 maybe even briefly 0.75? but then a strong buy follow pushing back up 0.85-0.95. Will take future announcement once test volumes continue to grow and profits to be seen at the end of the tunnel to push SP back up to Cap Raise 1.35 and above. Or an announcement of adoption by another medical institution getting on board, Singapore advancements etc.

Probably quite a few sitting with their finger on the buy order if touches down to key level 0.78. We will see how this week finishes. All around a good report that I would say was in line with what most longer term investors would have been expecting and hoped for.

[Habits]

Yes am probably selling at bottom of cycle, buy high sell low, no worries. Not suggesting anyone else should do so, or think it is an effective trading strategy.

[kiwidollabill]

Someone might want to ask why their COO left only after a few months in the job. They were very happy to announce the arrival but not the departure...

Call that a bit of local Dunedin insight.

[pierre]

More promises of a rosy future albeit finally backed up with a few numbers.

I've only had a quick scan of the lengthy (42 page) presentation but haven't spotted any mention of recovery of all those unpaid tests that DD was optimistically anticipating in prior years.

The answer to the above issue is in the Notes to the Financial Statements (P13):

"....In previous Financial Statements the Group reported that while no revenue has been received or recognised on these 22,634 tests, the Group still noted the potential of future receipt as negotiations continued. Negotiations have concluded and no further avenue is available for the Group to obtain reimbursement."

I was also interested to read in the Notes (P 10) that in the US although a physician orders a Cxbladder test, it is the individual patient who is PEB's customer.

"The Group [PEB] receives and processes the urine sample and returns the results of the test back to the ordering physician. The individual patient is the Group’s customer, however typically in the US market, the patient’s insurer may pay the Group for some or all of the cost of the test.

When a physician orders a Cxbladder test, the Group has an obligation to perform the test and report the results to the ordering physician irrespective of the patient’s insurance contract. A patient may have private insurance cover, be covered by the US government’s medical program through CMS, self cover or have no insurance cover.Once the Cxbladder test has been completed, all information required for insurance purposes is sent to the Group’s billing and reimbursement agent to begin the process to collect reimbursement from any applicable insurance company/ies for the Cxbladder test performed.

....For uninsured patients, the Group has no certainty of when or if the patient will pay."

From the reported numbers and the revenue received and commentary in the Financial Statements, there appears to be quite a lot of tests that are not paid for either through being done on a charitable basis, FOC in order to attract new clinicians to use the products, or not fully reimbursed by the insurer. Multiplying the commercial test number by $1,000 clearly is an unreliable formula to estimate revenue.

[stoploss]

The answer to the above issue is in the Notes to the Financial Statements (P13):

"....In previous Financial Statements the Group reported that while no revenue has been received or recognised on these 22,634 tests, the Group still noted the potential of future receipt as negotiations continued. Negotiations have concluded and no further avenue is available for the Group to obtain reimbursement."

I was also interested to read in the Notes (P 10) that in the US although a physician orders a Cxbladder test, it is the individual patient who is PEB's customer.

"The Group [PEB] receives and processes the urine sample and returns the results of the test back to the ordering physician. The individual patient is the Group’s customer, however typically in the US market, the patient’s insurer may pay the Group for some or all of the cost of the test.

When a physician orders a Cxbladder test, the Group has an obligation to perform the test and report the results to the ordering physician irrespective of the patient’s insurance contract. A patient may have private insurance cover, be covered by the US government’s medical program through CMS, self cover or have no insurance cover.Once the Cxbladder test has been completed, all information required for insurance purposes is sent to the Group’s billing and reimbursement agent to begin the process to collect reimbursement from any applicable insurance company/ies for the Cxbladder test performed.

....For uninsured patients, the Group has no certainty of when or if the patient will pay."

From the reported numbers and the revenue received and commentary in the Financial Statements, there appears to be quite a lot of tests that are not paid for either through being done on a charitable basis, FOC in order to attract new clinicians to use the products, or not fully reimbursed by the insurer. Multiplying the commercial test number by $1,000 clearly is an unreliable formula to estimate revenue.

So the Physican in theory could say "we need one of these tests I know you can't pay , go and get it done , you don't have to pay ...."
Might have to change that model , even have to pay for the car at the mechanic these days before they will release it.

[850man]

So the Physican in theory could say "we need one of these tests I know you can't pay , go and get it done , you don't have to pay ...."
Might have to change that model , even have to pay for the car at the mechanic these days before they will release it.

They did clarify on the call today that if a physician deems the test "medically necessary" that where CMS is the insurer, they will cover the costs of the test.

[850man]

Good pick Maxtrade - closing at 77c, 7.2% down today after the results announcement with not much propping it up

[thegreatestben]

I seriously weighed up the likelihood of the result dropping the SP when I threw in the towel, was a anxious couple of days but I guess I made the right call. Would have been better if I got out at the 1.20+ mark. Lesson learned.