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Interesting tidbits from the SeD June30 10Q (attached at bottom) and Future discussion
We lost power here in Charleston. Had some time to organize my thoughts. Doing this off hotspot so can't respond likely.
My takeaways:
1) It's clear CHF has $10’s- 100’s of millions to deploy to his companies as he sees fit. He directly finances SeD for projects. Over the last year he has restructured the company and aquires tons of shares through convertibles to himself and given himself tons of warrants, diluting himself as he is the major shareholder, but taking an ever larger stake in the company. SeD itself has 10's of millions of real estate assets on the books too, most turning a profit. He is comfortable loaning large sums to his companies for warrants, fixed price convertibles, and as loan facilities for draw-downs as needed.
2) Some of the delays GC mentioned and frustrations for us are very conceivably the result of coordination with SeD. There were several time in fall 2016 where GC and Fred said things like waiting on the other party timing. I imagine it took CHF awhile to make this momentous business transition. Clearly, as quickly as they signed iGalen and ourselves up after they got shareholder approval, they’d been developing this plan for some time. No doubt it’s why Dr. Joe told Gerald to just stay on the field! They didn’t even have Dr.Tang back then, and we see the commitment for 3 years and big returns for her if she succeeds. They are just getting started. If the change in auditor were the only item on the agenda for the coming, un-dated Extraordinary General Meeting, it would already happen. Clearly they have another major item to vote on (and pass since CHF is the major shareholder).
3) The un-named bio investments. Clearly these are un-named as a result of on-going negotiations as SeD mentions by name the activities of iGalen etc. The $400k investment aligns oh so close with the only money to date that infusion 51a has made in Avant. Recall how dead Avant looks, yet they’ve got some cash (enough to keep them alive), a new CEO (who wouldn’t join if the company truly on death’s bed), marketable products that produce revenue via Theranostics.
The $800,000 of consulting fees to separately described OTC company? It’s either us or Viva Oncology (I remind you, Rubinfield’s son is their CSO), but who needs the consulting right now? Us. Product infusement, business reorganization, etc. And who doesn’t have money to pay bills at the moment(us)? And who(CHF) would loan out such a some unless they were confident it would create a return? GC is still working and says updates are soon as of a month ago. As Rich says, the easiest thing to do is for him to walk away, but he’s staying in to try and get us back some money. I see signs he may succeed. It’s plain as day, via the SeD collaboration with Chemia is St. Louis. This plan is advancing.
Future, let’s debate it: So, what does a resulting deal look like, along the lines of the LOI. We have 75M shares. We give away approx. 90% of ESS, 90% of AVDX stake to clear out the toxics. We pay off probably $1-3M in payables including the SeD consulting fees. We take in the asset which instantly puts an asset of some assessed value on the books, but costs shares. And we use shares to pay CHF etc for money raised, to pay GC, John, Brownell and whoever for their time over the last year, plus to bring on personnel. I envision an expansion of the A/S to 1B, and a resulting O/S of 200M with a $5M cash available to get serious on MANF. Eltoprazine might also be sold for funds, or developed in parallel. We become a pure play neuro company, as we should have always been and we start the final MANF journey now that the science and delivery is mature. So we retain a severely discounted $10B asset given all the shots on goal, but difficulties of clinical trials+whatever eltoprazine is+mosquito+cash. Let’s say in the end, we expect full dilution. And we’ll discount MANF 95%. That starts us off with a market cap around the $50-75M range/200M shares. There’s your $0.25-0.40 shares.
Option 1: If we’re seriously ready to move on MANF, we need to be Nasdaq like Herantis is with CDNF (and clearly the market likes the asset). So why not do a 1/10-1/20 R/S in the current red hot bio IPO market (as opposed to cold, when we last tried under toxic ceiling). That can help us properly capitalize. Institutions are into a simplified CDNF story. They will be for MANF. Simple structure. 50M A/S, 10M share O/S +plus whatever we IPO at $5-8/share. Say 15M O/S with $30M cash. Pure neuro. Pekka Simula is not some God CEO for Herantis. He’s a physics teacher turned business man.
Option 2: We give SeD an indication specific MANF stake to raise funds. I think this fits better with SeDs goal to be in BioMedical rather than just investing in biomedical. This saves us shares, but I know GC doesn’t want to give up any skin in MANF so early.
Option 3: What we can’t even sniff. What other parties are out there?
http://quote.morningstar.com/stock-filing/Qua...16ddcf2b30
f) Investment securities
The Group has invested in shares of a U.S. listed company amounting to S$0.4 million" this sounds like the Infusion 51a money that went to Avant
g) Derivative assets
A promissory note of S$0.8 million from a company listed in the U.S. OTC market has
been received for providing consulting services.
Biomedical Business
As part of a strategic shift to diversify and develop new revenue streams, the Group received shareholders’ approval on 24 January 2017 to diversify into biomedical science, healthcare and biotechnology industries. Accordingly, the Group incorporated Global BioLife Inc. (“Global BioLife”) on 2 May 2017 to carry out its biomedical activities. Advanced research has been initiated for the Linebacker platform – a new universal therapeutic drug platform that seeks to offer a breakthrough option for multiple diseases to be cured. The Linebacker intellectual property has since been assigned to Global BioLife. The Group expects to obtain validating laboratory data for Linebacker by 2H2017 with the platform to be completed by 1H2018. As announced on 14 February 2017, the Group acquired a 53%-stake in iGalen International Inc (“iGalen”) to conduct the distribution of dietary and health supplements through network marketing. As at 30 June 2017, iGalen has achieved S$2.5 million in sales in four months since its launch. The Group has appointed Dr Tang Peihong as Director and Chief Executive Officer of Global BioLife effective 24 April 2017. Dr Tang has a Ph.D. in Chemical Engineering and was selected as National Distinguished Expert in China's Thousand Talents Plan in 2012.
We lost power here in Charleston. Had some time to organize my thoughts. Doing this off hotspot so can't respond likely.
My takeaways:
1) It's clear CHF has $10’s- 100’s of millions to deploy to his companies as he sees fit. He directly finances SeD for projects. Over the last year he has restructured the company and aquires tons of shares through convertibles to himself and given himself tons of warrants, diluting himself as he is the major shareholder, but taking an ever larger stake in the company. SeD itself has 10's of millions of real estate assets on the books too, most turning a profit. He is comfortable loaning large sums to his companies for warrants, fixed price convertibles, and as loan facilities for draw-downs as needed.
2) Some of the delays GC mentioned and frustrations for us are very conceivably the result of coordination with SeD. There were several time in fall 2016 where GC and Fred said things like waiting on the other party timing. I imagine it took CHF awhile to make this momentous business transition. Clearly, as quickly as they signed iGalen and ourselves up after they got shareholder approval, they’d been developing this plan for some time. No doubt it’s why Dr. Joe told Gerald to just stay on the field! They didn’t even have Dr.Tang back then, and we see the commitment for 3 years and big returns for her if she succeeds. They are just getting started. If the change in auditor were the only item on the agenda for the coming, un-dated Extraordinary General Meeting, it would already happen. Clearly they have another major item to vote on (and pass since CHF is the major shareholder).
3) The un-named bio investments. Clearly these are un-named as a result of on-going negotiations as SeD mentions by name the activities of iGalen etc. The $400k investment aligns oh so close with the only money to date that infusion 51a has made in Avant. Recall how dead Avant looks, yet they’ve got some cash (enough to keep them alive), a new CEO (who wouldn’t join if the company truly on death’s bed), marketable products that produce revenue via Theranostics.
The $800,000 of consulting fees to separately described OTC company? It’s either us or Viva Oncology (I remind you, Rubinfield’s son is their CSO), but who needs the consulting right now? Us. Product infusement, business reorganization, etc. And who doesn’t have money to pay bills at the moment(us)? And who(CHF) would loan out such a some unless they were confident it would create a return? GC is still working and says updates are soon as of a month ago. As Rich says, the easiest thing to do is for him to walk away, but he’s staying in to try and get us back some money. I see signs he may succeed. It’s plain as day, via the SeD collaboration with Chemia is St. Louis. This plan is advancing.
Future, let’s debate it: So, what does a resulting deal look like, along the lines of the LOI. We have 75M shares. We give away approx. 90% of ESS, 90% of AVDX stake to clear out the toxics. We pay off probably $1-3M in payables including the SeD consulting fees. We take in the asset which instantly puts an asset of some assessed value on the books, but costs shares. And we use shares to pay CHF etc for money raised, to pay GC, John, Brownell and whoever for their time over the last year, plus to bring on personnel. I envision an expansion of the A/S to 1B, and a resulting O/S of 200M with a $5M cash available to get serious on MANF. Eltoprazine might also be sold for funds, or developed in parallel. We become a pure play neuro company, as we should have always been and we start the final MANF journey now that the science and delivery is mature. So we retain a severely discounted $10B asset given all the shots on goal, but difficulties of clinical trials+whatever eltoprazine is+mosquito+cash. Let’s say in the end, we expect full dilution. And we’ll discount MANF 95%. That starts us off with a market cap around the $50-75M range/200M shares. There’s your $0.25-0.40 shares.
Option 1: If we’re seriously ready to move on MANF, we need to be Nasdaq like Herantis is with CDNF (and clearly the market likes the asset). So why not do a 1/10-1/20 R/S in the current red hot bio IPO market (as opposed to cold, when we last tried under toxic ceiling). That can help us properly capitalize. Institutions are into a simplified CDNF story. They will be for MANF. Simple structure. 50M A/S, 10M share O/S +plus whatever we IPO at $5-8/share. Say 15M O/S with $30M cash. Pure neuro. Pekka Simula is not some God CEO for Herantis. He’s a physics teacher turned business man.
Option 2: We give SeD an indication specific MANF stake to raise funds. I think this fits better with SeDs goal to be in BioMedical rather than just investing in biomedical. This saves us shares, but I know GC doesn’t want to give up any skin in MANF so early.
Option 3: What we can’t even sniff. What other parties are out there?
http://quote.morningstar.com/stock-filing/Qua...16ddcf2b30
f) Investment securities
The Group has invested in shares of a U.S. listed company amounting to S$0.4 million" this sounds like the Infusion 51a money that went to Avant
g) Derivative assets
A promissory note of S$0.8 million from a company listed in the U.S. OTC market has
been received for providing consulting services.
Biomedical Business
As part of a strategic shift to diversify and develop new revenue streams, the Group received shareholders’ approval on 24 January 2017 to diversify into biomedical science, healthcare and biotechnology industries. Accordingly, the Group incorporated Global BioLife Inc. (“Global BioLife”) on 2 May 2017 to carry out its biomedical activities. Advanced research has been initiated for the Linebacker platform – a new universal therapeutic drug platform that seeks to offer a breakthrough option for multiple diseases to be cured. The Linebacker intellectual property has since been assigned to Global BioLife. The Group expects to obtain validating laboratory data for Linebacker by 2H2017 with the platform to be completed by 1H2018. As announced on 14 February 2017, the Group acquired a 53%-stake in iGalen International Inc (“iGalen”) to conduct the distribution of dietary and health supplements through network marketing. As at 30 June 2017, iGalen has achieved S$2.5 million in sales in four months since its launch. The Group has appointed Dr Tang Peihong as Director and Chief Executive Officer of Global BioLife effective 24 April 2017. Dr Tang has a Ph.D. in Chemical Engineering and was selected as National Distinguished Expert in China's Thousand Talents Plan in 2012.
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